Continued improvement for Doro:
Q3 report (1 Jul-30 Sep 2007)
• Jérôme Arnaud Doro's new CEO
• Dramatic improvement of profit after tax, SEK 0.9 million (-13 m)
• Sales amounted to SEK 81 million (104 m) after completed disposals
• Former loss-making areas showing positive results
• Strong growth for Business Electronics and Care, +50%
• More promising product launches over the period
• EPS after tax, SEK 0.05 (-0,74)
• Positive cash flow from current activities
Chairman of the Board, Bo Kastensson's comments;
“Doro is reporting a profit for the third quarter, which is a considerable
improvement compared to last year. The major losses in the Home business area
have turned around to a small profit. The initiative to develop the growth areas
of Care and Business electronics, in which conditions for profit growth are
good, can therefore be intensified.
The Board has today appointed Jérôme Arnaud as Doro's new CEO. Jérôme is
currently the MD of Doro France and responsible for the Care and Business
Electronics business areas for the group. Due to the change of CEO, Rune
Torbjörnsen will leave his position and other assignments within the Doro Group.
Torbjörnsen will assist the Board for a transitional period.
The reason for the change of CEO is that Doro has undergone major changes over
the past two years. The company is now entering a phase with a stabilised
business in the Home business area and excellent opportunities for growth in the
Care and Business Electronics business area.
Jérôme Arnaud's experience in these business areas makes him, according to the
Board, suitable to lead the company through this development phase. Jérôme
Arnaud was born in 1963, lives in France and has been MD of Doro's French
business since 2000.
Profit for the Group in Q3
Dramatic growth in the Care and Business Electronics business areas, with higher
margins has helped towards a significantly better result. The Home business
area also showed a profit for the quarter, partly due to continued cost
trimming. The lower US dollar has had a positive effect on results.
Sales amounted to SEK 81 million (104 m)
The disposal of the loss-making businesses in Australia and Poland has meant
lower sales than for the same period last year. Sales in comparable businesses
were in line with last year but with a greater share of sales in the business
areas with high margins.
Gross margin strengthened
The gross margin has been strengthened due to Doro's business areas having
improved gross margins, rising by 10 percentage points to around 27% of sales,
while products with low margins in home telephony have successively been
disposed of. Furthermore, stock control has improved, which has cut stock
depreciation.
Overheads have fallen
Overheads are 20% lower than for the same period in 2006 and have fallen partly
as a result of the loss-making businesses being disposed of and partly through
the rationalisation scheme.
Operating profit (EBIT) up SEK 10 million
In total, the operating profit for the period improved from a loss last year of
SEK 9 million to a profit this year of SEK 1 million.
The Group showed a positive operating profit of SEK 3.1 million (-30.0 m) for
the first nine months of the year.
Business areas
Doro is active in three business areas: Home, which is mainly home telephony and
represents 73% of this year's sales (83% last year), Care, which specialises in
telephony for the elderly, 12% (6%) and Business Electronics, mainly
specialising in business telephony, 15% (11%).
Home, which previously represented a major part of Doro's losses is continuing
to stabilise with successively improved profit margins. Doro began supplying the
new NeoBio range in September, with its innovative design.
Care is continuing to show signs of strong growth and is focusing on the growing
market with specially developed products for senior citizens. The business area
is currently investing in the renewed product portfolio and in developing new
distributors for a larger geographic coverage.
A new series of products will be launched in the second half of 2007, which will
include GSM telephones with functional design, to be delivered in Q4.
Business Electronics has continued its growth through better distribution of
existing products. New products will be launched in Q4 2007 and Q1 2008,
including IP telephony products, which are expected to further improve growth.
The Care and Business Electronics business areas now have a stronger
organisation and are showing a combined growth of 50% compared to the same
period last year.
Regions
Doro's biggest markets since the New Year are France (43% of sales), Nordic
Region (35%) and the UK (11%). During the quarter the UK has progressed
positively and Care especially is showing strong growth.
Outlook
Doro launched a number of new products in Q3. Lower costs, better gross margins
and a seasonally higher number of sales provide excellent opportunities for a
positive earnings trend.
Balance sheet and Cash flow
Cash flow from current activities has improved significantly and was SEK 2
million for the quarter.
Since the New Year, cash flow has been negatively hit due to structural costs,
which impacted on 2006's results but which were paid during the period and
amounted to SEK 21 million. Furthermore, the working capital for the same period
rose by around SEK 7 million.
Doro's net debt remains unchanged and available borrowings now total SEK 60
million, while the equity/assets ratio is 25%.
Parent company
The parent company's net sales for the first nine months of the year amounted to
SEK 17 million (16 m). The loss before tax amounted to SEK 24 million (-15 m).
Significant risks and instability factors
Doro's risks and instability factors are mainly related to supplier disruption,
customer relations and currency exchange rate fluctuations. Apart from these
risks and instability factors, which are described in the Annual Report on pages
21-22, no other risks of any significance have been identified during the last
period.
Doro's new CEO
Doro's Board decided at today's Board meeting to appoint a new CEO. Doro's new
CEO will be Jérôme Arnaud, who is currently MD of Doro France and the Care and
Business Electronics business area. He is a graduate engineer and before coming
to Doro worked with business development and marketing at Matra Nortel. He has
also worked in sales towards the South and Latin American markets and was
stationed for two years in Argentina.
Future reports
The Board has decided that the financial statement for 2007 will be released on
12 February 2008.
Quarterly reports are available on the internet at: www.doro.com.
This quarterly report has been drawn up in accordance with the same accounting
principles as the last Annual Report and has not been subject to a review by the
company's auditors.
For more information
For further information, please contact:
Chairman of the Board
Bo Kastensson Tel: +46 (0)46 280 50 03
CFO Stefan Sjölin, Tel: +46 (0)46 280 50 62
Lund, 24 October 2007
The Board, Doro AB (publ)
Co. Reg. No 556161-9429
Doro is listed on the OMX Nordic Exchange Stockholm - Mindre Bolag - Telekom/IT
Magistratsvägen 10
SE-226 43 Lund, Sweden
Telephone: +46 46 280 50 60
www.doro.com
About Doro
With over 30 years' experience in telephony Doro is today characterised by
innovative and user-friendly consumer electronics products. The company develops
markets and sells a wide range of products in three business units: Home
Electronics, Business Electronics and Care 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 specialised channels.
The company had sales of SEK 433 million in 2006. Doro's shares are quoted on
the Stockholm Stock Exchange, Nordic list, Small companies. Read more about Doro
at www.doro.com
