Enzymatica: Two birds with one stone - ABG

Sales trend reversal in Q2 SEK 75m share issue, balance sheet issues resolved Estimates unchanged, EV/Sales ’23e-‘24e at 4.5-3.1x
Q2 shows signs that the negative trend has been reversed Enzymatica reported sales of SEK 9.6m in Q2 (20% above ABGSCe) for y-o-y growth of 58%, thus reversing the negative sales trend seen over the previous five quarters. Seemingly this was driven by its own sales to pharmacies in Sweden, which grew 222% y-o-y, although its LTM market share in the cold remedy market declined to 4.5% (Q1’22 4.6%), as symptom relief continues to outperform preventatives. Partner sales were on par with last year, but the company highlighted that STADA and Sanofi inventories are now closer to normal and that they have started placing orders again. Together with upcoming launches in Turkey and Mexico, as well as anticipation of a more normal cold season, we believe there is reason to expect the upward pointing trend to continue. The gross margin was roughly in line with our expectations (52% vs ABGSCe 54%) and opex was in line, resulting in EBIT of SEK -15.9m, slightly better than we expected (ABGSCe -17.0).

SEK 75m share issue secured, well-funded for coming 2y Following the Q1 report, we were concerned about Enzymatica’s financial position. This has now seemingly been resolved through a SEK 75m rights issue (ABGSCe 65m after fees) that is 100% covered through subscription and guarantee commitments (46%/54%) from its three largest owners, the chairman of the board and the CEO. The company will issue a maximum of 14.9m shares (10% increase) at a price of SEK 5 per share. The subscription period ends on 24 August and given the commitments, we expect the full amount to be issued. Based on our current forecasts, which imply a rebound in sales, we believe Enzymatica is funded for the coming two years.

Estimates unchanged, EV/Sales’23e-‘24e at 4.5-3.1x Other than including the planned share issue, we leave our estimates largely unchanged following the report. The share ... Läs mer på ABG Sundal Collier

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/enzymatica/Equity-research/2022/7/enzymatica---two-birds-with-one-stone/