Xplora Technologies: Replicating its success in a new category - ABG

Incorporating Doro lifts '26e-'27e EBITA by 25-53%
We forecast a '25e-'28e EBITA CAGR of 32%...
...as a result, EV/EBITA drops from 11x in '25e to 2.9x in '28e


Large potential upside from subscriptions with Doro phones

Following Xplora's acquisition of 89.6% of the shares i Doro AB, Doro will be consolidated from Q1. We therefore update our estimates to include Doro, and also to reflect the change from NGAAP to IFRS. As a result, we lift '25e-'27e revenue by 95-81% and EBITA by 45%, 25% and 53%, respectively (but with negative impact on EPS due to high interest expenses due to the new NOK 930m bank loan). The strategic rationale for the acquisition is to replicate the success Xplora has had in building a base of recurring subscription revenue from its kids' watches. It will now do the same with Doro's phones. Xplora's kids business has had a conversion rate (new subscribers per watch sold) of ~26%. We think the conversion rate for Doro is likely to be lower, given elderly people (as opposed to kids) already have an existing phone subscription. But, with ~1.5m phones sold annually, our calculations indicate that no more than 5-10% conversion rate is needed in order to drive strong earnings growth.