Sweden, Lund, 2016-10-28 08:00 CEST (GLOBE NEWSWIRE) -- July – September 2016
- Net sales amounted to SEK 473.2m (444.9), an increase of 6.4 percent.
- Operating profit (EBIT), including restructuring costs of SEK 4.3m, was SEK 13.9m (29.7), corresponding to an operating margin of 2.9 percent (6.7).
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Order intake amounted to SEK 547.8m (566.3), a decrease
of 3.3 percent. - Order book at the end of the period amounted to SEK 310.9m (294.2).
- Profit after tax for the period amounted to SEK 12.6m (22.0).
- Earnings per share after tax amounted to SEK 0.54 (0.95).
- Cash flow from current activities amounted to SEK 36.5m (32.9).
CEO comment
Fundamentals have improved since we issued a profit warning and lowered our full-year outlook in early July, though we show a modest growth rate this quarter. As sales since end of last year have been negatively affected by the situation in Doro Care, it is satisfying to see that our phone business continues to perform. This quarter we saw particularly good sales in the DACH region and in our feature phone offering. We continue developing and harvesting the senior phone market, a niche that has been resilient when the mobile device market globally has been under pressure during the year.
The production and logistics issues hampering our higher-end feature phones and smart phones have been solved during the quarter. Our simple 4G mobile Doro 8030, a follow up to our more advanced 4G mobile Doro 825, is now getting further listings after the initial hardware supply delays we experienced in the second quarter. The delayed launch of Doro 8030 has negatively affected our smartphone sales in the quarter, which by the end of the third quarter represented 18.5 percent of our total mobile sales (down from 21 percent by the end of the second quarter). The IFA fair in Berlin generated many interesting new contracts and projects.
Doro Care has not met our expectations this year and as explained previously the standstill due to the appealed framework agreement with SKL (Sveriges Kommuner och Landsting) continued to affect the third quarter. However, since mid-October, the situation has improved as the judgment by the Administrative Court (Förvaltningsrätten) was in our favour. As one of three approved suppliers Doro Care has now signed a new contract with the procurement office of SKL (SKI Kommentus Inköpscentral AB).
We now expect sales for social alarm devices and services to start materializing during the fourth quarter and mainly during 2017. Our own estimate is that, in a normal market environment, the overall market for digital care phone subscriptions in Sweden during the stand-still period would have been in the range of 20,000 – 30,000. In the period January-September 2015 Doro Care added 20,000 subscribers, while during the same period this year, the number of new subscribers was 5,000. Forward looking 12 months recurring revenues by the end of the third quarter reached SEK 132m, which can be compared to SEK 71m reported at year-end 2015 (SEK 89m excluding Trygghetssentralen).
In the past quarter we decided to integrate Doro Care under the Doro Group management and we are already seeing that it is working better.
We continue to address profitability. Rationalizations in our product portfolio have had a negative impact of SEK 6.5m on EBIT in the quarter due to accelerated depreciation mainly. Organizational changes have resulted in restructuring costs in the third quarter of SEK 4.3m. Better sales mix, improved production efficiency and incorporation of Trygghetssentralen have contributed to the improved gross margin compared to last quarter and last year, however operating costs have increased and need close monitoring and further actions going forward.
We are now in the important fourth quarter, Christmas sales have a significant effect on our full-year sales and profitability. The situation has started to brighten, but most improvements have impact on a longer term, therefore 2016 will be a lost year for Doro Care in terms of profitability. We reiterate our amended full-year outlook that we presented in July. We expect profit for the group to be somewhat below 2015 while sales can still be expected to be higher than previous year.
Jérôme Arnaud, President & CEO
For further information, please contact:
Jérôme Arnaud, President and CEO, +46 (0)46 280 50 05
Magnus Eriksson, CFO, +46 (0)46 280 50 06
Doro’s report to be presented via audiocast
Analysts, investors and the media are welcome to attend a presentation via http://edge.media-server.com/m/p/kgh4i2a5 or by telephone at 09:00 CET on October 28, 2016. Doro’s President and CEO Jérôme Arnaud and Doro’s CFO Magnus Eriksson will hold the presentation and answer questions. Before the start of the presentation, the material will be made available at http://corporate.doro.com/blog/hp-doro-webcast.
Call-in details
Sweden: + 46 (0) 8 505 564 74
France: + 33 (0) 170 750 712
United Kingdom: + 44 (0) 203 364 5374
United States: + 1 855 7532 230
About Doro
Doro develops telecom products and services for Seniors to lead full and rich lives: to do things they want to do more easily as well as the things they thought they might never do. The global market-leader in senior mobile phone, Doro offers easy-to-use mobile phones and smartphones, mobile applications, fixed line telephony with loud and clear sound. Within Doro Group, Doro Care offers social care and telecare solutions for elder and disabled persons for independent and safe living in their own homes. Doro AB is a Swedish public company and its shares are quoted on the Nasdaq OMX Stockholm exchange, Nordic List, Small Companies. Total revenue of SEK 1,838 million (EUR 200 million) was reported for 2015. www.doro.com
This information is information that Doro AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication at 08:00 CET on 28 October 2016.
