Fast-Grower in the Nutraceuticals & Herbal Medicine Markets
Eevia Health offer organic plant extracts for food nutraceuticals, drinks, and cosmetics under different brands. The Company is at a stage where it aims to increase production capacity, focus on higher margin extracts, and develop new proprietary ingredients targeting eye disorders, which could be strong value drivers ahead. Having a broad product portfolio and high demand from customers, Eevia Health is entering a fast-growth phase, where an EBIT of EUR 4.8m is estimated in 2026. Based on an applied EV/EBIT multiple of 5x on estimated EBIT, and a discount rate of 14%, this yields an equity value per share of SEK 8.8 in a Base scenario. In conclusion, we see several drivers as well as market trends in Eevia’s favor, and where steps in the right direction should reduce the current valuation discount.
- Riding on the ESG-Trend by Offering Organic and Sustainable Health Ingredients
The raw material that Eevia uses is sourced from nearby areas in Northern and Central Europe which minimizes the carbon footprint, the traceability of the products and allows for a more resilient supply chain that is less affected by global disruptions. Moreover, the wild organic raw material is taken from abundant resources that are either not utilized at all or underutilized which respects the natural ecosystem. The harvesting is performed carefully through handpicking and the majority of the raw materials come from forests of the Finnish Lapland. Lastly, Eevia selects its suppliers carefully in accordance with its quality and sustainability criteria. Having implemented these actions, it displays that sustainability is a part of Eevia’s DNA, considering it at each stage of the supply chain.
- Operating in Vast Markets with Strong Macro Trends
Eevia Health is operating within the global markets for nutraceutical ingredients and plant extracts. The global market for nutraceuticals was estimated to be worth USD 241bn in 2019 and is projected to reach USD 373bn in 2025 which represent a CAGR of 7.5% during the forecast period where the growth is attributed to changing consumer preferences and demographics along with increases in R&D activity. Regarding the plant extract market, it was estimated to be worth USD 24b in 2019 and is projected to reach USD 59b in 2025 which represents a CAGR of 16.5%. Growth drivers for the plant extract market include rising awareness of synthetic flavor side-effects and health benefits offered by plant-based medicine.
- Cash Position and Risks to Monitor
At the end of March 2022, cash amounted to EUR 0.4m, and the burn rate for the last six months was EUR -0.4m per month. Given the current cash position burn rate, and credit line of EUR 0.8m, Eevia has enough capital to operate the business until the end of the year, all else equal. Going forward, we assume that Eevia could obtain financing via a combination of loans, additional shareholder capital, sales from current operations, and/or investment grants.
Ledning & Styrelse
Samtliga analyser av bolag från och med år 2020 betygssätts utifrån ett nytt betygssystem - Värdedrivare, Historisk Lönsamhet och Ledning & Styrelse sträcker sig från 1 till 10, där 10 är högsta betyg. Riskprofil sträcker sig från 1 till 10, där 10 är att anse som högst risk. Aktieanalyser av bolag publicerade innan 2020 har betygssatts utifrån en annan modell.