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Third party research

Doro: Beating our sales and EBIT forecasts - ABG

Doro

This is a third party research report and does not necessarily reflect our views or values

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Q2 details
Sales SEK 407m (+13% vs. ABGSCe 361m). Group EBIT SEK 22m (+76% vs. ABGSCe 12m). Adjusted for FX, sales increased 28% y-o-y. Organic growth in Doro Care was 8.5% y-o-y. Adj. EBIT 31m (+79% vs ABGSCe 17m). Net profit SEK 13m (+57% vs ABGSCe 8m). Care EBIT was 8.1m (-12.5% vs ABGSCe 9.3m). Phones EBIT was SEK 24.8m (+126% vs ABGSCe 11.0m).

Increased market activity
Market activity continued to increase in Q2 as COVID-19 restrictions were lifted. Both business areas performed well with positive organic growth, with Doro Care gaining market share in Sweden during the quarter. Management expects that the positive momentum in both markets will continue in the coming quarters. The restructuring program developed according to plan in Q2, driving a strong adj. EBIT of SEK 31m. The program is expected to be completed in the coming quarters with cumulated cost savings of SEK 110-130m. We note that the EBIT beat vs. our forecast mainly stemmed from solid performance in Doro Phones, which showed an impressive EBIT margin of 10% in Q2’21 (-1%). Sales were somewhat impacted by component shortages and increased lead-times; management expects the situation to continue in coming quarters.

Listing of Doro Care is in full swing
The plan to separate the businesses is developing according to plan. Management aims to complete the listing in Q4’21. We continue to see positive on the listing. With relatively few synergies between the two areas, we believe it will result in improved efficiency and innovation for both businesses.
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