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Doro reports third quarter

08:00 / 21 October 2022 Doro Press release

Sequential improvements in a tough market

The quarter in summary

  • Doro’s net sales amounted to SEK 241.2 million (269.4), a decrease of 10.5 percent.
  • Gross margin increased to 37.7 percent (35.9).
  • EBITDA amounted to SEK 37.7 million (56.5), a decrease of 33.3 percent.
  • Operating profit (EBIT) amounted to SEK 26.9 million (40.5) corresponding to an operating margin of 11.2 percent (15.0).
  • Profit after tax for the period was SEK 16.6 million (29.5) and profit per share was SEK 0.68 (1.23).
  • Free cash flow was SEK -18.2 million (-33.8).

January - September in summary

  • Doro’s net sales amounted to SEK 664.1 million (728.4), a decrease of 11.6 percent.
  • Gross margin slightly decreased to 35.2 percent (35.4).
  • EBITDA amounted to SEK 68.2 million (118.2), a decrease of 42.2 percent.
  • Operating profit (EBIT) amounted to SEK 35.2 million (68.2), corresponding to an operating margin of 5.5 percent (9.4).
  • Profit after tax for the period was SEK 24.9 million (53.4) and profit per share was SEK 1.02 (2.23).
  • Free cash flow was SEK 2.6 million (-76.5).

*2021 balance sheet includes the business area Care which was divested in December 2021

Message from the CEO
Q3 has been an encouraging quarter for Doro business. For the first time since the Covid pandemic, we returned as exhibitors to the IFA trade show in Berlin during early September. It was inspiring to once again be able to meet so many of our customers and consumers at the same time. We enjoyed positive feedback regarding our newly launched products, especially on the Doro Watch, which fulfils an overlooked need for simplicity and easy-to-use features in the world of connected watches.
Although the economic challenges continued with fluctuating sell-out and though we saw an overall decline by 10.5% compared to the previous year, our third quarter was still a step forward as net sales reached 241.2 million SEK, making Q3 as expected the best quarter this year. We also had a decent rebound in major operator and retailer channels, especially in France and the UK, with both regions consequently generating sales on par with the previous year. The situation in DACH and Nordic, however, was more complicated with lower demand coming mainly from the distribution side.
The ever-increasing US dollar rate continued to drive up costs. However, our coming price adjustment effective from the next quarter, should at least partially mitigate the negative cost development. That said, moderation will have to be exercised since the market in general, and retailers in particular, are increasingly reluctant to accept further price increases. Despite the cost increase, Doro margin wise benefited from its hedging of the US Dollar and consequently the gross margin came in at 37.7% compared to 35.9% during the same quarter of the previous year. As the USD continues to strengthen, we do foresee some challenges in maintaining this margin level but are taking mitigating actions. EBIT in the quarter amounted to SEK 26.9 million, which although a decrease by 33.6 percent compared to the previous year, still is a reasonably satisfying result considering the current challenges.
As it stands now, the economic situation is foreseen to remain challenging in the coming quarter, with sales at lower levels than the previous year. However, the positive feedback on our new non-phone products, and the success of our latest 4G feature phones gives us confidence for the future. In addition, a number of exciting partnerships were announced at IFA, such as the German Golf Association, which will help us further promote our brand, our products and more importantly our mission of creating a better life for seniors. Last but not least, we were also proud to announce our new cooperation with the German rock-star Doro Pesch, as a nod to our brand name which we happen to share with the artist, who has warmly embraced our passion and dedication to making seniors’ lives easier.          
Jörgen Nilsson, President and CEO

WEBCAST
A video conference will be held on Friday 21 October at 9.00 am (CEST) when President and CEO Jörgen Nilsson and CFO Isabelle Sengès will present the report. The videoconference is accessed at Quarterly report meeting (doro.com). The presentation material is available on Doro’s financial website Presentations (doro.com).

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