Izafe Group
iZafe - Dosell pre-orders to contribute from Q2-Q3’21e (ABG Sundal Collier)
2021-03-01 07:30
450 Dosell pre-orders will contribute from late Q2’21e
‘21e lowered as H1 will likely be slower
DCF fair value range of SEK 2.18-6.87/share (2.16-8.26)
Q4’20 sales miss as customers prefer updated DoselliZafe’s Q4’20 report was below our estimates in terms of revenues and costs were somewhat elevated (mainly other external costs). Revenues were SEK 0.1m versus ABGSCe at SEK 1.2m. The large deviation is due to iZafe’s partners electing to pre-order the updated Dosell (now with a built-in battery) rather than purchase the existing version in Q4’20. Operating costs were also above our forecast, at SEK -7.5m vs. ABGSCe SEK -6.0m, due to costs from the further development of Dosell, namely developing the version with a built-in battery. This yielded EBITDA of SEK -8.1m vs. ABGSCe at SEK -5.2m.
Growth to kick in late Q2’21e and onwards
Several of iZafe’s partners have elected to pre-order a total of 450 updated Dosell’s rather than to purchase the older version. We believe that iZafe will begin manufacturing the new version in late Q1’21e, with a progressive roll-out to its partners. However, they also need to be delivered to the end-user before the monthly fees start contributing. Therefore, we do not expect any major effect on iZafe’s revenue until late Q2’21e. This will squeeze Q1’21e sales (in our estimates). We also believe that other external costs will remain elevated, as management focuses on developing Dosell further based on customer requests. Additionally, iZafe has developed a Dosell that will be rolled out to consumers in Sweden, but also in Italy through its partner. The consumer version will feature a “lighter version” of the original, and will be sold mainly through pharmacies in Sweden, but also through traditional e-commerce channels. The version has been developed for the 240,000 potential customers in Sweden that currently receive their medicine in sachets.
New estimates put DCF range at SEK 2.18-6.87 per share
Following our estimate changes, which are drive
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