OssDsign: Continued good momentum in Q2e - ABG

- Q2'24 results due 20 August
- 142% growth y-o-y for Catalyst, +9.9% sequential growth
- EBIT revised down 0.9%-2.2% due to FX

Q2'24 expectations
We forecast Q1 sales of SEK 29.7m, up 24% y-o-y on a reported basis and 142% adjusted for the discontinued business, as OssDsign is only selling one product (Catalyst) in one market (US) as of 1 January 2024. As OssDsign is in the launch phase of Catalyst, i.e. ramping up sales by gradually improving access to additional hospitals and expanding its sales and distribution capacity, we expect to see quarterly variations in the growth rate, and at times to see step changes in its quarterly sales development. However, we do expect to see a continued positive underlying sales momentum, not only in Q2, but also over the coming years. With regard to EBIT in Q2, we forecast SEK -14m in Q2, driven by a 92.5% gross margin and a sequential increase in opex to SEK -41.5m (vs. 38.3m in Q1'24) on an increased activity level, and as we expect OssDisgn to have expanded its sales and marketing organisation.

Estimate changes
We have lowered our '24e-'26e EBIT forecast by 0.9%-2.2% due to updated FX assumptions. For FY'24e, we forecast reported sales growth of 15%, but adjusted for the discontinued business, we forecast 100% sales growth for OssDsign in '24e. We leave our sales growth assumption for Catalyst of +35% in '25e and +25% in '26e unchanged, but from a marginally lower base due to the updated FX assumptions.

Fair value range left of SEK 8-15 unchanged
We leave our fair value range of SEK 8-15 unchanged ahead of the Q2 results. We arrive at our fair value range using a DCF model with a terminal growth rate of 3% and a WACC of 10%.

Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/ossdsign/Equity-research/2024/7/ossdsign---continued-good-momentum-in-q2e/