Sedana Medical AB (FRA:7D2A) Q3 2024 Earnings Call Highlights: Record Sales and Strategic Moves ...

GuruFocus News
4 min read

In This Article:

  • Net Sales: SEK 40 million, highest Q3 in company history.

  • Sales Growth (Excluding Currency Effects): 20% year-over-year, 19% year-to-date.

  • Revised Sales Guidance: Increased to 17% to 20% growth for the full year, excluding currency effects.

  • Ex-U.S. EBITDA: Negative SEK 5 million, improved from negative SEK 12 million last year.

  • Gross Margin: 71% for the quarter, up from 70% in Q3 last year.

  • Cash Position: SEK 226 million at the end of the quarter.

  • Cash Flow from Operations: Negative SEK 29 million, impacted by a significant working capital effect.

  • CapEx: SEK 36 million, primarily for U.S. clinical study and submission preparation.

  • Germany Sales Growth: 9% year-over-year in euros.

  • Other Direct Markets Growth: 49% in local currencies, driven by Spain and U.K.

  • Distributor Markets Growth: 30% excluding currency effects.

  • U.S. Market Potential: Estimated at SEK 10 billion to SEK 12 billion.

Release Date: October 24, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • Sedana Medical AB (FRA:7D2A) reported its highest Q3 net sales in history, reaching SEK 40 million, marking a 20% year-over-year growth excluding currency effects.

  • The company raised its full-year sales guidance to 17% to 20%, up from the previous 14% to 18%, due to strong performance across all regions.

  • Enrollment for both Phase III trials in the U.S. is completed, which is expected to significantly reduce cash burn in the coming year.

  • Sedana Medical AB (FRA:7D2A) signed an agreement to acquire its main supplier, Innovatif Cekal, which is projected to add 2 percentage points to EBITDA over time.

  • The company has a strong market potential in the U.S., estimated at SEK 10 billion to SEK 12 billion, with a favorable product-market fit and a supportive network of key opinion leaders.

Negative Points

  • The integration of the European clinical trial into the U.S. submission will delay the timeline by approximately a year and add SEK 20 million to SEK 30 million in additional costs.

  • Despite improved EBITDA margins, Sedana Medical AB (FRA:7D2A) remains in negative territory, with a group EBITDA of negative SEK 9 million for Q3 2024.

  • The company's cash and cash equivalents decreased significantly from SEK 304 million to SEK 226 million this quarter, raising concerns about cash management.

  • France experienced flat sales due to vacancies from sick leave, impacting promotional activities and sales growth.

  • The U.S. FDA submission process carries inherent uncertainties, and any delays could impact revenue projections and market entry timing.

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