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Doro

Doro

Mobile phones for the elderly

Doro is a market-leading supplier of products (e.g. feature phones) and telecare services, primarily directed to the senior population. The company was founded in 1974, is active in 40+ countries, and has since its inception made several transitions with its operations. It started by offering answering machines to business clients, but this changed into mainly offering mobile phones for the senior segment in 2007, and since 2014 it has largely been focusing on telecare services. The latter has both occurred through M&A and through organic development.

If Doro’s new goals, announced in late 2017, were to be met, the company would have significantly higher margins going forward. In addition, the “silver economy” (aging population) is still an opportunity for players such as Doro to seize. There is an increasing demand for products suited for seniors, which needs to be supplied.

Doro has a strong position within its niche, but there is a risk that bigger players could exploit this market, which eventually could hurt Doro’s market share. Another risk is associated with the increasing technological knowledge of seniors. This has resulted in advanced phones becoming more common.

SEKm 2020 2021e 2022e
Sales 1689 1631 1653
Sales growth (%) -18,1 -3,5 1,4
EBITDA 204 257 279
EBITDA margin (%) 12,1 15,7 16,9
EBIT adj 102 139 153
EBIT adj margin (%) 6 8,5 9,3
Pretax profit 69 121 151
EPS rep 2,05 3,89 4,83
EPS growth (%) -37,6 90 24,3
EPS adj 3,1 4,78 5,19
DPS 0 1,25 1,75
EV/EBITDA (x) 6 5,5 4,7
EV/EBIT adj (x) 12,1 10,2 8,6
P/E (x) 22,8 15,1 12,2
P/E adj (x) 15,1 12,3 11,3
EV/sales (x) 0,7 0,9 0,8
FCF yield (%) 12,7 8,1 10,9
Dividend yield (%) 0 2,1 3
Net IB debt/EBITDA 0,5 0,1 -0,3
Lease adj. FCF yield (%) 11,1 6,8 9,7
Lease adj. ND/EBITDA 0,2 -0,2 -0,6
SEKm 2020 2021e 2022e
Sales 1689 1631 1653
COGS -1119 -1061 -1061
Gross profit 570 569 593
Other operating items -366 -313 -314
EBITDA 204 257 279
Depreciation on tangibles -12 -21 -20
Depreciation on intangibles -79 -81 -80
EBITA 95 137 162
Goodwill impairment charges 0 0 0
Other impairment and amortisation -9 -9 -9
EBIT 86 127 153
Other financial items 0 0 0
Net financial items -17 -6 -3
Associated income 0 0 0
Other EO items 0 0 0
Pretax profit 69 121 151
Tax -20 -28 -35
Net profit 49 93 116
Minority interest 0 0 0
Net profit discontinued 0 0 0
Net profit to shareholders 49 93 116
EPS 2,05 3,89 4,83
EPS Adj 3,1 4,78 5,19
Total extraordinary items after tax -15,9 -12 0
Tax rate (%) -28,4 -23 -23
Gross margin (%) 33,7 34,9 35,9
EBITDA margin (%) 12,1 15,7 16,9
EBITA margin (%) 5,6 8,4 9,8
EBIT margin (%) 5,1 7,8 9,3
Pretax margin (%) 4,1 7,4 9,1
Net margin (%) 2,9 5,7 7
Growth rates Y/Y 2020 2021 2022
Sales growth (%) -18,1 -3,5 1,4
EBITDA growth (%) -2,5 25,8 8,9
EBIT growth (%) -23,6 48,7 20,2
Net profit growth (%) -37 90 24,3
EPS growth (%) -37,6 90 24,3
Profitability 2020 2021 2022
ROE (%) 6,2 11 12,3
ROE Adj (%) 9,4 13,5 13,2
ROCE (%) 7,7 11,3 12,5
ROCE Adj(%) 9,9 13,1 13,2
ROIC (%) 6,6 10,7 13,1
ROIC Adj (%) 7,8 11,7 13,1
Adj earnings numbers 2020 2021 2022
EBITDA Adj 220 269 279
EBITDA Adj margin (%) 13 16,5 16,9
EBITA Adj 111 149 162
EBITA Adj margin (%) 6,6 9,1 9,8
EBIT Adj 102 139 153
EBIT Adj margin (%) 6 8,5 9,3
Pretax profit Adj 94 143 159
Net profit Adj 74 115 125
Net profit to shareholders Adj 74 115 125
Net Adj margin (%) 4,4 7 7,5
Leasing payments -18 -18 -18
Depreciation and amortisation -109 -120 -118
Of which leasing depreciation -18 -18 -18
EO items -16 -12 0
Impairment and PPA amortisation -9 -9 -9
EBITDA lease Adj 202 251 262
EBITDA lease Adj margin (%) 12 15,4 15,8
SEKm 2020 2021e 2022e
EBITDA 204 257 279
Net financial items -17 -6 -3
Paid tax -27 -28 -35
Non-cash items 12 0 0
Cash flow before change in WC 172 222 242
Change in WC 72 -26 -12
Operating cash flow 244 196 230
CAPEX tangible fixed assets -20 -20 -20
CAPEX intangible fixed assets -43 -52 -56
Acquisitions and disposals -38 -11 0
Free cash flow 142 114 154
Dividend paid 0 0 -30
Share issues and buybacks 0 0 0
Other non cash items -68 0 0
Decrease in net IB debt 57 52 64
Balance Sheet (SEKm) 2020 2021 2022
Goodwill 514 519 519
Indefinite intangible assets 0 0 0
Definite intangible assets 239 221 222
Tangible fixed assets 60 59 59
Other fixed assets 18 18 18
Fixed assets 894 865 832
Inventories 224 153 184
Receivables 293 307 322
Other current assets 0 0 0
Cash and liquid assets 171 267 373
Total assets 1581 1591 1711
Shareholders equity 805 898 984
Minority 0 0 0
Total equity 805 898 984
Long-term debt 218 218 218
Pension debt 0 0 0
Convertible debt 0 0 0
Deferred tax 0 0 0
Other long-term liabilities 0 0 0
Short-term debt 0 0 0
Accounts payable 496 413 446
Other current liabilities 0 0 0
Total liabilities and equity 1581 1591 1711
Net IB debt 110 14 -92
Net IB debt excl. pension debt 110 14 -92
Capital invested 915 912 892
Working capital 21 47 60
EV breakdown 2020 2021 2022
Market cap. diluted (m) 1121 1409 1409
Net IB debt Adj 110 14 -92
Market value of minority 0 0 0
Reversal of shares and participations 0 0 0
Reversal of conv. debt assumed equity 0 0 0
EV 1231 1423 1317
Capital efficiency (%) 2020 2021 2022
Total assets turnover (%) 103,7 102,8 100,1
Capital invested turnover (%) 181,2 178,7 174,2
Capital employed turnover (%) 151,3 147,7 138
Inventories / sales (%) 13,9 11,4 10,2
Customer advances / sales (%) 0 0 0
Payables / sales (%) 30,4 26,8 24,8
Working capital / sales (%) 3,7 2,1 3,2
Financial risk and debt service 2020 2021 2022
Net debt / equity (%) 13,7 1,6 -9,3
Net debt / market cap (%) 11,5 1 -6,5
Equity ratio (%) 50,9 56,4 57,5
Net IB debt adj. / equity (%) 13,7 1,6 -9,3
Current ratio (%) 133,3 168 188,4
EBITDA / net interest (%) 1192,4 4096,5 10703,5
Net IB debt / EBITDA (%) 54,1 5,6 -32,8
Interest cover (%) 556,1 2184 6201,6
Lease liability amortisation -18 -18 -18
Other intangible assets 239 206 174
Right-of-use asset 63 63 63
Total other fixed assets 18 18 18
Leasing liability 63 63 63
Total other long-term liabilities 0 0 0
Net IB debt excl. leasing 48 -48 -154
Net IB debt / EBITDA lease Adj (%) 23,6 -19,2 -58,9
SEKm 2020 2021e 2022e
Shares outstanding adj. 24 24 24
Fully diluted shares Adj 24 24 24
EPS 2,05 3,89 4,83
Dividend per share Adj 0 1,3 1,8
EPS Adj 3,1 4,78 5,19
BVPS 33,52 37,41 40,99
BVPS Adj 2,16 7,19 12,13
Net IB debt / share 4,6 0,6 -3,8
Share price 40,1 58,7 58,7
Market cap. (m) 962 1409 1409
Valuation 2020 2021 2022
P/E 22,8 15,1 12,2
EV/sales 0,73 0,87 0,8
EV/EBITDA 6 5,5 4,7
EV/EBITA 12,9 10,4 8,1
EV/EBIT 14,4 11,2 8,6
Dividend yield (%) 0 2,1 3
FCF yield (%) 12,7 8,1 10,9
P/BVPS 1,39 1,57 1,43
P/BVPS Adj 21,59 8,17 4,84
P/E Adj 15,1 12,3 11,3
EV/EBITDA Adj 5,6 5,3 4,7
EV/EBITA Adj 11,1 9,6 8,1
EV/EBIT Adj 12,1 10,2 8,6
EV/cap. employed 1,1 1,2 1
Investment ratios 2020 2021 2022
Capex / sales 3,8 4,4 4,6
Capex / depreciation 69,6 70,2 76,1
Capex tangibles / tangible fixed assets 33,6 33,3 33,6
Capex intangibles / definite intangibles 18,1 25,3 32,4
Depreciation on intangibles / definite intangibles 33,1 39,3 46,2
Depreciation on tangibles / tangibles 20 36 33,3
Lease adj. FCF yield (%) 11,1 6,8 9,7

Equity research

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Media

Doro - Interview with CEO Carl-Johan Zetterberg
Doro - Company presentation with CEO Carl-Johan Zetterberg

Main shareholders - Doro

Main shareholders Share capital % Voting shares % Verified
Accendo Capital 15.5 % 15.5 % 31 Dec 2020
Nordea Fonder 12.9 % 12.9 % 28 Feb 2021
Rite Ventures 10.3 % 10.3 % 31 Dec 2020
Lazard Frères Gestion 5.7 % 5.7 % 31 Dec 2020
Dimensional Fund Advisors 3.1 % 3.1 % 28 Feb 2021
Familjen Eklund 3.0 % 3.0 % 31 Dec 2020
Originat AB 2.3 % 2.3 % 31 Dec 2020
Avanza Pension 2.3 % 2.3 % 31 Dec 2020
Thomas Eklund 1.8 % 1.8 % 31 Dec 2020
Nordea Liv & Pension 1.5 % 1.5 % 31 Dec 2020
Source: Holdings by Modular Finance AB

Insider list - Doro

Name Quantity Code Date
Josephine Salenstedt +2 486 572 * 26 Feb 2021
Jörgen Nilsson - 6 000 SELL 30 Dec 2020
Lennart Jacobsen + 10 000 BUY 3 Sep 2019
Erik Thomas Bergdahl - 70 000 SELL 20 Dec 2018
Erik Thomas Bergdahl - 9 425 SELL 20 Dec 2018
Erik Thomas Bergdahl - 3 075 SELL 30 Nov 2018
Johan Frogner + 40 000 BUY 15 Nov 2018
Erik Thomas Bergdahl - 11 210 SELL 19 Oct 2018
Robert Puskaric + 210 000 BUY 10 Aug 2018
Annika Lillie Hübner + 6 000 SUBS 10 Aug 2018

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