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Continued revenue increase, up 46 percent in second quarter

Continued revenue increase, up 46 percent in second quarter Highlights in the second quarter of 2009:• Net sales in Q2 rose to SEK 99.2 m (68.1), an increase of 45.7 percent. • The operating result (EBIT) amounted to a negative SEK 3.5 m (negative: 3.6), while the pre-tax result amounted to a negative SEK 4.8 m (negative: 4.3).• Earnings per share after tax: Negative SEK 0.27 (negative: 0.25).• Cash flow for the second quarter was positive at SEK 4.3 m (negative: 10.0),mainly due to a decrease in working capital. • Order intake amounted to SEK 97.1 m (79.1), an increase of 22.8 percent.• After the end of the period: Announcement of a retail alliance with theCarphone Warehouse Group PLC. Doro easy-to-use mobiles will be availablein-store and online in nine European countries. • The positive sales trend in the first half of 2009, combined with thebuild-up of marketing and product investments, is now expected to generate apositive profit trend, with clear improvement of the full-year operating result(EBIT), compared to the previous year. Comments by the CEO, Jérôme Arnaud:“The second quarter of 2009 was characterized by a continued increase inrevenues, mainly from sales within Care Electronics. Group sales rose by 45.7percent and order intake was SEK 97.1 m, an increase of 22.8 percent comparedto the corresponding quarter in 2008. Sales by our Care Electronics business unit amounted to SEK 55.8 m (27.4), morethan double the figure compared to second quarter of 2008. We foresee continuedgrowth of Care Electronics, based on the success of the easy-to-use mobilephones. During the third quarter, we are introducing the Doro PhoneEasy®410gsm, our first GSM phone in a stylish clamshell model. This model featureslarge buttons and characters for simpler dialing. Its elegant and simple designmakes it the obvious choice for seniors. Sales in Home Electronics amounted to SEK 43.4 m (40.7). As general marketconditions remain weak for this product range, we are pleased to note that Doroproducts are maintaining decent sales levels, although our margins have beenimpacted to some extent. Sales were up 6.6 percent, as compared to a decreaseof 1.5 percent in first quarter of 2009, and 25.7 percent in 2008. Our cash flow has improved as an effect of our focus on working capital, at thesame as we have increased our stocks in order to be able to supply the marketwith new models. As previously announced, we are investing in building brand awarenesssurrounding our easy-to-use mobiles and increasing sales. The focus on CareElectronics has been marked by our change of corporate color, from the familiarred to a crisp green. During July and August, Doro is marketing its brand andproducts in Germany, Norway and Sweden by means of television commercials. Thecommercials can also be viewed on our website. In addition, we are increasingour knowledge regarding our senior citizen target groups by investing instudies in this area. Entering the third quarter, we have been proud to announce a retail alliancewith Europe's largest independent mobile phone retailer, Carphone WarehouseGroup PLC. Doro Easy Mobiles and accessories will soon be available throughCarphone Warehouse and Phone House stores in the UK, the Republic of Ireland,Sweden, the Netherlands, Belgium, France, Germany, Spain and Portugal. Recently, the US certification process for our GSM models within CareElectronics passed an important milestone, establishing conditions for initialshipments to commence already during the third quarter of 2009. However,further milestones need to be passed for full scale sales development. The Group's operating result (EBIT) remains the same as for the correspondingperiod in 2008, as a result of increased costs associated with the our growthstrategy in Care Electronics. Furthermore, Doro has made some provisions fornon-core products, resulting in non-recurring costs being taken in secondquarter. To sum up, the second quarter was yet another that demonstrated the progress ofthe new Doro. We see strong demand for Care products in all our geographicalregions. The agreement with Carphone Warehouse and our progress in the US aresignificant signs of confidence in Doro's products and the company itself.” Net salesDoro's sales amounted to SEK 99.2 m (68.1) for the second quarter, an increaseof 45.7 percent. Net sales for the quarter include SEK 4.2 m following theamicable settlement of a dispute in Japan dating from 1999, which also affectsthe result. Excluding this non-recurring item and using the same exchange rateas for the previous year, organic growth would amount to 29.1 percent. Operating result (EBIT)The result before tax and financial items for the second quarter amounted tonegative SEK 3.5 m (negative: 3.6). The loss for the first half of 2009, inspite of favorable sales growth, is primarily explained by the expansion of theCare Electronics and provisions for non-core products. Cash flow, investments and financial positionThe cash flow from operations in the second quarter was positive in an amountof SEK 4.3 m (negative: 10.0). This sustained improvement is mainly due to thereduction of working capital. In order to comply with IFRS the current hedgecontracts have been valued among net financial items, affecting the resultnegatively by SEK 3.4 m. On June 30, 2009, Doro had a net debt of SEK 26.9 m (30.2). The company hadpre-agreed credit facilities of SEK 59.0 m. The equity/asset ratio was 16.3percent (25.1) at the end of the period. Business unitsAs of January 1, 2009, Home Electronics and Business Electronics were merged toform the Home Electronics business unit. Care ElectronicsCare Electronics supplies telecom and electronic products adapted to the needsof senior citizens. The business unit's sales in Q2 rose to SEK 55.8 m (27.4) agrowth of 104 percent, which represents 56.3 percent of Doro's total sales. Home ElectronicsHome Electronics offers domestic phones and other products for the modernfamily and also provides simple telecom solutions for enterprises by means ofanalog and VoIP technologies. Sales during the quarter amounted to SEK 43.4 m(40.7), an increase of 6.6 percent. RegionsDoro's largest markets are Continental Europe, with 48.2 percent of Groupsales, the Nordic region (36.2 percent) and the UK (13.7 percent). Doro alsooperates through distributors in other selected markets (1.9 percent). PersonnelAt the end of the period, the headcount was 61 (56). Of these, 27 are based inSweden, 18 in France, 6 in the United Kingdom, 4 in Norway and 6 in Hong Kong. Parent companyThe Parent company's net sales for the second quarter amounted to SEK 50.7 m(29.0). The profit before tax for the second quarter was SEK 8.0 m (negative: 1.5).Events after the close of the periodDoro has signed a European-wide retail agreement with The Carphone WarehouseGroup PLC for its range of easy-to-use mobile handsets. Doro Easy Mobiles willbe available in-store and online in nine European countries: the UK, theRepublic of Ireland, Sweden, Holland, Belgium, France, Germany, Spain andPortugal. Doro shareDoro is listed on the Nasdaq OMX Nordic Exchange Stockholm, Small Cap -Telecom/IT. OutlookThe positive sales trend in the first half of 2009, combined with the build-upof marketing and product investments, is now expected to generate a positiveprofit trend, with clear improvement of the full-year operating result (EBIT),compared to the previous year. The more precise revenue growth trend for thesecond half of 2009 will, amongst other factors, be dependent on some remainingtest milestones in the US, as well as sales development with European keycustomers. RisksRisks and instability factors are mainly related to supplier disruption,product adaptation and certifications, customer relations, exchange ratefluctuations and loan financing, which is more difficult following the generalcrisis in the banking sector. Apart from these risks and the instabilityfactors described on pages 22-23 and 40-42 of the 2008 Annual Report, no otherrisks of any significance were been identified during the most recent period. Accounting principlesThis interim report has been prepared on behalf of the Group according to IAS34, Interim Financial Reporting, and for the Parent Company in accordance withthe Annual Accounts Act and Swedish Financial Reporting Board RFR 2.2Accounting of legal entities. The accounting principles and calculation methods applied are consistent withthose that were applied when drawing up the previous year's accounts, with thefollowing exceptions due to new or revised standards and interpretationsadopted by the EU and which will be applied from January 2009. The changeaffecting the Group is the revised IAS 1 Presentation of Financial Statements.In addition, Doro's external reports on operating segments are, since lastyear, presented in the same way as its internal reports, thus Doro is incompliance with the new standard IFRS 8. IAS 1 Presentation of Financial StatementsThe effect of IAS 1 Presentation of Financial Statements is that IAS 1 dividesthe changes in equity as a result of transactions with owners and otherchanges. As a consequence a “Statement of comprehensive income” has been added. Financial calendarThe Board has set the following dates for the publication of Doro's interimreports: January - September 2009: November 4, 2009 - please note the new date,previously Nov 11! Year-end report 2009: February 18, 2010Interim ReportsThe interim reports are available at www.doro.com > Investors roomFor further information, please contact:President & CEO Jérôme Arnaud, +46 46 280 50 05CFO, Annette Borén, +46 46 280 50 62This has not been subjected to a review by the company's auditors.Lund, August 19, 2009The BoardDoro AB (publ) | Company registration number 556161-9429Doro AB (publ)Magistratsvägen 10SE-226 43 Lund, SwedenTel: +46 46 280 50 00 | www.doro.comThe Board and CEO confirm that this interim report provides a fair overview ofthe company's and Group's business, position and results and describes thesignificant risks and uncertainties faced by the company and the Groupcompanies. Bo Kastensson Peter BlomChairman of the Board Member of the BoardKarin Moberg Jonas MårtenssonMember of the Board Member of the BoardJérôme ArnaudPresident and CEO

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