Doro Interim Report July September 2016 Jérôme Arnaud, President & CEO Magnus Eriksson, CFO October 28 th 2016
Agenda Company overview - Our market position - Strategic objectives Third quarter 2016 - Comments on the result - Concluding remarks and Q&A session - Recap of our strategy
Doro in Brief 3
Doro Consumer Leader of senior mobile market #1 MARKET LEADER 65+ SENIORS 42 YEARS OLD Market Leader with 62,2% Market Share* Strong & reliable brand. Focused on seniors by addressing their specific needs Swedish public company. Created in 1974. Listed on the Stockholm Nasdaq OMX 40 COUNTRIES 25% CAGR Sales share by region R12** 11% Source: * GfK,, Senior Mobile Market, Panel data, EU3, Jan Dec 2015 ** Rolling 12 months October 2015 September 2016 Global presence. Distribution by major operators, consumer retail and specific retail Compound annual growth rate over five years Nordic Emea Dach UK US Other 14% 25% 25% 24% 4
Doro Group complementary value propositions Doro Group consist of several business areas and value propositions focusing on technology and services that make Age a life stage of independence, empowerment and enjoyment. These propositions are centered round strong synergies. Doro Consumer Devices B2C Mobile phones Applications & Services Fixed line devices Seniors Mobile Digital Focussed Doro Care B2B Digital care phones Alarm receiving centre 360 solutions 5
Doro Care 25 YEARS OLD #1 LEADER 120k CAREPHONES Founded in Kalix, Sweden. A history of innovation in carephone design incl. CareIP, the world s first digital carephone We offer a complete digital alarm chain, carephones, communication and response services Digital alarms sold since 2013. Number one carephone in Nordic market 120k CONNECTIONS 340 EMPLOYEES Alarm Response Centers in Malmö, Kalix & Oslo. Europe s fastest growing social alarm business handling circa 15.000 calls/day Offices in: Sweden, Norway, Germany, UK & Netherlands 6
Channels Network operators Europe Americas Middle East and Asia Pacific Africa 7
Channels Retail & Specialist Consumer Electronic retailers Specialist 8
Our strategic objectives Leader in traditional areas - Complete feature phone range - Adapted corded/cordless range Bridge the digital divide Easy to use Smart devices Address the more fragile users - Telecare solutions - Enable our traditional range with care functionalities Deliver Services that enrich lives - Doro applications - Doro devices linked to Alarm responsive centre 9
Q3 2016 10
Operational highlights - Stabilized situation with signs of recovery - Phones, particularly feature phones, performing well - Shipments of high end feature phones and smart phones back on track - Smartphones share of total 18.5% - Doro Care integrated under Doro Group management - Changes and reductions in Group Management - We still suffer from SKL standstill - New framework agreement with SKI, positive impact will mainly be seen in 2017 - Gross margin increases to 39.3% (36.6 in Q3 2015). - Forward looking 12 months recurring revenues reach 132 MSEK (71 MSEK in Q3 2015) - New Acting Chairman of the Board: Johan Andsjö 11
Total sales development SEKm 700 Q3 net sales: +6.4% 600 500 400 445 473 300 200 Appeal of a new framework agreement affects Doro Care 100 0 2014/Q4 2015/Q1 2015/Q2 2015/Q3 2015/Q4 2016/Q1 2016/Q2 2016/Q3 12
Order intake Only the 2nd best in company history SEKm 600 500 566 Q3 order intake: -3.3% 548 400 300 200 100 Order book SEK 310.9m, an increase of 5.7%. 0 2014/Q4 2015/Q1 2015/Q2 2015/Q3 2015/Q4 2016/Q1 2016/Q2 2016/Q3 13
Doro Care Subscribers and forward looking 12 months recurring revenues 120 000 100 000 80 000 Recurring revenues in MSEK 60 000 120 000 100 000 80 000 60 000 40 000 20 000 40 000 20 000 0 Q4 14 Q115 Q215 Q315 Q415 Q116 Q216 Q316 Number of subscribers 0 Q4 14 Q115 Q215 Q315 Q415 Q116 Q216 Q316 14
Sales development per region EMEA A large order from Algeria Telecom. Smartphone sales stable, supported by listings with two new operators. DACH Feature phones has sold particularly well. New listings and a better product mix in Switzerland. USA and Canada Normalized ordering pattern of feature phones, no reordering of smartphones July September SEKm 2016 2015 Change, % Nordic 133,3 121.1 EMEA 125.4 119.1 DACH 123.7 98.0 UK 56.5 63.5 US and Canada 32.8 39.0 Other regions 4.4 3.0 Central -2.9 1.2 10,1% 5,3% 26,2% -11,0% -15,9% Total Sales 473.5 444.9 6,4% - - Nordic July September 2016 12% 26% 7% 1% 26% 28% Europe, Middle East and Africa DACH (Germany, Austria, Switzerland, Central Europe) United Kingdom USA and Canada Other regions 15
Gross margin development The gross margin increased by 3.3 pp % 42 41 40 39 38 37 36 35 34 33 32 31 36,6 Q3 gross margin: +3.3 pp 39,3 2014/Q4 2015/Q1 2015/Q2 2015/Q3 2015/Q4 2016/Q1 2016/Q2 2016/Q3 16
EBITDA, EBITA, EBIT EBITA for the second quarter decreased to SEK 15.9m (32.1). In the second quarter, EBIT was SEK 13.9m (29.7), which corresponds to an EBIT margin of 2.9 percent (6.7). The temporarily lower share of new Doro Care contracts still impacts EBIT significantly. Net financial items in the third quarter were SEK 0.1m ( 0.8). Profit after tax or the period amounted to SEK 12.6m (22.0). Income Statement Jul Sept Jan Sept Jan Dec Doro Group (msek) 2016 2015 2016 2015 2015 EBITDA 32.9 39.4 76.2 67.4 139.2 EBITDA margin, % 7.0 8.9 5.6 5.6 7.6 Depr. acc. to plan, excl. dep. of int. assets related to company acq. -17,0-7,3-42,5-23,5-34.1 EBITA 15.9 32.1 33.7 43.9 105.1 EBITA margin, % 3.4 7.2 2.5 3.6 5.7 Depr. acc. to plan of int. assets related to company acq. -2,0-2,4-6,3-7,4-9.9 EBIT 13.9 29.7 27.4 36.5 95.2 EBIT margin, % 2.9 6.7 2.0 3.0 5.2 17
Cash flow from current activities SEKm 80,0 60,0 Q3 Net debt SEK 178.6m 40,0 20,0 32,9 36,5 0,0 20,0 2014/Q4 2015/Q1 2015/Q2 2015/Q3 2015/Q4 2016/Q1 2016/Q2 2016/Q3 40,0 60,0 18
Concluding remarks 19
Our strategy Keep developing our devices business and controlling its profitability. Grow Doro Care in Nordics first, then in a selection of European countries. - Organic growth, developing average revenue per user - Selective acquisitions Focus on increased efficiency through: - Streamlining operations - Reducing operational costs - Trimming our development portfolio Keep on developing the brand. 20
Summary - Situation has stabilized with signs of recovery - New framework agreement with SKL - The supply of high end feature phones and smart phones now solved - The roll out of Doro 8030 is progressively developing - But challenges ahead as well - Smart phone sales are not growing to the extend we would like to see it - Lost listing in Q2 affects Q3 and Q4 - Increasing operating costs need actions - Result has suffered from some exceptional costs - Revised outlook reiterated 21
Thank you for your attention Q&A Next report: Q4 2016 on February 17, 2017 22
Disclaimer FORWARD LOOKING STATEMENTS - This presentation contains forward looking statements with words such as believes, anticipates, outlook, confident, meeting and expects about expected revenues and earnings, anticipated demand, internal estimates and liquidity. These forward looking statements involve a number of unknown risks, uncertainties and other factors that could cause actual results to differ materially. Unknown risks, uncertainties and other factors are discussed in the Risk section of the Annual Report 2014 and in the Interim Report. CONSOLIDATED FINANCIAL RESULTS - Doro provides financial information adjusted for items such as currency effects and one off cost items solely as supplemental financial information to help investors and the financial community make meaningful comparisons of Doro s operating results from one financial period to another. These adjustments might not be in accordance with IFRS. 23
Thank you doro.com