SPINEGUARD Morning Note - 12th October 2023
SPINEGUARD | France - Medtech | |||||||
Q3 sales: transition phase in the United States | HOLD | |||||||
▪ A logical downturn in the US, but the rebound is beginning | Fair value (EUR) | 0.99 (vs 1.24) | ||||||
▪ | Q4 should see further solid growth | Price (EUR) | 0.3885 | |||||
▪ | Still a wait-and-see attitude | Upside/down side | +154.8% | |||||
Sales down sharply
Last night, SpineGuard published its sales figures for Q3, down sharply to EUR0.98m (-34% vs Q3 2022). Unsurprisingly, and given the complex situation of the main distributor (Wishbone Medical), performance in the United States was poor (-29%). A closer analysis of the figures nevertheless reveals an interesting trend in this strategic region (609 units sold in Q3, compared with 426 in Q2 and 569 in Q1). The reconstituted sales team's grip on key accounts seems to be yielding encouraging initial results. In the rest of the world, revenues were down 33% due to an unfavourable comparison base, which included royalty revenues in 2022. In terms of product sales, momentum remains good, with another positive quarter and sales up by +5%. It is important to note that the first order from Chinese partner Xiron was not booked in this quarter (invoicing expected in Q4). Although the positive trends seem to be confirmed, these figures are significantly below our expectations (EUR 1.3m), calling into question our estimates for the financial year.
A low point reached that must give way to a return to growth
While all hopes were pinned on the partnership with Wishbone Medical, the latter's shareholding evolution has resulted in new strategic orientations and has led to financial problems. SpineGuard is currently in the process of closing this agreement in order to take distribution back into its own hands. The team is working hard in the field, and the 42% increase in unit sales in Q3 vs Q2 is a very positive sign. Alongside the existing ranges, 2024 should see the emergence of new sources of growth with the roll-out of the device designed for anterior approach surgery, which is attracting a great deal of interest from surgeons. The PediGuard developed for sacroiliac fusion is also expected to be a key contributor to growth in 2024.
Valuation and rating
The figures published have led us to revise our scenario downwards. We now expect sales for 2023E to be close to EUR 4.5m (compared with EUR 5.5m) and are making a logical revision for 2024E and 2025E. This adjustment results in a time lag in future cash flows and hence a new fair value of EUR 0.99/share (vs. EUR 1.24), which also takes account of the shares issued. The financial situation remains sound. However, the group is still considering strengthening equity to finance new projects and sales ramp-up. We therefore remain "Neutral" for the short term, pending Q4 figures.
Lionel Labourdette, PhD, MBA
lionel@biostrategic-research.com+33 617 965 019
Stock data (2023-10-11)
ISIN | FR0011464452 |
Ticker | ALSGD.PA |
Price (EUR) | 0.3885 |
Market capitalisation (EURm) | 14.4 |
Free float (%) est. | 96.1 |
Floating capitalisation (EURm) | 13.8 |
Number of shares (,000) | 39,587 |
Average daily volume (3 m) | 164,949 |
12m performance
2,0 | ||||||
1,5 | ||||||
1,0 | ||||||
0,5 | ||||||
0,0 | 12/12/22 | 12/04/23 | 12/06/23 | |||
12/10/22 | 12/02/23 | 12/08/23 | 12/10/23 |
ALSGD | ALSGD rel to CAC Small & Mid 190 | ||||||
Change (%) | 1 m | 3 m | 12m | ||||
Absolute | +0.1 | -1.5 | -40.7 | ||||
Rel. to CAC SM190 | +6.4 | +7.1 | -50.4 | ||||
Rel. to Next Biotech | +3.7 | -26.5 | -50.8 | ||||
Financials (31/12) | |||||||
EURm | 2021 | 2022E | 2023E | 2024E | |||
Sales | 5.6 | 4.5 | 5.8 | 7.3 | |||
EBITDA | -1.4 | -2.5 | -1.6 | -0.8 | |||
EBIT | -1.7 | -2.9 | -2.0 | -1.2 | |||
Net income | -2.4 | -3.3 | -2.2 | -1.3 | |||
EPS (EUR) | -0.07 | -0.08 | -0.05 | -0.03 | |||
Net debt | -0.3 | 1.0 | 1.5 | 1.0 | |||
Key ratios | |||||||
2021 | 2022E | 2023E | 2024E | ||||
EV/Sales | 3.3x | 3.4x | 2.7x | 2.2x | |||
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 | 3.0x | 3.3x | 3.1x | |||
Gearing | -6% | 10% | 16% | 3% |
Next communication :full-year sales (estimated end January 2024)
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 | 4.48 | 5.82 | 7.35 |
Change n-1 | -7.3% | -9.9% | -29.0% | -9.2% | 27.1% | -20.0% | 30.0% | 26.2% |
Other revenues | - | - | - | - | - | - | - | - |
Total revenues | 7.58 | 6.83 | 4.85 | 4.41 | 5.60 | 4.48 | 5.82 | 7.35 |
Gross margin | 6.55 | 5.77 | 4.04 | 3.61 | 4.71 | 3.68 | 4.85 | 6.17 |
EBITDA | -0.86 | -0.14 | -1.49 | -1.04 | -1.37 | -2.52 | -1.61 | -0.77 |
Change n-1 | 68% | 84% | -993% | 30% | -31% | -84% | 36% | 52% |
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 | -2.89 | -1.99 | -1.16 |
Change n-1 | 63% | 61% | -326% | 27% | -23% | -74% | 31% | 42% |
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 | -3.20 | -2.17 | -1.21 |
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 | -3.27 | -2.24 | -1.28 |
Change n-1 | 43% | 71% | -296% | 37% | -39% | -37% | 31% | 43% |
EPS | -0.34 | -0.05 | -0.12 | -0.06 | -0.07 | -0.09 | -0.06 | -0.03 |
EPS fully diluted | -0.31 | -0.05 | -0.10 | -0.05 | -0.07 | -0.08 | -0.05 | -0.03 |
Gross margin (% of sales) | 86.5% | 84.5% | 83.2% | 81.9% | 84.2% | 82.1% | 83.3% | 83.9% |
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 | -3.27 | -2.24 | -1.28 |
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 | -0.22 | -0.34 | -0.23 |
Others | 1.49 | 0.71 | 1.04 | 0.35 | 1.07 | 0.89 | 0.76 | 0.64 |
Cash-flow from operations | -0.67 | 0.60 | -0.68 | -1.16 | -1.40 | -2.09 | -1.30 | -0.35 |
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 | -1.19 | -1.54 | -2.17 | -1.38 | -0.43 |
Acquisitions | - | - | - | - | - | |||
Divestments | - | - | - | - | - | - | - | - |
Dividends | - | - | - | - | - | - | - | - |
Capital increase | 1.69 | 1.75 | 1.75 | 6.51 | 1.20 | 1.00 | 1.00 | 1.00 |
Financing (bank and others) | 4.63 | 0.22 | 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 | 0.96 | 0.03 | 4.41 | -1.44 | -2.28 | -1.42 | -0.41 |
Opening cash position | 1.29 | 1.16 | 2.12 | 2.15 | 6.56 | 5.12 | 2.85 | 1.42 |
Closing cash position | 1.16 | 2.12 | 2.15 | 6.56 | 5.12 | 2.85 | 1.42 | 1.02 |
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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 | 0.70 | 0.91 | 1.14 |
Account receivables | 1.32 | 0.95 | 0.71 | 0.62 | 1.10 | 0.88 | 1.14 | 1.44 |
Other receivables | 0.59 | 0.55 | 0.67 | 0.57 | 0.63 | 0.79 | 0.64 | 0.83 |
Cash and cash equivalents | 1.06 | 1.40 | 1.22 | 5.21 | 4.12 | 1.84 | 0.42 | 0.01 |
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 | 9.05 | 7.64 | 7.66 |
Equity | -0.50 | 0.59 | -0.01 | 5.06 | 5.14 | 4.40 | 3.83 | 4.45 |
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 | 0.57 | 0.74 | 0.93 |
Other debts | 0.81 | 0.62 | 0.88 | 1.00 | 1.00 | 0.96 | 1.04 | 1.32 |
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 | 9.05 | 7.64 | 7.66 |
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IMPORTANT INFORMATION
Responsibility for this publication
This publication has been prepared under the only responsibility of BioStrategic Partners.
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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.
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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 October 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 October 2023 09:10:24 UTC.
