Interim report January-March 2009
Continued steady growth of order intake and sales in Care Electronics Highlights during the first quarter 2009: • Net sales in Q1 increased to SEK 94.7 m (71.4), an increase of 32.6 percent. • Operating profit (EBIT) amounted to SEK 4.0 m (1.1), while the pre-tax profit amounted to SEK 0.1 m (0.6). • Earnings per share after tax: SEK 0.01 (0.03). • Cash flow for the first quarter was positive at SEK 8.0 m (negative: 17.4), mainly due to decrease in working capital and the positive operating result. • Order intake was SEK 99.4 m (58.1), an increase of 71.1 percent. • After the end of the period: Settlement reached in Japanese dispute, emanating from 1999. • Revenues are expected to show a continued favorable trend in second quarter compared to previous year. Comments by the CEO, Jérôme Arnaud: “Despite a clear weakening of the market for consumer electronics in late 2008 and beginning of 2009, Doro has demonstrated good resilience and continued to grow. In the first quarter of 2009, Group sales rose by more than 30 percent and the market appreciated our focus on Care Electronics products. The favorable order bookings we witnessed in the fourth quarter of 2008 has continued into the first quarter 2009, where the order intake was SEK 99.4 m, an increase of 71.1 percent compared to the same quarter in 2008. This is mainly explained by the continued increase in market share and the penetration of new markets by Care Electronics and the GSM phones launched in 2008. This was combined with resilient sales in Home Electronics. Doro's sales of GSM phones rose threefold in the first quarter of 2009, a sign of strength, particularly considering a recent study from Swedbank estimating an 18-percent sales decline in the overall market for GSM phones in that period. We are now continuing our efforts to reinforce our leading position in the market for simple mobile phones by introducing five new models to the market between mid-April and mid-June. These additions mean we now have the broadest, most modern and well-adapted range for seniors seeking a mobile phone that is attractive and easy to use. Regarding international expansion, product certifications for the US market are well in progress as well as negotiations with operators. In Home Electronics, which combines the former Home Electronics and Business Electronics operations, we are managing to resist to the market decline. We are growing more relevant to retail customers by offering the both residential phones and easy-to-use GSM devices. As a result, our operational result (EBITDA) has increased significantly up to SEK 5.4 m (5.7 percent of sales). This result allows us to invest more in brand building and sales in next quarters. Cash flow has clearly improved as a result of focused efforts to reduce working capital despite our growth. We have also reduced our net indebtedness since the close of 2008, from SEK 30.7 m to SEK 23.5 m. Doro's user-friendly products, developed specially for the senior target group, continue to win international awards. In the first quarter, five products within the Care Electronics product segment, including the HandleEasy 326gsm mobile phone, received the iF Gold Award, one of the world's foremost design prizes. We are convinced that our strategy of growth within Care Electronics will contribute to our ability to improve earnings. Our core markets - the Nordic region and continental Europe - show increasing demand, while the US market remains at an early phase. Finally, I am also pleased with the amicable settlement we reached in a Japanese dispute dating from 1999, which will have a positive cash impact of approximately SEK 4 m in the second quarter of 2009.” President & CEO Jérôme Arnaud, +46 46 280 50 05 CFO, Annette Borén, +46 46 280 50 62 About Doro With over 30 years' experience in telephony Doro is today characterized by innovative and user-friendly consumer electronics products. The company develops markets and sells a wide range of products in two business units: Care Electronics and Home Electronics. The company's products are sold in more than 30 countries worldwide through a variety of retail outlets, including electronics stores, online stores and specialized channels. The company had sales of SEK 363 million in 2008. Doro's shares are quoted on the Nasdaq OMX Nordic Exchange Stockholm, Small Cap. Read more about Doro at www.doro.com
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