Q1 report

Q1 report (January 1-March 31 2000) * Sales totalled SEK 347 million (274 m) * Profit before tax of SEK 12 million (19 m) * EPS after standard tax of SEK 0.82 (1.37) * Components shortage continues Invoiced sales SEK 347 million +26% Profit before tax SEK 12 million -37% EPS after standard tax SEK 0.82 -39% Sales and results During Q1, DORO, the telecommunications company listed on the OTC-list of the Stockholm Exchange, recorded sales of SEK 347 million (274 m), an increase of 26% on the same period last year. Adjusted for acquisitions, sales were down by 7%. The Group made a profit before tax of SEK 12 million (19 m). Demand has been strong, but DORO has not been able to deliver volumes as planned. Logistical costs have risen to compensate for delayed deliveries. DORO reported a major success in the UK in Q1 last year. This was responsible for a significant part of the results' difference compared to 1999. The units acquired in 1999 (UpGrade of Sweden, DORO Matra Telecom of France and DORO Atlantel of Poland) are developing according to plan. Initially these will achieve significant additional sales but make a smaller contribution to the results before their product ranges have been co-ordinated with the DORO product range, and their organisations have been adapted. Increased goodwill depreciation and higher financial costs from the acquisitions has reduced the results. Global components shortage continues The shortage of different components continued during the quarter. This components shortage has been caused by a worldwide lack of manufacturing capacity and has mainly affected DECT digital wireless telephones. The main reason is the substantial demand for mobile phones. DORO's size and importance as a purchaser of different telephony products gives DORO access to the components required. Through its wide contact network DORO has agreements with different manufacturers. Delivery orders are in place until Q3. The shortage of products increases the purchase price and logistics costs. DORO does not foresee any let up in the global components shortage for 2000. Outlook for the coming year A number of factors that have a positive effect on profits are * The acquisitions in 1999 will provide, pro forma, SEK 376 million in sales * The international launch of exchanges and wireless broadband * The launch of new cordless telephones and terminal products The global shortage of components will have a negative impact on profits for the rest of the year. The market The agreement for wireless broadband with Allgon is being further developed. An agreement has been signed with their subsidiary Wireless Solution concerning wireless LAN. The range will be called DORO Airborne, and created a lot of interest at its introduction at the CeBit trade fair in Hanover at the end of February. It will be launched during the latter part of the year. Further co-operation has started around wireless Ethernet microwave links. The market for cordless telephones performed more slowly during Q1 due to lower product supply. A transition is underway from analogue to digital telephones within the cordless telephone market, and Q1 saw the launch of the new X100 and 4055 digital cordless telephones. Terminal products (telephones, telephone answering machines, caller identity products etc.) are continuing to progress well, and the product range was launched in France and Poland. The market for switchboards has been more subdued during Q1 following heavy sales at the end of the 1999. The network of PBX-distributors continues to expand outside Sweden. An agreement has been signed with SafePay to give DORO's distributors the possibility of accessing an Internet shop. Initially starting with Sweden, it will then continue with the remaining DORO companies. Sales per region and product line Major climbs in sales were noted in Australia and on the markets where DORO has no subsidiaries. Sales in the UK were also very high at the start of last year. This year's sales are considerably lower. DORO is mainly active in the following product lines: cordless telephones, terminal products, switchboards, wireless broadband and ISDN products. The largest proportion of sales is in cordless telephones (50% of sales), followed by terminal products (30%) and company switchboards (10%). The proportion for wireless broadband and ISDN products is approaching 10% of total sales. The largest rise in figures is for cordless telephones, while wireless broadband products increased mostly in relative terms. In conjunction with the original acquisition of DORO Target in Norway came a number of products that are only sold in Norway. These product ranges and the name Target were sold during the quarter. The effect on profits is marginal and sales for 1999 were SEK 38 million. DORO A/S is now totally focussed on telecoms in Norway. Financial performance and investments The Group's balance sheet total has risen by SEK 127 million to SEK 673 million, since the start of the current financial year. DORO Matra Telecom and DORO Atlantel have been included since 1 January. The recently acquired companies are responsible for a majority of the boost to the balance sheet total. Investments totalled SEK 1 million (0 m). Goodwill has risen to SEK 94 million (8 m) due to corporate acquisitions. The Group's net debt (interest-bearing liabilities less cash) has declined by SEK 40 million to SEK 100 million since the start of the year. Comprehensive airfreight has contributed to an improved cash flow (delivery is usually by sea freight). The debt/equity ratio has fallen from 0.73 to 0.58. This reduction is explained by a better cash flow and temporary non-interest bearing liabilities in connection with the acquisitions.Most of these liabilities are in SEK and GBP. Parent company The parent company's net sales totalled SEK 7 million (8 m) during the first three months. The profit before tax was SEK 14 million (-1 m). Dividends have been received from the subsidiaries. Future reports The Board has decided on the following dates for the quarterly reports: 17 July, 16 October and 25 January 2001. The Annual General Meeting will be held on 14 March 2001. Quarterly reports can be found on DORO's website at www.DORO.com. This report has not been audited. For further information, please contact: Claes Bühler, CEO, +46 46 280 50 61 Ingvar Karlsson, CFO, +46 46 280 50 62 17 April 2000 Lund, Sweden The Board of Directors, DORO AB ------------------------------------------------------------ Please visit http://www.bit.se for further information The following files are available for download: http://www.bit.se/bitonline/2000/04/17/20000505BIT00890/bit0001.doc http://www.bit.se/bitonline/2000/04/17/20000505BIT00890/bit0002.pdf