(News Bulletin 247) – The specialist in sensory analysis plunges onto the Paris Stock Exchange after indicating on Friday evening that it expects a sharp drop in its activity in 2023. Alpha MOS cites delays in orders planned for the current quarter, to 2024.

The eve of weekends are times favored by certain listed companies to broadcast bad news. This is the case of the Toulouse company Alpha MOS which announced on Friday evening after the close of the markets that it was lowering its 2023 turnover target.

The manufacturer of electronic noses, tongues and eyes, which was still counting on an increase in its revenues – although not quantified – is now targeting a turnover for the 2023 financial year of around 4.8 million euros. ‘euros. This level of income therefore reflects sales down 17% compared to the 5.8 million euros in turnover achieved in 2022.

This new objective therefore implies a very low turnover in the second half, with a 40% drop in billings over one year, underlines EuroLand Corporate in its note dedicated to this warning on sales.

The group attributes this adjustment to its annual revenue target to “the postponement of investments by agri-food players, faced with a marked decline in household food consumption”. Several orders expected by Alpha MOS for the current quarter have thus been postponed to the 2024 financial year, adds the company.

Remember that Alpha MOS is the world leader in instrumental sensory analyzers for the food, beverage and packaging industry. The company has developed a complete range of innovative solutions dedicated to olfactory (Heracles), taste (Astree) and visual (Iris) characterization. The instruments developed by Alpha MOS make it possible to detect organoleptic qualities [une substance qui est capable de stimuler un récepteur sensoriel, NDLR] of a product through its taste, smell, texture or appearance.

“Unexpected” shifts

But EuroLand Corporate had already felt the tide turning. “Our caution and our fears around the lack of visibility of the activity in the short term ultimately proved to be justified,” indicates the financial intermediary.

“We believe that visibility is still insufficient over the coming months and that the group is not excluded from further postponements at the start of next year in the event that the economic context does not improve quickly enough” , he continues.

On the Paris Stock Exchange, the sanction is final after this lowering of the objective, linked to these “unexpected order shifts”, to use the terms of EuroLand Corporate. The share of the Toulouse group plunges by almost 15%, returning to historic lows under the symbolic euro, at 0.98 euros around 3:30 p.m.

Last October, the company had nevertheless renewed its objective of achieving organic growth in turnover in 2023, thanks to good activity in the first half of the year. Over the first six months of the year, Alpha MOS had in fact achieved growth of 14% to 2.7 million euros.

A complicated financial situation

On the other hand, the bottom of the income statement presented a less attractive face. At the end of June 2023, the group saw its net operating loss widen significantly over one year, reaching 1.6 million euros, after an operating deficit close to 1 million euros in 2022. a little lower, the net loss amounts to 2.01 million euros, compared to a net deficit of 1.3 million euros at the end of the first half of 2022.

Alpha MOS’s half-year accounts suffered significantly, due to inflationary pressures and investments made by the company “aimed at developing its activity with major accounts”.

The financial situation is not in good shape either with negative equity of 5.67 million euros, the equivalent of twice the turnover achieved in the first half. As of June 30, the net financial debt stood at 5.19 million euros and made up of 5.97 million euros of financial debt (excluding rental obligations) and 784,000 euros of cash.

Alpha MOS thus estimates that this level of cash “is not sufficient to finance the company’s operational development plan over the next twelve months” and in particular the needs linked to the continued development of the MedTech project, it is that is to say its non-invasive device for monitoring glucose by breath analysis.

The company then indicated that it was considering different hypotheses in order to strengthen its financial structure and favored “in particular obtaining external financing to finance this plan”. The company had even already mentioned thinking about a plan B if these operations did not succeed.

Despite the warning issued Friday evening, Alpha MOS remains confident in the longer term about the trajectory of its activity. The company affirms that its growth prospects “remain intact” for the coming years, “in particular due to the partnership relationships established with several major accounts for a global deployment of Alpha MOS solutions on a large number of industrial sites”.

The confidence displayed by Alpha MOS in the longer term is also shared by EuroLand Corporate which remains “convinced of the relevance of the solutions offered by Alpha Mos and the commercial potential of the model”. But while waiting for a return to better fortunes, the intermediary downgrades his opinion on the stock to neutral from buy previously. Its price target is halved, going from 2.50 euros to 1.20 euros after this new disappointment on the file.

This objective is based on a return of Alpha MOS shares to price levels prior to the publication of the first half accounts at the end of October. Since this disappointing publication, the file has dropped more than 30%, bringing the losses recorded by Alpha MOS for the whole of 2023 to 60%.