Polygiene - Strong profitability in Q1
EBIT of SEK 10. 3m in Q1, 24. 7% EBIT margin Lower assumption on ViralOff offset by higher margins DCF valuation range of SEK 29-48 (30-48) Q1: 141% y-o-y sales growth despite ViralOff decline q-o-q Polygiene reported Q1 net sales of SEK 42m (+141 y-o-y, of which 32% organic), which was behind our forecast of SEK 49. 5m.
The deviation was caused by substantially lower ViralOff sales than we had anticipated as revenues from the segment declined q-o-q. On the bright side, the core business (StaysFresh) grew 12% y-o-y despite an FX-headwind of over 10%, which was above our estimate of 5%. Addmaster contributed SEK 18.
9m, which was roughly in line with our forecast. EBIT surprised us positively and was SEK 10. 3m (0.
2m), corresponding to an EBIT margin of 24. 7% (1. 2%).
We had SEK 8. 2m and a 16. 5% EBIT margin.
The deviation was mainly caused by lower other external expenses and favourable FX adjustments that occurred in conjunction with the acquisition of Addmaster in January. Cash generation was SEK 31m in Q1, leaving Polygiene with SEK 36. 2m in cash and cash equivalents.
Keeps adding new partnerships, supporting the LT outlook The uncertainty about the ViralOff sales ramp-up makes us lower our assumptions, and we now have ViralOff sales of SEK 55. 5m for ‘21e. However, the revision is somewhat offset by higher sales assumptions in the core business.
In total, it results in an 8. 9% decline in sales for ‘21e and a 3. 2% decline in ‘22e.
We also raise our EBIT margin assumptions following the lower opex level in Q1, and therefore our revision on the EBIT level is only ~1% for ‘21e-‘22e. ‘22e P/E of 19. 1x and EV/EBIT of 15.
2x Despite our lower ViralOff sales assumptions, we think the long-term outlook is intact. In fact, the importance of ViralOff has decreased with the addition of Addmaster and the recovering core business. We also regard the addition of Descente and Samsonite as impressive.
Our DCF range is slightly revised to SEK 29-48 (30-48) and the share trades.
