Earnings Release • Feb 15, 2018
Earnings Release
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Doro AB Corporate Identity Number 556161-9429
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 GROUP (SEKm) |
2017 Oct-Dec |
2016 Oct-Dec |
2016 Jan-Dec |
2016 Jan-Dec |
|---|---|---|---|---|
| Net sales | 560.4 | 599.4 | 1,924.0 | 1,959.1 |
| Net sales growth, % | -6.5 | -3.7 | -1.8 | 7.1 |
| EBITDA | 53.1 | 45.2 | 156.2 | 121.4 |
| EBITDA margin, % | 9.5 | 7.5 | 8.1 | 6.2 |
| EBITA | 35.7 | 21.4 | 97.2 | 55.1 |
| EBITA margin, % | 6.4 | 3.6 | 5.1 | 2.8 |
| EBIT | 34.1 | 20.3 | 92.0 | 47.7 |
| EBIT margin, % | 6.1 | 3.4 | 4.8 | 2.4 |
| Profit after tax | 22.5 | 11.4 | 66.5 | 31.0 |
| Earnings per share | 0.95 | 0.49 | 2.83 | 1.33 |
| Equity/assets ratio, % | 49.6 | 40.4 | 49.6 | 40.4 |
Net sales growth
Sales down by 6.5%
Lower sales in the UK and Nordics, growth in other regions
Positive progress for Doro Care, strategic order won
Efficiency measures lead to lower operating expenses
Updated strategy and new financial goals announced
Expectations for 2018 of sales of SEK 1.9bn – 2.1bn, EBIT of SEK 100m – 140m
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. Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
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.
Net sales down by 6.5%
Weak sales in the UK and Nordics, growth in other regions and Care
Smartphone sales made satisfactory progress
Operating margin of 6.1%. Lower gross margin was compensated by lower operating costs
Doro's net sales for the fourth quarter amounted to SEK 560.4m (599.4), a 6.5 percent decrease year on year. Adjusted for currency effects, the decrease was 5.4 percent.
Fourth-quarter order intake was down by 12.5 percent to SEK 500.6m (572.3). The value of the order book was SEK 314.9m (307.8) at the end of the quarter.
Sales in the Nordics were down by 31.4 percent year on year after poor progress at the end of the period.
Sales in the DACH region increased by 14.2 percent, supported by several marketing campaigns, a positive product mix and geographical expansion.
Sales in the EMEA region increased by 1.9 percent, despite the continued embargo on mobile phone imports to Algeria.
Sales in the US/Canada region increased by 1.1 percent, supporting our view that sales in the region have stabilized.
Sales in the UK decreased by 28.3 percent in the fourth quarter. A weak mobile phone market in general, major phone launches from competitors and a successful product launch in Q4 2016 being the main reasons for the outcome.
Sales of smartphones made satisfactory progress in the quarter, representing approximately 24 percent of Doro's total mobile phone sales. Our offering in this category is in continuous enhancement and regeneration, and sales of our new smartphone, the Doro 8040, have started in most of our markets.
Doro Care increased sales by 17.2 percent in the fourth quarter. Sales were SEK 70.9m (60.5), of which SEK 48.5m (38.8), were recurring revenue.
Doro's gross margin decreased on the fourth quarter 2016 and amounted to 39.2 percent (42.1). The decrease year on year is mainly explained by a negative currency effect from the revaluation of forward contracts. All other things equal, depreciation of the USD against the EUR is fundamentally positive for Doro, since a substantial part of our material and component sourcing is made in USD and has a positive impact on our result.
Fourth-quarter EBITDA was up by 17.5 percent to SEK 53.1m (45.2), corresponding to an EBITDA margin of 9.5 percent (7.5). The increased EBITDA was mainly due to lower operating expenses.
EBITA improved significantly, to SEK 35.7m (21.4). Amortization of intangible assets from business combinations according to plan was SEK -1.6 m (-1.1) in the quarter, corresponding to an EBIT of SEK 34.1m (20.3) and an EBIT margin of 6.1 percent (3.4). EBIT includes restructuring expenses of SEK 0m (20.6). 10 2016 2017
Net financial items for the fourth quarter were SEK -0.8m (-4.0) including the revaluation of financial instruments in foreign currencies. 5 7,5
Group tax for the quarter was SEK -10.8m (-4.9). 2,5
Profit after tax for the period was SEK 22.5m (11.4). 0
Cash flow from operating activities in the fourth quarter was SEK 38.5m (50.2), with the decrease mainly due to an increase in working capital. Free cash flow, after investments but before acquisitions, amounted to SEK 17.8m (31.7).
Cash and cash equivalents were SEK 57.1m at the end of the fourth quarter (61.0). At the same time, the equity/assets ratio was 49.6 percent (40.4).
Net debt declined in the period, amounting to SEK 102.9m at the end of the fourth quarter, which can be compared to SEK 120.6m at the end of the previous, third, quarter, and SEK 149.5m at the end of the fourth quarter 2016.
The board will make its proposal on dividend for 2017 at the latest in the notice convening the Annual General Meeting 2018.
Magnus Eriksson left Doro and his position as CFO at the end of October.
Carl-Johan Zetterberg Boudrie took up the position as Doro's new CFO on 1 November.
Carl-Johan Rijpma was appointed VP Operations and a member of Group Management at the beginning of October. He took up his position on 1 November.
A capital markets day for investors, financial analysts and the media was held in Stockholm on 14 November, which included presentations of Doro's updated strategy and new financial goals.
In a press release of 18 January, Doro reported its preliminary sales and EBIT for 2017, and net debt at year-end 2017, explained by full-year sales not matching the company's expectations.
Jörgen Alsing has been appointed Vice President and member of Group management with responsibility for the new SmartCare & Services unit.
Annika Björk has been appointed Human Resources Director and member of Group management.
United Kingdom
Care
| 5% 23% |
Doro group (SEKm) | 2017 Oct-Dec |
Net sales growth, % |
2016 Oct-Dec recalc. |
2017 Jan-Dec |
2016 Jan-Dec recalc. |
|---|---|---|---|---|---|---|
| 13% | Nordics | 82.1 | -31.4 | 119.7 | 332.6 | 353.1 |
| EMEA | 129.9 | 1.9 | 127.5 | 437.0 | 461.4 | |
| 27% | DACH (Germany, Austria, Switzerland and Central Europe) | 179.5 | 14.2 | 157.2 | 522.4 | 462.9 |
| UK | 72.2 | -28.3 | 100.7 | 239.9 | 266.4 | |
| US/Canada | 28.4 | 1.1 | 28.1 | 96.1 | 189.8 | |
| Nordic | Other regions | 8.7 | 31.8 | 6.6 | 22.6 | 18.9 |
| Care | 70.9 | 17.2 | 60.5 | 276.6 | 210.1 | |
| Europe, Middle East, Africa | Central overheads | -11.3 | -0.9 | -3.2 | -3.5 | |
| DACH | Total | 560.4 | -6.5 | 599.4 | 1,924.0 | 1,959.1 |
* Note 1 Nordic
Sales in the Nordics decreased by 31.4 percent compared to the fourth quarter 2016 after a poor finish to the period. Notifications of price increases that lifted sales in Q4 2016 were not repeated in 2017. Launches by leading mobile phone vendors absorbed most of our resellers' purchasing. USA, Canada Other regions
Sales in the DACH region increased by 14.2 percent, supported by a range of campaigns by resellers, a strong product mix supported by Doro 8040 being part of many campaigns, and geographical expansion.
Sales in the fourth quarter increased by 1.9 percent, despite a continued embargo on mobile phone imports in Algeria. France and Italy contributed to strong sales to operator customers as well as retail.
Sales fell by 28.3 percent in the fourth quarter. Sales into resellers were strong in the comparative quarter, thanks to a successful product launch. A generally weak mobile phone market and launches from competitors resulted in lower purchasing volumes from resellers, although this did result in lower inventory levels at the end of the period.
Sales increased marginally, by 1.1 percent, supporting our view that the regional sales downturn has levelled off. We continue to plan for the next technology generation on the North American market, with the ambition of launching a 4G feature phone in the second half-year 2018.
Care's sales increased by 17.2%, supported by continued positive progress in hardware and service income. Export sales progressed well. Care's total income for the fourth quarter was SEK 70.9m (60.5), of which SEK 48.5m (38.8) was recurring revenue.
At the end of the quarter, the total subscriber base was approximately 126,000, an increase on the end of the fourth quarter 2016, when the subscriber base was some 118,000.
Net sales in other regions were SEK 8.7m (6.6).
Income and income adjustments not related to any specific region were SEK - 11.3m (-0.9) in the fourth quarter.
Doro's shares are listed on Nasdaq Stockholm, Small Cap, Telecom/IT list. On December 31, 2017, the number of shares outstanding was 23 755 255. Shareholders' equity amounted to SEK 583.7m (520.0).
No transactions took place between Doro and related parties that had a material impact on the Company's financial position or results during the period.
Doro had 458 (500) employees as of December 31, 2017, equivalent to 380 (379) full-time employees. Of these, 238 (256) are based in Sweden, 26 (37) in France, 16 (13) in the UK, 9 (9) in Hong Kong, 109 (124) in Norway, 2 (2) in Italy and 58 (59) in Germany.
Risks and uncertainty factors primarily relate to Doro's ability to continuously develop competitive products, supply disruptions, customer relationships, exchange rate fluctuations, loan finance and the public tendering processes within Doro Care. Apart from these risks and uncertainty factors, which are described in more detail on pages 23 and 24 of the Annual Report, no other material risks were identified in the period.
The Parent Company's net sales for the fourth quarter amounted to SEK 460.4m (431.7). The profit after tax amounted to SEK 24.5m (-22.5).
This Year-end Report has been prepared on behalf of the Group according to IAS 34, Interim Financial Reporting, and for the Parent Company in accordance with the Annual Accounts Act and the Swedish Financial Reporting Board's recommendation RFR 2 Accounting of legal entities. The accounting principles and calculation methods applied are consistent with those that were applied when drawing up the previous year's accounts.
The evaluation of the potential accounting effect of the new accounting standards IFRS 9 Financial instruments and IFRS 15 Revenue from customer contracts, to be implemented on 1 January 2018, is finished and accounted for in Note 3 below.
Doro's sales are subject to seasonal changes. Sales in the first quarter are normally the weakest in the year. Sales in the second and third quarter are normally sequentially higher than in the first quarter. Sales in the fourth quarter are normally the strongest in the year.
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.
The Q1 2018 report will be published on April 27, 2018
This report will be presented via audiocast on February 15 at 9:00 CET
Q1-report, January-March 2018: April 27, 2018 Q2-report, January-June 2018: July 13, 2018 Q3-report, January-September 2018: October 19, 2018
The Annual General Meeting 2018 will be held in Stockholm on April 27, 2018.
Robert Puskaric, President and CEO, +46 (0)46 280 50 05 Carl-Johan Zetterberg Boudrie, CFO, +46 (0)46 280 50 47
E-mail: [email protected]
Analysts, investors and media are welcome to attend a presentation of the Yearend 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-andpresentations/presentations/.
| + 46 (0) 8 505 564 74 |
|---|
| + 33 (0) 1 7075 0725 |
| + 44 (0) 203 364 5374 |
| + 1 855 7532 230 |
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 smart phones, 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 1 924 million (EUR 200 million) were reported for 2017.
www.doro.com
| Doro Group (SEKm) | 2017 Oct-Dec |
2016 Oct-Dec |
2017 Jan-Dec |
2016 Jan-Dec |
|---|---|---|---|---|
| Net sales | 560.4 | 599.4 | 1 924.0 | 1 959.1 |
| Own work capitalized and other income | 2.4 | 5.4 | 34.4 | 16.0 |
| Operating costs | -509.7 | -559.6 | -1 802.2 | -1 853.7 |
| Operating profit/loss before depreciation and write-downs, EBITDA | 53.1 | 45.2 | 156.2 | 121.4 |
| Depreciation according to plan, excl depreciation of intangible assets related to company acquisitions | -17.4 | -23.8 | -59.0 | -66.3 |
| Operating profit/loss after depreciation and write-downs, EBITA | 35.7 | 21.4 | 97.2 | 55.1 |
| Depreciation according to plan of intangible assets related to company acquisitions | -1.6 | -1.1 | -5.2 | -7.4 |
| Operating profit/loss after depreciation and write-downs, EBIT | 34.1 | 20.3 | 92.0 | 47.7 |
| Net financial items | -0.8 | -4.0 | -0.3 | -8.3 |
| Profit/loss after financial items | 33.3 | 16.3 | 91.7 | 39.4 |
| Taxes | -10.8 | -4.9 | -25.2 | -8.4 |
| Profit/loss for the period | 22.5 | 11.4 | 66.5 | 31.0 |
| Average number of shares, thousands | 23 755 | 23 238 | 23 536 | 23 238 |
| Average number of shares after dilution, thousands* | 23 755 | 23 380 | 23 591 | 23 411 |
| Earnings per share, SEK | 0.95 | 0.49 | 2.83 | 1.33 |
| Earnings per share after dilution, SEK* | 0.95 | 0.49 | 2.82 | 1.32 |
| ) |
* The effect of dilution is considered only when the effect on earnings per share is negative.
| Doro Group (SEKm) | 2017 Oct-Dec |
2016 Oct-Dec |
2017 Jan-Dec |
2016 Jan-Dec |
|---|---|---|---|---|
| Profit/loss for the period | 22.5 | 11.4 | 66.5 | 31.0 |
| Other comprehensive income to be reclassified to profit or loss in subsequent periods: | ||||
| Translation differences | 3.8 | -1.3 | 1.1 | 4.9 |
| Effects from cash flow hedges | 0.5 | 0.9 | -3.1 | 4.9 |
| Deferred tax | -0.1 | -0.2 | 0.7 | -1.1 |
| Total result related to Parent Company's shareholders | 26.7 | 10.8 | 65.2 | 39.7 |
| Doro Group (SEKm) | 2017 Dec 31 |
2016 Dec 31 |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 466.5 | 464.1 |
| Property, plant, and equipment | 19.0 | 12.9 |
| Financial assets | 7.8 | 7.3 |
| Deferred tax assets | 9.5 | 11.9 |
| Current assets | ||
| Inventories | 196.9 | 217.9 |
| Current receivables | 420.5 | 512.8 |
| Cash and cash equivalents | 57.1 | 61.0 |
| Total assets | 1 177.3 | 1 287.9 |
| Shareholders' equity attributable to Parent company's shareholders | 583.7 | 520.0 |
| Long term liabilities | 119.2 | 197.0 |
| Current liabilities | 474.4 | 570.9 |
| Total shareholders' equity and liabilities | 1 177.3 | 1 287.9 |
| Financial instruments recognized at fair value in the Balance sheet, SEKm | 2017 31 dec |
2016 31 dec |
|---|---|---|
| Exchange rate contracts recorded as current liability | 8.1 | 3.2 |
| Exchange rate contracts recorded as current receivable | 4.0 | 12.4 |
Financial instruments recognized at fair value consist of currency forward contracts and are used primarily for hedging purposes and are measured at level 2.
| 2017 | 2016 | 2017 | 2016 | |
|---|---|---|---|---|
| Doro Group (SEKm) | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
| Operating profit/loss after depreciation and write-downs, EBIT | 34.1 | 20.3 | 92.0 | 47.7 |
| Depreciation according to plan | 19.0 | 24.9 | 64.2 | 73.7 |
| Net paid financial items | -1.2 | -4.1 | -5.0 | -8.3 |
| Unrealized exchange differences in cash flow | -2.7 | -4.9 | 9.9 | -0.6 |
| Taxes paid | 1.4 | 0.5 | -10.9 | -26.3 |
| Changes in working capital (including changes in provisions) | -12.1 | 13.5 | -30.7 | -24.5 |
| Cash flow from current activities | 38.5 | 50.2 | 119.5 | 61.7 |
| Investments in intangible and tangible fixed assets | -20.7 | -18.5 | -70.2 | -67.4 |
| Total free cash flow before acquisitions | 17.8 | 31.7 | 49.3 | -5.7 |
| Acquisitions | 0.0 | -1.1 | 0.0 | -29.0 |
| Cash flow from investing activities | -20.7 | -19.6 | -70.2 | -96.4 |
| Amortization of debt | -25.0 | -20.2 | -75.5 | -79.8 |
| New loans/changes in bank overdraft facility | 0.0 | 29.2 | 25.0 | 129.8 |
| Dividend | 0.0 | 0.0 | -23.2 | 0.0 |
| New share issue | 0.0 | 0.0 | 21.7 | 0.0 |
| Warrant program, new/buy back | 0.0 | -0.9 | -1.2 | -0.6 |
| Cash flow from financing activities | -25.0 | 8.1 | -53.2 | 49.4 |
| Exchange differences in cash and cash equivalents | -0.1 | -0.5 | 0.0 | 2.4 |
| Change in cash and cash equivalents | -7.3 | 38.2 | -3.9 | 17.1 |
| Net debt | 102.9 | 149.5 | 102.9 | 149.5 |
| STATEMENT OF CHANGES IN EQUITY Doro Group (SEKm) |
2017 Dec 31 |
2016 Dec 31 |
|---|---|---|
| Opening balance | 520.0 | 482.0 |
| Total result related to Parent company shareholders | 65.2 | 39.7 |
| Dividend | -23.2 | 0.0 |
| Warrants | 0.0 | -1.8 |
| New share issue | 21.7 | 0.0 |
| Closing balance | 583.7 | 520.0 |
| Doro Group | 2017 Dec 31 |
2016 Dec 31 |
|---|---|---|
| Orderbook at the end of period, SEKm | 314.9 | 307.8 |
| Order intake in quarter, SEKm | 500.6 | 572.3 |
| Gross margin, % | 38.6 | 38.5 |
| Gross margin in the quarter, % | 39.2 | 42.1 |
| Equity/assets ratio, % | 49.6 | 40.4 |
| Number of shares at the end of the period, thousands | 23 755 | 23 238 |
| Number of shares at the end of the period after dilution, thousands* | 23 755 | 23 357 |
| Equity per share, SEK | 24.57 | 22.38 |
| Equity per share after dilution, SEK* | 24.57 | 22.26 |
| Return on average shareholders' equity, % | 12.1 | 6.2 |
| Return on average capital employed, % | 13.5 | 6.8 |
| Share price at period's end, SEK | 43.70 | 53.00 |
| Market value, SEKm | 1 038.1 | 1 231.6 |
* ) The effect of dilution is considered only when the effect on earnings per share is negative.
| SALES PER MARKET*) Doro Group (SEKm) |
2017 Oct-Dec |
2016 Oct-Dec (recalc ulated) |
2017 Jan-Dec |
2016 Jan-Dec (recalc ulated) |
|---|---|---|---|---|
| Nordic | 82.1 | 119.7 | 332.6 | 353.1 |
| Europe, Middle East and Africa | 129.9 | 127.5 | 437.0 | 461.4 |
| DACH (Germany, Austria, Switzerland and Central Europe) | 179.5 | 157.2 | 522.4 | 462.9 |
| United Kingdom | 72.2 | 100.7 | 239.9 | 266.4 |
| US and Canada | 28.4 | 28.1 | 96.1 | 189.8 |
| Other regions | 8.7 | 6.6 | 22.6 | 18.9 |
| Care | 70.9 | 60.5 | 276.6 | 210.1 |
| Central overhead | -11.3 | -0.9 | -3.2 | -3.5 |
| Total | 560.4 | 599.4 | 1 924.0 | 1 959.1 |
| ) * Note 1 |
| 2017 | 2016 | 2017 | 2016 | |
|---|---|---|---|---|
| Parent company (SEKm) | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
| Net sales | 460.4 | 431.7 | 1 531.8 | 1 439.5 |
| Own work capitalized and other income | 1.7 | 0.4 | 24.1 | 5.7 |
| Operating costs | -410.2 | -438.9 | -1 444.7 | -1 384.6 |
| Operating profit/loss before depreciation and write-downs, EBITDA | 51.9 | -6.8 | 111.2 | 60.6 |
| Depreciation | -20.5 | -18.5 | -65.1 | -58.2 |
| Operating profit/loss after depreciation and write-downs, EBIT | 31.4 | -25.3 | 46.1 | 2.4 |
| Net financial items | 0.8 | -2.9 | 2.4 | -3.7 |
| Profit/loss after financial items | 32.2 | -28.2 | 48.5 | -1.3 |
| Group contribution | 1.4 | 0.0 | 1.4 | 0.0 |
| Taxes | -9.1 | 5.7 | -13.1 | -0.2 |
| Profit/loss for the period | 24.5 | -22.5 | 36.8 | -1.5 |
| STATEMENT OF COMPREHENSIVE INCOME Parent company (SEKm) |
2017 Oct-Dec |
2016 Oct-Dec |
2017 Jan-Dec |
2016 Jan-Dec |
|---|---|---|---|---|
| Profit/loss for the period | 24.5 | -22.5 | 36.8 | -1.5 |
| Other comprehensive income to be reclassified to profit or loss | ||||
| Effects from cash flow hedges | 0.5 | 0.9 | -3.1 | 4.9 |
| Deferred tax | -0.1 | -0.2 | 0.7 | -1.1 |
| Total result related to Parent company shareholders | 24.9 | -21.8 | 34.4 | 2.3 |
| Parent company (SEKm) | 2017 Dec 31 |
2016 Dec 31 |
|---|---|---|
| Non-current assets | ||
| Intangible assets | 282.9 | 52.0 |
| Property, plant, and equipment | 14.0 | 0.8 |
| Financial assets | 119.6 | 347.5 |
| Current assets | ||
| Inventories | 139.3 | 130.5 |
| Current receivables | 521.0 | 574.1 |
| Cash and cash equivalents | 41.5 | 43.4 |
| Total assets | 1 118.3 | 1 148.3 |
| Shareholders' equity | 411.3 | 373.2 |
| Provisions | 58.6 | 74.9 |
| Long term liabilities | 100.0 | 160.0 |
| Current liabilities | 548.4 | 540.2 |
| Total shareholders' equity and liabilities | 1 118.3 | 1 148.3 |
Effective 1 January 2017, Doro altered the definition of its markets, so reporting is consistent with how sales are organised. This means sales are divided into geographical regions, with Doro Care as a separate region. The comparative figures for 2016 have been restated to comply with this new reporting method.
| Sales per market Doro Group (SEKm) |
2016 Jan-Mar recalc. |
2016 Apr-Jun recalc. |
2016 Jul-Sep recalc. |
2016 Oct-Dec recalc. |
2016 Full year recalc. |
|---|---|---|---|---|---|
| Nordic | 57.9 | 88.3 | 87.2 | 119.7 | 353.1 |
| Europe, Middle East, and Africa | 106.8 | 102.7 | 124.4 | 127.5 | 461.4 |
| DACH (Germany, Austria, and Central Europe) | 86.6 | 97.7 | 121.4 | 157.2 | 462.9 |
| United Kingdom | 60.7 | 49.6 | 55.4 | 100.7 | 266.4 |
| US and Canada | 53.9 | 74.9 | 32.8 | 28.2 | 189.8 |
| Other regions | 6.3 | 1.5 | 4.5 | 6.6 | 18.9 |
| Care | 39.4 | 59.6 | 50.6 | 60.5 | 210.1 |
| Central overhead | 1.4 | -0.8 | -3.1 | -1.0 | -3.5 |
| Total | 413.0 | 473.5 | 473.2 | 599.4 | 1 959.1 |
Effective 1 January 2017, Doro reports the period's recurring revenue. Earlier, Doro reported forward looking 12 months recurring revenue on current subscriptions. The comparative figures for 2016 have been restated to comply with this new reporting method.
| Recurring revenue Doro Group (SEKm) |
2016 Jan-Mar recalc. |
2016 Apr-Jun recalc. |
2016 Jul-Sep recalc. |
2016 Oct-Dec recalc. |
2016 Full year recalc. |
|---|---|---|---|---|---|
| Recurring revenue | 17.2 | 33.3 | 35.4 | 38.8 | 124.7 |
IFRS 9, Financial Instruments, replaces the existing guidance in IAS 39 Financial Instruments, Recognition and Measurement. IFRS 9 addresses the classification, measurement and derecognition of financial assets and financial liabilities, introduces new rules for hedge accounting and a new impairment model for financial assets. The standard must be applied for financial years commencing on or after 1 January 2018. The Group has reviewed its financial assets and liabilities and assessed the potential impact on its consolidated financial statements resulting from the application of IFRS 9. Based on the assessments performed Doro concluded that its current hedge relationships qualify as continuing hedges upon the adoption of IFRS 9 and has updated its hedge documentation in accordance with IFRS 9. Also, in other areas IFRS 9 does not have a material impact on Doro's consolidated financial statements. The Group will adopt the standard from 1 January 2018 and the cumulative impact of the adoption, which is not expected to be material, will be recognised in retained earnings as of 1 January 2018.
IFRS 15, Revenue from contracts with customers, establishes a comprehensive framework for determining whether, how much and when revenue is recognised. This standard replaces IAS 18 covering contracts for goods and services, IAS 11 covering construction contracts and IFRIC 13 covering Customer Loyalty Programmes. The new standard is based on the principle that revenue is recognised when control of a good or service transfers to a customer. The standard is mandatory for financial years commencing on or after 1 January 2018. Doro carried out an analysis and impact assessment during the past financial year. Based on a detailed analysis of contracts, Doro identified a need to adjust the allocation of sales prices between different performance obligations included in the package deals Doro Care provides. The changed allocation model has no significant impacts on Doro's consolidated financial statements. The Group will adopt the standard from 1 January 2018 and the cumulative impact of the adoption, which is not expected to be material, will be recognised in retained earnings as of 1 January 2018.
| Gross Margin | Net sales - Merchandise costs |
|---|---|
| Gross Margin, % | Gross Margin in percentage of Net sales |
| Average number of shares | Number of shares at the end of each period divided with number of periods. |
| Average number of shares after dilution |
Average number of shares adjusted with the dilution effect from warrants is calculated as the difference between the assumed number of shares issued at the exercise price and the assumed number of shares issued at average market price for the period. |
| Earnings per share | Profit/loss after financial items minus tax divided by average number of shares for the period. |
| Earnings per share, after dilution | Profit/loss after financial items minus tax divided by the average number of shares for the period after dilution. |
| Number of shares at the end of the period |
Actual number of shares at the end of the period. |
| Number of shares at the end of the period, after dilution |
The number of shares at the end of the period adjusted with the dilution effect from warrants is calculated as the difference between assumed number of shares issued at the exercise price and the assumed number of shares issued at the closing market price at the end of the period. |
| Equity per share | Shareholders' equity at the end of the period divided by the number of shares at the end of the period. |
| Equity per share, after dilution | Shareholders' equity at the end of the period divided by the number of shares at the end of the period, after dilution. |
| Equity/assets ratio, % | Shareholders' equity as a percentage of the balance sheet total. |
| Return on average shareholders' equity, % |
Profit/Loss rolling twelve months after financial items and tax divided by average shareholders' equity. |
| Capital employed | Total assets reduced with non-interest-bearing debt and cash and bank balances. |
| Return on average capital employed, % |
Operating profit/loss rolling twelve months, divided by the quarterly average capital employed excluding cash and bank balances. |
| Share price at period's end | Closing market price at the end of the period. |
| Market value, SEK m | Share price at period's end times the number of shares at the end of the period. |
Guidelines on Alternative Performance Measures (APMs) for companies with securities listed on a regulated market within the European Union have been issued by ESMA (the European Securities and Markets Authority). These guidelines apply to APMs disclosed when publishing regulated information on or after July 3, 2016. Reference is made in the interim report to a number of non-IFRS performance measures that are used to help investors as well as management analyse the company's operations. Described below are the non-IFRS performance measures that are used as a complement to the financial information that is reported in accordance with IFRS.
| Non-IFRS performance measure Description | Reason for use of the measure | |
|---|---|---|
| Restructuring costs | Costs for impairment together with personnel costs in connection to restructuring. |
This measure shows the specific costs that have arisen in connection to restructuring of a specific operation, which contributes to a better understanding of the underlying cost level in the continuing operations. |
| Gross margin % | Net Sales minus Merchandise costs in percentage of Net Sales. |
Gross Margin is an important measure for showing the margin before Personnel expenses and Other external expenses. |
| Sales growth comparable entities %Net Sales for the period minus Net Sales for entities acquired during the year minus Net Sales for the corresponding period last year in percentage of Net Sales for the corresponding period last year. |
Sales growth for comparable entities shows the Group's organic growth excluding acquired businesses. |
|
| Currency adjusted sales growth % Net Sales for the period recalculated using last year's currency exchange rates minus Net Sales for the corresponding period last year in percentage of Net Sales for the corresponding period last year. |
The measure shows the Sales growth excluding the effect of changes in currency exchange rates between the years. |
|
| Equity/assets ratio | Equity expressed as a percentage of total assets. | A traditional measure for showing financial risk, expressing the amount of total assets that is financed by the owners. |
| Return on shareholders' equity | Profit/Loss rolling twelve months after financial items and tax divided by average shareholders' equity. |
Shows from a shareholder perspective the return that is generated on the owners' capital that is invested in the company. |
| Capital employed | Total assets reduced with non-interest-bearing debt and cash and bank balances. |
This measure shows the amount of total capital that is used in the operations and is thus one component for measuring the return from operations. |
| Return on average capital employed |
Operating profit/loss rolling twelve months, divided by the quarterly average capital employed excluding cash and bank balances. |
This is the central ratio for measuring the return on the capital tied up in operations. |
| Recurring revenue | Net Sales during the quarter from existing recurring agreements. |
The measure shows revenues during the quarter from recurring agreements. |
| Number of subscribers | Number of subscribers connected to the alarm receiving centre. |
The measure shows the volume of customers in the alarm receiving centre. |
| Calculation of financial performance measures that are | 2017 | 2016 | 2017 | 2016 |
|---|---|---|---|---|
| not defined in IFRS | Oct-Dec | Oct-Dec | Jan-Dec | Jan-Dec |
| Currency adjusted sales growth (SEKm) | ||||
| Currency adjusted sales growth | -32.4 | -25.5 | ||
| Currency effect | -6.6 | 2.3 | ||
| Reported sales growth | -39.0 | -23.2 | ||
| Capital employed | ||||
| Total assets | 1 177.3 | 1 287.8 | ||
| -Non interest-bearing liabilities | 428.6 | 533.5 | ||
| -Cash and bank | 57.1 | 61.0 | ||
| Reported capital employed | 691.6 | 693.3 |
The Board of Directors and the CEO confirm that this year-end report provides a fair overview of the Company's and Group's business position and results and describes the significant risks and uncertainties faced by the Company and its subsidiaries.
This year-end report has not been reviewed by the Company's auditors.
Lund, Sweden, February 15, 2018
Johan Andsjö Chairman of the Board Henri Österlund Vice chairman of the Board Lena Hofsberger Board member
Karin Moberg Board member Jonas Mårtensson Board member
Robert Puskaric President & CEO
This information is information that Doro AB (publ) 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 on page 7, at 08:00 CET on February 15, 2018.
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