Year-end Report January-December 2011

Record-high quarterly sales and operating profit

Lund, Sweden, 2012-02-15 07:30 CET (GLOBE NEWSWIRE) --

Highlights of the fourth quarter of 2011:

  • Net sales rose to SEK 263.5 m (229.1), an increase of 15 percent
  • Operating profit (EBIT) rose to SEK 30.0 m (26.4), an increase of 13.6 percent.
  • The operating margin was 11.4 percent (11.5).
  • Profit for the period amounted to SEK 19.2 m (34.1)
  • Earnings per share after paid tax amounted to SEK 1.67 (1.65) while
  • Cash flow from current activities totalled SEK 65.9 m (103.3).
  • Order bookings amounted to SEK 194.6 m (164.9), an increase of 18.0 percent.
  • For the Care product range, order bookings increased by 25.3 percent.
  • Increased presence in North America, the UK and Ireland.

 Highlights of the 2011 full year:

  • Net sales rose to SEK 745.4 m (632.8) – an increase of 17.8 percent.
  • Operating profit (EBIT) rose to SEK 62.0 m (47.0), an increase of 31.9 percent.
  • The operating margin improved to 8.3 percent (7.4).
  • Profit for the year amounted to SEK 57.9 m (57.1).
  • Earnings per share after paid tax amounted to SEK 3.62 (2.04) while
  • Cash flow from current activities totalled SEK 104.9 m (80.4).
  • The Board of Directors proposes a dividend of SEK 1.00 per share.
  • Close to a million mobile phones sold in 2011.
  • The global distribution network was further extended with 12 new retailers/operators, strengthening Doro's presence mainly in North America, the UK and Ireland.
  • Doro’s protection of intellectual property was confirmed through three court rulings.
  • In order to strengthen Doro’s position in mHealth and Android-based applications Prylos SAS and Birdy Technology SAS were acquired. The acquisitions have had a marginal effect on Doro’s sales and earnings in 2011.

CEO Jérôme Arnaud: An active 2011 ends with a quarter of continued growth

“Doro’s growth has returned to double digits; 15 percent, in the fourth quarter. Growth is mainly being driven by the US and the Nordic region, but also by EMEA, where our new models have been successful. In total, Doro’s sales of mobile phones grew by
almost 40 percent.

All regions grew, delivering a positive EBIT margin and we can report improved EBIT for the 12th consecutive quarter. The positive trend can also be traced in our continued strong order bookings, which rose by 18 percent over the quarter.

In the fourth quarter we extended our global presence. Areas in which we made particular progress include the US, where our American partner signed a distribution agreement with pharmacy chain Walgreens. It now sells Doro phones in more than 800 stores across Florida. In the UK and Ireland, we signed an agreement with O2, which is part of Telefonica, one of the world’s largest operators. In total during the year, we signed 12 new agreements with leading operators and retailers on four continents. As a result, we increased our sales significantly, reinforcing our leading position. Our market share in Western Europe is now twice that of our closest competitor, and worldwide we sold nearly a million mobile phones in 2011.

Over the year, we launched seven new mobile phones, some of which were based on 3G technology, 60 software programs and nine fixed-line phones.

At the Mobile World Congress in Barcelona in February, we will showcase Doro Experience – an Android-based solution with applications that, together with our new smartphone, the Doro PhoneEasy® 740, can connect users with friends and relatives. Prylos, which we acquired during summer, has been instrumental in this development. This innovation enlarges our accessible market among seniors.
Three court rulings in Doro’s favor regarding the protection of our intellectual property rights confirm that Doro has established a certain entry barrier for competitors.

In 2011, we raised the pace of our product investment. Looking ahead into 2012, we will further increase such investments to feed our growth, to make our offering evolve to-gether with more tech savvy seniors, and to aid our expansion into the mHealth sector. Our strong financial position gives us favorable conditions to develop this strategy through organic development and/or acquisitions.”

The Group, Fourth quarter 2011

Net sales and operating profit
Doro’s net sales for the fourth quarter amounted to SEK 263.5 m (229.1), an increase of 15 percent compared with the strong fourth quarter of 2011. Growth for the quarter was primarily driven by the US, but also by the Nordic and EMEA regions, which are still being impacted negatively by the phasing out of certain Home products. However, these regions are also benefiting from successful launches of new phones with cameras and 3G technology.

Despite the phasing out of Home products, accumulated growth was almost 18 percent.

Using the same exchange rates as for the previous year, growth amounted to 16 percent for the fourth quarter.

EBIT amounted to SEK 30.0 m (26.4), an increase of 13.6 percent. The EBITmargin amounted to 11.4 percent (11.5) despite increased investments in new markets, products and applications. The improved EBIT is mainly attributable to the increased sales volume, as well as to the higher gross margin compared with last year. The gross margin may vary depending on the geographical distribution of sales and on the product mix. The improvement in the quarter is however also attributable to factors as more efficient purchasing procedures and new unique products.

Geographic regions

Nordic region
Sales in our largest region, the Nordic region, rose by 21.6 percent compared with the fourth quarter of 2010 to SEK 88.8 m, which was primarily a result of the updated prod-uct range. EBIT margin is somewhat lower due to group cost allocations and cost for marketing activities.

Accumulated, sales rose by 13.8 percent. The Nordic region still reports the highest EBIT margin.

EMEA (Europe, the Middle East and Africa)
In the EMEA region, sales rose by 13.8 percent compared with the year-earlier quarter to SEK 110.8 m. The EBIT margin also improved considerably. The improvements are attributable to an updated range and a strong trend primarily in Germany.
The increased sales for the quarter offset the phasing out of Home products that took place over the year.

Accumulated, the decrease in sales could therefore be limited to 1.3 percent. The EBIT margin for the full-year was also better.

United Kingdom
In the UK, sales for the fourth quarter rose by 3.6 percent to SEK 34.8 m with a somewhat lower EBIT margin for the quarter as well as for accumulated as a consequence of continued investment to develop the UK market.

Accumulated, sales growth remained strong, rising 37.1 percent.
US and Canada
Compared with the corresponding quarter in 2010, operations in the US and Canada
reported an increase in sales of 20.2 percent to SEK 26.8 m, driven primarily by the US. Due to the increased volumes, the EBIT margin improved significantly for the quarter as well as accumulated, reaching a level close to that in the Nordic region.

Accumulated, sales rose by 160 percent, driven mainly by Canada.

Other regions
For the quarter, other regions account for only SEK 2.3 m (2.8) with a positive EBIT margin.

The operating margin for the different regions may vary from quarter to quarter since the allocation of overhead costs is based on sales.

Profit/loss for the period
Profit for the fourth quarter amounted to SEK 19.2 m (34.1).
Net financial items for the period were SEK 3.5 m lower than in the year-earlier period. This is primarily due to the fact that Doro’s forward rate agreements have, in accordance with IFRS, been assessed under financial items, affecting net financial items positively by SEK 2.8 m (6.7).

The tax expense, which rose by SEK 15.0 m to SEK 13.9 m (income 1.1) is attributable to deferred tax assets being offset against profit for the year. The deferred tax assets were thus reduced by SEK 13.1 m, affecting profit but not cash flow. In addition, the tax expense in France increased as a consequence of improved earnings.

Cash flow, investments and financial position
Cash flow from current activities in the quarter totaled SEK 65.9 m (103.3). The lower level, compared with the corresponding quarter in 2010, when the delayed VAT receivable of SEK 23.8 m was recovered, is otherwise primarily attributable to the larger

For the full-year, cash flow from current activities amounted to SEK 104.9 m (80.4), giving a cash conversion rate of 169 percent.

Consolidated net cash flow, which over the year amounted to SEK 56.5 m, has been
impacted by dividends totaling SEK 9.6 m, company acquisitions for SEK 19.6 m and investments of SEK 21.2 m. Investments are attributable to capitalized investments that are primarily attributable to product development since investments in IT have decreased.
The equity/assets ratio was 39.5 percent (36.0) at the close of the period

At the end of the period, Doro had interest bearing liabilities of SEK 2.4 m (0) with a net cash balance of SEK 146 m (89.5). The company also has unutilized overdraft facilities of SEK 32.0 m.

At the end of the year, the headcount was 77 (60). Of these, 33 (29) are based in Sweden, 26 (16) in France, 8 (5) in the UK, 3 (4) in Norway and 7 (6) in Hong Kong. Most headcount increase is a consequence of our acquisitions.

Parent Company
The Parent Company’s net sales for the year’s fourth quarter amounted to SEK 255.6 m (223.7). The profit before tax amounted to SEK 23.7 m (31.2).

Events after the close of the period
After having been awarded a Mobile d’Or in December, Doro’s easy-to-use mobile phone, the Doro PhoneEasy® 615 has in January received the Janus de la Santé Award.
On January 17, the Landgericht Hamburg court in Germany upheld the previous pre-liminary ruling of September 7, 2011. In that ruling, Doro’s competitor, Emporia Deutschland, was forbidden, subject to a considerable fine, from holding, selling, using, importing or exporting a clamshell mobile phone model with a certain appearance and marketed under the Telme brand.

Doro’s sales growth is expected to continue. Investments in new product development will increase in 2012. No profit forecast is given at this point of time.
Doro share
Doro’s shares are quoted on the Nasdaq OMX Nordic Exchange Stockholm, Small Cap – Telecom/IT list.

As per December 31, 2011, Doro’s market capitalization was SEK 528.2 m, which can be compared with SEK 596.2 m on December 31, 2010. During the period September 30 to December 31, 2011, the share price rose from SEK 23.00 to SEK 27.30.

At the end of the period, Doro had interest bearing liabilities of SEK 2.4 m (0) with a net cash balance of SEK 146 m (89.5). The company also has unutilized overdraft facilities of SEK 32.0 m.

As per December 31, 2011, there were 6,114 shareholders (5,900).

Related-party transactions
No transactions took place between Doro and related parties that had a material impact on the Company’s financial position and results.

Risks and instability factors are mainly related to supplier disruption, product adaptation and certification, customer relations, exchange rate fluctuations and loan financing. Apart from these risks and the instability factors described on page 24 and 53–55 of the 2010 Annual Report, no other risks of any significance have been identified during the most recent period.

Accounting principles
This Interim Report has been prepared on behalf of the Group according to IAS 34, Interim Financial Reporting, and for the Parent Company in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board’s recommendation RFR 2 Ac-counting of legal entities. The accounting principles and calculation methods applied are consistent with those that were applied when drawing up the previous year’s accounts.

Annual General Meeting
The AGM will be held on March 21, 15:00 at the Scandic Anglais hotel, Humlegårds-gatan 23, 102 44 Stockholm, Sweden. The notice to attend the AGM will be available on www.doro.com, where it will also be possible for shareholders to register their intention to attend.

Nomination Committee
The Nomination Committee consists of Tedde Jeansson who is elected Chairman of the Nomination Committee, Arne Bernroth and Bo Kastensson (Chairman of Doro AB).

Financial calendar 2012
The Board has set the following dates for the publication of Doro’s Interim Reports:
January-March 2012: May 11, 2012
January-June 2012: August 21, 2012
January – September 2012: November 8, 2012
Interim Reports
The Interim Reports are available at www.doro.com under Corporate and Press

For full report, please view the enclosed pdf file.

For further information, please contact:
President & CEO, Jérôme Arnaud, +46 (0)46 280 50 05
Vice President & CFO, Annette Borén, +46 (0)70 630 00 09

Doro’s interim report to be presented via webcast and telephone conference
Analysts, investors and the media are welcome to attend a presentation via www.doro.com or by telephone from 09:00 a.m. CET on February 15, 2012. Doro’s President and CEO Jérôme Arnaud and CFO Annette Borén will participate.

Approximately 1 hour before the start of the presentation, the presentation materials will be made available on the Company’s website.

Please call about five minutes before the advertised starting time to access the telephone conference.

Call-in details:
UK: +44 (0)20 3043 2436,
SE: +46 (0)8 505 598 53,
US: +1 866 458 40 87
France: +33 (0) 172 72 0115

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 Wednesday, February 15, 2012, at 07:30 a.m. CET

About Doro
Doro, the leader in the telecom care market, is a Swedish public company. With over 37 years of experience in the telecom industry, the company focuses on developing, marketing and selling products, software, TeleCare and mHealth solutions specially adapted to the growing worldwide population of seniors. Doro’s range of easy-to-use mobile phones is unmatched and its unique know-how has been recognized through several international design awards. The company’s products are sold in more than 30 countries on five continents. In FY 2010 revenue totalled SEK 633 m. Doro’s shares are quoted on the Nasdaq OMX Stockholm exchange, Nordic list, Small companies. Read more about Doro at www.doro.com or at facebook.com/DoroSverige.



Doro AB
Jörgen Kocksgatan 1 B
211 20  Malmö
Phone 0046 46 280 50 00

Corporate identification number

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