Presentation

Mentice offers simulation solutions for the medical sector with a focus on the fast-growing market for endovascular procedures. The simulators are used to educate, train, and improve surgeon’s skills in various types of procedures and when introduced to new clinical instruments. Mentice was founded in 1999 and has since then developed a wide product portfolio with a majority of the largest medical technology companies as clients. Mentice has an installed base of some 2,000 systems including approximately 500 hospitals around the world. The company was introduced on Nasdaq First North in June 2019 after a period of strong growth and improving margins.

Recent highlights
The order intake increased to SEK 57.3m (40.1) while net sales decreased to SEK 45.1m (46.4) following delayed orders. Net sales grew in EMEA (19.7%) and APAC (21.4%), but strong seasonal variability in America (-31.3%) led to decreased sales. Medical Device Industry (MDI) had a weaker Q2 and was down 12.6% y/y, however, total aggregated H1 numbers were up 29.9% y/y, and MDI continues to remain the largest business area, contributing with 74% of net sales Jan-Jun 2022. The only segment up in Q2 was Healthcare Systems which lifted 56.1% y/y. EBITDA was down and amounted to SEK -12.2m (-0.5), however, the gross margin was up 84%.
In June, the acquisition of Ankyras from Galgo Medical SL was finalized for an amount of EUR ~1.8m and possibly an additional purchase price of EUR ~0.975m. The acquisition was externally financed by a directed new share issue of SEK ~60m.

Outlook
Mentice is deviating from the next 3-5 year financial targets (30-40% average revenue growth, 30% EBITDA margin) and will require an improved cost management to turn that around. We forecast the gross margin to be 82% for full-year 2022. The cash flow was also burdened by the late order intake and should therefore recover already in Q3. We still expect Mentice to show positive operational cash flow for the full year. However, we adjusted our cost assumptions after the Q2 report and we expect the EBITDA to be just above zero for the year 2022.