Izafe Group
iZafe - Ongoing rollout of Dosell solidifies outlook (ABG Sundal Collier)
2020-11-10 19:02
Q3 EBIT (excl. divestments) of SEK -6m, -36% vs. ABGSCe
Dosell rollout in Sweden, Norway and Finland intensifies
DCF range of SEK 2.16-8.26 (2.16-8.88) per share
Dosell revenues grow ~180% y-o-y, to SEK 0.7mIn Q3’20 iZafe reported revenues of SEK 0.7m, the first quarter driven solely by revenues generated by Dosell, as the divestment of iZafe Security was completed in July 2020. As such, Dosell revenues grew by approximately 180.4% y-o-y, albeit from a low base. Opex declined q-o-q as a result of the divestment, amounting to SEK 5.6m. We think the opex base should be relatively stable from now, as the company has streamlined its personnel base, but increased other external expenses in association with the commercialization of Dosell. Ultimately, this yielded reported EBIT of SEK 7.3m, which includes SEK 13.7m attributable to the divestment of the Security segment, and thus an adj. EBIT of SEK -6.4m, -36% vs. ABGSCe.
Dosell rollout intensifies, but COVID-19 causes slight delays
The rollout of Dosell is intensifying in several markets. For instance, in Norway, the large public tender through Hepro AS of ~1,800 digital medicine dispensers is proceeding, with iZafe focusing on helping municipalities evaluate Dosell, establishing best-practices for their personnel and modifying Dosell according to their feedback. Following the new COVID-19 outbreak, we suspect that we will not see any large volumes from Hepro until early next year. In Sweden, iZafe has initiated pilot studies with Attendo and TioHundra, which are currently evaluating Dosell and a potential wide-scale implementation. In Finland, iZafe has delivered 20 Dosells through its partner Vivago, which will be evaluated by one of Vivago’s largest customers, and all the necessary modifications have been made to make Dosell fit for the Finnish market.
New estimates drive DCF range of SEK 2.16-8.26 per share
Following our estimate changes, which are driven by the Q3’20 report, we adjust our DCF fair value range to SEK 2.16
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