SPINEGUARD Morning Note - 12th July 2023
SPINEGUARD | France - Medtech | |||||||
Q2: air pocket in the US | HOLD (vs BUY) | |||||||
▪ Q2 sales down -32% | Fair value (EUR) | 1.24 (vs 1.56) | ||||||
▪ | Sales team back in the field | Price (EUR) | 0.436 | |||||
▪ | Lower revenue estimates for 2023 | Upside/down side | +184.1% | |||||
The US partner is going through a difficult period
SpineGuard published last night sales for Q2 of EUR963k, down sharply (- 32%). This underperformance is the result of a significant drop in activity in the United States (-45% of units sold compared to Q2 2022, -24% compared to Q1 2023) where the main commercial partner is experiencing governance and financing of its activity. In contrast, sales in the rest of the world are up +13% according to our restatements with a strong increase in the number of units sold (+37%), a very positive and reassuring point of this press release showing the continuous and increasing adoption by surgeons of DSG technology. These figures are significantly lower than our expectations (EUR3.6m estimated in H1 against EUR2.2m published)
Make up for the failure of the US distributor as quickly as possible
As part of its deployment strategy in the United States, SpineGuard was counting on key distributors such as Wishbone Medical, but had also planned to set up its own team to address key accounts and support the actions of its commercial partners. The failure of the main distributor, which is difficult to reverse, puts the newly-formed team in the front line to develop the business. The effects on the ground should be visible in Q3, but especially in Q4. That said, unrealized sales in Q1 and Q2 are unlikely to be caught up.
Revised expectations for 2023
DSG technology or the benefits provided by PediGuard are not in question, as evidenced by the strong growth outside the US. We are adjusting our model downwards, which shows 2023E revenue of EUR5.5m, virtually unchanged from 2022 but significantly lower than our previous estimate of EUR7.2m. The impact on profitability is mechanical, with increased losses of EUR -2.6m in 2023E (vs. EUR -0.4m).
Valuation and rating
The incident with the American distributor has had a logical impact on the growth scenario, and has postponed the achievement of break-even by at least 18 months. SpineGuard has sufficient cash to get through this difficult period. The revision of our model has resulted in a new fair value of EUR 1.24/share (vs. 1.56), still leaving real potential for appreciation (+184%). Uncertainty persists over the recovery in US sales, which can only be assessed once Q3 sales are published. In the short term, and pending confirmation of a return to sustainable growth in the US, we are adopting a Neutral position on the dossier, the technological potential and future long- term commercial success of which remain intact.
Lionel Labourdette, PhD, MBA
lionel@biostrategic-research.com+33 617 965 019
Stock data (2023-07-11)
ISIN | FR0011464452 |
Ticker | ALSGD.PA |
Price (EUR) | 0.436 |
Market capitalisation (EURm) | 15.7 |
Free float (%) est. | 96.1 |
Floating capitalisation (EURm) | 15.1 |
Number of shares (,000) | 35,975 |
Average daily volume (3 m) | 161,338 |
12m performance
2,0 | ||||||
1,5 | ||||||
1,0 | ||||||
0,5 | ||||||
0,0 | 12/11/22 | 12/05/23 | ||||
12/07/22 | 12/09/22 | 12/01/23 | 12/03/23 | 12/07/23 | ||
ALSGD | ALSGD rel to CAC Small & Mid 190 |
Change (%) | 1 m | 3 m | 12m |
Absolute | -16.2 | -44.7 | -37.7 |
Rel. to CAC SM190 | -15.0 | -41.7 | -43.2 |
Rel. to Next Biotech | -10.7 | -45.0 | -27.2 |
Financials (31/12)
EURm | 2022 | 2023E | 2024E | 2025E |
Sales | 5.6 | 5.5 | 7.1 | 8.9 |
EBITDA | -1.4 | -1.9 | -1.4 | -0.7 |
EBIT | -1.7 | -2.2 | -1.8 | -1.1 |
Net income | -2.4 | -2.6 | -2.1 | -1.3 |
EPS (EUR) | -0.07 | -0.07 | -0.05 | -0.03 |
Net debt | -0.3 | 0.5 | 0.8 | 0.2 |
Key ratios
2022 | 2023E | 2024E | 2025E | |
EV/Sales | 3.3x | 3.0x | 2.4x | 1.8x |
EV/EBITDA | na | na | na | na |
EV/EBIT | na | na | na | na |
PER | na | na | na | na |
ROIC | na | na | na | na |
ROE | na | na | na | na |
EV/IC | 3.6x | 3.1x | 3.3x | 3.1x |
Gearing | -6% | 10% | 16% | 3% |
Next communication :H1 results on September 12th
The issuer and Biostrategic Partners have agreed that Biostrategic Partners will produce and disseminate investment research as a service
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Profit and Loss
As of 31/12 (EURm) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023E | 2024E | 2025E |
Sales | 7.58 | 6.83 | 4.85 | 4.41 | 5.60 | 5.52 | 7.09 | 8.89 |
Change n-1 | -7.3% | -9.9% | -29.0% | -9.2% | 27.1% | -1.4% | 28.4% | 25.4% |
Other revenues | - | - | - | - | - | - | - | - |
Total revenues | 7.58 | 6.83 | 4.85 | 4.41 | 5.60 | 5.52 | 7.09 | 8.89 |
Gross margin | 6.55 | 5.77 | 4.04 | 3.61 | 4.71 | 4.51 | 5.86 | 7.40 |
EBITDA | -0.86 | -0.14 | -1.49 | -1.04 | -1.37 | -1.87 | -1.44 | -0.74 |
Change n-1 | 68% | 84% | -993% | 30% | -31% | -37% | 23% | 48% |
Depreciation & amortisation | 0.26 | 0.30 | 0.35 | 0.31 | 0.43 | 0.51 | 0.52 | 0.53 |
Goodwill | - | - | - | - | - | - | - | - |
EBIT | -1.11 | -0.43 | -1.84 | -1.35 | -1.66 | -2.24 | -1.82 | -1.13 |
Change n-1 | 63% | 61% | -326% | 27% | -23% | -35% | 19% | 38% |
Net financial income | -1.21 | -0.64 | -0.84 | -0.30 | -0.43 | -0.31 | -0.18 | -0.05 |
Minorities | - | - | - | - | - | - | - | - |
Other | - | - | - | - | - | - | - | - |
Net profit before tax | -2.32 | -1.07 | -2.68 | -1.65 | -2.09 | -2.55 | -2.00 | -1.18 |
Tax | -0.02 | 0.39 | -0.04 | -0.08 | -0.30 | -0.07 | -0.07 | -0.07 |
Net in come | -2.33 | -0.69 | -2.72 | -1.72 | -2.39 | -2.62 | -2.07 | -1.25 |
Change n-1 | 43% | 71% | -296% | 37% | -39% | -9% | 21% | 39% |
EPS | -0.34 | -0.05 | -0.12 | -0.06 | -0.07 | -0.07 | -0.05 | -0.03 |
EPS fully diluted | -0.31 | -0.05 | -0.10 | -0.05 | -0.07 | -0.07 | -0.05 | -0.03 |
Gross margin (% of sales) | 86.5% | 84.5% | 83.2% | 81.9% | 84.2% | 81.7% | 82.7% | 83.3% |
EBITDA (% of sales) | na | na | na | na | na | na | na | na |
EBIT (% of sales) | na | na | na | na | na | na | na | na |
Net margin (% of sales) | na | na | na | na | na | na | na | na |
Cash Flow statement
Au 31/12 (MEUR) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023E | 2024E | 2025E |
Net income | -2.33 | -0.69 | -2.72 | -1.72 | -2.39 | -2.62 | -2.07 | -1.25 |
Depreciation and amortisation | 0.26 | 0.30 | 0.35 | 0.31 | 0.43 | 0.51 | 0.52 | 0.53 |
Goodwill | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
Change in WCR | -0.08 | 0.27 | 0.64 | -0.09 | -0.51 | -0.33 | -0.31 | -0.19 |
Others | 1.49 | 0.71 | 1.04 | 0.27 | 1.07 | 0.89 | 0.76 | 0.64 |
Cash-flow from operations | -0.67 | 0.60 | -0.68 | -1.23 | -1.40 | -1.55 | -1.09 | -0.28 |
Capex | -0.05 | -0.08 | -0.05 | -0.04 | -0.14 | -0.08 | -0.08 | -0.08 |
Free cash flow | -0.72 | 0.52 | -0.73 | -1.27 | -1.54 | -1.63 | -1.17 | -0.36 |
Acquisitions | - | -0.15 | -0.15 | -0.33 | -0.32 | -0.30 | -0.30 | -0.30 |
Divestments | - | - | - | - | - | - | - | - |
Dividends | - | - | - | - | - | - | - | - |
Capital increase | 1.68 | 1.75 | 1.75 | 6.48 | 1.19 | 1.00 | 1.00 | 1.00 |
Financing (bank and others) | 4.64 | 0.22 | 0.01 | 0.04 | 0.00 | 0.00 | 0.00 | 0.00 |
Others | -5.73 | -1.54 | -0.99 | -0.91 | -1.09 | -1.11 | -1.04 | -0.98 |
Change in cash over the period | -0.13 | 0.80 | -0.12 | 4.01 | -1.76 | -2.03 | -1.52 | -0.64 |
Opening cash position | 1.19 | 1.05 | 2.01 | 2.03 | 6.41 | 4.97 | 3.24 | 2.02 |
Closing cash position | 1.06 | 1.85 | 1.89 | 6.04 | 4.65 | 2.94 | 1.72 | 1.38 |
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Balance sheet
Au 31/12 (MEUR) | 2018 | 2019 | 2020 | 2021 | 2022 | 2023E | 2024E | 2025E |
Fixed assets | 0.12 | 0.63 | 0.50 | 0.37 | 0.28 | 0.19 | 0.10 | 0.00 |
Intangible assets | 0.72 | 0.72 | 0.69 | 0.89 | 1.27 | 1.07 | 0.86 | 0.66 |
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 | 0.84 | 0.66 | 0.66 | 0.68 | 0.87 | 0.86 | 1.10 | 1.38 |
Account receivables | 1.32 | 0.95 | 0.71 | 0.62 | 1.10 | 1.08 | 1.39 | 1.74 |
Other receivables | 0.59 | 0.55 | 0.67 | 0.57 | 0.63 | 0.79 | 0.78 | 1.01 |
Cash and cash equivalents | 1.06 | 1.40 | 1.22 | 5.21 | 4.12 | 2.38 | 1.17 | 0.83 |
Prepaid expenses | - | - | - | - | - | - | - | - |
Other non-current assets | 0.13 | 0.50 | 0.51 | 0.48 | 0.17 | 0.50 | 0.50 | 0.50 |
Total assets | 7.86 | 8.50 | 8.06 | 11.90 | 11.50 | 9.96 | 8.98 | 9.20 |
Equity | -0.50 | 0.59 | -0.01 | 5.06 | 5.14 | 5.05 | 4.78 | 5.51 |
Others | - | - | - | - | - | - | - | - |
Provisions | 0.05 | 0.05 | 0.05 | 0.05 | 0.18 | 0.04 | -0.10 | -0.25 |
Financial debt | 6.07 | 6.08 | 5.64 | 4.47 | 3.83 | 2.87 | 1.93 | 0.99 |
Account payables | 1.16 | 1.04 | 1.34 | 1.00 | 1.14 | 0.70 | 0.90 | 1.13 |
Other debts | 0.81 | 0.62 | 0.88 | 1.00 | 1.00 | 1.08 | 1.27 | 1.60 |
Deferred income and other liabilities | 0.26 | 0.11 | 0.15 | 0.32 | 0.21 | 0.21 | 0.21 | 0.21 |
Total liabilities | 7.86 | 8.50 | 8.06 | 11.90 | 11.50 | 9.96 | 8.98 | 9.20 |
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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".
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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.
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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
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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
- 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.
- Biostrategic Partners holds an investment stake greater than or equal to 5% in the capital of the company under analysis.
- The company who is the subject of this analysis holds an investment stake greater than or equal to 5% in Biostrategic Partners.
- 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.
- Biostrategic Partners has agreed with the company to provide a service of production and distribution of analysis regarding the company.
- Biostrategic Partners has modified its conclusions after notifying the company before its distribution of this analysis.
- 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 | |||
- 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.
- SwissLife Banque Privée holds an investment stake greater than or equal to 5% in the capital of the company under analysis.
- The company who is the subject of this analysis holds an investment stake greater than or equal to 5% in SwissLife Banque Privée.
- 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.
- SwissLife Banque Privée has agreed with the company to provide a service of production and distribution of analysis regarding the company.
- SwissLife Banque Privée has modified its conclusions after notifying the company before its distribution of this analysis.
- 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.
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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
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SpineGuard SA published this content on 12 July 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 July 2023 16:47:01 UTC.
