Press release
Malmö, February 14 2019
Year-end Report, January-December 2018
Improved profitability and cash flow
October – December 2018
- Net sales were SEK 554.1 million (560.4), a decrease of 1.1 percent.
- Net sales for the category Products were SEK 467.9 million (509.1), a decrease of 8.1 percent. Net sales for the category Services were SEK 86.2 million (51.3), an increase of 68.0 percent.
- The gross margin increased to 32.6% (31.0). For Products, the gross margin increased to 29.4 percent (29.3) and for Services the gross margin increased to 49.8 percent (49.4).
- Operating profit (EBIT) was SEK 38.0 million (34.1), which corresponds to an operating margin of 6.9 percent (6.1).
- Profit after tax for the period was SEK 25.6 million (22.5).
- Earnings per share were SEK 1.08 (0.95).
- Free cash flow before acquisitions was SEK 36.1 million (17.8)..
January – December 2018
- Net sales were SEK 1,906.4 million (1,924.0), a decrease of 0.9 percent.
- Net sales for the category Products were SEK 1,621.0 million (1,731.3), a decrease of 6.4 percent. Net sales for the category Services were SEK 285.4 million (192.7), an increase of 48.1 percent.
- The gross margin increased to 33.4% (30.3%). For Products, the gross margin increased to 31.0 percent (29.0) and for Services the gross margin increased to 47.4 percent (41.7).
- Operating profit (EBIT) was SEK 122.3 million (92.0), which corresponds to an operating margin of 6.4 percent (4.8). The operating profit includes restructuring costs of SEK 4.3 million (3.5).
- Profit after tax for the period was SEK 91.5 million (66.5).
- Earnings per share were SEK 3.86 (2.83).
- Free cash flow before acquisitions was SEK 122.5 million (49.3).
Message from the CEO
In 2018, we continued to develop our business towards offering the market service-oriented care solutions. During the year we have created a solid foundation to build on, a foundation that will now enable continued growth in prioritized segments. The organisation, which is now divided into private and public customers, now has better opportunities for creating offers that are tailored to the needs of each target group.
Services continued to show strong growth during the quarter and represents an ever-increasing share of sales. The positive development is primarily driven by increasing sales in the public sector in Sweden, Norway and the United Kingdom. The British telecare company Welbeing is now our base for the service business in the United Kingdom and the company has generated several new contracts during the period, including a new agreement that brought us 3,200 new connections.
It is primarily in the service segment that we are seeing interesting growth opportunities, for both consumers and the public sector, something that is also supported by market trends, with an increasingly ageing population. Moving forward, we wish to develop and broaden what we offer to both existing and new geographical markets.
In Sweden, we have conducted a first launch of the consumer service Response by Doro in a few selected stores. The service, which links our mobile phones with alarm centres and family members, is a new technology enabled care service, which we launch in more channels during the first half of 2019.
In our Products category, Doro is maintaining its market share in our key markets. Generally, the market in Europe is challenging. The USA stands out positively by generating growth figures, largely due to the fact that our feature phone adapted for 4G, 7050, was well received.
Our strategic initiatives to optimise operations have continued. During the period, warehousing in the Nordics and France was moved to our new central warehouse facility in the Czech Republic. Warehouse consolidation is continuing during the first quarter of this year. We have also implemented a new business system in much of the group, which creates the foundation for improving efficiency throughout the entire chain.
In conclusion, 2018 was a year in which we improved our operating profit (+33 percent), our free cash flow (+148 percent) and earnings per share (+37 percent), largely due to growth and investment in the public service sector. Naturally we are proud of this, but we have more work to do to achieve our long-term financial goals. We shall now continue to develop what we have started. By being responsive to developments in the market and the needs of our target group, we look forward to an exciting 2019.
Outlook
The overall market for mobile phones is expected to remain challenging, Doro has maintained and is expected to maintain or increase market share in the senior segment.
Services is growing organically and we are active in multiple acquisition discussions and we expect continued double-digit growth for Services in 2019.
The profitability is expected to remain at a healthy level.
For further information, please contact:
Robert Puskaric, President and CEO, +46 (0)70 519 34 07
Carl-Johan Zetterberg Boudrie, CFO, +46 (0)70 335 84 49
Doro’s report is presented via an audiocast
Analysts, investors and the media are welcome to join the presentation via https://edge.media-server.com/m6/p/tae6csa5 or telephone at 09.00 CET on 14 February 2019. Doro’s President and CEO Robert Puskaric and CFO Carl-Johan Zetterberg Boudrie will give the presentation and answer questions. Approximately one hour after the presentation has ended, an on-demand version will also be made available on the website https://corporate.doro.com/investors/reports-and-presentations/presentations/
Telephone numbers
Sweden: + 46 (0) 8 505 564 74
France: + 33 (0) 1 7075 0712
United Kingdom: + 44 (0) 203 364 5374
USA: + 1 855 7532 230
About Doro
Doro develops telecom products and services for seniors to lead full and rich lives: to do things they want to do more easily as well as the things they thought they might never do. The global market-leader in senior mobile phone, Doro offers easy-to-use mobile phones and smartphones, mobile applications, fixed line telephony with loud and clear sound. Within Doro Group, Doro Care offers social care and telecare solutions for elder and disabled persons for independent and safe living in their own homes. Doro AB is a Swedish public company and its shares are quoted on the Nasdaq OMX Stockholm exchange, Nordic List, Small Companies. Net sales of SEK 1,906 million (EUR 186 million) were reported for 2018. www.doro.com
This information is information that Doro AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on February 14 2019, at 08.00 CET.
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