40 % Growth at 10× EBIT? Intellego’s Valuation Still Looks Healthy
Post-3× check-up
Intellego has delivered a 3.1× return when the Swedish krona’s 10 % appreciation against the US dollar is taken into account; even without that currency tailwind, the stock has still gained about 185 % in just six months. Because many of my subscribers are shareholders, I believe it is time to provide an update on the company. Although the share price has already risen sharply, I still see significant upside, and management appears to agree: a newly proposed warrant-based incentive programme will vest only if the share price triples again within three years. Whether you are an existing or a potential shareholder, this article should be valuable to you.
The original thesis, check it out for the original valuation:
To refresh your memory, Intellego operates in the UV disinfection market, Intellego monetises UV disinfection in two ways. First, it sells the machines themselves—the company recently acquired the manufacturer of its disinfection units, so it now captures the full hardware margin. Second, it sells dosimeters: small pieces of paper with photochromic ink that changes colour once an object has received a sufficient UV dose for disinfection. These dosimeters cost only a few cents to produce but sell for one or two dollars, yielding extraordinary margins. The company’s main challenge used to be motivating sales representatives to push such low-ticket items to hospitals, but that has changed. Representatives can now lead with the higher-value machines and add the dosimeters as the recurring consumable needed for the equipment to operate, creating a razor-and-blade model.
In this update, which is exclusive to paid subscribers, we will revisit our past assumptions, compare guidance with actual results, analyse new contracts and roll everything into a revised valuation model.
Intellego’s FY 2024 results and preliminary Q1 2025 figures
The company missed its FY 2024 revenue target of SEK 300 million, achieving SEK 265 million, but posted EBIT of SEK 105 million, in line with the SEK 110 million it had guided. Management attributes the revenue shortfall to SEK 30 million in shipments that slipped into January 2025 instead of December 2024. Even so, revenue grew 40 % year-on-year, margins remain strong, and the order book has reached a record SEK 300 million. Management now forecasts more than SEK 500 million in revenue and SEK 160 million in EBIT for FY 2025.
Since the end of 2024, the company has released preliminary Q1 2025 results, reporting revenue of more than SEK 200 million for the quarter and EBIT above SEK 100 million. Available liquidity stands at SEK 80 million, although receivables have grown to SEK 70 million, an area of concern given past write-offs. A subsequent update revealed that EBIT has already surpassed SEK 160 million, thanks largely to faster-than-expected uptake of Intellego’s products.
New colaborations:
Regarding their partnerships, I think Intellego is handling them very strategically. They understand they have a strong product but currently lack the capacity for effective distribution. As a result, they are seeking strategic partners—particularly companies already familiar with their products—and granting them exclusive rights in specific geographical regions.
In the Asia-Pacific region, they've granted exclusivity to Likang, contingent upon achieving minimum sales volumes of USD 360 million over five years. In the Americas, they've similarly granted exclusivity to an undisclosed company, with minimum committed volumes of USD 60 million and initial revenues expected by 2025.
(New colaborations and contracts, risks, management compensation and valuation update exclusive for paid subscribers)