SPINEGUARD Morning Note - 13th September 2023
SPINEGUARD | France - Medtech | |||||||
H1: impact of poor performance in the United States | HOLD (vs BUY) | |||||||
▪ On all fronts despite decline in sale | Fair value (EUR) | 1.24 | ||||||
▪ | A return to growth expected in H2 | Price (EUR) | 0.388 | |||||
▪ | A wait-and-see stance in the short term | Upside/down side | +219.8% | |||||
A logical deterioration in the income statement
In July, SpineGuard published H1 sales of EUR2.23m (down 12%). While the trend is positive in the rest of the world, the United States saw a marked decline in Q2 (-32%) due to difficulties encountered by its main distributor. Given the high prices charged in this key market, the impact on gross margin is unavoidable (79.1% vs. 84.9% in H1 2022). In order to restore the growth that the technology offer can deliver, a new organization has been put in place, leading to a logical increase in selling expenses (+13%). R&D programs have also been stepped up to make progress on the development of innovations, for which good news is expected in 2024. The end of the dental partnership also resulted in non-recurring legal costs and debt write-offs. The operating loss is therefore logically higher (EUR -1.97m vs. EUR -1.00m in H1 2022). On the positive side, financial expenses were lower (debt renegotiation). The net loss is (EUR-2.00m vs EUR-1.18m in H1 2022), significantly higher than our expectations (EUR-1.7m).
H2: regain momentum in the United States as quickly as possible
The first challenge facing the company is to re-establish an efficient organization in the United States. The recruitments made now make it possible to take over from Whisbone Medical and re-establish relationships with key accounts. It is important to note that the underperformance is in no way linked to a rejection of the technology by surgeons, quite the contrary. It is likely that the first effects will be seen in Q3, with the fall in sales halted, before we see increased demand in Q4. In the rest of the world, momentum is very good. China is in the process of being set up. The partner Xinrong, which has acquired a stake in the company, is very active in penetrating its local market and putting in place the regulatory files for the entire PediGuard® range.
Valuation and rating
These figures are not surprising, given the unfavourable "low sales/increased costs" scissor effect. The company has a healthy cash position (EUR 4.6m at 30/06), enabling it to get through this phase without refinancing. That said, in order to support its innovative projects and commercial expansion, the company is currently considering equity financing to control dilution of the share price. In the short term, and pending the publication of Q3 sales figures, we remain on "Hold" on the stock, which should see some fine achievements in 2024 (including advances in robotics and the smart drill project, etc.
Next communication :Q3 revenues on October 11th
Lionel Labourdette, PhD, MBA
lionel@biostrategic-research.com+33 617 965 019
Stock data (2023-07-11)
ISIN | FR0011464452 |
Ticker | ALSGD.PA |
Price (EUR) | 0.388 |
Market capitalisation (EURm) | 14.0 |
Free float (%) est. | 96.1 |
Floating capitalisation (EURm) | 13.4 |
Number of shares (,000) | 35,975 |
Average daily volume (3 m) | 167,324 |
12m performance
2,0 | ||||||
1,5 | ||||||
1,0 | ||||||
0,5 | ||||||
0,0 | 13/05/23 | 13/09/23 | ||||
13/09/22 | 13/11/22 | 13/01/23 | 13/03/23 | 13/07/23 | ||
ALSGD | ALSGD rel to CAC Small & Mid 190 |
Change (%) | 1 m | 3 m | 12m |
Absolute | -10.4 | -24.5 | -37.4 |
Rel. to CAC SM190 | -9.8 | -22.5 | -41.8 |
Rel. to Next Biotech | -14.7 | -45.6 | -45.9 |
Financials (31/12)
EURm | 2021 | 2022E | 2023E | 2024E |
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
2021 | 2022E | 2023E | 2024E | |
EV/Sales | 3.3x | 2.7x | 2.1x | 1.6x |
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 | 2.8x | 2.9x | 2.8x |
Gearing | -6% | 10% | 16% | 3% |
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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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 13 September 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 13 September 2023 15:55:03 UTC.
