Lund, February 15, 2018
Stable earnings despite weaker than expected sales
October - December 2017
- Net sales amounted to SEK 560.4m (599.4), a decrease of 6.5 percent.
- Earnings before interest and taxes (EBIT) of SEK 34.1m (20.3), corresponding to an operating margin of 6.1 percent (3.4). EBIT includes SEK 0m (20.6) of restructuring expenses.
- Order intake decreased by 12.5 percent to SEK 500.6m (572.3).
- The order book amounted to SEK 314.9m (307.8) at the end of the period.
- Profit after tax for the period was SEK 22.5m (11.4).
- Earnings per share amounted to SEK 0.95 (0.49).
- Free cash flow before acquisitions amounted to SEK 17.8m (31.7).
January - December 2017
- Net sales amounted to SEK 1,924.0m (1,959.1), a decrease of 1.8 percent.
- EBIT of SEK 92.0m (47.7), corresponding to an operating margin of 4.8 percent (2.4). EBIT includes SEK 3.5m (29.8) of restructuring expenses.
- Profit after tax for the period was SEK 66.5m (31.0).
- Earnings per share amounted to SEK 2.83 (1.33).
- Free cash flow before acquisitions amounted to SEK 49.3m (-5.7).
- Proposal on dividend for 2017 will at the latest be given in the notice convening the AGM 2018.
Our expectations for 2018 are sales in the range of SEK 1.9bn - 2.1bn and operating profit (EBIT) in the range of SEK 100m - 140m, excluding potential M&A.
Doro's sales in the fourth quarter were somewhat disappointing after a weak finish in the Nordics and UK. Meanwhile, a lower cost base contributed to stable earnings despite lower revenue. Measures we initiated and executed in 2017 are paying off and we are continuing our work also in 2018.
Our mobile phone sales in the Nordics and UK decreased in the latter part of the fourth quarter, partly due to product launches from competitors. This impacted total sales negatively despite growth in other regions and caused a total downturn of 6.5 percent year on year. However, Doro Care made very positive progress in sales and operational efficiency. Sales were up by 17 percent, recurring revenues increased 25 percent. We signed our first agreement based on Doro Connect, a mobile safety service, with a scope of over 1,200 connections.
Our fourth-quarter operating margin of 6.1 percent was somewhat lower than in the fourth quarter of 2016, excluding restructuring expenses, mainly because of lower gross margin. However, for the full year 2017, we increased our operating margin, adjusted for restructuring expenses, year on year mainly because of lower operating expenses. We strengthened our Balance Sheet in the year and increased our equity/assets ratio to 49.6 percent.
Doro started a journey of change in 2017. Our management team was reinforced, and we launched an updated strategy and financial goals for the coming years at our capital markets day in November. Our focus is on extending our leadership in mobile phones for seniors, expanding our operations in telecare and executing our new concept for consumer-oriented safety services for seniors - SmartCare by Doro - which includes the Doro Connect service.
I expect 2018 to be another eventful year with positive progress for Doro. Our ambition is to advance Doro's positioning in smartphones in 2018. We have established our recently launched Doro 8040 in our markets and new offerings in this segment are underway. Launch of a 4G feature phone in the US & Canada and Europe will be done in the second half-year. We are strengthening our focus on services by bringing a new role into our management team. In the short term, I'm looking forward to our first presentation of SmartCare by Doro at the Mobile World Congress in Barcelona in February, where we will also demonstrate our leadership in mobile phones with new product launches.
Our expectations for the full year 2018 are sales in the range of SEK 1.9bn - 2.1bn and operating profit (EBIT) in the range of SEK 100m - SEK 140m, excluding potential M&A.
Robert Puskaric, President & CEO
For further information, please contact:
Robert Puskaric, President and CEO, +46 (0)46 280 50 05
Carl-Johan Zetterberg Boudrie, CFO, +46 (0)46 280 50 47
Doro's report to be presented via audiocast
Analysts, investors and media are welcome to attend a presentation of the Year-end report via https://edge.media-server.com/m6/p/6htae86j or by telephone at 9:00 CET on February 15, 2018. Doro's President and CEO Robert Puskaric and CFO Carl-Johan Zetterberg Boudrie will hold the presentation and answer questions. Before the start of the presentation, the presentation material will be available at: https://corporate.doro.com/investors/reports-and-presentations/presentations/.
Sweden: + 46 (0) 8 505 564 74
France: + 33 (0) 1 7075 0725
UK: + 44 (0) 203 364 5374
US: + 1 855 7532 230
This information is information that Doro AB is obliged to make public pursuant to the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 08:00 CET on February 15, 2018.