OssDsign: Breaking records as Catalyst takes off - ABG

Managed to beat ABGSCe by 18% in tough conditions We lift our ’22e-’24e sales estimates by 5-9% Fair value range unchanged at SEK 8-21 /share

Catalyst seems to have driven most of the sales beat OssDsign is performing well considering the challenging macro environment. It managed to grow 63% y-o-y and beat ABGSCe by 18% on sales. This was despite a highly volatile hospital setting during Q2, with low patient throughput and sudden surgery cancellations due to COVID-19. The US grew by 155%, and we think this strength was in part driven by Catalyst, which we estimate had sales nearing SEK 2m in the quarter. Adjusting for an FX revaluation gain, costs increased c. 30% y-o-y; however, we expect that a large part of the increase was driven by FX, with a smaller underlying opex increase. However, the FX effect is negative for profitability as costs are nearly twice as high as revenues, thus keeping EBIT at SEK -24m for the third quarter in a row, despite the high growth.

We extrapolate the Catalyst momentum The performance witnessed in Q1 is highly supportive of the long-term trajectory given the high indicative demand for Cranial, but more importantly for Catalyst. Initial uptake seems solid and clinical programmes to collect data are progressing according to plan. Hence, we lift our sales estimates by 9% for ’22e and 5% for ’23e-’24e. We now expect a sales CAGR of 66% for ’21-’26e. We expect a slightly more negative EBIT, mostly given the FX impact on costs. Given this and the cash position now at SEK 106m, we think a modest cash injection is likely in H2’23e.

Share down 49% YTD with improving operational performance We leave our fair value unchanged at SEK 8-21 per share, using a WACC of 11%. Despite the 19% jump on Q2 earnings, the share is still down 49% YTD, compared to the small cap index CSX at -31%. We think the company is executing well according to plan and that the setup for strong operational performance in H2 looks likely as market conditions ease, AP-HP and Japan ... Läs mer på ABG Sundal Collier

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