Vitrolife - Solid Q1 points to improved market conditions
Q1: org. growth of 20%, EBITDA +15% vs. ABGSCe IVF cycles almost back at pre-pandemic levels Increased Technology sales lifts ’21e EBIT by +4% Q1 results above expectations Operational momentum remains in place at Vitrolife, which reported a decent set of Q1 numbers. Sales were +6% above our expectations, with Technology sales growing by 36% (-2% ABGSCe); the company noted strong demand in Japan, China and Australia.
While Consumable sales were a touch below our expectations, the 15% growth still indicates further market recovery. Furthermore, profitability remained strong, with Vitrolife posting a 65. 2% gross margin (+3.
6pp y-o-y). Travelling and marketing expenses rem+ained low during the quarter, and EBITDA was SEK 163m, +15% vs ABGSCe and 41% y-o-y. Demand for time-lapse picking up again Vitrolife is continuing along the positive trajectory seen since the trough in Q2’20.
Management stated that IVF cycles are roughly back to pre-pandemic levels (although regional variances persist), and we are encouraged that the Technology sales gains were partly due to the latest time-lapse software addition, “IDAscore”, which is based on AI. Overall, the strong sales growth in Q1’21 and rising demand for the time-lapse systems indicate that pandemic pressure is starting to ease, bolstering our forecast of robust Technology growth in future. EBIT up by 2-4%; ‘21e EV/S and EV/EBIT 22x and 61x Raised expectations for Technology sales and lower operating expenses lead us to hike EBIT by 4% for 2021e.
Moreover, Vitrolife’s cash position now sits at SEK 1. 1bn, which is a great war chest for future M&A. At the current share price and given our estimate revisions, the share trades at an EV/sales and EV/EBIT of 22x and 61x, respectively.
