Morning Note - 16th September 2021

SPINEGUARD

France - Medtech

HY results: positive signals

BUY

▪ A return to growth

Fair value (EUR)

2.15

▪

Costs under control

Price (EUR)

1.444

▪

2022 is looking good

Upside/down side

+48.9%

Activity picks up, still some uncertainties in the US

SpineGuard published its H1 sales in July, highlighting a return to modest growth (+4% at constant exchange rates). While uncertainty persists in the US (down 8% like-for-like), the rest of the world is experiencing a marked significant rebound (+59%). The gross margin rate eroded slightly (81.5% vs. 84.1%) due to the lower contribution from the US but also following cost price increases. A provision for obsolete American stocks (EUR 41k) also negatively impacts this line. The good control of marketing and general expenses allows to intensify R&D (new robotics projects in particular). The current operating loss is -692EURk vs -557EURk in H1 2020. With the renegotiation of the debt repayment, the financial costs are reduced. In the end, the net loss amounts to -782EURk, a significant improvement compared to H1 2020. These figures are slightly below our expectations (-600EURk) but this difference is not at all worrying insofar as the company allocates resources to value-creating innovation.

Stronger cash position, very good financial visibility

The good stock performance, the positive news and the high liquidity of the share made it possible to implement the financing line. Equity was thus strengthened in H1 (+EUR 4.4m). The cash position as of 30-06 amounted to EUR 5.1m, compared with EUR 1.2m as of 31-12-2020, giving financial visibility to 2023, with the possibility of additional drawdown of the financing line in the event of a one-off need.

End of safeguard period, good news from the pipeline

Following the positive decisions of the French and American courts, the safeguard procedure is now a thing of the past. The investor should now focus on the progress made in robotics and intelligent bone matrix drilling devices. The results obtained recently (100% success rate in the detection of bone breaches) open up very interesting application prospects which will be the subject of intense discussions with possible partners at various upcoming orthopedics conferences.

Lionel Labourdette, PhD, MBA

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

Stock data (2021-09-15)

ISIN

FR0011464452

Ticker

ALSGD.PA

Price (EUR)

1.164

Market capitalisation (EURm)

38.8

Free float (%) est.

91.6

Floating capitalisation (EURm)

35.5

Number of shares (,000)

26 851

Average daily volume (3 m)

926 778

12m performance

3,0

2,5

2,0

1,5

1,0

0,5

0,0

16/09/21

16/09/20

16/11/20

16/01/21

16/03/21

16/05/21

16/07/21

ALSGD

ALSGD rel to CAC Small & Mid 190

Change (%)

1 m

3 m

12m

Absolute

+33.5

+16.3

+702.2

Rel. to CAC SM190

+34.3

+17.2

+675.2

Rel. to Next Biotech

+28.9

+18.6

+699.3

Financials (31/12)

EURm

2020

2021E

2022E

2023E

Sales

4.9

5.6

6.7

8.1

EBITDA

-1.5

-0.3

0.3

0.9

EBIT

-1.8

-0.6

0.0

0.6

Net income

-2.7

-1.2

-0.4

0.4

EPS (EUR)

-0.10

-0.04

-0.01

0.01

Net debt

4.4

3.2

1.5

0.1

Valuation and rating

The figures published are reassuring, particularly the cash position, which secures the company until key value steps (deals) are reached. Covid turbulence is still likely in the US, where the vaccination rate is still too low in some states. However, the company still has real strengths in terms of its technological content, which should eventually be recognised. We remain very positive on this still largely undervalued dossier.

Next communication:Q3 revenues October 14th (after market)

Key ratios

2020

2021E

2022E

2023E

EV/Sales

7.9x

7.7x

6.2x

5.0x

EV/EBITDA

na

na

126.2x

43.0x

EV/EBIT

na

na

na

64.6x

PER

na

na

na

114.8x

ROIC

na

na

na

16%

ROE

na

na

na

8%

EV/IC

9.4x

9.8x

10.0x

9.4x

Gearing

na

220%

49%

2%

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)

2016

2017

2018

2019

2020

2021E

2022E

2023E

Sales

7,46

8,17

7,58

6,83

4,85

5,55

6,71

8,14

Change n-1

17,6%

9,5%

-7,3%

-9,9%

-29,0%

14,4%

20,9%

21,3%

Other revenues

-

-

-

-

-

-

-

1,00

Total revenues

7,46

8,17

7,58

6,83

4,85

5,55

6,71

9,14

Gross margin

6,35

6,95

6,55

5,77

4,04

4,81

5,82

7,08

EBITDA

-3,31

-2,66

-0,86

-0,14

-1,49

-0,33

0,33

0,94

Change n-1

11%

20%

68%

84%

-993%

78%

202%

-183%

Depreciation & amortisation

0,33

0,31

0,26

0,30

0,35

0,30

0,31

0,32

Goodwill

-

-

-

-

-

-

-

-

EBIT

-3,63

-2,96

-1,11

-0,43

-1,84

-0,63

0,03

0,63

Change n-1

9%

18%

63%

61%

-326%

66%

104%

-2393%

Net financial income

-0,54

-1,16

-1,21

-0,64

-0,84

-0,53

-0,40

-0,28

Minorities

-

-

-

-

-

-

-

-

Other

-

-

-

-

-

-

-

-

Net profit before tax

-4,18

-4,13

-2,32

-1,07

-2,68

-1,16

-0,38

0,35

Tax

-

-

-0,02

0,39

-0,04

-

-

-

Net in come

-4,18

-4,13

-2,33

-0,69

-2,72

-1,16

-0,38

0,35

Change n-1

-8%

1%

43%

71%

-296%

57%

67%

193%

EPS

-0,82

-0,72

-0,34

-0,05

-0,12

-0,05

-0,01

0,01

EPS fully diluted

-0,75

-0,65

-0,31

-0,05

-0,10

-0,04

-0,01

0,01

Gross margin (% of sales)

85,1%

85,1%

86,5%

84,5%

83,2%

86,6%

86,8%

87,0%

EBITDA (% of sales)

NA

NA

NA

NA

NA

NA

5,0%

11,6%

EBIT (% of sales)

NA

NA

NA

NA

NA

NA

0,4%

7,7%

Net margin (% of sales)

NA

NA

NA

NA

NA

NA

NA

4,3%

Cash Flow statement

Au 31/12 (MEUR)

2016

2017

2018

2019

2020

2021E

2022E

2023E

Net income

-4,18

-4,13

-2,33

-0,69

-2,72

-1,16

-0,38

0,35

Depreciation and amortisation

0,33

0,31

0,26

0,30

0,35

0,30

0,31

0,32

Goodwill

0,00

0,00

0,00

0,00

0,00

0,00

0,00

0,00

Change in WCR

-1,01

0,26

-0,08

0,27

0,64

-0,51

0,34

0,29

Others

0,83

1,05

1,49

0,71

1,04

0,88

0,75

0,68

Cash-flow from operations

-4,03

-2,51

-0,67

0,60

-0,68

-0,48

1,03

1,63

Capex

-0,06

-0,05

-0,05

-0,08

-0,05

-0,08

-0,08

-0,08

Free cash flow

-4,09

-2,56

-0,72

0,52

-0,73

-0,56

0,95

1,55

Acquisitions

-0,09

-

-

-0,15

-0,15

-0,15

-0,15

-0,15

Divestments

0,01

-

-

-

-

-

-

-

Dividends

-

-

-

-

-

-

-

-

Capital increase

0,42

2,21

1,68

1,75

1,75

2,00

1,00

-

Financing (bank and others)

2,87

0,01

4,64

0,22

0,01

-

-

-

Others

-0,54

-0,26

-5,73

-1,54

-0,99

-1,25

-1,19

-1,13

Change in cash over the period

-1,42

-0,61

-0,13

0,80

-0,12

0,03

0,61

0,28

Opening cash position

3,23

1,80

1,19

1,05

2,01

2,03

2,22

2,97

Closing cash position

1,80

1,19

1,06

1,85

1,89

2,07

2,82

3,25

2

Balance sheet

Au 31/12 (MEUR)

2016

2017

2018

2019

2020

2021E

2022E

2023E

Fixed assets

0,18

0,14

0,12

0,63

0,50

0,43

0,35

0,26

Intangible assets

1,11

0,90

0,72

0,72

0,69

0,55

0,40

0,25

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

1,02

0,81

0,84

0,66

0,66

0,55

0,67

0,81

Account receivables

1,41

1,38

1,32

0,95

0,71

0,93

1,13

1,37

Other receivables

0,68

0,54

0,59

0,55

0,67

0,48

0,55

0,66

Cash and cash equivalents

1,80

1,19

1,06

1,40

1,22

1,41

2,16

2,59

Prepaid expenses

-

-

-

-

-

-

-

-

Other non-current assets

0,13

0,12

0,13

0,50

0,51

0,51

0,51

0,51

Total assets

9,41

8,15

7,86

8,50

8,06

7,94

8,85

9,53

Equity

1,19

-0,21

-0,50

0,59

-0,01

1,46

3,03

4,28

Others

-

-

-

-

-

-

-

-

Provisions

0,07

0,05

0,05

0,05

0,05

0,05

0,05

0,05

Financial debt

6,00

6,23

6,07

6,08

5,64

4,63

3,65

2,66

Account payables

1,19

1,04

1,16

1,04

1,34

0,70

0,85

1,03

Other debts

0,96

0,98

0,81

0,62

0,88

0,93

1,12

1,36

Deferred income and other liabilities

-

0,06

0,26

0,11

0,15

0,15

0,15

0,15

Total liabilities

9,41

8,15

7,86

8,50

8,06

7,94

8,85

9,53

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 16 September 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 16 September 2021 08:01:09 UTC.