Q4 sales at SEK 514m was better than expected (3% vs. ABGSCe at SEK 500m and 5% vs. cons. of SEK 489m), but organic growth at 4% was worse (ABGSCe 7%, Cons 11%). Igenomix contributed with SEK 116m (31% vs. ABGSCe at SEK 89m), while “Old Vitrolife” sales were SEK 398m (-3% vs. ABGSCe). Adj. EBITDA at SEK 164m was below our expectations but in line with cons (-15% vs. ABGSCe at SEK 193m and 1% vs. cons. of SEK 163m) and included M&A NRI of SEK -79m (ABGSCe -85). EBIT was SEK 40m (-55% vs. ABGSCe at SEK 88m and -62% vs. cons. of SEK 104m). Net profit: SEK 34m (-50% vs. ABGSCe at SEK 68m and -47% vs. cons. of SEK 64m). The adj. EBITDA margin was worse than expected at 31.9% (ABGSCe 38.6%, cons. 33.3%), citing higher shipping costs and increased customer activities. The Americas region continues to develop well, while Japan & Pacific was worse.
Estimate changes and outlook
Continue to say that global number of IVF procedures are in line with pre-pandemic, but with regional variations. US are seeing more treatments while it has seen a minor slowdown in China. IVF tourism market continues to be imapcted by travel restrictions. Reiterates long term outlook of 5-10% market growth. We believe there is uncertainty to what extent the Igenomix sales beat can be extrapolated, given it has sold Covid-19 services during 2021. We expect cons to lower its margin expectations and expect mid-single digit negative revisions to cons '22e EBITDA.
Valuation and conference call
The share is down 31% YTD vs. the OMXSPI at -11%. It is now trading at 17x NTM EV/Sales and 48x NTM EV/EBITDA, roughly in line with its 2y average. There is a conference call at 10.00 a.m. CET. Dial in Sweden: +46 (0)8 506 921 69 International: +44 (0) 2030 095709 Event Passcode: 9477484
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