Interim report January-June 2010
Interim Report January - June 2010 Press release, August 19, 2010 Total second quarter order intake up 56 percent Care Electronics' second quarter sales up 76 percent Highlights of the second quarter of 2010: Net sales for the second quarter rose to SEK 130.8 m (99.2), an increase of 32 percent.The Care Electronics business unit's generated sales of SEK 98.1 m, accounting for 75 percent of consolidated sales for the second quarter. Operating profit (EBIT) amounted to SEK 3.0 m (negative 3.5), while pre-tax profit increased to SEK 8.3 m (negative 4.8). Earnings per share after tax were SEK 0.38 (negative 0.27). Cash flow from current activities was SEK 2.2 m (4.3). Order intake amounted to SEK 151.7 m (97.1), an increase of 56 percent. Doro® signed a two year financing agreement totaling SEK 170 m, with a new bank, replacing the existing six month credit facility as of July 1, 2010. In the second quarter, Doro signed an agreement with Claro Chile, owned by Latin America's leading mobile operator, and broadened its offering to the UK market through Orange. After the end of the period, Doro commenced sales through Vodafone in Germany, reaching up to 1,800 stores, and signed a significant retail agreement with France's second-largest mobile operator, SFR - Vodafone's partner in the French market. In addition Doro has extended its current partnership with 20:20 Mobile. Comments by the CEO, Jérôme Arnaud: “With order intake growing by 56 percent and sales increasing by 32 percent in the second quarter and by 21 percent in the first six months of 2010, Doro® confirmed its growth strategy. For the sixth consecutive quarter, we were also able to report an improved operating margin compared with the year-earlier period. Sales generated within the Care Electronics business unit rose 76 percent, from SEK 55.8 m in the second quarter 2009 to SEK 98.1 m. Care Electronics also accounted for 75 percent of the Group's total sales for the quarter. The business unit's order intake was up 121 percent the second quarter. This trend reflects the strong sales increases generated through established partnerships in Europe and an increasing share of new customers in the markets we have entered more recently, such as the US, Latin America and the Asia Pacific region. These newer markets represented 8 percent of Group sales in the second quarter, compared with 3 percent in the first quarter of 2010. We have continued to be successful in signing partnerships with leading operators. In April, Claro began to distribute our products in Latin America and in June, Orange UK commenced sales of Doro PhoneEasy® 410gsm in matt-black. During the summer we announced new and extended partnerships with top-class telecom operators, such as Vodafone in Germany and Ireland, as well as SFR in France. The fact that operators extend their cooperation with Doro into additional countries is a strong indication of their satisfaction. We also extended the agreement with 20:20 Mobile to include Italy, Turkey, the UK and expanding eastern European markets. The Doro range was recently extended through the launch of the Doro PhoneEasy® 332gsm, a mobile phone offering excellent sound quality in a modern design appealing to a broader audience, while remaining very easy to use, with preprogrammable buttons and a direct access to sms functions. As a growth company, we invest continuously in developing existing and new partnerships and markets, as well as new products. The company is also progressively enhancing the level of brand recognition to support the Group's expansion. EBIT for the second quarter of 2010 amounted to SEK 3.0 m (negative 3.5). The improvement was in fact SEK 10.7 m, adjusted for a non-recurring income item of SEK 4.2 m, attributable to the settlement of a Japanese dispute in the second quarter of 2009. The operating margin for the second quarter 2010 was 2.3 percent, and is still burdened by substantial investments in products and geographical expansion in Care Electronics. As we are seeing continued favorable momentum in most of our markets, I expect investments to generate a return already during the current year. I am also happy that Home Electronics reported a profit for the second consecutive quarter and continues to focus on a smaller range of products. These are marketed through carefully selected distributors to optimize the business unit's profitability. Doro's stable financial position remains and was further confirmed by the two year financing agreement totaling SEK 170 m with a new bank, replacing the existing six month credit facility of July 1, 2010.” Net sales Doro's sales amounted to SEK 130.8 m (99.2) for the second quarter, an increase of 31.9 percent. Using the same exchange rates as for the previous year, organic growth amounted to 43.0 percent (29.1). Operating result (EBIT) The Group's second quarter 2010 profit before tax and financial items amounted to SEK 3.0 m (negative 3.5). EBIT was improved by SEK 10.7 m when adjusted for a non-recurring income item of SEK 4.2 m, attributable to the settlement of a Japanese dispute reported in the second quarter 2009. Cash flow, investments and financial position The cash flow from current activities in the second quarter was SEK 2.2 m (4.3) following a build-up of working capital in line with expanded volumes as well as a result of a delayed VAT recovery of SEK 14.4 m, following the new legal set-up effective as of 1 January, 2010. In order to comply with IFRS, the current hedge contracts have been valued among net financial items, affecting the net result for the period positively by SEK 5.8 m. At end of June, 2010, Doro was net debt free, with a net cash of SEK 19.3 m, to be compared with a net debt of SEK 26.9 m for the same quarter the previous year, 2009. In addition, the company has unused check facilities of SEK 42 m. The equity/asset ratio further improved to 33.0 percent (16.3) by the end of the period. Business units Care Electronics Care Electronics supplies telecom and electronic products adapted to the needs of senior citizens. Sales in the second quarter increased to SEK 98.1 m (55.8), an increase of 75.8 percent. Care Electronics represented 75.0 percent of Doro's total sales for the period. Home Electronics Home Electronics offers domestic telephones and other products for the modern family. Sales during the quarter amounted to SEK 32.7 m (43.4), a decrease of 24.7 percent, as a result of Doro's strategy to set a more focused range, which have lead to discontinued sales with certain customers. Regions Effective from January 1, 2010, Doro has reorganized its markets into Nordic, EMEA (Europe, Middle East and Africa), UK, US & Canada, CALA (Central and Latin America) and AP (Asia Pacific). Of the Group's total sales, Nordic represented 35 percent, EMEA 51 percent, UK 9 percent, and the other markets 5 percent. Personnel At the end of the quarter, the headcount was 59 (61). Of these, 27 (27) are based in Sweden, 17 (18) in France, 5 (6) in the United Kingdom, 4 (4) in Norway and 6 (6) in Hong Kong. Parent Company The Parent Company's net sales for the year's second quarter amounted to SEK 130.8 m (50.7). The profit before tax amounted to SEK 13.9 m (8.0). Events after the close of the period In August, Doro extended its cooperation with 20:20 Mobile, Europe's leading distributor of mobile phones and accessories, by signing a significant international distribution deal. 20:20 Mobile will be distributing Doro's award-winning range of easy-to-use mobile phones into UK, Italy, Turkey and Eastern Europein addition to the current markets of Ireland, France, Nordics, Spain and the UAE. As of August, two of Doro's most popular models are being sold through the Vodafone network in Germany. Vodafone is one of the largest mobile operators in the world and provide service to approximately 35 million German customers. Doro also signed a significant retail agreement with France's second-largest mobile operator, SFR - Vodafone's French market partner. SFR will offer the top-selling mobile, the Doro PhoneEasy® 410gsm through 820 “espace SFR” stores across France and via the operator's online store. Doro share Doro is listed on the Nasdaq OMX Stockholm, Nordic list, Small Cap - Telecom/IT. Outlook Doro's second quarter revenues and order intake are in line with the company's plans, confirming the previous full-year forecast of continued growth in sales and operating profit (EBIT). Full report is enclosed. Doro AB discloses the information provided herein pursuant to the Securities Markets Act and/or the Financial Instruments Trading Act. The information was submitted for public release on Thursday, August 19, 2010, at 07:30 a.m. CET. Doro AB | Corporate reg. no. 556161-9429 About Doro Doro is a Swedish company focusing on the development, marketing and sales of telecom products specially adapted to the growing worldwide population of seniors. With over 35 years of experience in telecommunications, and sales in more than 30 countries on 5 continents, Doro is the world's leading brand for easy-to-use mobile phones. Doro created the Care Electronics category and in recent years and the products have received several highly distinguished international design awards. The company had sales of SEK 493 m in 2009. Doro's shares are quoted on the Nasdaq OMX Stockholm, Nordic list, Small companies. Read more about Doro at www.doro.com.
|