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Doro

Doro

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Doro reports year-end report 2020

08:00 / 17 February 2021 Doro Press release

Improved operating profit despite a challenging quarter

The quarter in summary

  • Doro’s net sales amounted to SEK 489.6 million (615.8), a decrease of 20.5 percent.
  • Net sales for business area Doro Care were SEK 144.7 million (130.6), an increase of 10.8 percent and for business area Doro Phones were SEK 344.9 million (485.2), a decrease of 28.9 percent.
  • Gross margin increased to 34.3 percent (29.5). For Doro Care, the gross margin decreased to 39.5 percent (42.8) and for Doro Phones the gross margin increased to 32.0 percent (25.9).
  • EBITDA amounted to SEK 69.0 million (61.1), an increase of 13.0 percent.
  • Operating profit (EBIT) amounted to SEK 46.9 million (41.5), excluding restructuring costs of SEK 9.2 million, corresponding to an operating margin of 9.6 percent (6.7). Including restructuring costs, EBIT amounted to SEK 37.7 million (30.9) with an operating margin of 7.7 percent (5.0).
  • Profit after tax for the period was SEK 19.2 million (20.8) and profit per share was SEK 0.80 (0.88).
  • Free cash flow before acquisitions was SEK 27.9 million (58.7).

January – December in summary

  • Doro’s net sales amounted to SEK 1,689.3 million (2,063.0), a decrease of 18.1 percent.
  • Net sales for business area Doro Care were SEK 524.1 million (476.7), an increase of 9.9 percent and for business area Doro Phones were SEK 1,165.2 million (1,586.3), a decrease of 26.5 percent.
  • Gross margin increased to 33.7 percent (31.5). For Doro Care, the gross margin decreased to 41.4 percent (42.1) and for Doro Phones the gross margin increased to 30.3 percent (28.3).
  • EBITDA amounted to SEK 203.9 million (209.3), a decrease of 2.6 percent.
  • Operating profit (EBIT) amounted to SEK 101.6 million (131.4), excluding restructuring costs of SEK 15.9 million (19.3), corresponding to an operating margin of 6.0 percent (6.4). Including restructuring costs, EBIT amounted to SEK 85.7 million (112.1) with an operating margin of 5.1 percent (5.4).
  • Profit after tax for the period was SEK 49.1 million (77.9) and profit per share was SEK 2.06 (3.28).
  • Free cash flow before acquisitions was SEK 180.4 million (118.7).
  • The rapid spread of the COVID-19 virus had a negative effect on sales in the period due to closed markets, which predominately affected business area Doro Phones. A gradual recovery occurred in the end of the second quarter and in the third quarter, but sales were again negatively impacted at the end of the fourth quarter due to COVID-19's second wave.

Message from the CEO

2020 has undoubtedly been a different year, strongly affected by the pandemic. The challenges that exist in social and elderly care has become increasingly clear and our offering in technology enabled care is and will be a part of the solution. Despite all the challenges that COVID-19 has brought us, we have managed to maintain our service delivery and continued to deliver the same quality in both our alarm receiving centres and in our field service throughout the year. This shows the flexibility that exists in the organisation and that, regardless of circumstances, we continue to deliver what we do best - safety and independence for seniors.

During the fourth quarter we were hit by the second wave of COVID-19 and some of our main markets were once again completely or partially in lockdown. The consequence of this was that the recovery that was noted during the third quarter slowed down. Sales during the fourth quarter amounted to SEK 489.6 million (615.8), a decrease of 20.5 percent compared to the fourth quarter of 2019. With good cost control and support from our saving initiatives that were implemented during the year, we successfully managed to fend off the sales drop and deliver an improved adjusted EBIT-margin of 9.6 percent (6.7) in the quarter.

The markets within business area Doro Care remained quiet during the fourth quarter. Municipalities and social care commissioners had their focus on handling the effects of the pandemic and therefore important procurements have been postponed. Although sales development is slow due to delayed procurements, we increased our sales during the fourth quarter compared to the third quarter and had organic growth, adjusted for currency effects, compared to the same quarter last year. With a strengthened team and more experience, we hope to continue the trend and create organic growth.

Earlier in the year, we took several steps forward in our growth strategy, which we also continued to do during the fourth quarter. In October we completed our third acquisition of the year and acquired the assets of the Careline services from Connexus Housing Group and further expanded our presence in the UK market. With several strategically important events behind us and a strengthened team, we are ready to enter 2021 with focus on expanding and strengthening our offer, continuing to drive an organic growth, and increasing the efficiency of our service delivery.

Business area Doro Phones had a tough quarter in terms of sales with a decrease of 28.9 percent compared to the fourth quarter of 2019. Sales were negatively affected by closed markets due to the second wave of the pandemic, but also by the decision to phase out less profitable markets, such as North America. Despite lower sales, business area Doro Phones managed to deliver a high operating profit with a very strong EBIT-margin of 11.7 percent in the quarter. The strengthened EBIT-margin is an effect of the cost savings that were implemented during the year combined with an improved gross margin. The work to reduce operating expenses continues to progress and focus for the coming year will be to maintain a good cost control whilst we actively try to find new solutions for the seniors of today and tomorrow.

To create the best conditions for each business area to develop more favorably on their own and reach its full potential, preparation will be initiated to separately list business area Doro Care. I believe that Doro Care independently can create the best conditions for utilizing interesting opportunities and prospects we see in technology enabled care. I also believe that a refinement creates better opportunities for Doro Phones to further strengthen its market position. Preparation for a separate listing of business area Doro Care will be initiated with the aim to complete a stock exchange listing during the year. We will continue to create safety for seniors, capturing the growth opportunities that lie ahead of us and prioritise the health and safety of our employees, while we continue our journey forward.

Carl-Johan Zetterberg Boudrie, President and CEO

Webcast
A webcast conference call will be held on Wednesday 17 February at 9.00 am (CET) when President and CEO Carl-Johan Zetterberg Boudrie will present the report. The webcast is accessed at https://tv.streamfabriken.com/doro-q4-2020. The presentation material is available on Doro’s financial website  http://www.doro.com/corporate.

Telephone numbers:
Sweden: +46 8 50 55 83 75
United Kingdom: +44 33 33 00 92 74
USA: +1 83 38 23 05 86
France: +33 170 75 07 18

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