Translation: Original comment published in Finnish on 2/24/2022 at 10:17 am.
Nightingale’s fiscal year H1 report (7/1/21-12/31/21) was in line with expectations. Since its listing a year ago, the company has actively worked on the commercialization of its technology and developing its service and projects connected to this seem to be progressing well in their initial stages. As expected, revenue was still low and investments in commercialization depressed profitability into red. The company did not yet report its order book, which it intends to raise to EUR 5 million by the end of June. At first glanced, the report did not contain any particular surprises.
Building of business and service seems to be on track
Since the September report, Nightingale has promoted its commercial projects and partnerships, progress of which has been sporadically reported in press releases. In addition, the company launched Nightingale Home consumer sales in December, and the Nightingale Pro service carried out with partners was launched in Finland with Terveystalo and in Japan with Mitsui. The report did not discuss the progress of the projects in much detail but doubling of laboratory capacity in Japan at least indicates that the company believes that the projects will generate growth in service use.
As regards service development, Nightingale says it is on schedule and that the new mobile app will be launched during Q1. To support this development, the company acquired Yolife that develops digital health solutions last summer. In January, Nightingale expanded to genetics through an acquisition, aiming to achieve the ability to consider genetic factors next to current lifestyle-related disease risks.
Revenue is still only forming, growth investments depressed profitability
H1 revenue grew slightly and remained as expected at EUR 1.3 million. We believe revenue is still mainly generated from revenues received from universities and research projects. Profitability was also clearly in red as expected and EBIT was EUR -4.8 million. The low profitability is explained by Nightingale’s growth strategy that is in its investment phase, as well as the virtually non-existent revenue that will slowly start to form during the ongoing calendar year. The company's fiscal year ends on June 30 and, therefore, differs from the calendar year.
There should be enough momentum in the ongoing six months
Nightingale has several objectives for the ongoing half-year period related to promoting services (Q1: new mobile app and risk predictions) and commercialization (FDA approval, new international commercial agreement). The company also targets an order book of EUR 5 million by the end of the fiscal year ending on June 30, 2022, where we estimate the company's current R&D revenue corresponds with EUR 2 million of the order book. The company did not yet report its order book, so we expect that the growth of new commercial projects will focus on spring. As a whole, the company must continue to build its business on several fronts, but the successes and progress made so far support confidence in further development.
Nightingale Health
Nightingale Health operates in medical technology. The company specializes in the development of medical devices. The product portfolio is broad and includes platforms and services in blood tests that are used for disease prevention purposes. In addition to the main business, service and associated ancillary services are also offered. The business is run globally with the largest presence in Europe.
Read more on company pageKey Estimate Figures2021-09-16
2021 | 22e | 23e | |
---|---|---|---|
Revenue | 2.1 | 2.9 | 8.8 |
growth-% | 31.88 % | 39.36 % | 203.45 % |
EBIT (adj.) | -5.3 | -7.1 | -13.2 |
EBIT-% (adj.) | -253.63 % | -245.37 % | -150.02 % |
EPS (adj.) | -0.13 | -0.13 | -0.23 |
Dividend | 0.00 | 0.00 | 0.00 |
P/E (adj.) | - | - | - |
EV/EBITDA | - | 5.71 | 1.70 |