Q1 sales of SEK 4m, +32.8% y-o-y, -10.4% vs. ABGSCe

Strategic partnerships strengthen Dosell outlook

Updated DCF range SEK 1.12-6.21 per share (1.21-6.33)

Q1’20: Net sales of SEK 4m, EBIT SEK -5m
iZafe reported Q1 net sales of SEK 4m, +32.8% y-o-y, but -10.4% vs. ABGSCe as we had expected slightly stronger figures from the Security segment, where new sales were hit by COVID-19 at the end of the quarter. The Health segment, which we believe will become the company’s main revenue driver, reported net sales of SEK 0.4m, +409% y-o-y. Operating costs were in line with our estimates at SEK 8m, although we estimate that we will see declining personnel expenses as iZafe has utilised furloughs in conjunction with the COVID-19 lockdown. Reported EBIT was SEK -5m, -35.7% vs. ABGSCe, with an EBIT margin of -115.8%.

First Dosell delivery to Norway, new partners signed
Regarding the roll-out of Dosell, we saw positive newsflow and developments during Q1. iZafe initiated its first delivery of 30 Dosells to the company’s Norwegian partners, as the product has now been launched and adjusted for the Norwegian market. Additionally, iZafe has entered into partnership agreements with partners in Finland, Germany, Norway, and additional new partners in Sweden, for the distribution and sale of the dispensers. We believe it will take some time before the new partners have been appropriately trained to market the product, but these developments bode well for the future growth and sales of Dosell. As such, we have increased our sales estimates for the Health segment for ’20e-’22e (see further information on p. 4). Note also that our estimate revisions for ’21e appear large in percentage terms, but are in fact small in absolute figures.

Net sales CAGR of 50.7% ’19-’22e, EV/sales 3.4x-1.3x
On our updated estimates, our DCF scenarios indicate a fair value range of SEK 1.12-6.21 per share (1.21- 6.33). Additionally, we find that iZafe is currently trading at an EV/Sales multiple of 3.4x-1.3x for ’20e
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