Doro - 30% adj. EBIT beat, Care back to org. growth
Sales -5% vs. ABGSCe, adj. EBIT +30% vs. ABGSCe Care saw +5% organic growth y-o-y (+6% vs.
ABGSCe) Seeks to spin off Care in 2021 Q4 details Sales SEK 490m (-5% vs ABGSCe 515m and -6% vs cons. 523m). Group EBIT SEK 38m (+78% vs ABGSCe and -12% vs cons.
). Adj. EBIT SEK 47m (+30% vs ABGSCe 36m).
Net income SEK 19. 2m (+37% vs ABGSCe 14m and +37% vs cons. 14m).
Despite a 20. 5% drop in sales y-o-y, Doro managed to hold up profitability well. Excluding the restructuring costs of SEK 9m (expected SEK 15m), adj.
EBIT increased 13% y-o-y to SEK 47m, for an adj. EBIT margin of 9. 6% (6.
7% in Q4’19). This was good number, in our view. Strong margins, despite 20% drop in sales Care continued to be a growth driver, and posted 4.
7% organic growth y-o-y (total growth of 11. 7%). During the quarter, Care added 24,000 new subscribers, reaching a total of 372,000 subscribers.
While Phones saw a clear recovery Q3, the business unit was impacted by the second COVID-19 wave in Q4. Phones sales were SEK 345m, corresponding to -9% vs. our estimate of -29% y-o-y (-21% in Q3).
Gross margin for Phones held up well and increased to 32% in Q4 (+1. 8pp vs ABGSCe), vs. 25.
9% in Q4’19. Phones EBIT margin was 11. 7% (+4.
1pp vs ABGSCe), driven by the improved gross margins. We have been waiting for the spin-off Yesterday, the company sent out a press release, stating that it aims to separately list its business area Care. There are relatively few synergies between the two areas; hence we like the news, and believe that it will result in improved efficiency and innovation for each business area.
The potential spin-off is subject to BOD authorization.
