Doro reports fourth quarter and full-year results 2023

Fourth quarter 2023 in summary

• Doro‘s net sales amounted to SEK 289.6 million (265.4), an increase of 9.1 percent.
• Gross margin was 39.8 percent (34.2).
• EBITDA amounted to SEK 44.0 (32.2), an increase of 36.6 percent.
• Operating profit (EBIT) amounted to SEK 25.6 million (20.2), corresponding to an operating margin of 8.8 percent (7.6).
• Profit after tax for the period was SEK 5.7 million (16.0) and earnings per share was SEK 0.23 (0.66).
• Free cashflow was SEK 57.6 million (32.5).

January-December 2023 in summary

• Doro‘s net sales amounted to SEK 973.6 million (909.5), an increase of 7.0 percent.
• Gross margin was 40.1 percent (34.9).
• EBITDA amounted to SEK 120.4 (100.4), an increase of 19.9 percent.
• Operating profit (EBIT) amounted to SEK 68.7 million (55.4), corresponding to an operating margin of 7.1 percent (6.1).
• Profit after tax for the period was SEK 32.4 million (40.9) and earnings per share was SEK 1.33 (1.68).
• Free cashflow was SEK 121.6 million (35.1).
• The Doro Board of Directors will propose that the 2024 Annual General Meeting approves a dividend of SEK 2.00 per share for the 2023 financial year, and that the remaining profit be carried forward.

MESSAGE FROM THE CEO
Another robust performance
The fourth quarter marked another robust performance for Doro, standing out as the best quarter of the year in terms of sales. The positive momentum from the third quarter continued into Q4 with sustained demand across operators, distributors, and retail channels, with the latter being the primary driver of revenue increase compared to the same quarter last year.
 
In contrast to the challenges faced by our retail customers in 2022 (grappling with substantial post-pandemic inventory burdens and diminished consumer purchasing power due to prolonged inflation) this year witnessed a significant shift, as the retailers showed increased confidence in their ordering, anticipating heightened consumption during the end-of-year commercial milestones.

Further to that, the success of our 4G portfolio continued, particularly fuelled by the introduction of the new 4G feature phone range at the end of September. In addition, we saw a substantial uptick in the sales of smartphones in UK, and even more so in the Nordics. This all contributed to a quarter-end revenue of SEK 290 million, a 9.1% increase compared to the fourth quarter last year.
The product mix during the quarter, characterized by increasing shares of both 4G feature phones and smartphones, coupled with a notable recovery in the Nordic region, were the primary catalysts behind the significantly improved gross margin of 39.8%, versus the 34.2% recorded last year.
Despite the challenges of the conflict erupting in the Middle East in early October, and the ensuing transport crisis in the Red Sea, our transport and deliveries remained resilient, and we did not face any significant disruptions during the quarter. While transport costs were slightly higher than previous quarter this year, they still remained at a reasonable level. Moreover, we benefited from a more stable currency situation, resulting in reduced hedging losses compared to the same quarter last year, especially as the USD showed fewer extreme fluctuations against other currencies. 
In Q4, EBIT reached SEK 25.6 million, a notable improvement of 26.7% compared to the previous year. We take pride in this achievement, especially considering the continued investments in both product development and sales and marketing initiatives.
 
In the latter part of the quarter, especially around Black Friday and Christmas, we executed a number of data-driven, consumer-focused, digital marketing initiatives. Together with the previously launched Doro pop-up store, these marketing initiatives provided further valuable insights into seniors’ preferences with regards to technology and marketing, as well as their online behaviour. At the same time it also enabled us to display and educate seniors and their family members about our products and offerings.
The marketing initiatives and the pop-up store concept will now be assessed as we deliberate on the next steps in aligning our products and services with the ever-evolving technology needs of seniors. A mile stone in this development, was the launch of our Doro HearingBuds, the third and latest addition to our new non-phone-based product portfolio. Together with the soon to be launched Doro Video DoorBell, the HearingBuds took centre stage during an all-staff company conference held in Båstad in Sweden during the quarter. The conference brought together all our regions and functions for two days, and together with the two new products, displayed strong optimism for the future. This positive energy makes me confident that the achievements of the company in 2023 will pave the way for even more successful years ahead.

Jörgen Nilsson, President and CEO

Webcast
A video conference call will be held on Thursday, 15 February 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).