Equity Research Nosa Plugs: First impression Q4, 2024

This morning, on February 14, Nosa Plugs reported its Q4 2024 earnings. Below are our first impressions of the report.

• Net sales during the quarter came in significantly higher than in Q4 of 2023 at SEK 4.8 million (3.6), a growth YoY of 31%. The outcome was slightly below our estimate of SEK 5.4 million, a 13% difference. The growth was attributable to strong performance in relevant markets in southern Europe as well as the Danish market.
• The gross profit amounted to SEK 3.3 million (2.4) representing a margin of 72% (65) and a growth YoY of  ~38%. Our estimate was SEK 3.9 million.
• EBITDA came in at SEK -1.9 million (-4.6) compared to our estimate of SEK -0.4 million.
• EBIT amounted to SEK -2.3 million (-5.0) as compared to our estimate of SEK -1.1 million.

Looking at the full-year 2024, the company has made significant progress in achieving its goals and moving towards profitability.

• Net sales for FY2024 came in at SEK 16.1 (10.4) million, a growth YoY of 55%. The outcome was marginally below our estimate of SEK 16.8 million, a 4% difference. With many new distribution agreements as well as smell training making good progress, the growth has come from many sources.
• The gross profit amounted to SEK 11.2 million (7.0) representing a margin of 60% (67) and a growth YoY of  60%. Our estimate was SEK 11.6 million.
• EBITDA came in at SEK -8.4 million (-12.7) compared to our estimate of SEK -7.2, a deviation from our estimate of 17%.
• EBIT amounted to SEK -10.3 million (-14.2) as compared to our estimate of SEK -9.4 million, representing a deviation from our estimate of ~10%.

Carlsquare Equity Research sees the strong growth as a clear sign of the strong and growing demand for the company’s products. Many key distribution agreements have been inked, including the recent one with Pharmacure Healthcare International AB, which will see NOSA selling the Nozoil-products in select markets. Pharmacure had a turnover in FY2023 of SEK ~16 million. Furthermore, NOSA has taken several steps in order to ensure long-term growth. From investing in production capacity to the development of drug delivery. However, the growth in sales has still, at least to some extent, been at the cost of profitability, with margins lagging our expectations. With profitability being a near-term goal, and with only around SEK 4 million in the bank, the company must keep a lid on costs going forward or land a partnership with drug delivery in order to grow sustainably and to ensure the continued development of new products.

Taken together, Carlsquare Equity Research views the fourth quarter, and by extension FY2024, as a quarter and year marked by strong growth and key development in the drug delivery program. We look forward to more information being released about a target indication or partnership in the coming quarters.

Watch our interview with CEO, Adrian Liljefors, in conjunction with the report here

Read our latest update on Nosa Plugs here

Disclaimer

Carlsquare AB, www.carlsquare.se, hereinafter referred to as Carlsquare, conducts business with regard to Corporate Finance and Equity Research in which areas it, among other things, publishes information about companies including analyzes. The information has been compiled from sources that Carlsquare considers to be reliable. However, Carlsquare cannot guarantee the accuracy of the information. Nothing written in the analysis should be regarded as a recommendation or invitation to invest in any financial instrument, option or the like. Opinions and conclusions expressed in the analysis are intended only for the recipient.

The content may not be copied, reproduced or distributed to another person without the written approval of Carlsquare. Carlsquare shall not be held responsible for any direct or indirect damage caused by decisions made on the basis of information contained in this analysis. Investments in financial instruments provide opportunities for value increases and profits. All such investments are also subject to risks. Risks vary between different types of financial instruments and combinations of these. Historical returns should not be considered as an indication of future returns.

The analysis is not directed to U.S. persons (as defined in Regulation S of the United States Securities Act and interpreted in the United States Investment Company Act 1940) nor may it be disseminated to such persons. The analysis is also not directed to such natural and legal persons where the distribution of the analysis to such persons would result in or entail a risk of a violation of Swedish or foreign law or constitution.

The analysis is a so-called Commissioned Research Report where the analyzed Company has signed an agreement with Carlsquare for analysis coverage. The analyzes are published on an ongoing basis during the contract period and for a usual fixed remuneration.

Carlsquare may or may not have a financial interest in the subject of this analysis. Carlsquare values the assurance of objectivity and independence and has established procedures for managing conflicts of interest for this purpose.

The analysts Herman Kuntscher and Niklas Elmhammer does not own and is not allowed to own shares in the Company analyzed.