Further digitalization within elderly care is expected to benefit Doro’s service segment going forward. As the number of retirees grows, it will be difficult to provide traditional care for everyone in need, which illustrates the need for increased spending and more efficient elderly care, which Doro Care can  capitalize on.

Diversified product portfolio expected to generate revenue synergies. Introducing the concepts “Smartcare by Doro” and “Response by Doro” strengthens the incentives to choose a Doro phone while using other services from DoroCare, and vice versa.  This implies a lock in effect and a possible revenue synergi between Doro’s segments.

Increased sales through acquisition in the UK market. The acquisition of Welbeing in Q2 (2018) represent an expansion of operations to the UK market. Welbeing were acquired to EV/EBITDA 8x, adding 90 MSEK in yearly revenue. The management has stated that Doro is actively looking for continuous acquisitions and there is a credit facility that can be used.

Increased EBITDA-margin of 13.39% due to the growth in DoroCare. The higher share of total revenue expected from the service segment in 2019E, combined with its higher margins, is expected to lead to a higher EBITDA-margin of 13.39 % in 2019E compared to 8.12 % in 2017A.

Analysts: Rikard Jannesson & Magdalena Johansson

 

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