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Interim Report January – March 2023
ChromoGenics delivers to Denmark and begins cooperation in France
In Q1 2023, ChromoGenics’ net sales amounted to SEK 5.8 (8.5) million, a decrease of SEK 2.7 million compared to the corresponding quarter in 2022. The company made deliveries during the first quarter to, among others, Franska Skolan in Copenhagen, Denmark, which impacted net sales by SEK 2.5 million during the quarter.
ChromoGenics’ operating loss for the first quarter of the year amounted to SEK -12.2
(-16.8) million, which is an improvement of SEK 4.6 million compared to the corresponding period in 2022. The company's operating profit is negatively impacted by a provision of SEK 1.1 million for bad debts. The company continued to have problems with scrapping and waste at the beginning of the year, but production has worked well since the start of March.
The company has an ongoing insurance claim linked to Gullhaug Torg 5 in Oslo, Norway. The company’s assessment is that the damages occurred as a result of an error at a subcontractor and that the estimated costs of between 3,5 to 4 MSEK will be covered by insurance.
On February 13, ChromoGenics announced that it is receiving an order for ConverLight® Dynamic glass worth approximately SEK 1.0 million. The order involves ConverLight® Dynamic glass and control systems for a ceremony building under construction at a cemetery in Järva, Stockholm, Sweden, for delivery during the summer of 2023.
On February 15, ChromoGenics announced that it is introducing ConverLight® Interlayer and applying for a patent. ConverLight® Interlayer enables the glazing industry to manufacture smart dynamic glass without the need to invest in new equipment. ConverLight® Interlayer accelerates the execution of ChromoGenics' partner strategy by simplifying partner production of ConverLight® Dynamic.
On February 15, ChromoGenics announced that it is entering into a cooperation with SECM in France regarding manufacturing, marketing and distribution of the dynamic glass ConverLight® Dynamic.
On March 20, ChromoGenics announced that it will receive approval in the accelerated aging ISO 18543:2021 test.
On March 21, ChromoGenics announced that CFO & Head of Investor Relations Erik Elfström has decided to pursue his career elsewhere and will leave the company during the summer of 2023.
On March 29, ChromoGenics announced the outcome of exercised warrants of series TO 4 and TO 5. Warrants of series TO 5 were subscribed at approximately 44.7 percent, and warrants of series TO 4 were subscribed at approximately 0.3 percent. In total, ChromoGenics will receive approximately SEK 5.8 million before issue expenses.
For the period January–March 2023, profit/loss after tax amounted to SEK -13.1 (-17.6) million, which corresponds to earnings per share of SEK -0.09 (-0.91), basic.
Order intake for Q1 2023 amounted to approximately SEK 2.4 (0.8) million. The order volume at the end of the first quarter amounted to SEK 2.7 million (6.8).
Cash and bank balances amounted to SEK 16.7 (49.4) million as at March 31, 2023.
EARNINGS PERFORMANCE IN SUMMARY
|EPS before dilution, SEK||-0,09||-0,91||-1,56||-8,98|
|Cash and bank end of the period||16,7||49,4||16,7||49,4|
EVENTS AFTER THE END OF THE PERIOD
On April 21, ChromoGenics announced that the Board of Directors had decided to postpone the Annual General Meeting until June 27 and the delivery and publication of the Annual Report for 2022 until June 6.
On May 3, ChromoGenics announced that it had signed a letter of intent with Future Glass of the United Arab Emirates regarding manufacturing, marketing and distribution of the dynamic glass ConverLight® Dynamic.
On May 9, ChromoGenics announced that it is starting a cooperation with Thomsa Glass and receiving a small strategic order from the Netherlands for ConverLight® Dynamic glass.
While waiting for a decision from the insurance companies, the company has agreed with the property owner at Gullhaug Torg 5 on a loan amounting to a maximum of SEK 5 million, which will be paid out as costs are incurred, in order to cover the expenses linked to replacing damaged glass. The interest on the loan is 7.5%. The entire loan does not have to be used.
On May 17, The board of directors of ChromoGenics AB ("ChromoGenics" or the "Company") has today, on 17 May 2023, resolved, subject to the subsequent approval by the annual general meeting of the Company on 21 June 2023, to carry out a new issue of shares and warrants ("Units") with preferential rights for the Company's existing shareholders (the "Rights Issue"). The Rights Issue consists of not more than 300,432,678 new shares and not more than 300,432,678 warrants. The subscription price is SEK 0.1 per Unit, which corresponds to a subscription price of SEK 0.1 per share. The Rights Issue, which is covered up to approximately 80 percent of subscription commitments and issue guarantees, will, upon full subscription, initially provide ChromoGenics with approximately SEK 30.0 million before transaction costs related to the Rights Issue. In the event of full subscription and that all warrants within the framework of issued Units are fully exercised, the Company may receive an additional capital contribution of approximately SEK 30 million, based on a subscription price corresponding to the subscription price in the Rights Issue. In order to ensure the financing needs until the Rights Issue is completed, the Company has taken up a loan facility of SEK 10 million at market terms. In addition, the board of directors of ChromoGenics has resolved to bring forward the annual general meeting, from 27 June 2023 to 21 June 2023, and change the date for publication of the annual report for 2022, from 6 June 2023 to 31 May 2023.
On May 17, ChromoGenics announced that Anne-Marie Gullman has been appointed interim CFO and Head of Investor Relations as of June 12, 2023.
Comments from the CEO
ChromoGenics is a proptech company that contributes to more daylight and well-being indoors, higher energy efficiency, and a decreased footprint for the real estate industry. During the quarter and the period thereafter, the company has taken important steps both technically and commercially.
Broadens market preparations
Despite headwinds in the economy, sales activity has been high during the quarter. ChromoGenics entered into several promising cooperations. SECM in France has fulfilled our expectations in terms of both technical and commercial competence. We are now seeing high activity in the market.
We have also bid on several projects around Europe in cooperation with Thomsa Glass, a company based in the Netherlands that is an expert in sales and advice on sustainable and smart glass solutions.
The construction and property market in the Middle East is following a different business cycle than Europe. We see opportunities in a number of different sectors in the Middle East and are delighted to have entered into a cooperation with a leading player in the area, Future Glass.
Through these and future cooperations, we are increasing our market presence and knowledge. By focusing on our core competence—the production and development of electrochromic film—we increase the scalability of our business and reduce capital tied up. We aim to have started a total of seven cooperations in 2023.
An important technological step to accelerate new cooperations is the development of ConverLight® Interlayer, for which a patent application was submitted during the quarter. The product is a light and robust semi-finished product that is easy and cheap to transport. In this way, we significantly lower the thresholds for other companies to produce glass solutions using ConverLight.
We are also seeing a high level of activity in the Norwegian market, largely thanks to the attention received by the Gullhaug Torg 5 project. The project was previously nominated for the Norwegian Construction Industry’s Climate Prize, and during the quarter it was also nominated for the Norwegian Construction Project of the Year, 2022, thanks to its innovative glass facade.
We are continuing our preparations on the Swedish market with a focus on communal properties, but we are seeing a weakened level of activity. We secured an important reference order in the Stockholm area with the order for a new construction at the Järva cemetery, a beautiful building that will be open to the public, and the dynamic glass will contribute to creating unique contact with the surrounding nature and cultural reserve.
Stability in production
Since March, our production has been reliable and robust, and we feel that we have resolved many of the challenges we have wrestled with in previous quarters. This has given us the opportunity to not only deliver on our commitments but also focus on capacity-raising and cost-reducing measures. Fixed costs are heading in the right direction, and the gross margin has improved.
During the quarter, we were able to successfully complete the important and comprehensive ISO test work. The approved ISO 18543:2021 test is an important certification of the performance, longevity and quality of the company's products.
We have now completed the deliveries to Ny Prins Henriks Skole in Norrebro, Copenhagen, Denmark. The school will become a fantastic reference for construction that is both climate-smart and focuses on students' well-being. At the best address in Copenhagen. The inauguration of the school is planned for October, and the school will become an important reference for ChromoGenics even beyond Denmark's borders.
We are seeing a high level of activity in the markets where we have established cooperations and are confident that this will lead to increased sales and improved profitability. The improved stability and reliability in production enables us to deliver on our commitments, raise capacity and continue to lower our costs.
I would like to conclude by thanking our new shareholders and those who have supported us through the years for your renewed confidence.
Fredrik Fränding, CEO
This information constitutes such information that ChromoGenics AB is obligated to disclose in accordance with the EU Market Abuse Regulation. The information was submitted by the above-mentioned contact persons for publication on May 25, 2023, at 8:30 AM CET.
This statement has been made in a Swedish and English version. In the event of any discrepancies between the Swedish and English text, the Swedish text shall prevail.
ChromoGenics is a proptech company producing smart dynamic glass that improves indoor environments and well-being and lowers buildings’ energy consumption, operating expenses and impact on the climate. The company’s product ConverLight® Dynamic is based on a unique patented technology from the Ångström Laboratory in Uppsala, where electrochromic coatings are sputtered onto plastic film. The result is a dynamic film that can be laminated between glass layers, which provides buildings with good solar protection and lowered environmental impact from production, transport and use. The dynamic film is easy to transport and can be applied by local partners in the glass industry, which means it is possible to avoid long-distance shipping of bulky glass. All of ChromoGenics’ products strive to follow the key words environment and health. This means a focus on environmentally friendly material, lower energy consumption, increased access to daylight and views and improved indoor comfort.
The company’s production facilities in Uppsala have been financed in part by a conditional loan from the Swedish Energy Agency. ChromoGenics’ share (CHRO) is listed on Nasdaq First North Growth Market, and Vator Securities is the Certified Adviser.