Doro delivered solid gross and operating margins in the quarter. However, tough comparables and delay in delivery of Leva feature phones led to a 20% decline, bringing sales down to SEK218m.  Very high gross margin pushed up the operating margin to 13.9% despite decline in sales. The current bid of SEK34 supports the stock price and the acceptance period is to ends around November 8.

Doro

* Limited recurring revenue streams, as primary income is derived from hardware sales, potentially affecting long-term revenue predictability.
* Unlikely to achieve five-fold growth within a decade, indicating potential limitations in market size or growth trajectory.
* Products typically have shorter life cycles, requiring continuous innovation and reinvestment to maintain market relevance.
* Limited pricing power in a competitive market, potentially impacting profit margins and ability to pass on cost increases.
* Lack of proactive environmental sustainability initiatives, which may become increasingly important for stakeholders and investors in the future.

* Strong market position in senior-focused technology, benefiting from secular tailwinds of an aging population.
* Asset-light business model with consistent profitability, positive cash flow, and returns on invested capital exceeding cost of capital.
* Diversified product offerings and geographic expansion, demonstrating ability to innovate and capture new market opportunities.
* Products contribute positively to society by improving accessibility and safety for seniors, enhancing brand reputation and customer loyalty.
* Resilient business model with limited cyclical dependencies and minimal regulatory interference, providing operational stability.

Over the past five years, Doro's revenue growth has decreased by -14.1% and net profit by -9.7% per year. So, even though the company is now generating strong cash flows, it needs to demonstrate increasing growth in the future. Doro is a mature company that generates stable profitability, with expected revenue growth slightly above inflation at around 3% to 4% per year."

Doro has worked over the past year to streamline its inventory, reduce working capital as a percentage of sales, and improve cash flow. In addition, Doro now has a net cash position. The board decided in 2023 to start distributing funds to its shareholders. Consequently, the balance sheet is in very good condition, and the cash flow is robust at Doro.

* Limited direct experience of the new CEO in Doro's core senior-focused technology market, potentially impacting industry-specific knowledge and expertise.
* Lack of long-term tenure for the CEO and senior team, which may affect stability and consistent strategy execution in the short term.
* Limited female representation in leadership positions, indicating a need for improvement in gender diversity at the board and executive levels.
* Unclear alignment between CEO pay and share performance under new leadership, potentially affecting shareholder value creation.
* Absence of sustainability-related performance incentives in executive compensation, potentially limiting focus on long-term environmental and social goals.

* Strong leadership with CEO Julian Read bringing strategic thinking, innovation, and brand-building experience, focusing on long-term value creation and growth in senior-focused technology.
* Lean, efficient organization with a clear strategic plan, emphasizing innovation in senior-oriented technologies and telehealth solutions, demonstrating commitment to long-term value creation.
* Transparent and consistent investor communication, with regular updates and a focus on long-term business value, aligning with the company's core mission and values.
* Diverse board with relevant industry expertise, capable of challenging management and understanding the value creation process, supporting effective governance and strategic direction.

SEKm	2022	2023	2024e	2025e	2026e
Revenues	909.2	973.1	899.9	935.9	973.3
Revenue Growth	-12.5%	7.0%	-7.5%	4.0%	4.0%
EBITDA	100.1	119.9	122.5	111.9	160.7
EBIT	55.1	68.2	81.7	74.4	121.7
EBIT Margin	6.1%	7.0%	9.1%	7.9%	12.5%
Net Income	40.6	32.0	83.0	51.1	88.7
EV/Sales	0.3	0.4	0.7	0.6	0.6
EV/EBIT	5.1	5.1	7.5	8.2	4.5

Soft topline paired with strong profitability

Xplora's bid of SEK34 is still on the table

Valuation - no change

Key financials

Q3 2024