Quarter 3 2023 in summary
- Doro's net sales amounted to SEK 272.7 million (241.2), an increase of 13.1 percent.
- Gross margin was 43.4 percent (37.7).
- EBITDA amounted to SEK 48.4 (37.7), an increase of 28.4 percent.
- Operating profit (EBIT) amounted to SEK 38.9 million (26.9), corresponding to an operating margin of 14.3 percent (11.2).
- Profit after tax for the period was SEK 22.0 million (16.6) and earnings per share was SEK 0.90 (0.68).
- Free cash flow was SEK 65.8 million (-18.2).
January-September 2023 in summary
- Doro's net sales amounted to SEK 684.0 million (644.1), an increase of 6.2 percent.
- Gross margin was 40.2 percent (35.2).
- EBITDA amounted to SEK 76.4 (68.2), an increase of 12.0 percent.
- Operating profit (EBIT) amounted to SEK 43.1 million (35.2), corresponding to an operating margin of 6.3 percent (5.5).
- Profit after tax for the period was SEK 26.7 million (24.9) and earnings per share was SEK 1.10 (1.02).
- Free cash flow was SEK 64.0 million (2.6).
Message from the CEO
High activity level with strong results
The third quarter of the year is typically a busy period with major fairs and heightened marketing and sales activities in preparation for Black Friday and Christmas. This year's third quarter proved to be robust for us, marked by increases in sales, profit, and cash flow. Despite a declining market in our regions, we expanded market share and grew sales in most countries, driven by our successful early migration of 2G to 4G technology.
The transition to 4G continues to yield favourable results. We have managed the sunset of 2G in France and Sweden without any lingering 2G inventory concerns, even though the transition occurred faster than expected. The range of 4G products launched last year has emerged as bestsellers in these countries with strong margins. Furthermore, by the end of September, we introduced our new range of better positioned 4G products ahead of schedule, intended as a direct replacement of our 2G phones and providing us with a comprehensive portfolio.
Major sales numbers from the non-phones' portfolio have yet to be realised, but thanks to the success of the 4G portfolio, our third-quarter sales reached SEK 272.7 million, reflecting an increase of 13.1% compared to the same quarter last year. Gross margin reached 43.4%, driven by several factors in our favour, including portfolio mix, low freight costs, and positive foreign currency effects. While operational costs increased compared to the previous year, as planned, the strong sales and high margin generated an EBIT of SEK 38.9 million, corre-sponding to an EBIT margin of 14.3% compared to 11.1% the same quarter last year.
Another highlight for the quarter was free cash flow reaching SEK 65.8 million. This result reflects a strong EBIT, and a positive development of working capital.
In early September, we participated at the IFA Telecom Fair in Berlin, where we launched Doro HearingBuds. The development of the HearingBuds has required extensive time and effort from our R&D team to ensure that the new technology meets our desired quality standards. We are proud to deliver a product that can truly make a difference for individuals suffering from minor hearing impairment, or for those simply wanting to listen to music with crystal-clear sound. At IFA, we also pre-announced the forthcoming Doro DoorBell product.
Since the IFA Fair, the HearingBuds product has garnered positive media coverage and good feedback from reviewers, customers, and users. In preparation for the upcoming commercial launch, we have developed a hearing simulator which has been made available on our website, allowing potential users to experience the benefits of our HearingBuds product first hand.
A milestone in September was the opening of the first Doro pop-up store, located in the southern city of Malmö, in one of the largest shopping malls in Scandinavia. While we anticipate that this store will raise brand awareness and promote our products, the primary objective is to be able to directly engage with our end-users, the seniors, and their relatives to gain valuable insights into their needs and preferences.
Throughout the third quarter, our Products and R&D teams have been working on the Ecodesign Directive which is expected to significantly impact the mobile phone market in the near future. The Ecodesign Directive establishes a framework for implementing mandatory ecological standards for energy-using and energy-related products. This Directive directly affects the development of all our - and the whole industry's - future products, with specified requirements pertaining to durability, energy efficiency, recyclability, environmental impact, and waste reduction.
While the interpretation and implementation of the Ecodesign directive necessitate significant resources from our side, we believe that our well-designed and purpose build products, positions us well for future.
We close the third quarter knowing that we stand on solid financial ground, have good sales, order intake and healthy margins, and exciting new products just about to be launched.
Jörgen Nilsson, President and CEO
For more information, please contact:
Jörgen Nilsson, President & CEO, +46 731 01 28 01, ir@doro.com
About Doro
Doro is a leading technology brand for seniors developing consumer products and services to support an active and independent life. Doro's technology enables generations to connect digitally - both while at home and when out and about. Doro is a Swedish company listed on Stockholm Nasdaq Stock Exchange. The company is headquartered in Malmö and has sales operations in 27 countries. In 2022, Doro had 110 employees and net sales amounted to SEK 909.5 million (EUR 86 million), making it the European market leader for senior specialised mobile phones. Read more about Doro on our website 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 persons set out above, at 2023-10-27 08:00 CEST.
