Izafe Group
iZafe - ’20e outlook bolstered by new markets (ABG Sundal Collier)
2020-02-24 12:04
Strong performance by Security segment in Q4’19
Dosell due to launch on Norwegian market in H1’20
Updated DCF range SEK 1.21-6.33 per share (1.10-5.91)
Q4’19: Net sales of SEK 5m & EBIT SEK -7miZafe’s Q4’19 report offered a strong finish to 2019, with total net sales of SEK 5m, +15.7% vs. ABGSCe. Revenues were mainly driven by the Security segment, which reported net sales of SEK 4m, +22.8% vs. ABGSCe. The segment saw 597 new subscriptions, which totalled 4,910 at the end of 2019, while maintaining a relatively stable quarterly ARPU of SEK 271 per month and a churn of 4%. The Health segment delivered SEK 0.3m in sales during Q4, which was 35.2% below our estimate (we had estimated that additional Dosells would have been delivered at year end). Opex came in at SEK -10m, +59.3% vs. ABGSCe, and was mainly attributable to the development and commercialisation of Dosell. As such, the reported EBIT of SEK -7m was below our estimate of SEK -3.7m
Financing secured in Q4, Dosell Norwegian launch due H1’20
iZafe secured financing through a preferential rights issue in Q4’19, through which the company will receive SEK 20m before issuing costs, which amounted to SEK 4m. Several members of iZafe’s board of directors and management team subscribed to the issue, including Carl Johan Merner (a previous director of the board), Göran Hermansson (a current member of the board), and Anders Segerström (the current CEO), for a combined 15.6% of the issue. Subscribers in the new share issue also have the option of exercising warrants in ’20e, totalling SEK 9m. The funding has been secured at a crucial time, as the commercialisation of Dosell is ongoing. During Q4 iZafe signed distribution agreements with Doro Care AS and Hepro AS in regards to the Norwegian market. iZafe is currently preparing Dosell for launch in Norway; management estimates that this will occur during H1’20e.
Net sales CAGR of 50.7% ’19-’22e & EV/Sales 3.7x-1.5x
Following our updated estimates, with an increasing
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