OssDsign - Continued growth is on the agenda for 2021
Q4’20 growth and profitability pressured by COVID-19 Set for a back-end loaded 2021 60% sales CAGR ’20-‘23e, DCF value range SEK 12-37 Q4: 37% organic growth y-o-y, elective surgery pressured OssDsign delivered sales of SEK 6. 8m (-20% vs. ABGSCe), as the resurgence of COVID-19 cases across the globe continued to have a negative impact on OssDsign’s volumes and new customer access. Cranioplasty generally requires access to ICU beds.
This was a key bottleneck as hospitals across key regions for OssDsign are deferring elective procedures and ring fencing ICU beds in favour of COVID-19 patients. Hence, the sequential pace of improvement seen in Q3’20 was hampered, showing a more modest 4% q-o-q sales growth in Q4’20. This was especially evident in the high margin US market (-9% y-o-y) and Japan, where the expected sales launch has been delayed until Q2’21e (previously H2’20).
Contrastingly, Europe continued its impressive momentum with 81% organic growth y-o-y driven by Germany & France. Negative revisions due to COVID-19 disruptions With sales volumes below our expectations and the relative strength in Europe (~63% of Q4’20 sales), the quarterly EBIT of SEK -25m came in 15% below our estimates. Planned investments in the sales organisations have been postponed due to COVID-19, leading us to expect a growing opex base in 2021 and beyond.
While OssDsign expects an improvement of the COVID-19 situation in 2021, we fear continued disruption in H1’21e. This leads us to reduce our sales estimates by 18-13% for ‘21e-‘22e respectively. We look forward to an eventful 2021, where we hope to get more details on the launch activities of OssDsign Cranial in Japan as well as the US launch of Osteo3 ZP Putty from the Sirakoss acquisition during H2’21e.
DCF valuation range updated to SEK 12-37 per share (13-40) Factoring in our revised estimates reduces our DCF fair value range to SEK 12-37 per share (13-40). We continue to model two equity issues: SEK 85m in Q2’21 and SEK.
