Interim report January-March 2015

Lund, 2015-04-27 13:30 CEST (GLOBE NEWSWIRE) --  

Sharp increase in demand for full product range and across all regions
Quarterly loss due to insufficient currency hedge

January – March 2015
• Net sales amounted to SEK 340.1m (233.0), an increase of 46.0 percent.
• Net sales growth excluding Caretech was 34.5 percent.
• Order intake amounted to SEK 423.3 (238.0), an increase of 77.9 percent.
• Growth in order intake excluding Caretech was 66.4 percent.
• Order stock at the end of the period amounted to SEK 140.3 m (66.3) excluding Caretech, an increase of 111.6 percent.
• Operating profit (EBIT) was SEK -22.5m (3.6).
• Full currency impact on EBIT is SEK -27.1m, of which main part is non-recurring and due to insufficient hedging.
• Profit after tax for the period amounted to SEK -21.7m (2.0).
• Earnings per share after tax amounted to SEK -0.99 (0.10).
• Cash flow from current activities amounted to SEK -44.6m (-28.8).

CEO comment
In the first quarter we saw a remarkable increase in demand for a broad range of our products, as well as in our acquisition Caretech. Our expanded smartphone range for seniors has been well established with the larger operators and partners across most of our markets. This is visible in both sales and order intake.

I am perhaps most positively surprised about the swift return of high growth in our high margin Nordic region where sales increased by 2.4 times compared to the same quarter last year. This growth was triggered by our smart phones ramp-up.

Sales in EMEA also increased sharply or by 78.1 percent, and sales in the UK increased by 35.5 percent – growth rates that confirm the solid demand for our products and our new design, strengthening the growth trend of our niche senior phones market. Sales in US & Canada declined compared to the same quarter last year, but the order intake was up 60.5 percent compared to previous year. Sales have been negatively affected by phasing between different phone models.

I am sorry to report a currency loss due to insufficient hedging during a period of sharp and rapid appreciation of the USD, which of course reduces our short term earnings. The total negative currency impact on the first quarter result was SEK 27.1m, as explained in the “Currency impact” section on page 3. We have reviewed our currency hedging routines and consider the main part of the loss as of non-recurring character.

Going forward, and in view of the continued strong USD, we do continue to take measures for reviewed pricing and product costs as well as operating expenses. Our organization has achieved a critical size for continued growth. Consequent positive effects on our profit margins will be seen primarily in the second half of 2015.

Our accelerated expansion with larger operators and partners in Europe means that also our working capital grows. This has affected cash flow in the quarter. We expect cash flow generation to improve gradually.

Caretech, which was consolidated in February, has developed according to plan and is a key part of our strategy for the coming years. A synergy program is in place and our next focus will be on developing the care service offering in order to expand our recurring subscription based revenues.

The transition from analogue to digital social alarm technology is of high priority among our customers and creates business opportunities for us through the development and launch of new services. Caretech can benefit from the Doro organization and we see that synergies can be extracted in several markets. It is a unique combination addressing the international telecare market – a market which we see as an important platform for growth for the coming years.

We reiterate our previously communicated outlook for the year: 2015 sales and profit for the group are expected to increase with the main part generated in the second half of the year.

Jérôme Arnaud, President & CEO

For further information, please contact:
Jérôme Arnaud, President and CEO, +46 (0)46 280 50 05
Christian Lindholm, CFO, +46 (0) 46 280 50 06

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 Monday, April 27, 2015, at 13:30 CET.

About Doro
Doro AB is a Swedish public company formed in 1974.  It released its pioneering ‘easy-to-use’ mobile phone in 2007 and today is the global market-leader within the category. Doro products and solutions are available in more than thirty countries spanning five continents. These include; mobile phones and smart devices, applications and software, fixed line telephony, telecare and mobile health solutions.  Doro removes barriers to adoption of new technologies and holds numerous international awards in recognition of its product designs and innovations.  Doro shares are quoted on the Nasdaq OMX Stockholm exchange, Nordic List, Small Companies. Net sales of SEK 1,277 million (EUR 135 million) were reported for 2014. www.doro.com



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

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