Morning Note - 10th January 2023

SPINEGUARD

France - Medtech

Q4: a very positive end to the year

BUY

▪ Confirmation of the momentum observed in Q3

Fair value (EUR)

1.56

▪

Improvement in the US underway

Price (EUR)

0.776

▪

Still undervalued

Upside/down side

+101.8%

Strong growth in Q4

SpineGuard reported last night Q4 sales of EUR 1.58m, up strongly by +37% (+27% at constant exchange rates). On a full year basis, after a modest Q1 (+8%), growth accelerated in H2. Turnover reached EUR5.6m (vs EUR4.4m in 2021), up +27% (+17% at constant exchange rates). This is the 4th consecutive quarter of growth, an evidence of a return to a more established activity after long months disrupted by the successive waves of the pandemic. In the US, SpineGuard sold 2,738 DSG units in 2022 (+11%) with solid growth in Q4 (+18%). In the rest of the world 3,196 units were sold in 2022 (+18%), with Q4 performance being exceptional (+50%). Outside the US, sales were particularly strong in Mexico and several European countries. In Q4, the Group only recorded a small amount of non-operating revenues (cash received from partnerships). The reading of the activity on the ground is therefore clear. The reception of DSG Connect (signal now visible on a tablet) is excellent. This novelty is taking a growing share of surgeries. The sales published for the financial year are in line with our expectations (EUR5.6m).

New organization delivers in the US

In line with the previous quarter, sales in this strategic country are very well oriented. Wishbone Medical, the local partner, has placed new orders (post initial deliveries). Penetration of paediatric spine surgery is therefore well on track.

Lionel Labourdette, PhD, MBA

lionel@biostrategic-research.com+33 617 965 019

Stock data (2023-01-09)

ISIN

FR0011464452

Ticker

ALSGD.PA

Price (EUR)

0.773

Market capitalisation (EURm)

24.5

Free float (%) est.

96.1

Floating capitalisation (EURm)

23.6

Number of shares (,000)

31,741

Average daily volume (3 m)

136,887

12m performance

2,0

1,5

1,0

0,5

0,0

10/05/22

10/09/22

10/11/22

10/01/22

10/03/22

10/07/22

ALSGD

ALSGD rel to CAC Small & Mid 190

2023: reassuring prospects

The renewed sales momentum should continue in the coming quarters. DSG Connect brings real added value and is a clear marketing asset. This new functionality gives the technology a "facelift" and is generating strong interest among surgeons. The return to normal activity in hospitals (post covid) is also reassuring and surgeries are rescheduled.

.

Valuation and rating

Q3 had given us a glimpse of a better post-pandemic sky. This Q4 confirms the trend. The market will therefore be reassured and will be able to place again its trust in the company. Financial visibility is good (cash until end of 2024), giving the company time to develop its sales but also to advance its R&D programmes which, according to our expectations, will be monetised within 18-24 months (own revenues or deals/licences). We therefore reiterate our positive opinion on this dossier, whose potential will progressively be recognized.

Change (%)

1 m

3 m

12m

Absolute

+20.2

+54.3

-36.2

Rel. to CAC SM190

+15.2

+36.1

-26.7

Rel. to Next Biotech

+24.7

+56.6

-30.1

Financials (31/12)

EURm

2021

2022E

2023E

2024E

Sales

4.4

5.6

7.2

8.9

EBITDA

-1.5

-0.4

0.3

1.0

EBIT

-1.8

-0.7

0.0

0.6

Net income

-2.7

-1.1

-0.3

0.5

EPS (EUR)

-0.10

-0.03

-0.01

0.01

Net debt

4.4

-1.0

-1.6

-2.8

Key ratios

2021

2022E

2023E

2024E

EV/Sales

7.5x

4.2x

3.2x

2.4x

EV/EBITDA

na

na

na

22.4x

EV/EBIT

na

na

na

34.6x

PER

na

na

na

50.8x

ROIC

na

na

na

17%

ROE

na

na

na

7%

EV/IC

7.8x

5.6x

5.8x

5.8x

Gearing

na

-19%

-28%

-42%

Next communication:FY results - April 13th

The issuer and Biostrategic Partners have agreed that Biostrategic Partners will produce and disseminate investment research as a service

1

Profit and Loss

As of 31/12 (EURm)

2017

2018

2019

2020

2021

2022E

2023E

2024E

Sales

8.17

7.58

6.83

4.85

4.41

5.62

7.16

8.91

Change n-1

9.5%

-7.3%

-9.9%

-29.0%

-9.2%

27.6%

27.4%

24.4%

Other revenues

-

-

-

-

-

-

-

-

Total revenues

8.17

7.58

6.83

4.85

4.41

5.62

7.16

8.91

Gross margin

6.95

6.55

5.77

4.04

3.61

4.56

5.90

7.38

EBITDA

-2.66

-0.86

-0.14

-1.49

-1.04

-0.38

0.35

0.97

Change n-1

20%

68%

84%

-993%

30%

63%

191%

-178%

Depreciation & amortisation

0.31

0.26

0.30

0.35

0.31

0.33

0.34

0.35

Goodwill

-

-

-

-

-

-

-

-

EBIT

-2.96

-1.11

-0.43

-1.84

-1.35

-0.71

0.01

0.63

Change n-1

18%

63%

61%

-326%

27%

47%

102%

-4338%

Net financial income

-1.16

-1.21

-0.64

-0.84

-0.30

-0.40

-0.28

-0.15

Minorities

-

-

-

-

-

-

-

-

Other

-

-

-

-

-

-

-

-

Net profit before tax

-4.13

-2.32

-1.07

-2.68

-1.65

-1.11

-0.26

0.48

Tax

-

-0.02

0.39

-0.04

-0.08

-

-

-

Net in come

-4.13

-2.33

-0.69

-2.72

-1.72

-1.11

-0.26

0.48

Change n-1

1%

43%

71%

-296%

37%

35%

77%

285%

EPS

-0.72

-0.34

-0.05

-0.12

-0.06

-0.04

-0.01

0.02

EPS fully diluted

-0.65

-0.31

-0.05

-0.10

-0.05

-0.03

-0.01

0.01

Gross margin (% of sales)

85.1%

86.5%

84.5%

83.2%

81.9%

81.2%

82.5%

82.9%

EBITDA (% of sales)

NA

NA

NA

NA

NA

NA

4.9%

10.9%

EBIT (% of sales)

NA

NA

NA

NA

NA

NA

0.2%

7.1%

Net margin (% of sales)

NA

NA

NA

NA

NA

NA

NA

5.4%

Cash Flow statement

Au 31/12 (MEUR)

2017

2018

2019

2020

2021

2022E

2023E

2024E

Net income

-4.13

-2.33

-0.69

-2.72

-1.72

-1.11

-0.26

0.48

Depreciation and amortisation

0.31

0.26

0.30

0.35

0.31

0.33

0.34

0.35

Goodwill

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Change in WCR

0.26

-0.08

0.27

0.64

-0.09

0.14

0.46

0.40

Others

1.05

1.49

0.71

1.04

0.27

0.34

0.26

0.13

Cash-flow from operations

-2.51

-0.67

0.60

-0.68

-1.23

-0.30

0.80

1.36

Capex

-0.05

-0.05

-0.08

-0.05

-0.04

-0.08

-0.08

-0.08

Free cash flow

-2.56

-0.72

0.52

-0.73

-1.27

-0.38

0.72

1.28

Acquisitions

-

-

-0.15

-0.15

-0.33

-0.15

-0.15

-0.15

Divestments

-

-

-

-

-

-

-

-

Dividends

-

-

-

-

-

-

-

-

Capital increase

2.21

1.68

1.75

1.75

6.48

1.00

-

-

Financing (bank and others)

0.01

4.64

0.22

0.01

0.04

-

-

-

Others

-0.26

-5.73

-1.54

-0.99

-0.91

-1.19

-1.13

-1.06

Change in cash over the period

-0.61

-0.13

0.80

-0.12

4.01

-0.72

-0.56

0.07

Opening cash position

1.80

1.19

1.05

2.01

2.03

6.33

5.76

5.36

Closing cash position

1.19

1.06

1.85

1.89

6.04

5.61

5.21

5.43

2

Balance sheet

Au 31/12 (MEUR)

2017

2018

2019

2020

2021

2022E

2023E

2024E

Fixed assets

0.14

0.12

0.63

0.50

0.37

0.30

0.21

0.12

Intangible assets

0.90

0.72

0.72

0.69

0.89

0.72

0.55

0.38

Goodwill

3.08

3.08

3.08

3.08

3.08

3.08

3.08

3.08

Financial assets

0.00

0.00

0.00

0.00

0.00

0.00

0.00

0.00

Inventories

0.81

0.84

0.66

0.66

0.68

0.56

0.71

0.88

Account receivables

1.38

1.32

0.95

0.71

0.62

0.95

1.20

1.50

Other receivables

0.54

0.59

0.55

0.67

0.57

0.51

0.65

0.83

Cash and cash equivalents

1.19

1.06

1.40

1.22

5.21

4.64

4.23

4.45

Prepaid expenses

-

-

-

-

-

-

-

-

Other non-current assets

0.12

0.13

0.50

0.51

0.48

0.48

0.48

0.48

Total assets

8.15

7.86

8.50

8.06

11.90

11.23

11.12

11.73

Equity

-0.21

-0.50

0.59

-0.01

5.06

5.30

5.65

6.64

Others

-

-

-

-

-

-

-

-

Provisions

0.05

0.05

0.05

0.05

0.05

0.05

0.05

0.05

Financial debt

6.23

6.07

6.08

5.64

4.47

3.65

2.66

1.67

Account payables

1.04

1.16

1.04

1.34

1.00

0.71

0.91

1.13

Other debts

0.98

0.81

0.62

0.88

1.00

1.21

1.54

1.92

Deferred income and other liabilities

0.06

0.26

0.11

0.15

0.32

0.32

0.32

0.32

Total liabilities

8.15

7.86

8.50

8.06

11.90

11.23

11.12

11.73

3

IMPORTANT INFORMATION

Responsibility for this publication

This publication has been prepared under the only responsibility of BioStrategic Partners.

Recipient

This publication is exclusively designed for "Eligible Counterparties" or "Business Customers". It is not designed to be distributed or transmitted. directly or indirectly. to "Retail Customers".

Absence of investment advice

This publication has been produced for information only and does not represent investment advice. given that it has been prepared without knowledge of the financial situation. asset position or any other personal circumstance of the persons who may receive it.

Absence of buy or sell offering of financial instruments

This publication does not represent an offering or an incentive to buy or sell the financial instruments outlined in it.

Reliability of information

Every precaution has been taken by Biostrategic Partners to ensure that the information contained in this publication come from sources considered reliable. Unless otherwise specifically indicated in this publication. all opinions. estimations and forecasts given. are those of Biostrategic Partners at that date and may be revised without prior notice.

Exemption from liability

Neither Biostrategic Partners nor SwissLife Banque Privée shall be liable for any damage that may result from the incorrect or incomplete nature of this publication. Neither Biostrategic Partners or SwissLife Banque Privée is not liable for any investment decisions. regardless of their nature. made by the users of this publication on its basis.

Transfer and distribution of this publication

This document was sent. prior to its publication. to the issuer of the financial instruments to which it refers. This document may not be reproduced. distributed or published in whole or in part without the prior written consent of Biostrategic Partners and SwissLife Banque Privée.

Warning concerning performance

Investors should note that any income from financial instruments can fluctuate and that prices can fall as well as rise. Past and simulated performance does not guarantee future performance.

Detection of potential conflicts of interest

Company

Potential conflicts of interest with Biostrategic Partners

SPINEGUARD

a)

b)

c)

d)

e)

f)

g)

No

No

No

No

Yes

No

No

The analyst has a familial relationship with a founding partner of IPF Partners who holds SpineGuard' bonds with warrants attached

  1. Biostrategic Partners has participated or is participating. either as lead manager or member of an investment or guarantee syndicate for a financial transaction. either as advisor of a public offering over the last twelve months or as Listing Sponsor of the company.
  2. Biostrategic Partners holds an investment stake greater than or equal to 5% in the capital of the company under analysis.
  3. The company who is the subject of this analysis holds an investment stake greater than or equal to 5% in Biostrategic Partners.
  4. Biostrategic Partners and/or one of its affiliates is/are liquidity provider(s) or market maker(s) for (one of) the company's financial instrument/s.
  5. Biostrategic Partners has agreed with the company to provide a service of production and distribution of analysis regarding the company.
  6. Biostrategic Partners has modified its conclusions after notifying the company before its distribution of this analysis.
  7. The person/s responsible for the analysis. a director or a member of the Board of Directors of Biostrategic Partners is a manager. director or member of the Board of Directors of the company.

Company

Potential conflicts of interest with SwissLifeBanquePrivée

SPINEGUARD

a)

b)

c)

d)

e)

f)

g)

Yes

No

No

Yes

No

No

No

  1. SwissLife Banque Privée has participated or is participating. either as lead manager or member of an investment or guarantee syndicate for a financial transaction. either as advisor of a public offering over the last twelve months or as Listing Sponsor of the company.
  2. SwissLife Banque Privée holds an investment stake greater than or equal to 5% in the capital of the company under analysis.
  3. The company who is the subject of this analysis holds an investment stake greater than or equal to 5% in SwissLife Banque Privée.
  4. SwissLife Banque Privée and/or one of its affiliates is/are liquidity provider(s) or market maker(s) for (one of) the company's financial instrument/s.
  5. SwissLife Banque Privée has agreed with the company to provide a service of production and distribution of analysis regarding the company.
  6. SwissLife Banque Privée has modified its conclusions after notifying the company before its distribution of this analysis.
  7. The person/s responsible for the analysis. a director or a member of the Board of Directors of SwissLife Banque Privée is a manager. director or member of the Board of Directors of the company.

4

Swiss Life Banque Privée

Société Anonyme au capital de 37.092.080 €

Code établissement bancaire n°11 238

RCS Paris 382 490 001

7. place Vendôme - F 75041 Paris Cedex 01 - France Tél. : +33 1 53 29 14 14

BioStrategic Partners SAS

Société par Actions Simplifiée au capital de 30. 000 €

RCS Paris 530 430 487

140 bis. rue de Rennes - F 75006 Paris - France

Tél. : +33 6 17 96 50 19

BioStrategic Research est une marque déposée de BioStrategic Partners SAS

5

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SpineGuard SA published this content on 10 January 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 10 January 2023 15:22:06 UTC.