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Important information: All information regarding limitation of liability and potential conflicts of interest can be found at the end of the report Redeye, Mäster Samuelsgatan 42, 10tr, Box 7141, 103 87 Stockholm. Tel. +46 8-545 013 30, E-post: info@redeye.se
Initiation of Coverage
Equity Research 27 May 2020
KEY STATS
Ticker Optomed.HE Market Small cap
Share Price (EUR) 4.4 Market Cap (MEUR) 62 Net Debt 20E (MEUR) -1.422 Free Float 100 %
Avg. daily volume (‘000) 29.3
BEAR BASE BULL 2
8
12
KEY FINANCIALS (EUR t)
2018 2019 2020E 2021E 2022E 2023E Net sales 12733 14977 11668 15450 18157 20944 EBITDA 1062 -335 -2119 -270 1331 3040 EBIT -748 -2596 -4092 -1610 -42 1653 EPS (adj.)
2018 2019 2020E 2021E 2022E 2023E EPS (adj.) 0.0 -0.3 -0.3 -0.1 0.0 0.1
EV/Sales 0.8 -0.5 5.2 4.1 3.5 3.0
EV/EBITDA 9.4 23.4 -28.8 -235.1 48.3 21.0
EV/EBIT -13.4 3.0 -14.9 -39.4 -1523.4 38.6
P/E 0.0 0.0 -14.7 -47.0 -470.8 51.6
ANALYSTS
Gergana Almquist gergana.almquist@redeye.se
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3
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05-dec 04-mar
OMXS 30
Optomed
Optomed: Time for a Breakthrough Redeye initiates coverage of Optomed with a base case of EUR 8 per share. Optomed is an
innovative medtech company and a leader in a niche market: it designs and sells handheld
cameras and software solutions for eye examination, with artificial intelligence (AI) tools to
help evaluate the images. The cameras are light, easy to use and cost efficient. With this
superior solution, committed and competent management, we believe Optomed will achieve
a breakthrough in sales in the coming years also on the background of the strong push for
digitalization triggered by the covid-19.
Large market, leading technology
Worldwide, there are more than 460m people with diabetes, who need an annual screening.
The handheld camera market for eye examinations is estimated to be worth USD 186m in
2025 and grow with CAGR of 9-11%. We believe that Optomed can grow at a higher rate than
the market, because it offers a superior solution and has a clear strategy how grow revenues.
With subsidiaries both in China and the US (US represents around 40% of the total market),
Optomed is decisively on the path of a significant breakthrough, we believe.
The company reports Q1 2020 results this Friday. While we expect Q1 to be slightly affected
and Q2 to be a temporary setback for the company. However, be believe revenues will pick
up again in Q3 and especially Q4. Revenues are postponed, not lost for Optomed, we believe.
Upside and catalysts
Our conservative DCF analysis shows that Optomed has a fundamental value of EUR 8 per
share and is currently trading at a significant discount.
In H2 2020 Optomed launches a new camera with an integrated AI tool. Further into 2021,
we expect this camera combined with the rollout of the US sales strategy, to bring significant
revenues. Our bull case is Euro 12 per share.
These will be the catalysts for the stock in the coming months, in our view.
Optomed Sector: Medtech
REDEYE RATING
Optomed.HE VERSUS OMXS30
FAIR VALUE RANGE
Financials
People
Business
REDEYE Equity Research Optomed 27 May 2020
2
Investment Case
Investment Thesis: Set for Growth Optomed is an R&D intense medtech company offering complete solutions for eyesight
screening. Based on our research, we find the company’s offering to be superior to others on
the market: the patented illumination technology produces high-quality images despite the
small size, the cameras are easy to use and affordable. The software infrastructure is scalable
for needs big and small: for single clinics, for hospital patient management, or large national
screening programs, plus the AI-assisted grading of the images requires no specialist training.
The company sells its own brand through a network of distributors in 60 countries and also
under the brands of other medtech companies such as Zeiss, Topcon, Volk. The Optomed has
also a subsidiary and a sales organisation in China, an important market, and has set up a US
subsidiary in the US to rollout sales under its own brand in 2021. With this layout, Optomed is
set for growth.
Our DCF valuation indicates a significant upside in the share, with a base case fair value per
share of EUR 8. Conservatively, we estimate that the company will grow a few percentages
faster than the market. We also forecast expanding gross margins and EBITDA to turn positive
in 2023.
Source: Redeye, Optomed
A huge market
The company addresses a large market. The estimated prevalence of diabetes is 460m people
worldwide, who all need an annual screening. This prevalence is expected to grow in the
coming decades, especially in China, India, and the Middle East. Most of these patients live in
rural areas, and do not have access to specialist ophthalmologists, which are in short supply.
Optomed solves this problem by enabling primary care or remote screening with its AI-assisted
grading tools and patient management software. Furthermore, we believe that the push to
digitalisation due to covid-19 creates a very favourable environment for Optomed to roll out its
solution to primary care and national screening programs.
REVENUES (EURm) & Growth (%)
12.7
15.0
12.0
15.0
17.8
20.6
24.485%
18%
-20%
25%18% 16% 19%
18 19 20 21 22 23 24
Historicals Estimates
EBIT (EURm) & EBIT Margin (%)
-0.7
-2.6
-4.2
-2.4
-0.3
1.3
4.4
-6%
-17%
-35%
-16%
-2%
6%
18%
18 19 20 21 22 23 24
EstimatesHistoricals
dsfdsf REDEYE Equity Research Optomed 27 May 2020
3
2020 and beyond
Despite the covid-19 lockdown impacting revenues especially in Q2, we believe towards Q4
2020 devices sales will pick up and perhaps exceed 2019 Q4 levels. We expect gross margins
to improve towards the 70-80% range in the coming years and EBITDA margin to reach 30%
towards 2024-2025. Our conservative estimates are that the company’s EBITDA will turn
positive in 2022 and EBIT to turn positive in 2023, which will also make it an attractive
acquisition target.
We do not think that Optomed will need another capital raise before that, except for
acquisitions.
Significant upside
Our DCF valuation, based on conservative growth assumptions, indicates a fair value of EUR 8
per share, which means that the share is greatly undervalued and still undiscovered. A bull case
of EUR 12 per share offers significant upside from current share price levels and is conditioned
on the company grew significantly faster than the market, for devices and software combined.
Optomed can achieve this if its rollout in the US and its integrated AI tools prove to be very
successful.
The management has integrity, energy, and commitment, in our view. The founder is still the
CEO, and the head of devices and the head of software have many years of experience in the
respective business area. All of them have a deep knowledge of the market and technology.
Optomed has a stable concentrated institutional ownership structure and the share has
fluctuated around EUR 4.4 for the past weeks in anticipation of the Q1 report this Friday, May
29th. We think that the market has not yet discovered this stock and that the negative impact
of the covid-19 is already priced in.
EBITDA (EURm) & EBITDA Margin (%)
1.1
-0.3
-2.2
-0.1
2.1
3.9
7.2
8%
-2%
-18%
0%
12%
19%
29%
18 19 20 21 22 23 24
EstimatesHistoricals
GROSS PROFIT & GROSS MARGIN
Source: Optomed, Redeye Research
8.29.7
8.4
10.8
13.3
15.5
19.1
64% 65%70%
72%
75%
75%
78%
2018 2019 2020E 2021E 2022E 2023E 2024E
Gross Profit (EURm) Gross Margin (%)
FAIR VALUE RANGE (EUR)
2.0 2.9
8.0
12.0
7.1
4.4
Bear Base Bull 52 wk Hi - Lo Share Price
EV / Revenues
4.7x 3.9x
3.3x
8.6x
7.0x
6.0x
20 21 22
Current Fair Value
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Optomed’s share performance since listing, Redeye Research.
The addressable market is large, the solution is superior, and the context is favourable:
Optomed is in a perfect position for a breakthrough.
Risks The global lockdown due to the spreading of covid-19 has affected all businesses. The biggest
risk for Optomed is the disruption of distribution and sales.
Production risk: the lockdown and the recession can also disrupt the supply of components
and contract manufacturing. Large customers have postponed purchasing decisions and we
expect reduced sales for 2020.
The global recession that could follow, will force governments to cut budgets, so there will be
fewer funds to spend on new equipment. Practices and hospitals might go into saving mode
and postpone purchases.
Innovation risk: There is a risk that the company might not be able to continue to innovate and
new products and competitors might be quick to offer similar solutions.
Marketing and sales risk: The company might fail to reach the right customers and to
implement its growth strategy.
Financial risk: Optomed is not profitable at present, which might affect its ability to reach its
financial targets. In a worst-case it might need to raise additional capital, which will lead to
dilution.
2.00
3.00
4.00
5.00
6.00
7.00
8.00
Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20
OPTOMED OMXH25 (indexed)
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Company Overview
Mission and History Optomed was founded 2004 with the vision to create a high-quality handheld fundus camera
(for glossary consult Appendix I) that would be affordable, easier to use than traditional
desktop cameras, and will solve the problem of retinal screening in remote areas. Today, the
company has two business divisions: devices and software solutions, and revenues are roughly
equally split between the two.
Optomed’s history. Source: company material
The Need: tabletop fundus cameras have capacity constraints
Optomed addresses a large market: Diabetes is a global epidemic and diabetic retinopathy
(DR) – progressive degeneration of the eye-sight – is the main cause of blindness in working-
age people worldwide. While this degeneration is preventable and treatable with early detection
and annual screening, only about 30 to 40% of the world’s almost 460 million diabetics ever
get a screening and a much smaller percentage of those are screened more than once.
The reason for this is the lack of access and capacity constraints. Traditionally, a specialist
ophthalmologist performs a typical screening on a bulky and expensive table-top camera, after
a primary care referral. Usually, about 50% of patients referred to a screening do not follow
through, for various reasons. The lack of access to screening is especially severe in rural areas,
where about 153 million people with diabetes live, worldwide1.
Optomed solves the problem of eye screening in remote areas
Optomed’s solution was designed especially for primary care: the light, simplified and cost-
efficient handheld cameras allow all healthcare professionals with a bit of training to examine
patients’ eyesight on location, without the need for pupil dilation (drops that enlarge the pupil).
The camera is non-mydriatic (chemical enlargement of the pupil is not required) and produces
high-quality images, which the AI software can evaluate, or send them for evaluation to an
ophthalmologist, remotely. The system supports subsequent visits scheduling with in-built
reminders.
Optomed has protected the technology with 55 international patents and has sold more than
8 700 cameras through its own brand and under the brands of other medtech companies such
1 IDF Atlas 9th edition
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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as Topcon and Zeiss. The cameras increase screening coverage because this process can be
moved into primary care and screening volumes can be increased with the help of AI.
Sales Channels
The company sells the cameras through three channels: own salesforce, distributors network,
and OEM cameras sold under the clients’ own brand. Revenues are roughly split equally
between these three:
1. Optomed sells through its own sales organisation directly to screening providers, selected
leading hospitals and clinics, and strategic customers such as national health authorities,
insurance companies, and other bulk-buyers.
2. Via the network of distributors, the company sells the cameras, and in some cases
complete solutions, to private screening providers, small and medium-sized eye clinics,
optic chains, optic stores, and optic shops. Through this channel the company can reach
out to primary care units and other hospital segments, such as emergency, neurology,
endocrinology, and paediatrics, in selected markets.
3. Another source of revenues comprises the OEM branded handheld cameras, developed
for medical technology companies such as Volk Optical Inc., Carl Zeiss Meditec Inc., Haag-
Streit Diagnostics, and Topcon Medical Systems Inc. and sold under their respective
brand.
Overview of Optomed’s sales strategy:
Source: Company material
The sales of cameras drive software revenues either through a subscription model (public
organisations) or variable pay (per screening, mostly for private clinics).
Optomed’s Screening Solution: Devices and Software Optomed has two cameras on the market under its own brand, Optomed Aurora and the
previous version, Optomed Smartscope. In H2 2020 Optomed will launch a new camera with
an integrated AI grading, which only needs a wifi connection to access the software and
evaluate the images.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Retinal screening important for early diagnosis
The fundus of the eye is the part opposite the pupil, to the back of the eye, and includes the
retina, optic nerve, and retinal blood vessels. The retina is the light-sensitive layer of cells that
converts incoming light into electrical signals suitable for processing in the visual cortex of the
brain, which turns them into the images we see.
Anatomically and developmentally, the retina is an extension of the brain. Due to its
architecture and its function, and the fact that it is a metabolically active tissue with a double
blood supply, both diseases of the eye and cardiovascular and CNS diseases can manifest
themselves in the retina, even before other symptoms.
Anatomy of the human eye, Arizona State Uni
Fundus cameras project a stream of light through the pupil to capture images of the interior
surface of the eye – the posterior pole, the optic disc, retina, macula, and fovea, as well as blood
vessels and optic nerve. This enables a detailed study and fast long-term tracking with easy
image comparison. Screening of the eye helps capture degeneration in time and treat it. In the
future Optomed plans to expand its screening solution to be able to diagnose AMD, glaucoma,
cardiovascular, and CNS conditions. This is conditioned on finding high-quality clinically
validated AI algorithms, for each specific condition.
Handheld Fundus Cameras
Optomed designs and develops its cameras in-house, and has outsourced production.
Optomed’s branded product portfolio consists of two handheld devices under the Optomed
brand: Optomed Aurora and Optomed Smartscope PRO, both non-mydriatic. The optical lens
solutions are patented, while the innovative illumination method and enhanced retinal
reflection control enable images of high quality. The cameras consist of interchangeable
modular optics components, which gives more options for utilization.
Optomed has produced also the Volk Picture Plus & Prestige, Topcon Signal, Zeiss Visuscout,
and Haag-Streit Fundus Module 300, sold under the respective brand names to hospitals and
screening organisations around the world.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Overview of Optomed’s cameras. Source: company material.
Optomed Aurora
Aurora fundus camera. Source: Optomed
Launched in 2017, the Optomed Aurora is a fifth-generation handheld camera with a 50-degree
field of view (FOV), has a larger display than the Smartscope PRO, and an improved user
interface. It uses the retina's reflective properties to produce detailed high-quality images. It
can also store images and be integrated into hospital systems.
Smartscope PRO
Smartscope PRO is the company’s previous-generation non-mydriatic camera: lightweight,
cost-effective and can be integrated with fluorescein angiography (FA) module. Launched in
2013, the Optomed Smartscope PRO features a 40-degree field of view and an optical
resolution of >60 lp/mm. The device meets the international ISO 10940 resolution
requirements for fundus cameras.
The cameras are approved in all key markets, including CE (Europe) and FDA (USA), and CFDA
(China) - Smartscope PRO only. The production facility is located in Thailand and can be scaled
up as needed.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Artificial Intelligence Screening Solutions
Optomed’s software operations began in 2018 with the acquisition of Commit; Oy, a software
company offering solutions for medical screening. Since 1989 Commit; has delivered over a
thousand healthcare software projects across Europe, primarily in the diagnostic screening,
e.g. for breast, cervical, and colorectal cancer. Approximately 90% of breast cancer screening
in Finland are managed by the solution. Also, Optomed evaluates providers of DR AI algorithms
and integrates them into the software to automate the screening.
Efficient AI strategy based on strong partnerships
Collaboration with algorithm providers is an efficient strategy because developing algorithms
for various conditions and clinically validating them in different markets requires a lot of
resources. In this model the partners are responsible for developing the algorithms, clinically
validating them, and ensuring that they meet regulatory and other requirements that are
needed to enter local markets. The main selection criterion is the quality of clinical validation
of the algorithm that aligns to offer the best possible combination of camera, software, and AI.
Deep clinical evidence is key in proving safety and efficacy.
Algorithm selection is also a very local process. In each market Optomed needs to work with
local providers, to integrate these algorithms into its camera and software products, test and
validate compatibility and workflows. The company plans to soon expand its screening to age-
related macular degeneration (AMD) and glaucoma and works with AI companies, which have
validated and registered their algorithms for different eye diseases.
Tailored solutions
Optomed’s software can be tailored to needs big and small: it covers the complete process,
ranging from participant enrolment, call/recall, making the examination, storing examination
results, informing of results, managing additional examinations, creating statistics, and
starting all over again. The solution integrates seamlessly with existing IT systems and
equipment.
Optomed’s software solutions, overview. Source: company material
• Optomed Screen is for national screening programs with several clinics. It is a
comprehensive process management software for improving the efficiency of diabetic
retinopathy screening programs. The system schedules times and sends out invitations,
it combines data from hospital systems with the fundus images and saves reports. It
collects data and statistics from the screening operations.
• Optomed Link is a single-hospital telemedicine solution: a tool for virtual consultation
linking the site of retinal imaging with an eye specialist, who provides a report with analysis
of the images.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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• Optomed Orbit is for single users. It is a complete patient data management solution for
viewing, sharing, and archiving of fundus images. It is a versatile imaging toolset for
viewing and enhancing retinal images. It enables the use of AI in image analysis.
• Optomed Avenue is an AI real-time software for automatic screening of early stages of
diabetic retinopathy. It analyses retinal images automatically and gives easily
understandable results immediately if the patient has an elevated risk of diabetic
retinopathy. The solution is suitable for all professional fundus cameras.
Diabetic Retinopathy Damaged macula causes vision loss
The eye’s macula is the place where light is focused by the structures in the front of the eye
(cornea & lens) and it is located to the opposite site of the lens, in the back of the eye. It is the
functional centre of the retina, an elliptical area of about 5–6 mm, and responsible for central
and colour vision. The macula provides us with the ability to read and see in great detail
whereas the rest of the retina provides peripheral vision.
In the very centre of the macular region is the fovea. The fovea is the most important part of
the eye and very often vision is not lost until the fovea is affected by diseases such as diabetic
retinopathy (DR), the most common cause of blindness in young and middle-aged people,
and age-related macular degeneration (AMD), the most common cause of blindness in the
elderly.
Elevated sugar content damages blood vessels
Diabetes interferes with the body’s ability to use and store sugar (glucose) and is characterised
by too much sugar in the blood, which over time damages small blood vessels throughout the
body, including the retina. Initially, this degeneration is symptom-free and causes tissues to
swell, which results in cloudy or blurred vision. The condition affects both eyes. A
comprehensive annual examination is important to diagnose and treat the condition. The
examination includes patient history, visual acuity measurements, and evaluation of the ocular
structures and the retina.
Source: American Optometric Association
DR is the most frequent cause of new cases of blindness among working-age adults (20–60
years). During the first two decades of disease, nearly all patients with type 1 diabetes and
>60% of patients with type 2 diabetes have retinopathy.
Slow progression
Diabetic retinopathy progresses slowly and NPDR (non-proliferative diabetic retinopathy) is the
early stage of diabetic eye disease. Many people with diabetes have it but without symptoms.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Tiny blood vessels leak, causing the retina to swell. When the macula swells, it is called macular
edema. This is the most common reason why people with diabetes lose their vision. Another
anomaly is that blood vessels close, which is called macular ischemia - the blood cannot reach
the macula.
DR progresses invisibly and is a great social and economic burden. It can however easily be
detected and prevented with access to regular annual screening, for which Optomed provides
an easy-to-operate and affordable solution.
Prevalence of Diabetes Mellitus • The proportion of people with type 2 diabetes is increasing in most countries;
• The global diabetes prevalence in 2019 is estimated to be 9.3% (463 million people),
rising to 10.2% (578 million) by 2030 and 10.9% (700 million) by 20452.
• The prevalence is higher in urban (10.8%) than rural (7.2%) areas, and in high-income
(10.4%) than low-income countries (4.0%).
• One in two (50.1%) people living with diabetes do not know that they have diabetes.
• 79% of adults with diabetes were living in low- and middle-income countries;
• The greatest number of people with diabetes were between 40 and 59 years of age;
Growing incidence of DR
The number of people with diabetes is likely to increase as a result of an aging global
population, urbanisation, rising prevalence of obesity, and a sedentary lifestyle. While recent
improvement in diabetes treatment has decreased macrovascular mortality, more patients
with diabetes live long enough for DR and vision-threatening diabetic retinopathy (VTDR) to
develop.
• According to the American National Health and Nutrition Examination survey (NHNES,
2005-2008), 28.5% of diabetic patients had some degree of DR, and 4.4% had VTDR.
Similar prevalence estimates are seen in many other developed countries.3
Source: IDF Diabetes Atlas Committee, 9th edition (Global and regional diabetes prevalence estimates for 2019 and
projections for 2030 and 2045).
2 https://www.diabetesresearchclinicalpractice.com/article/S0168-8227(19)31230-6/fulltext 3 A recent systematic review of 35 population-based studies showed that the prevalence of DR, proliferative diabetic
retinopathy (PDR), diabetic macular edema (DME), and VTDR among individuals with diabetes is 34.6%, 7.0%, 6.8%, and
10.2%, respectively3. By extrapolating these results to the global number of diabetics, we can estimate that the number of
people with DR will grow to 202m by 2030, and the number of people with VTDR will increase to 58m, if no urgent action
is taken.
2019 2030 2045
Rank
Country or
Territory
Nr people with
diabetes, million Rank
Country or
territory
Nr people with
diabetes, million Rank
Country or
territory
Nr people with
diabetes, million
1 China 116.4 1 China 140.5 1 China 147.2
2 India 77 2 India 101 2 India 134.2
3 United States
of America
31 3 United States
of America
34.4 3 Pakistan 37.1
4 Pakistan 19.4 4 Pakistan 26.2 4 United States
of America
36
5 Brazil 16.8 5 Brazil 21.5 5 Brazil 26
6 Mexico 12.8 6 Mexico 17.2 6 Mexico 22.3
7 Indonesia 10.7 7 Indonesia 13.7 7 Egypt 16.9
8 Germany 9.5 8 Egypt 11.9 8 Indonesia 16.6
9 Egypt 8.9 9 Bangladesh 11.4 9 Bangladesh 15
10 Bangladesh 8.4 10 Germany 10.1 10 Turkey 10.4
Total 310.9 387.9 461.7
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Globally, the patient population is set to grow from 8.3% prevalence in 2019 to 9.2% in 2030
and 9.6% in 2045.
Source: IDF Diabetes Atlas Committee, 9th edition.
Regular screening reduces the rate of blindness
Similar developments are observed in developing countries like China and India. China has
around 116m and India 77m people with diabetes. It is expected that the incidence and
prevalence will likely increase to 140m and 101m respectively in 2030. A recent study in rural
China showed that 4.3% of the patients with diabetes already have retinopathy and 6.3% have
VTDR4. A study in rural China found that 21m people aged 30+ have diabetes and 9.2m have
DR, including 1.3m with VTDR. There is a pressing need for appropriate screening and
management of diabetes and its complications in rural China, the study concludes.5 China is
an important market for Optomed and the company is active there with 15 sales executives.
WHO recommends regular screening
The World Health Organisation (WHO) recommends that screening should be done for any
condition that is an important health problem, has an effective treatment that can be delivered
early, usually before symptoms of the condition are apparent, when facilities for diagnosis and
treatment are available, when screening is feasible and cost-effective, and when subjects can
be followed up longitudinally.
Diabetic retinopathy fulfills most of these criteria and studies have shown that screening can
reduce the rate of blindness due to DR.
There are three steps to prevent vision loss due to DR:
1. early detection of retinopathy by screening,
2. subsequent monitoring of the condition with regular fundus examination, and
3. timely and effective laser treatment when deemed necessary.
The American Diabetes Association (ADA) recommends that adults and children older than 10
years of age with DM should have an annual eye examination to prevent DR.
This illustrates that Optomed operates in a very large market and there is both public and
private urgency to implement screening solutions. While this has been down-prioritized in the
last months due to the covid-19 crisis, we believe private and public actors will turn their
attention to retinal screening and digitalization of eye care in H2 2020.
4 https://www.ncbi.nlm.nih.gov/pubmed/19168222 5 https://www.ncbi.nlm.nih.gov/pubmed/19168222
2019 2030 2045
Rank
IDF
Region
Nr people with
diabetes, million
World-age standardised
diabetes prevalence, %
Nr people with
diabetes, million
World-age standardised
diabetes prevalence, %
Nr people with
diabetes, Million
World-age standardised
diabetes prevalence, %
World 463 8.3 578.4 9.2 700.2 9.6
1 MENA 54.8 12.2 76 13.3 107.6 13.9
2 WP 162.6 11.4 196.5 12.4 212.2 12.8
3 SEA 87.6 11.3 115.1 12.2 152.8 12.6
4 NAC 47.6 11.1 56 12.3 63.2 13
5 SACA 31.6 8.5 40.2 9.5 49.1 9.9
6 EUR 59.3 6.3 66 7.3 68.1 7.8
7 AFR 19.4 4.7 28.6 5.1 47.1 5.2
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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National Screening Programs Of the 460m diabetes patients worldwide, who must have annual screening, it is estimated that
only about 40% have some form of screening, and the rate of follow-up is even lower. Due to
the immense increase of patients, the time needed from every ophthalmologist also rises
exponentially to the point where the concept of in-person examination is neither practical nor
sustainable.
Given that less than 10% of the population will require further management for vision-
threatening DR, the in-person clinical evaluation of DR in the specialized ophthalmology clinics
(by face-to-face interaction) is not cost-efficient6.
A Canadian study7 of the cost-effectiveness of a pilot Toronto tele-retina screening program
for DR comparing it to an existing standard of care (SOC) concluded that the costs per correctly
diagnosed case were almost four times lower with the tele-screening than with the existing
SOC. The total cost of the Canadian program was the equipment and operation of mobile
screening clinics: purchasing the devices, labour costs, and transportation costs. Tele-retinal
screening is not just less costly and more efficient than the SOC, but it also increases access
and subsequently the rate of repeated screenings. From a national health system perspective,
the program is preferable to the SOC, because it would detect and diagnose more cases than
the in-person examination8.
The studies show that it makes much more sense to organize the screening process through
mobile clinics, which have higher throughput, are cost-efficient and can be operated by staff
with only a basic qualification.
The covid-19 pandemic has made the need for digitalization obvious – all examinations that
can be done by tele-medicine, must be done remotely, to avoid face-to-face contact. Tele-
ophthalmology and AI-grading must be implemented to adapt the healthcare system to the
new reality: the sky-rocketing need for screening, limited specialist time, growing demand for
digital solutions. The push for digitalization both on the supply and on the demand side of
healthcare has created a more receptive environment for Optomed’s solutions, in our view.
Patients prefer telemedicine
Series of studies comparing tele-retina screening to traditional screening confirmed that it can
be just as effective and that it improves access and convenience for patients. Mobile tele-
screenings increased participation in the programs, not just in remote rural areas, but also in
urban settings.
A large number of patients (82%) preferred tele-retinal screening to an actual face-to-face
examination with a specialist, as they considered it faster, easier, more accessible, and
convenient. Interestingly, 95% preferred to have their next examination via tele-medicine
system and be referred to a specialist only when required. The study concluded that
teleophthalmology can persuade more patients to participate in regular screening9.
Patients prefer tele-retinal screening
Teleretinal screening is convenient for patients, as most programs utilize nonmydriatic
cameras, which minimize the image acquisition time and bypass the drawbacks of pupillary
dilation. Telemedicine leads to increased DR screening rates, which leads to earlier detection
of treatment-level lesions—and presumably earlier intervention. Recent evidence from England
6 https://reader.elsevier.com/reader/sd/pii/S1888429619301098 7 https://www.sciencedirect.com/science/article/abs/pii/S0008418218303855 8 https://www.sciencedirect.com/science/article/pii/S000841821831278X 9 https://www.sciencedirect.com/science/article/pii/S1888429619301098
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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and Wales suggests that tele-retinal screening programs may be responsible for a drastic
decrease in the prevalence of DR.
High-quality fundus camera key to a successful screening program
Successful implementation of national screening programs depends also on the quality of the
images, and appropriate follow-up management, both of which are essential parts of
Optomed’s offering.
If the camera produces low-quality images, a large number of them cannot be graded and this
would result in more referrals and in-person examinations with an ophthalmologist cost
increase and diminishing cost-effectiveness of the program.
This means that the key to successful privately operated or national screening program is the
proper solution that provides easy to use and reliable grading. Additionally, integrated AI will
save cost and time, and ensure sustainability. This is why we believe Optomed’s solution could
become a preferred choice for these programs if the company finds the right channels to
approach this market.
Primary care involvement essential
Successful national screening program such as the one implemented in the UK, also ensures
that primary care or multispecialty clinics are equipped with fundus cameras, especially in
areas without access to eye care specialists. Several studies have illustrated that that properly
trained primary care physicians can reliably evaluate fundus images. Training and education
and the implementation of tools such as AI for DR screening can improve screening among
diabetes patients10.
Two global trends combine to create a favourable market situation for Optomed: exploding
demand for retinal screening and the push for digitalisation of healthcare as a result of the
covid-19 pandemic. We believe these two developments will accelerate in the future,
particularly in low-income countries, creating an opportunity for Optomed.
Age-related Macular Degeneration (AMD)
Optomed plans to expand also into AMD screening. AMD is another leading cause of
irreversible blindness and visual impairment in the world. In 2020 the number of people living
with macular degeneration is expected to reach almost 200 million and by 2040 to increase to
288 million11.
It is not known exactly what causes AMD, but it develops as the light-sensitive cells of the
macula slowly deteriorate, leading to a gradual loss of central vision. Debris left by deteriorating
cells build up in the macula and generate further cell loss. Wet AMD, the more aggressive form,
affects only 10% of people with AMD but accounts for 90% of the severe vision loss.
The most common symptoms are blurred vision, difficulty recognising faces, and the need for
brighter light to see. As more light-sensitive cells are destroyed, people with dry AMD develop
a blind spot in the centre of their field of vision that expands as the disease progresses.
10 https://www.sciencedirect.com/science/article/pii/S1888429619301098 11 Global prevalence of age-related macular degeneration and disease burden projection for 2020 and 2040: a
systematic review and meta-analysis". Wan Ling Wong, Xinyi Su, Xiang Li, Chui Ming G Cheung, Ronald Klein, Ching-Yu
Chen, Tien Yin Wong. The Lancet. Volume 2, No. 2, e106–e116, February 2014.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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The Global Fundus Camera Market The global fundus camera market is expected to grow beyond USD 625.1m by 2024 (Grand
View Research), and a similar number by Zion Market Research, around USD 620m, and a
GAGR of around 6.5%. The non-mydriatic fundus cameras segment accounted for the highest
share in the global fundus camera market and among the tabletop and handheld non-mydriatic
fundus cameras, tabletop dominated the global market in 2017.
The global nonmydriatic handheld fundus camera market size is expected to reach USD 186.4
million by 2025, registering a 9.1% CAGR during the forecast period. Other studies estimate a
CAGR of 11%.
Source: Zion market research, Optomed material
According to laws and regulations by various medical devices agencies in the U.S. as well
as Japan, fundus imaging cameras must be replaced once every four years. Hence, the
demand for these devices is likely to increase in these developed countries in the coming years.
Supportive government regulations such as these are likely to have a positive impact on the
nonmydriatic handheld fundus camera market.
Studies prove the effectiveness of handheld fundus cameras
Studies confirm that handheld fundus cameras are just as effective as tabletop cameras in
identifying common retinal conditions. Advances in electronic illumination control, non-
mydriatic imaging systems, and high-resolution digital image capture has enhanced the
camera’s capabilities for retinal diseases screening12. The study found that non-mydriatic
fundus photography has advantages in retinal screening programs and emergency
departments. Without dilation, the image quality of current cameras was significantly affected
by the pupil size, especially when the pupils were dilated below 3.5mm. Another study by
Schwartz et al. showed that non-mydriatic fundus camera is an effective, feasible screening
tool for the early detection of DR.
Interestingly, another study found that family physicians were just as good as retinal specialists
in assessing non-mydriatic fundus images in screening for diabetic retinopathy (DR) in primary
healthcare. Non-mydriatic fundus retinography associated with appropriate general physician
training is essential for the DR screening and would significantly reduce the incidence of DR
related blindness13. A similar study in Northern Italy concluded that fundus images obtained
with a non-mydriatic handheld fundus camera could be considered an effective, cost-saving,
and feasible screening tool for the early detection of DR, preventing blindness as a result of
diabetes.14
12 https://www.ncbi.nlm.nih.gov/pmc/articles/PMC5470179/ 13 Non-mydriatic fundus retinography was shown to be useful in DR screening in the primary health-care setting. FPs made assessments with good levels of agreement with an RS. Non-mydriatic fundus retinography associated with appropriate general physicians training is essential for the DR screening. 14 https://www.hindawi.com/journals/joph/2016/4625096/
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All these studies support the feasibility of Optomed’s strategy to address primary care.
Demand on the rise, especially in developing regions
Improvements in technology, clarity of images, and ease of use of the hand-held cameras have
encouraged growth. The handheld cameras are light, portable, allow wireless flexibility, and
simple retinal imaging. These cameras provide operational ease that increases their adoption.
According to Grand View Research (2018), the global nonmydriatic handheld fundus camera
market was USD 93m in 2017 and is expected to grow faster than the total fundus camera
market – at an annual rate of 9-10%.
Demand for non-mydriatic handheld fundus cameras and the corresponding AI diagnostics
tools will increase especially in developing countries with the growing need to monitor various
serious degenerative conditions, such as glaucoma, macular degeneration, injury caused by
multiple sclerosis, high blood pressure, and DR. The sheer number of patients, who have to be
monitored, and the lack of trained ophthalmologists will accelerate the adoption of easy-to-use
screening solutions in the primary care.
Government initiatives drive demand for handheld cameras
The numerous initiatives taken by governments to provide affordable fundus cameras are
anticipated to drive the fundus imaging market. For instance, in the U.S., Medicare covers the
cost of glaucoma screening, ocular prosthesis, cataract surgery. Moreover, the rising number
of new product launches in the U.S. has led to the acceptance of enhanced technologies by
ophthalmologists. Government approval of new advanced screening tools will facilitate the
adoption of Optomed’s solution in the US market.
FDA Approved an AI-based diagnostic tool for DR
The FDA recently approved the first AI-based diabetic retinopathy (DR) diagnostic tool15, based
on a clinical trial with 900 subjects. The device, called IDx-DR, is a software program that uses
an AI algorithm to analyse images of the eye taken with a retinal camera, the Topcon NW400.
A doctor uploads the digital images of the patient’s retinas to a cloud server on which IDx-DR
software is installed. If the images are of sufficient quality, the software provides the doctor
with one of two results: 1. More than mild diabetic retinopathy detected, refer to an eye care
professional, or 2. Negative for more than mild DR, rescreen in 12 months.
This is the first device authorized for marketing that provides screening decision without the
need for a clinician to also interpret the image results, which makes it useful for health care
providers who may not normally be involved in eye care. The device received a Breakthrough
Device designation16 and was reviewed under the FDA’s De Novo premarket review pathway.
This is a positive signal for Optomed in the US as it paves the way for Optomed’s AI integrated
camera.
15 https://www.fda.gov/news-events/press-announcements/fda-permits-marketing-artificial-intelligence-
based-device-detect-certain-diabetes-related-eye 16FDA provides intensive interaction and guidance to the company on efficient device development, to
expedite evidence generation and the agency’s review of the device. To qualify for such designation, a device must provide for more effective treatment or diagnosis of a life-threatening or irreversibly debilitating disease or condition, and meet one of the following criteria: the device must represent a breakthrough technology; there must be no approved or cleared alternatives; the device must offer significant advantages over existing approved or cleared alternatives; or the availability of the device is in the best interest of patients.
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The Competitor Landscape
Optomed faces competition from two types of cameras: tabletop and handheld. We believe
that the company offers a superior solution to the competitors: 1. superior quality of the device
itself, 2. very elaborate software solution supporting every step of the diagnostic and patient
management process and 3. the AI solution, which provides diagnosis within minutes and will
be integrated with the next generation of Optomed cameras.
Since Optomed competes on size, weight and ease of use, we believe providing the reader with
images of the devices the company compares itself with, to be interesting.
Overview Tabletop Cameras Carl Zeiss Meditec
Zeiss’ Visucam 224 and 524 is an expensive and bulky tabletop
solution for specialized ophthalmologist clinics, which provides
detail-rich images. It has limited space to save images and no
internet connectivity or AI solutions.
Clarus 500 is the newest and more advanced retinal camera from
Zeiss and it shows true colour and high-res across an entire ultra-widefield image. The images
accurately depict the retina, so there is no need for interpretation. This removes the subjective
factor when managing the disease, especially in a group practice, where many doctors might
see one patient.
Early indications of disease can often be subtle and difficult to see through direct observation
or low-res fundus imaging. The camera captures high-res fundus autofluorescence images
FAF-Blue and FAF-Green and external eye images. The true-color images can aid in the
diagnosis and documentation of ocular disease, especially DR.
Forus Health Bangalore, India
Forus develops and manufactures advanced medical devices
built for affordability and accessibility for both urban and rural
patients. The company offers a digital health solution and
offers telemedicine platform aiming to become a leading
digital health solutions provider.
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Product: 3ethra tabletop and 3ethra portable (mydriatic). It provides only digital photographs
of the eye and does not provide any analysis or diagnostics. Must be operated by a qualified
clinician.
CenterVue was acquired by Revenio (Finland) in April
2019 and develops, produces, and sells high-tech
diagnostic systems. Centervue’s product portfolio
includes several tabletop cameras such as the
Compass, Eidon, DRS, MAIA, with functionalities such as
a high-res imaging, 3D view and simple to use, and
compact.
The DRSplus can connect to the internet and Wi-Fi, both for remote viewing and secure data
backup and for remote browser-based reviewing system. It is with fully automated focusing
and alignment. Another tabletop camera is the DRSplus. It creates very high-quality detailed 45
degrees retinal images and allows to scan through cataract. It has a non-mydriatic capability
and fully automated operation, it allows for network connectivity, remote viewing, and viewing
on multiple review stations/computers (by buying a license).
Canon USA
The Canon CR-2 is the basic camera, small, compact, and energy-
efficient. The advanced one, the Canon CR-2 PLUS AF offers color
and fundus autofluorescence (FAF) imaging within a small
compact design. Its features include Auto-Fundus, Auto-Focus,
Auto-Capture, and Image Error Detection.
Geographic Atrophy, Macular Degeneration, Glaucoma, Diabetic
Retinopathy may be identified and monitored using FAF mode.
Using invisible infrared alignment light, the digital non-mydriatic
camera may image patients with pupils as small as 2.7mm (small
pupil mode) without dilation drops. This is especially useful when
performing retinal screenings or expediting routine retinal imaging
exams during office visits.
CR-2 AF has a contrast-enhancing function. The contrast enhancement examines the structure
of the eye and increases contrast as needed (helps when the patient has a cataract). This can
allow users to see edges of veins and arteries more cleanly. The camera provides auto
exposure by reflecting an infrared signal off the back of the eye and using that exposure
information to drive the camera settings to generate an optimal image. This means that the
operator does not need to be highly skilled. It also makes it more
comfortable for the patient. However, the camera is still bulky compared
to Aurora, and does not have AI function.
Coburn is a global provider of computer-integrated ophthalmic lens
processing systems and ophthalmic instruments. The company designs,
manufactures, and services software, equipment and supplies. The retinal
camera SK-650A, is non-mydriatic, bulky, and has no AI capability.
Nidek/Marco’s AFC-330 fundus camera is automated, standalone
and capturing a high-quality picture regardless of the operator’s skill
level. The camera is compact and can communicate via LAN, all-in-
one built-in camera and computer, five automated functions for
operator assist, it includes printing function, but no internet
connection or can connect to the NAVIS-EX software.
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KOWA American Corporation offers various mydriatic/non-mydriatic standalone tabletop
cameras, without connection to internet or telemedicine solutions, Nonmyd 8s and Nonmyd
WX3D.
Topcon Medical Systems
TRC-NW400 fully automated, non-mydriatic retinal camera
producing colour fundus images, fully automated alignment,
autofocus, easy to use, and space-saving. The operator can
with one touch of the screen make images of both eyes. No AI
function.
Large and expensive tabletop cameras are needed for detailed examination of the eyes by a
specialist and the observation and diagnosis of already existing conditions, which have to be
pictured in great resolution. Handheld cameras on the other hand are complementary, and
suitable for pre-screening and save specialist time, while referring to specialists only the
serious cases. We do not think Optomed is competing with these cameras directly, but only
for the part of this market, which comprises regular pre-screenings function.
Competitors in the Handheld Fundus Cameras Space Remidio and Fundus-on-Phone
Remidio Innovative Solutions launched in November 2018 a DR
screening solution in the shape of a smartphone based, Infrared
enabled Ophthalmic camera. It is not a wide-field camera, but a
low-cost imaging device that can be hooked on to a mobile
phone camera, called “Fundus On Phone” and is a platform for
comprehensive telemedicine enabled eye-wellness imaging
device. The cloud synchronized mobile application of NM-FOP
camera enables images to be synced and archived in the cloud
for remote review and clinical management. There is also a web
application.
Their aim is to capture the rural healthcare device market, but commercial success is limited.
Remidio has one domestic competitor: Forus Healthcare in Bengaluru, which has both desktop
(mydriatic and non-mydriatic) and mydriatic hand-held cameras, in combination with a data-
management system, but no AI.
Hill-Rom Welch Allyn RetinaVue 700 Imager
A camera with quality comparable to Optomed Aurora is Hillrom’s
new Welch Allyn RetinaVue 700 Imager. It can capture high-
quality retinal images in a fully automated way in pupils as small
as 2.5 millimeters, according to a company news release. With its
60-degree field of view and image-quality assessment algorithm,
the new RetinaVue 700 Imager enables remote eye specialists to
efficiently review up to 75% more retinal area compared to
cameras with a standard 45-degree field of view. RetinaVue 700
is Wi-Fi-enabled, though offering no AI grading service.
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D-EYE
D-EYE Retinal Imaging System turns the iPhone into a digital direct
ophthalmoscope, capable of transmitting images for clinical
assessment. It has (rather limited) 20 degrees field of view. The D-
EYE system covers the camera aperture and LED light source of
the smartphone and is capable of recording and transmitting high-
definition images and video of the fundus. The examiner uses the D-
EYE App on the smartphone display to enter patient information,
focus the retinal camera and record, archive, view
and transmit images. It is a good solution for telemedicine, but we think that it would produce
a rather high number of ungradable (useless) images.
Revenio
The focus of Revenio’s screening technology is on the early detection and monitoring of
Glaucoma, Diabetic Retinopathy and Macular Degeneration. Revenio Research in turn focuses
on the commercialization of systems designed to help diagnose and plan the treatments for
skin cancer and asthma. Revenio Group's core business is to develop and commercialize
efficient and easily adopted health tech devices especially for the detection of eye diseases
that are significant to public health. Revenio bought CenterVue in 2019. Revenio is also listed
on the Helsinki stock exchange.
The Nidek digital scope VersaCam is versatile, automatic, light
(only 445g) and produces high quality images. It is easy to
operate and auto focus and auto shoot enable simple button-free
operation and image capture. However, it does not connect to
the internet, instead, the image is saved on an SD card and
transferred to a computer by the NAVIS-EX, image filing software
for Nidek devices. It requires a specialist to evaluate the images.
It is therefore inferior to the Optomed devices.
Signal by Topcon and Visuscout by Zeiss are Optomed products.
Source: Optomed, Centervue, Canon
This overview shows that Optomed compares favourably both with bulky traditional tabletop
cameras and with handheld cameras such as the RetinaVue 700. While the tabletop cameras
are expensive and suitable for specialist ophthalmologist clinics, handheld devices are gaining
traction in specialists as well as primary care. In the handheld segment Optomed offers the
most competitive combination of hardware and software, in our view.
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Financial Performance Financial targets within reach
Optomed is an innovation-driven newcomer on a very competitive market and has sold more
than 8,600 cameras to date. Still, profitability is some years away. In December 2019 the
company raised EUR 20m before fees through an IPO on OMX Helsinki. On January 1st it had
EUR 18,866m in cash and has around EUR 13m cash on the bank at present. To grow
organically, the company might not need another cash infusion until it reaches profitability,
according to our projections. It might however need to raise more capital for acquisitions.
Optomed’s financial target is 20% annual revenue growth and EBITDA margin of 30%.
We believe with its product portfolio Optomed is very well positioned to meet the new demand
for digital and tele-screening solutions and expect that camera sales will pick up in Q3 and
especially in Q4 of 2020. Traditionally, Optomed has seasonality in its camera revenues, with
an uptick in orders in Q4. We expect this to be the case in 2020 as well, with larger orders being
closed in Q4. Especially with the launch of the new AI-integrated camera in H2 2020 and the
launch of the US operations, we believe Optomed has a good chance to reach its financial
targets within the next 3 years.
Historical Performance and Forecasts Optomed is a growth company, which invests substantially in R&D of new products in constant
dialogue with the market. Annual investments in innovation are around EUR 2m. Over the past
years, the company has grown revenues mainly through opening new distribution channels,
OEM sales, and a subsidiary in China selling to the Chinese market.
The company has had an impressive growth in camera sales given that it is a newcomer in a
very competitive and conservative market. With its innovative and light-weight technology it
has managed to carve out a share and build brand recognition in the fundus camera space.
SUMMARY KEY FINANCIALS
EURm 2018 2019 2020E 2021E 2022E 2023E 2024E
Net Sales 12.7 15.0 12.0 15.0 17.8 20.6 24.4
Growth % 18% -20% 25% 18% 16% 19%
Gross Profit 8.2 9.7 8.4 10.8 13.3 15.5 19.1
Margin % 64% 65% 70% 72% 75% 75% 78%
EBITDA 1.1 (0.3) (2.2) (0.1) 2.1 3.9 7.2
Margin % 8.3% NM NM NM 12.1% 19.1% 29.5%
EBIT (0.7) (2.6) (4.2) (2.4) (0.3) 1.3 4.4
Margin % NM NM NM NM NM 6.4% 18.1%
Pre-tax Profit (1.3) (3.0) (4.3) (2.6) (0.6) 1.1 4.2
CapEx (1.3) (1.2) (1.0) (1.2) (1.4) (1.6) (2.0)
Equity/Assets (%) 26% 57% 57% 51% 49% 49% 53%
Source: Optomed, Redeye Research
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Expanding margins
Optomed does not hold a large stock. The company works with distributors, who purchase the
cameras and hold them in their own storage, and with independent sales representatives, who
receive a commission, and Optomed manufactures and delivers the cameras as orders come
in.
Optomed produces the cameras at an FDA-approved electronic manufacturing services (EMS)
partner, Fabrinet in Thailand. Fabrinet specializes in precision optical and high-tech electronics
and Optomed provides the factory with special equipment, training, engineering support, and
instructions covering the whole process, to ensure reliable high quality.
Source: Redeye, Optomed
Historically, the gross margin has improved and is now 65%, and we expect it to improve further
towards the 70-80% range when the company grows the sales under its own brand in 2021
and order volumes increase. This will also drive the software revenues and improve group
margins. Optomed works to optimize the supply chain by ordering larger quantities and
optimizing transportation costs, which will also have a positive impact on gross margins.
EBITDA positive in 2022
Currently, EBITDA and EBIT are negative, and we expect 2020 camera revenues to be
significantly lower than 2019, and software revenues to remain roughly on a level with 2019.
If the company succeeds in growing revenues with the market growth rate, we expect EBITDA
to pass the EUR 2m mark by 2022. We project revenues to pick up significantly in 2021
especially boosted by the launch of the new AI-integrated camera and the US sales and expect
EBIT to turn positive in 2023.
As the global economy recovers from the lockdown shock by the end of 2020, be expect
Optomed to close deals that have been postponed in the previous year. We also calculate that
with growing revenues, the EBITDA and EBIT margins will expand further, over time.
SUMMARY KEY FINANCIALS
EURm 2018 2019
Net Sales 12.7 15.0
Growth % 18%
Gross Profit* 8.2 9.7
Margin % 64% 65%
EBITDA** 1.1 (0.3)
Margin % 8.3% NM
EBIT** (0.7) (2.6)
Margin % NM NM
Pre-tax Profit** (1.5) (3.0)
CapEx (1.3) (1.2)
Equity/Assets (%) 26% 57%
Nr. of Employees 108 108
Source: Optomed, Redeye Research
REVENUE (EURm) & EBIT MARGIN (%), 2018-2024E
Source: Optomed, Redeye Research
12.715.0
12.0
15.0
17.8
20.6
24.4
8%
-2%
-18%
0%
12%
19%
29%
2018 2019 2020E 2021E 2022E 2023E 2024E
Historicals Estimates
Margins 2018 2019 2020E 2021E 2022E 2023E 2024E
Gross Profit 64.1% 64.7% 70.0% 72.0% 75.0% 75.0% 78.0%
EBITDA 8.3% NM NM NM 12.1% 19.1% 29.5%
EBIT NM NM NM NM NM 6.4% 18.1%
Net Income NM NM NM NM NM 4.3% 13.8%
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Source: Redeye, Optomed
Operating costs and investments
While the costs of materials and services are directly related to the sales of cameras, personnel
and marketing cost do not have the same correlation. Personnel is needed for the rather
elaborate R&D process, marketing, and post-sales service, but the company grows revenues
mainly through distributors and sales reps, plus a small in-house salesforce. We expect higher
personnel costs in 2021, when the US marketing and service organization is ramped up.
For 2020 we project employee expenses to remain roughly on the level of 2019, minus some
savings due to temporary working hours reduction and streamlining of the organisation. We
calculate employee expenses to grow with a compounded annual growth rate (CAGR) of 5%
for our forecast period. This is because they are not directly related to revenue growth, which
comes mostly from a large distributor network and sales in more and larger markets,
particularly in the US from 2021. Still, in-house personnel is needed for the increased
administration needs and for post-sales service.
EBITDA (EURm) & EBITDA Margin (%)
1.1
-0.3
-2.2
-0.1
2.1
3.9
7.2
8%
-2%
-18%
0%
12%
19%
29%
18 19 20 21 22 23 24
EstimatesHistoricals
EBIT (EURm) & EBIT Margin (%)
-0.7
-2.6
-4.2
-2.4
-0.3
1.3
4.4
-6%
-17%
-35%
-16%
-2%
6%
18%
18 19 20 21 22 23 24
EstimatesHistoricals
INVESTMENTS AND DEPRECIATION
Source: Optomed, Redeye Research
1.3
1.2
1.0
1.2
1.4
0.4
0.6
0.3
0.8
1.1
298%
197%
293%
144%126%
2018 2019 2020E 2021E 2022E
Capex (EURm)* Depreciation (EURm)** Capex/Depreciation (%)
EQUITY & NET DEBT
Source: Optomed, Redeye Research
5.6
22.6
18.315.7 15.2
8.2
-8.9
-5.4-3.1 -2.8
2018 2019 2020E 2021E 2022E
Equity (EURm) Net Debt (EURm)
EQUITY & TOTAL ASSETS
Source: Optomed, Redeye Research
5.6
22.6
18.315.7 15.2
21.1
39.6
32.230.6 30.8
26%
57% 57%
51%49%
2018 2019 2020E 2021E 2022E
Equity (EURm) Total Assets (EURm) Equity / Assets (%)
EBITDA & LIQUID ASSETS
Source: Optomed, Redeye Research
1.1
-0.3
-2.2
-0.1
2.12.0
18.9
13.5
11.2 10.9
2018 2019 2020E 2021E 2022E
EBITDA (EURm) Liquid Assets (EURm)
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Optomed is an R&D driven organization and we calculate with Capex of about EUR 2m annually,
as the company needs to invest in innovation and continuous improvement of its devices and
software solutions in order to stay competitive.
Optomed has decreasing net debt and no need to borrow within the next 2-3 years.
Quarterly results: historical and 2020 projection
2019 was an important year for Optomed because the company got listed on the Nasdaq
Helsinki main list. 2020 is a temporary setback, but we still expect positive news such as the
launch of the US organization and of the new camera.
The lockdown due to Covid-19 has affected Optomed negatively: sales reps cannot meet
prospective buyers, non-emergency doctors and hospital visits have been put on hold, face-to-
face consultations moved to digital media, and non-essential business has been postponed.
We expect therefore Q1, which the company will report on May 29th, to be almost unaffected
by the lockdown: camera revenues to be slightly below Q1 2019, software revenues roughly on
the same level.
For Q2 we expect a significant drop in camera sales: we calculate with EUR 500’ due to the
global lockdown. We also forecast software sales to be below Q2 2019.
As countries begin to open for business, we believe camera revenues will pick up in Q3, yet stay
below Q3 2019 level, while the software revenues will return to normal as people return to
normal activity and to the clinics and hospitals.
We expect a good Q4, which historically is the strongest quarter as clinics tend to buy new
equipment at the yearend for tax management purposes. We also calculate that a deal that
was postponed in 2019 will close in Q4.
Historical quarterly performance and expectations 2020:
Optomed has some seasonal fluctuations in camera revenues with an uptick in Q4, while
software revenues have a stable trend.
2020
EUR 000 Q1 Q2 Q3 Q4 2019 Q1 Q2 Q3 Q4 2020
Cameras 1210 2078 1863 2158 7309 1000 500 1200 2000 4700
Software 2029 1780 1688 2171 7668 2000 1500 1600 2200 7300
Total 3239 3858 3551 4329 14977 3000 2000 2800 4200 12000
2019
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We believe the impact of the lockdown on Optomed is temporary and the company was lucky
to have raised capital just before the crisis and is now in the fortunate position to be able to
focus on growth and not worry about financing. We believe that revenues have been
postponed, and orders will pick up strongly in 2021.
Optomed set to roll out sales in the US
A major step for Optomed is the rollout of the US organization. Optomed has already received
a reimbursement code and has a clear plan on how to approach specialist ophthalmologist
clinics and primary care. Based on its superior offering we expect Optomed to be able to win
over a significant number of primary care providers as well. We will see early signs of how this
plays out in H1 2021.
For a more detailed view of Optomed’s financials and forecasts, please consult Appendix II.
Devices - 12m Rolling Revenues (EURm) vs. Y/Y Growth (%)
Source: Optomed, Redeye Research
6.2 6.1 6.2
7.5 7.37.7
8.0
7.3 7.1
5.5
4.9 4.7
-13%
-4% -4%
8%
19%
26%30%
-2% -3%
-28%
-39%-36%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2018 2019 2020
Historicals Estimates
Software - 12m Rolling Revenues (EURm) vs. Y/Y Growth (%)
Source: Optomed, Redeye Research
1.7
3.4
5.2
7.07.3 7.4 7.3
7.7 7.67.4 7.3 7.3
322%
119%
42%
10% 5% -1% -1% -5%
-40%
10%
60%
110%
160%
210%
260%
310%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2018 2019 2020
Historicals Estimates
Total - 12m Rolling Revenues (EURm) vs. Y/Y Growth (%)
Source: Optomed, Redeye Research
7.9
9.5
11.3
14.5 14.615.1 15.3 15.0 14.7
12.912.1 12.0
11%
50%
76%
110%
85%
59%
35%
4% 1%
-15%-21% -20%
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2018 2019 2020
Historicals Estimates
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Management
The core team is very experienced and has been with the company for a long time: CEO Seppo
Kopsala founded Optomed and still owns 4.5% of the shares. He has a degree in industrial
engineering and solid management experience. Laura Piila, VP Devices, has been with the
company for 10 years and Markku Myllylä, VP Software, joined Optomed with the acquisition
of Commit; in 2018 and has been the co-founder of this company. All of them have a deep
knowledge of the business, the markets, and the technology.
We have experienced the management to have high integrity, focus, energy, and commitment
combined with deep knowledge of all aspects of the business. We believe that management
has the skills and resources to successfully grow the company.
For detailed management bios consult appendix III.
Valuation Market size and sales strategy
Various market studies estimate the global nonmydriatic handheld fundus camera market to
be worth USD 186.4m by 2025, growing with a CAGR between 9%17and 11%. This is due to the
growing prevalence of diabetes and the need for annual screenings, especially in remote areas
and in primary care. We believe if it plays its cards well, Optomed has a chance to capture a
large piece of this market, especially primary care clinics and remote screening.
Optomed’s sells its cameras through three channels: distributors, other brands such as Zeiss,
and own salesforce targeting large buyers (especially in China). The sales are roughly equally
split between these three. Optomed’s strategy is to increase sales under its own brand,
especially in the US. If this operation is successful, this will have a major impact on the
company’s valuation.
DCF valuation For 2020 we calculate with camera revenues of around EUR 4.7m and software revenues
roughly in line with 2019, at EUR 7.3m. Since camera sales drive the sale of software, revenue
growth in software is limited by the low camera sales. However, when camera sales pick up,
software revenues will grow even faster as some of the revenue is variable, ie per consultation.
17 https://www.grandviewresearch.com/industry-analysis/nonmydriatic-handheld-fundus-camera-
market
Name Year of birth Citizenship Position Appointed Employed in
Seppo Kopsala 1978 FI CEO 2005 2004
Niina Huikuri 1977 FI VP Marketing 2018 2018
Sakari Knuutti 1984 FI Chief Legal Officer 2019 2019
Lars Lindqvist 1957 SE CFO 2019 2019
Markku Myllylä 1961 FI VP Software 2018 2018
Laura Piila 1983 FI VP Devices 2015 2010
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Base case scenario
In our base case scenario, we assume that the company will grow approximately as or slightly
higher than the market. This is a conservative assumption, given that the company offers a
superior solution and is implementing a clear (and well-funded) revenue growth strategy.
Furthermore, we assume the following:
• For 2020 we calculate with a revenue decline of 18% compared to 2019 and expect
the sales of camera and software to be around EUR 4.7m and EUR 7.5m, respectively.
• We expect the new AI-integrated camera to boost revenues in 2021 and beyond;
• 2021 distributor growth rate up 25% from 2019 levels and a CAGR of 15% in the
following few years. This is above the market CAGR of 11%, because of the US
organization and the new AI camera;
• The sales of cameras drive the sale of software. We expect software revenues to
follow, then exceed and grow at a faster rate than the camera revenues as each
Optomed camera generates a software income stream, over time;
• We calculate with improving gross margins due to economies of scale and
improvement of logistics and the growing share of software as a percentage of
revenues;
• In the OEM business we calculate with a CAGR of 10%;
• For the revenues in China we calculate with a CAGR in line with the market, 11%;
• In the US we estimate a revenue CAGR between 12% and 15% from 2022;
• We apply a WACC of 12%.
Under these assumptions, we calculate a fair value share price of EUR 8, which shows that
Optomed is undervalued at today's’ price of EUR 4.4 and is trading at a significant discount.
In our bull case scenario we assume that Optomed has the breakthrough it has prepared for
and succeeds in capturing a larger share of the market, ie rolls out sales to clinics and primary
care in the US, wins government contracts, becomes a supplier for national screening
programs, especially in China, India, and the Middle East. In this scenario, we calculate that the
company will grow revenue with CAGR between 20-25% through the forecasting period.
Camera sales will drive a large volume of software revenues, and gross margins rise to 80%
and higher. In this case our fair value per share is EUR 12.
FAIR VALUE RANGE (EUR)
2.0 2.9
8.0
12.0
7.1
4.4
Bear Base Bull 52 wk Hi - Lo Share Price
EV / Revenues
4.7x 3.9x
3.3x
8.6x
7.0x
6.0x
20 21 22
Current Fair Value
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Bull case scenario, Redeye Research, Optomed
In our bear case scenario, if the management fails to implement its marketing strategy and
group revenue (cameras and software) grows below the market, with a CAGR of 5%, we
calculate with a fair value per share of EUR 2. In this case Optomed will remain unprofitable for
a longer time and will need to raise more capital, which will lead to dilution and further
deterioration of the fair value. Given that Optomed is a very innovative company with a superior
solution and with a marketing and sales organisation in place, this negative scenario is very
unlikely, in our view.
Bear case scenario, Redeye Research, Optomed
Peer Comparison
In this peer table we compare market estimates on Optomed and Revenio, and on mature
companies as Zeiss, Canon and Topcon. The table shows that consensus expectations are for
Optomed to grow at a low rate, about 10% in line with the mature players, while for Revenio, a
comparable company, the market expects a much higher CAGR of 30%.
We do not believe that the low growth expectations and the resulting low valuation are justified.
The market puts Optomed in the same category as mature companies like Zeiss or Topcon,
but we believe that this is an underestimation of the company’s growth potential.
REVENUES (EURm) & Growth (%)
12.715.0
12.314.7
17.7
22.1
27.6
85%
18%
-18%
20% 20% 25% 25%
18 19 20 21 22 23 24
Historicals Estimates
EBIT (EURm) & EBIT margin (%)
-0.7
-2.6
-4.6-3.6
-0.9
2.4
6.8
-6%
-17%
-37%
-25%
-5%
11%
25%
-50%
-30%
-10%
10%
30%
50%
18 19 20 21 22 23 24
EstimatesHistoricals
REVENUES (EURm) & Growth (%)
12.7
15.0 15.7 16.5 17.318.2
19.185%
18%5% 5% 5% 5% 5%
18 19 20 21 22 23 24
Historicals Estimates
EBIT (EURm) & EBIT margin (%)
-0.7
-2.6
-1.5
-1.9-1.7
-1.4
-1.1
-6%
-17%-10% -11% -10% -8% -6%
-50%
-30%
-10%
10%
30%
50%
18 19 20 21 22 23 24
EstimatesHistoricals
CAGRAverage
EBITDA
Company 2018 2019 2020E 2021E 2022E 2018 2019 2020E 2021E 2022E 2018-2022E 2018-2022E
Revenio 66.7 47.6 40.1 27.6 22.3 23.4 14.1 12.1 9.8 8.2 30% 34%
Optomed 51.5 neg neg neg 132.8 4.3 3.5 3.9 3.3 2.9 10% -2%
Carl Zeiss Medtech 33.0 23.2 26.0 21.0 19.1 5.9 5.0 4.9 4.5 4.1 9% 20%
Canon 6.3 7.5 8.7 8.1 7.9 0.9 0.9 1.0 0.9 0.9 0% 13%
Topcon 8.5 7.3 7.2 6.6 6.7 1.2 1.1 0.9 0.9 0.8 9% 13%
Average 33.19 21.38 20.50 15.79 37.73 7.14 4.92 4.55 3.89 3.39
Median 32.95 15.32 17.34 14.52 19.05 4.29 3.54 3.88 3.34 2.89
EV/EBITDA EV/Sales
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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This comparison confirms our DCF analysis that the share is greatly undervalued. We believe
that the company has not been discovered yet, and the market has not yet appreciated its
growth prospects.
Share and Ownership Optomed was listed on Nasdaq Helsinki December 2019 for the price of EUR 4.5 per share and
has a market cap of EUR 61.5m. The share had 52 weeks low at 2.92 and high at 7.12. The
company is owned mainly by long-term institutional investors. The average daily volume was
29,300. Since listing, the share has fluctuated and has now stabilized around the listing price
of EUR 4.4.
Before the lockdown began, the Optomed share was performing better than index. On March
19 the company announced it was lowering its 2020 estimates triggering a sharp decline of
the share price. The share price has followed the overall market since, and has stabilized at
around 4.3 as of now, in anticipation of the Q1 report this Friday.
Ownership structure
Optomed is owned mainly by large and stable institutional investors. The SEB and Nordea
banks hold custodian shares of foreign institutional investors. The largest shareholder is
Cenova Capital, China, with a board representative. Aura Capital and Robert Bosh Venture
Capital GmbH are other major shareholders with representation on the board.
The company holds 5.8% of treasury shares in order to be able to convert the options of the
employee option programs into shares or to use them in acquisitions.
There is a relatively high ownership concentration: the 3 largest owners control 48% of the
shares, and the top 5 owners control 58% of the shares. The top 10 control 77% of the votes.
The founder Seppo Kopsala owns 4.5% of the shares.
OPTOMED SHARE PRICE (EUR) PERFORMANCE
Source: Optomed, Redeye Research
2
3
4
5
6
7
8
Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20
Optomed OMXH25
31.5%
11.1%
5.8% 4.9% 4.5%
SEB, Helsinki Branch Nordea Bank Abp Optomed Oyj Aura Capital Oy Kopsala Seppo Henrik
Top Five Shareholders
48%
58%
77%
Top 3 Top 5 Top 10
Ownership Concentration
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Both Chinese Genova Capital have significant influence over Optomed. This provides stability
in case Optomed needs to raise more capital in the future to fund acquisitions.
In sum, we believe that Optomed is a promising company built on excellent technology and a
good team, and it is also an attractive investment. It is also a high-risk investment as it currently
not profitable and it will take some time to see if the growth strategy will work.
OWNERSHIP STRUCTURE
Number Total
Rank Shareholder of shares Capital
1 SEB, Helsinki Branch 4 406 983 31.5%
2 Nordea Bank Abp 1 556 403 11.1%
3 Optomed Oyj 811 000 5.8%
4 Aura Capital Oy 691 756 4.9%
5 Kopsala Seppo Henrik 637 080 4.5%
6 Mandatum Life Insurance Company Ltd.635 000 4.5%
7 Suomen Teollisuussijoitus Oy 601 080 4.3%
8 Nordea Nordic Small Cap Fund 493 755 3.5%
9 Kaleva Mutual Insurance Company 490 000 3.5%
10 Aktia Capital Mutual Fund 400 000 2.9%
Other shareholders 3 280 087 23.4%
Total number of shares 14 003 144 100%
Source: Optomed, Redeye Research
* Participated in the rights issue in February w ith unknow n size
** Other participants in the February rights issue that could potentially join the list are:
Core Ny Teknik, Coeli SICAV II - Absolute European Equity and Islet 2
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Appendix I: Glossary
AMD Age-related macular degeneration, degeneration of the eyesight with age
Cornea The transparent front part of the eye that covers the iris, pupil, and anterior
chamber. The cornea, with the anterior chamber and lens, refracts light, with
the cornea accounting for approximately two-thirds of the eye's total optical
power.
Dilation Making the pupil wider in order to examine the inside of the eye, usually
chemically
DR Diabetic retinopathy: degeneration of the eyesight as a result of diabetes
Edema Swelling of the blood vessels in the eye
Fovea A small depression in the retina of the eye where visual acuity is highest. The
centre of the field of vision is focused in this region, where retinal cones are
particularly concentrated.
Fundus The part of a hollow organ that is furthest from the opening: The part of the
eyeball opposite the pupil
Fundus camera Camera for the examination of the fundus, usually by illumination
Grading Evaluation of images for deviations from the healthy condition, which require
further examination and medical intervention
Macula An oval yellowish area surrounding the fovea near the centre of the retina in
the eye, which is the region of keenest vision.
Mydriatic Camera that requires dilation of the pupil of the eye
Non-mydriatic Camera that can be used without chemical dilation
Pupil The dark circular opening in the centre of the iris of the eye, which varies in
size to regulate the amount of light reaching the retina.
Retina A layer at the back of the eyeball that contains cells sensitive to light, which
trigger nerve impulses that pass via the optic nerve to the brain, where a
visual image is formed.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Appendix II: Financial Statements
INCOME STATEMENT
EUR in thousands 2018 2019 2020E 2021E 2022E 2023E 2024E
Revenues
Total Devices 7 460 7 309 4 700 7 246 9 132 10 114 11 202
Total Software 5 273 7 668 7 300 7 811 8 592 10 311 12 888
Total Revenues 12 733 14 977 12 000 15 057 17 724 20 424 24 090
Materials and services (4 568) (5 287) (3 600) (4 216) (4 431) (5 106) (5 300)
Gross Profit 8 165 9 690 8 400 10 841 13 293 15 318 18 791
Employee benefit expenses 5 137 7 299 7 664 8 047 8 450 8 872 9 316
Other operating expenses 2 855 2 980 3 069 3 161 3 256 3 354 3 455
Other operating income 889 254 - - - - -
EBITDA 1 062 (335) (2 333) (368) 1 587 3 092 6 020
Depreciation 435 595 327 837 1 133 1 362 1 581
Amortization 1 026 1 280 1 261 1 102 975 874 795
Depreciation of Right-of-Use Assets 349 386 386 386 386 386 386
EBIT (748) (2 596) (4 307) (2 693) (907) 470 3 258
Interest Income 1 3 189 133 107 99 101
Interest Expenses 269 374 361 324 324 324 324
Other interest Income (Expenses) (73) 14 - - - - -
Financial Net, + Expense / (-) Income 341 357 172 191 217 225 223
Non-recurring Income / (Expenses) (214) - - - - - -
EBT (1 303) (2 953) (4 479) (2 884) (1 124) 244 3 035
Income Tax Expenses / (Income) 24 (77) - - - 49 607
Net Income (1 327) (2 876) (4 479) (2 884) (1 124) 195 2 428
Non-Recurring Items (Loss), Post Tax (214) - - - - - -
Recurring Net Income (1 541) (2 876) (4 479) (2 884) (1 124) 195 2 428
Margins 2018 2019 2020E 2021E 2022E 2023E 2024E
Gross Profit 64.1% 64.7% 70.0% 72.0% 75.0% 75.0% 78.0%
EBITDA 8.3% NM NM NM 9.0% 15.1% 25.0%
EBIT NM NM NM NM NM 2.3% 13.5%
Net Income NM NM NM NM NM 1.0% 10.1%
Data Per Share 2018 2019 2020E 2021E 2022E 2023E 2024E
EPS (0.17) (0.32) (0.32) (0.21) (0.08) 0.01 0.17
Adjusted EPS (0.20) (0.32) (0.32) (0.21) (0.08) 0.01 0.17
Dividend Per Share - - - - - - -
Book Value Per Share 0.68 1.59 1.28 1.08 1.00 1.01 1.18
Weighted Average No. of Shares (m) 7.8 8.9 14.0 14.0 14.0 14.0 14.0
Shares Outstanding, Year-End (m) 8.1 14.0 14.0 14.0 14.0 14.0 14.0
Ratios and Estimates 2018 2019 2020E 2021E 2022E 2023E 2024E
Revenue Growth 18% -20% 25% 18% 15% 18%
Return on Equity NM NM NM NM NM 1% 16%
Return on Invested Capital NM NM NM NM NM 3% 21%
Net Cash (8 207) 8 939 5 235 2 630 1 776 2 037 4 371
Nr. of Employees, Year-end 108
Source: Redeye Research
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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BALANCE SHEET
EUR in thousands 2018 2019 2020E 2021E 2022E 2023E 2024E
ASSETS
Current Assets
Cash & Equivalents 2 000 18 867 13 337 10 732 9 878 10 139 12 473
Inventories 1 121 2 468 1 672 1 964 2 064 2 378 2 462
Accounts Receivable 2 871 2 897 2 328 2 929 3 448 3 973 4 673
Other Current Assets 528 1 228 984 1 235 1 453 1 675 1 975
Total Current Assets 6 520 25 460 18 321 16 859 16 842 18 165 21 584
Fixed Assets
Property, Plant & Equipment, Net 739 406 1 039 1 407 1 692 1 964 2 310
Goodwill 4 256 4 256 4 256 4 256 4 256 4 256 4 256
Intangible Assets 8 540 8 406 7 349 6 503 5 829 5 302 4 916
Right-of-Use Assets 1 084 1 075 1 075 1 075 1 075 1 075 1 075
Total Non-Current Assets 14 627 14 151 13 727 13 249 12 860 12 604 12 565
Total Assets 21 147 39 611 32 048 30 107 29 702 30 769 34 149
DEBT & EQUITY
Current Liabilities
Short-Term Debt 7 214 1 826 - - - - -
Accounts Payable 733 1 667 1 131 1 328 1 396 1 609 1 665
Lease liabilities 393 414 414 414 414 414 414
Other Current Liabilities 2 147 3 650 2 928 3 674 4 325 4 984 5 878
Total Current Liabilities 10 487 7 557 4 473 5 416 6 135 7 006 7 957
Non-Current Liabilities
Long-Term Debt 2 993 8 102 8 102 8 102 8 102 8 102 8 102
Total Non-current Liabilities 5 108 9 417 9 417 9 417 9 417 9 417 9 417
Shareholder's Equity 5 552 22 637 18 158 15 274 14 150 14 346 16 774
Total Liabilities & Equity 21 147 39 611 32 048 30 107 29 702 30 769 34 149
CASH FLOW STATEMENT
EUR in thousands 2018 2019 2020E 2021E 2022E 2023E 2024E
Operating Activities
Net Income (4 479) (2 884) (1 124) 195 2 428
Depreciation 327 837 1 133 1 362 1 581
Amortization 1 261 1 102 975 874 795
Depreciation of Right-of-Use Assets 386 386 386 386 386
Working Capital, Decrease / (Increase) 351 (200) (119) (190) (133)
Operating Cash Flow (76) 161 (2 154) (759) 1 251 2 628 5 057
Investing Activities
Capital Expenditures (1 295) (1 175) (960) (1 205) (1 418) (1 634) (1 927)
Intangible Assets (404) (260) (204) (256) (301) (347) (410)
Acquisitions - - - - -
Divestments - - - - -
Goodwill - - - - -
Investing Cash Flow (8 765) (1 434) (1 164) (1 460) (1 719) (1 981) (2 337)
Financing Activites
Short-Term Debt, Issuance / (Repayment) - - (1 826) - - - -
Share Issuance / (Repurchase) - - - - - - -
Dividends Paid to Shareholders - - - - - - -
Financing Cash Flow 9 814 18 123 (2 212) (386) (386) (386) (386)
Net Cash Flow 973 16 850 (5 530) (2 605) (854) 261 2 334
Cash Balance 2 000 18 867 13 337 10 732 9 878 10 139 12 473
Source: Redeye Research
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Appendix III: Management Team and Board of Directors
Seppo Koppsala
CEO, founder
B. 1978, Finnish citizen, Member of the Leadership team since 2005.
Seppo Kopsala founded Optomed in 2004 and he has acted as the CEO of the company since
2005. Previously, Mr. Kopsala was a member of the Board of Directors of Medigo Oy.
Education: Master of Science degree in Industrial Engineering from the University of Oulu.
Lars Lindqvist
Chief Financial Officer
B. 1957, Swedish citizen, Member of the Leadership team since 2019.
Lars Lindqvist joined Optomed in 2019. Mr. Lindqvist also serves as a member of the Boards
of Directors of Neonode Inc.. He is also a deputy member of the Board of Directors of
Neonode Technologies AB. Previously, Mr. Lindqvist was a member of the Boards of
Directors of Uppland Kapital AB, Uppland Kredit AB (publ), Upplandsspar AB, Neoeye
AB,Lendlink AB, ONE CC AB, Pronode Technologies AB and Terranet Holding AB. In addition,
he has served as the Chief Financial Officer of Neonode Inc., Microcell Ltd and Ericsson
Mobile Phones AB.
Education: Master of Science degree in Finance from Uppsala University.
Niina Huikuri
Vice President, Marketing
B. 1977, Finnish citizen, Member of the Leadership team since 2018.
Niina Huikuri joined Optomed in 2018. Previously, Ms. Huikuri has held the positions as Sales
Manager (Nordic) and Account Manager and Business Development Manager Finland at
Johnson & Johnson and Territory Manager at Boehringer Ingelheim Finland Ky.
Education: Master of Science degree in Business Administration with a Major in Marketing
from Oulu University Business School.
Sakari Knuutti
Chief Legal Officer
B. 1984, Finnish citizen, Member of the Leadership team since 2019.
Sakari Knuutti Mr. Knuutti also serves as a member of the Securities Market Association’s
Market Practice Board. Previously, he has held the position of Head of Legal and IR at Affecto
Plc. He has also held the positions of Senior Legal Counsel at CGI Inc. and Head of Corporate
Affairs at Ruukki Group Plc.
Education: Master of Laws degree from the University of Helsinki.
Markku Myllylä
Vice President, Software
B. 1961, Finnish citizen, Member of the Leadership team since 2018.
Markus Myllylä joined Optomed in 2018 through the acquisition of Commit; Oy. Mr. Myllylä is
the co-founder of Commit; Oy (presently Optomed Software Oy) and has been the Chief
Executive Officer of Optomed Software Oy since 2009. In addition, Mr. Myllylä is the founder,
a member of the Board of Directors and Chief Executive Officer of Softmax Technologies Oy.
Education: Master of Science degree in Computer Sciences and Economics from the
Technical University of Helsinki.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Laura Piila
Vice President, Devices
B. 1983, Finnish citizen, Member of the Leadership team since 2015.
Laura Piila joined Optomed in 2010. Prior to becoming the Vice President of Devices of
Optomed, Ms. Piila has held several managerial positions at Optomed, including Quality
Manager and Business Development Director, as well as the position of Build Manager at
Nokia Corporation.
Education: Master of Science degree in Industrial Engineering and Management from the
University of Oulu.
Board of Directors Petri Salonen
B. 1958, Finnish citizen, chairman of the board since 2006
Dependent of the company
Petri Salonen serves as the Chairman of the Board of Directors of Delfoi Ltd and as a member
of the Boards of Director of AW-Energy Oy. In addition, he serves as Sales Director at JAS
Partners Oy. Previously, Mr. Salonen was the Chairman and a member of the Board of
Directors of Commit; Oy (presently Optomed Software Oy), a member of the Boards of
Directors of Aura Capital Oy, Chip-Man Technologies Ltd, IonPhasE Ltd and Silicon
Laboratories Finland Inc, the Chief Executive Officer of Atbusiness Communications Oyj and
Bluegiga Technologies Inc. and the Investment Director of Aura Capital Oy. Petri Salonen is
dependent of the company as he has had consultancy agreement with the company and
receives salary. Further, he has been a member of the Board for more than 10 years.
Education: Master of Science degree in Shipbuilding Technology, Naval Architecture and
Marine Engineering from Aalto University.
Matthew Hallam
B. 1972, British citizen, member of the board since 2018
Independent of the company and major shareholders
Matthew Hallam serves as the Finance Director of Keeler Ltd. Previously, Mr. Hallam served
as EMEA Divisional Finance Director, Group Financial Planning and Analysis Manager and UK
& Nordics Controller at Abbott Laboratories Inc, as well as Finance Manager at Guidant Ltd.
Education: Bachelor of Arts degree in Mathematics and Economics from the University of
Liverpool.
Seppo Mäkinen
B. 1952, Finnish citizen, member of the board since 2019
Independent of the company and major shareholders
Seppo Mäkinen serves as a member of the Boards of Directors of Bittium Corporation,
AegirBio AB and Videovisit Ltd, as a deputy member of the Board of Directors of Noribe
Group Oy and Taikon Advisor Oy and as Partner at Pathena SGPS. Previously, Mr. Mäkinen
was the Chairman of the Boards of Directors of Taikon Advisor Oy and ValiFinn Ltd, and a
member of the Board of Directors of Neurotar Ltd, ArcDia International Oy Ltd, Coimbra
Genomics SA, Evondos ltd, Ginolis Oy, Magnasense Technologies Oy, Med Group Oy, Med
Group Holding Oy and Valirx Oy. In addition, he has been Partner at Ventac Partners and
Regional Partner at Mérieux Développement SAS, Founding and Managing Partner at BioFund
Ventures and Director of Life Sciences at Sitra.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Education: Master of Science degree in Physical Chemistry from the University of Jyväskylä.
Ingo Ramesohl
B. 1969, German citizen, member of the board since 2018
Independent of the company and major shareholders
Ingo Ramesohl serves as the Managing Director of Robert Bosch Venture Capital GmbH.
Previously, Dr. Ramesohl served as Vice President of Robert Bosch GmbH, as General
Manager at United Automotive Electronic Systems Co. Ltd, as Director at Korea Automotive
Motor Cooperation (KAMCO), as well as other managerial positions at Robert Bosch GmbH.
Education: Doctoral degree in Electrical Engineering from RWTH Aachen University.
Reijo Tauriainen
B. 1956, Finnish citizen, member of the board since 2019
Independent of the company and major shareholders
Reijo Tauriainen serves as the Chairman of the Boards of Directors of Arvo Invest Nordic Oy,
Meka Pro Oy, Pohjanmaan Arvo Sijoitusosuuskunta and Unipro Oy Ltd, as a member of the
Boards of Directors of Champion Door Oy, Hoivatilat Plc, Lapwall Oy, Nordic Option Oy,
Propria Oy, Temotek Oy and Temotek Palvelut Oy. Previously, Mr. Tauriainen was the
Chairman of the Boards of Directors of Nordic Option Oy, Oulun Ydinkeskustan Parkki Oy,
Sanerall Group Oy, Technopolis Kiinteistöt Pääkaupunkiseutu Oy, Technopolis Kiinteistöt Oulu
Oy and Technopolis Kiinteistöt Tampere Oy, the Chief Executive Officer of Pohjanmaan Arvo
Sijoitusosuuskunta, and a member of the Board of Directors and the Chief Financial Officer of
Uros Ltd and as the Deputy Chief Executive Officer and Chief Financial Officer of Technopolis
Plc. In addition, he has served as a member of the Board of Directors of Technopolis Kuopio
Oy, as a deputy member of the Board of Directors and the Chief Executive Officer of
Technopolis Hitech Oy.
Education: Master of Science degree in Economics from the University of Oulu.
Anders Torstensson
B. 1956, Swedish citizen, member of the board since 2008
Independent of the company and major shareholders
Anders Torstensson serves as the Chairman of the Board of Directors and the Chief
Executive Officer of Mankato Management Services GmbH, and as the Chairman of the
Boards of Directors of Aava Mobile Oy, Avanzia Communication Centre AG, Canoxa Capital
AB, Catalunia Capital AB, Fuerte Holding AB, Kapitalio Financial Group AB, Kapitalio Financial
Technologies AB, Nanjing Scandinavian Industrial Campus Limited and Uppland Kapital AB.
Furthermore, Mr. Torstensson also serves as a member of the Boards of Directors and the
Chief Executive Officer of Mankato Capital Ltd and Upplandsspar AB and as a member of the
Boards of Directors of Lendlink AB, Uppland Kredit AB (publ) and Virteco AB. In addition, he
serves as the Chief Executive Officer of International Card Establishment Europe AB,
Manager of Apptor Holding GmbH and is self-employed via his sole proprietorship
Torstensson Consulting. Previously, Mr. Torstensson was the Chairman of the Board of
Directors and a member of the Board of Directors of Xeric AB, the Chairman of the Boards of
Directors of ONE Media Holding AB (publ), Mankato Investments AG and Virteco AB, and a
member of the Board of Directors of ONE CC AB. Furthermore, Mr. Torstensson has been the
Chief Executive Officer of Brightpoint EMA Ltd, Ericsson Mobile Communication AB, Uppland
Kredit AB (publ) and Lendlink AB, as well as the Executive VP and General Manager at
Ericsson Inc. (North America).
Education: Master of Science degree in Industrial Engineering from Linköping University and
has also completed the General Management Program at CEDEP/INSEAD, France.
dsfdsf REDEYE Equity Research Optomed 27 May 2020
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Jens Umehag
B. 1974, Swedish citizen, member of the board since 2019
Independent of the company and major shareholders
Jens Umehag serves as the Chief Financial Officer of Innovation at Halma Plc. and as a
Director of Halma Ventures Limited Previously, Mr. Umehag was a member of the Boards of
Directors of Fotech Solutions Ltd, Heliex Power Ltd and Rocket Route Ltd. In addition, he has
served as the Chief Financial Officer and Head of Finance Group Technology at BP Ventures
Ltd, as Finance Director of Germany & International Key accounts at BP Plc’s Castrol
subsidiaries in Germany and he has also held several positions ranging from analyst to
finance director at BP Ventures Ltd.
Education: Bachelor of Arts degree in European Business Administration from the European
Business School, London.
Jun Wu
B. 1966, United States citizen, member of the board since 2014
Dependent of a major shareholder
Jun Wu is the founder, Chairman and Managing Partner of Cenova Capital and serves as a
member of the Boards of Directors of Aslan Pharmaceuticals Ltd, Cheng Heng Health
Science and Technology Holdings Ltd, Choice Technology Inc, Etongonline Shanghai Medical
Consulting Co. Ltd, HK Doctorlink Internet Tech Co. Ltd, Jing Medicine Technology (Shanghai)
Ltd, Luqa Ventures Co. Ltd, Shanghai Aohua Photoelectricity Endoscope Co., Shanghai
EnsurLink Ltd, Shanghai Lianji Biotechnology Co. Ltd, Shanghai Yao Shi Quan Cloud Health
Technology Development Ltd, Start (Shanghai) Pharmaceutical Technology Ltd, Suzhou
SceneRay Corporation Ltd, Virtuoso Therapeutics Inc and Vivace Therapeutics Inc. In
addition, he serves as a Director at Alnair Investment, Cenova China Healthcare GP IV Ltd,
Cenova Management Advisors Ltd, Novoasis Investment Ltd and Ruikang Investment Ltd.
Furthermore, Mr. Wu is the co-founder of Shanghai Genomics, Inc. and he has previously
served as the Chief Executive Officer, as a member of the Board of Directors and held various
managerial postions at Shanghai Genomics, Inc., as well as various managerial positions at
GNI Ltd. He is dependent of a major shareholder of the company due to him controlling a
major shareholder.
Education: Doctor of Philosophy degree in Microbiology and Immunology from the University
of California at San Francisco and a Bachelor of Science degree in Biology from San Jose
State University.
REDEYE Equity Research Optomed 27 May 2020
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REDEYE Equity Research Optomed 27 May 2020
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PROFITABILITY 2018 2019 2020E 2021E 2022E ROE 0% -20% -21% -8% -1% ROCE -9% -10% -16% -8% 0% ROIC 0% -17% -30% -8% 0% EBITDA margin 8% -2% -18% -2% 7% EBIT margin -6% -17% -35% -10% 0% Net margin -10% -19% -37% -9% -1%
Please comment on the changes in Rating factors……
INCOME STATEMENT 2018 2019 2020E 2021E 2022E Net sales 12,733 14,977 11,668 15,450 18,157 Total operating costs -11,671 -15,312 -13,787 -15,720 -16,826 EBITDA 1,062 -335 -2,119 -270 1,331 Depreciation -1,810 -2,261 -327 -216 -373 Amortization 0 0 -1,261 -1,124 -1,001 Impairment charges 0 0 0 0 0 EBIT -748 -2,596 -4,092 -1,610 -42 Share in profits 0 0 0 0 0 Net financial items -556 -357 -172 -51 -124 Exchange rate dif. 0 0 0 0 0 Pre-tax profit -1,304 -2,953 -4,264 -1,661 -166 Tax -24 77 0 332 33 Net earnings -1,328 -2,876 -4,264 -1,329 -133
BALANCE SHEET 2018 2019 2020E 2021E 2022E Assets Current assets Cash in banks 2,000 18,867 1,422 1,545 1,816 Receivables 2,871 2,897 2,917 3,863 4,539 Inventories 1,121 2,468 1,517 2,009 2,360 Other current assets 528 1,228 1,228 1,228 1,228 Current assets 6,520 25,460 7,084 8,644 9,943 Fixed assets Tangible assets 739 406 1,079 1,863 2,491 Associated comp. 0 0 0 0 0 Investments 0 0 0 0 0 Goodwill 4,256 4,256 4,256 4,256 4,256 Cap. exp. for dev. 0 0 0 0 0 O intangible rights 8,540 8,406 7,495 6,671 5,920 O non-current assets 0 0 0 0 0 Total fixed assets 14,619 14,143 12,830 12,790 12,667 Deferred tax assets 8 8 8 8 8 Total (assets) 21,147 39,611 19,922 21,442 22,618 Liabilities Current liabilities Short-term debt 7,214 1,826 0 468 669 Accounts payable 2,880 5,317 933 1,236 1,453 O current liabilities 0 0 0 0 0 Current liabilities 10,094 7,143 933 1,704 2,122 Long-term debt 2,993 8,102 0 2,078 2,969 O long-term liabilities 0 0 0 0 0 Convertibles 695 0 0 0 0 Total Liabilities 13,782 15,245 933 3,782 5,091 Deferred tax liab 693 616 616 616 616 Provisions 0 0 0 0 0 Shareholders' equity 5,552 22,637 18,373 17,044 16,911 Minority interest (BS) 0 0 0 0 0 Minority & equity 5,552 22,637 18,373 17,044 16,911 Total liab & SE 21,147 39,611 19,922 21,442 22,618
FREE CASH FLOW 2018 2019 2020E 2021E 2022E Net sales 12,733 14,977 11,668 15,450 18,157 Total operating costs -11,671 -15,312 -13,787 -15,720 -16,826 Depreciations total -1,810 -2,261 -1,974 -1,340 -1,373 EBIT -748 -2,596 -4,092 -1,610 -42 Taxes on EBIT -14 68 0 322 8 NOPLAT -762 -2,528 -4,092 -1,288 -34 Depreciation 1,810 2,261 1,974 1,340 1,373 Gross cash flow 1,048 -267 -2,119 52 1,340 Change in WC -1,640 364 -3,452 -1,135 -812 Gross CAPEX -15,345 -1,794 -1,350 -1,300 -1,250 Free cash flow -15,937 -1,697 -6,921 -2,383 -722
CAPITAL STRUCTURE 2018 2019 2020E 2021E 2022E Equity ratio 26% 57% 92% 79% 75% Debt/equity ratio 217% 49% 0% 15% 22% Net debt 10,022 -7,826 -1,422 1,001 1,823 Capital employed 14,454 13,698 16,951 18,045 18,734 Capital turnover rate 0.6 0.4 0.6 0.7 0.8
GROWTH 2018 2019 2020E 2021E 2022E Sales growth 0% 18% -22% 32% 18% EPS growth (adj) 0% 0% -7% -69% -90%
DATA PER SHARE 2018 2019 2020E 2021E 2022E EPS 0.00 -0.32 -0.30 -0.09 -0.01 EPS adj 0.00 -0.32 -0.30 -0.09 -0.01 Dividend 0.00 0.00 0.00 0.00 0.00 Net debt 0.00 -0.88 -0.10 0.07 0.13 Total shares 0.00 8935.65 14200.00 14200.00 14200.00
VALUATION 2018 2019 2020E 2021E 2022E EV 10,022.0 -7,826.0 61,058.0 63,481.4 64,302.8 P/E 0.0 0.0 -14.7 -47.0 -470.8 P/E diluted 0.0 0.0 -14.7 -47.0 -470.8 P/Sales 0.0 0.0 5.4 4.0 3.4 EV/Sales 0.8 -0.5 5.2 4.1 3.5 EV/EBITDA 9.4 23.4 -28.8 -235.1 48.3 EV/EBIT -13.4 3.0 -14.9 -39.4 -1,523.4 P/BV 0.0 0.0 3.4 3.7 3.7
SHARE INFORMATION Reuters code Optomed.HE List Small cap Share price 4.4 Total shares, million 14200.0 Market Cap, MEUR 62480.0 MANAGEMENT & BOARD CEO Seppo Kopsala CFO Lars Lindqvist IR Chairman Petri Salonen FINANCIAL INFORMATION ANALYSTS Redeye AB Gergana Almquist Mäster Samuelsgatan 42, 10tr gergana.almquist@redeye.se 111 57 Stockholm
SHARE PERFORMANCE GROWTH/YEAR 18/20E 1 month 10.8 % Net sales -4.3 % 3 month -13.7 % Operating profit adj 133.9 % 12 month -
99,999,999,900.0 %
EPS, just 0.0 % Since start of the year -30.6 % Equity 81.9 %
SHAREHOLDER STRUCTURE % CAPITAL VOTES Cenova Capital 17.4 % 17.4 % Robert Bosch GmbH 7.9 % 7.9 % Berenberg Funds 6.7 % 6.7 % Optomed Oy 5.8 % 5.8 % Aura Capital Oy 4.9 % 4.9 % Seppo Kopsala 4.6 % 4.6 % Aktia Asset Management 4.5 % 4.5 % Mandatum Life Insurance Company Limited 4.5 % 4.5 % OP Fonder 4.3 % 4.3 % Finlands Industriinvestering Oy 4.3 % 4.3 %
REDEYE Equity Research Optomed 27 May 2020
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Redeye Rating and Background Definitions Company Quality
Company Quality is based on a set of quality checks across three categories; PEOPLE, BUSINESS, FINANCE. These
are the building blocks that enable a company to deliver sustained operational outperformance and attractive long-
term earnings growth.
Each category is grouped into multiple sub-categories assessed by five checks. These are based on widely
accepted and tested investment criteria and used by demonstrably successful investors and investment firms. Each
sub-category may also include a complementary check that provides additional information to assist with
investment decision-making.
If a check is successful, it is assigned a score of one point; the total successful checks are added to give a score for
each sub-category. The overall score for a category is the average of all sub-category scores, based on a scale that
ranges from 0 to 5 rounded up to the nearest whole number. The overall score for each category is then used to
generate the size of the bar in the Company Quality graphic.
People
At the end of the day, people drive profits. Not numbers. Understanding the motivations of people behind a business
is a significant part of understanding the long-term drive of the company. It all comes down to doing business with
people you trust, or at least avoiding dealing with people of questionable character.
The People rating is based on quantitative scores in seven categories:
• Passion, Execution, Capital Allocation, Communication, Compensation, Ownership, and Board.
Business
If you don’t understand the competitive environment and don’t have a clear sense of how the business will engage
customers, create value and consistently deliver that value at a profit, you won’t succeed as an investor. Knowing
the business model inside out will provide you some level of certainty and reduce the risk when you buy a stock.
The Business rating is based on quantitative scores grouped into five sub-categories:
• Business Scalability, Market Structure, Value Proposition, Economic Moat, and Operational Risks.
Financials
Investing is part art, part science. Financial ratios make up most of the science. Ratios are used to evaluate the
financial soundness of a business. Also, these ratios are key factors that will impact a company’s financial
performance and valuation. However, you only need a few to determine whether a company is financially strong or
weak.
The Financial rating is based on quantitative scores that are grouped into five separate categories:
• Earnings Power, Profit Margin, Growth Rate, Financial Health, and Earnings Quality.
REDEYE Equity Research Optomed 27 May 2020
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Redeye Equity Research team
Management Björn Fahlén
bjorn.fahlen@redeye.se
Håkan Östling
hakan.ostling@redeye.se
Technology Team Jonas Amnesten
jonas.amnesten@redeye.se
Henrik Alveskog
henrik.alveskog@redeye.se
Havan Hanna
havan.hanna@redeye.se
Kristoffer Lindström
kristoffer.lindstrom@redeye.se
Erika Madebrink
erika.madebrink@redeye.se
Fredrik Nilsson
fredrik.nilsson@redeye.se
Tomas Otterbeck
tomas.otterbeck@redeye.se
Eddie Palmgren
eddie.palmgren@redeye.se
Oskar Vilhelmsson
oskar.vilhelmsson@redeye.se
Viktor Westman
viktor.westman@redeye.se
Editorial Mark Siöstedt
mark.siostedt@redeye.se
Life Science Team Gergana Almquist
gergana.almquist@redeye.se
Oscar Bergman
oscar.bergman@redeye.se
Anders Hedlund
anders.hedlund@redeye.se
Arvid Necander
arvid.necander@redeye.se
Erik Nordström
erik.nordstrom@redeye.se
Jakob Svensson
jakob.svensson@redeye.se
Ludvig Svensson
ludvig.svensson@redeye.se
Niklas Elmhammer
niklas.elmhammer@redeye.se
Mats Hyttinge
mats.hyttinge@redeye.se
REDEYE Equity Research Optomed 27 May 2020
42
Disclaimer Important information Redeye AB ("Redeye" or "the Company") is a specialist financial advisory boutique that focuses on small and mid-cap growth companies in the Nordic region. We focus on the technology and life science sectors. We provide services within Corporate Broking, Corporate Finance, equity research and investor relations. Our strengths are our award-winning research department, experienced advisers, a unique investor network, and the powerful distribution channel redeye.se. Redeye was founded in 1999 and since 2007 has been subject to the supervision of the Swedish Financial Supervisory Authority. Redeye is licensed to; receive and transmit orders in financial instruments, provide investment advice to clients regarding financial instruments, prepare and disseminate financial analyses/recommendations for trading in financial instruments, execute orders in financial instruments on behalf of clients, place financial instruments without position taking, provide corporate advice and services within mergers and acquisition, provide services in conjunction with the provision of guarantees regarding financial instruments and to operate as a Certified Advisory business (ancillary authorization). Limitation of liability This document was prepared for information purposes for general distribution and is not intended to be advisory. The information contained in this analysis is based on sources deemed reliable by Redeye. However, Redeye cannot guarantee the accuracy of the information. The forward-looking information in the analysis is based on subjective assessments about the future, which constitutes a factor of uncertainty. Redeye cannot guarantee that forecasts and forward-looking statements will materialize. Investors shall conduct all investment decisions independently. This analysis is intended to be one of a number of tools that can be used in making an investment decision. All investors are therefore encouraged to supplement this information with additional relevant data and to consult a financial advisor prior to an investment decision. Accordingly, Redeye accepts no liability for any loss or damage resulting from the use of this analysis. Potential conflict of interest Redeye’s research department is regulated by operational and administrative rules established to avoid conflicts of interest and to ensure the objectivity and independence of its analysts. The following applies:
• For companies that are the subject of Redeye’s research analysis, the applicable rules include those established by the Swedish Financial Supervisory Authority pertaining to investment recommendations and the handling of conflicts of interest. Furthermore, Redeye employees are not allowed to trade in financial instruments of the company in question, from the date Redeye publishes its analysis plus one trading day after this date.
• An analyst may not engage in corporate finance transactions without the express approval of management and may not receive any remuneration directly linked to such transactions.
• Redeye may carry out an analysis upon commission or in exchange for payment from the company that is the subject of the analysis, or from an underwriting institution in conjunction with a merger and acquisition (M&A) deal, new share issue or a public listing. Readers of these reports should assume that Redeye may have received or will receive remuneration from the company/companies cited in the report for the performance of financial advisory services. Such remuneration is of a predetermined amount and is not dependent on the content of the analysis.
Redeye’s research coverage Redeye’s research analyses consist of case-based analyses, which imply that the frequency of the analytical reports may vary over time. Unless otherwise expressly stated in the report, the analysis is updated when considered necessary by the research department, for example in the event of significant changes in market conditions or events related to the issuer/the financial instrument. Recommendation structure Redeye does not issue any investment recommendations for fundamental analysis. However, Redeye has developed a proprietary analysis and rating model, Redeye Rating, in which each company is analyzed and evaluated. This analysis aims to provide an independent assessment of the company in question, its opportunities, risks, etc. The purpose is to provide an objective and professional set of data for owners and investors to use in their decision-making. Redeye Rating (2020-05-27)
Duplication and distribution This document may not be duplicated, reproduced or copied for purposes other than personal use. The document may not be distributed to physical or legal entities that are citizens of or domiciled in any country in which such distribution is prohibited according to applicable laws or other regulations. Copyright Redeye AB.
Rating People Business Financials
5p 14 11 4 3p - 4p 105 81 30 0p - 2p 7 34 92 Company N 126 126 126
CONFLICT OF INTERESTS
Gergana Almquist owns shares in the company : No Redeye performs/have performed services for the Company and receives/have
received compensation from the Company in connection with this.
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