Interim Report January–March 2020

ChromoGenics completed a preferential share issue for SEK 76.2 million to accelerate growth

Q1 2020

  • Net sales for the period amounted to SEK 5.2 (10.7) million, and earnings amounted to SEK -19.5 (-16.3) million, which corresponds to earnings per share of SEK -0.04 (-0.25).
  • Due to the coronavirus pandemic, orders from the company’s customers have been delayed. Order intake and invoicing in 2020 have been pushed to later in the year, and the net sales for the year are therefore expected to be lower than the net sales in 2019. Given this, the Board of Directors has decided to roll out an action plan to reduce the company’s operating costs and secure good liquidity.
  • Operating profit amounted to SEK -18.7(-15.5) million, which is a decrease of SEK -3.2 million compared to the corresponding period in 2019. The decrease in sales had a negative impact on earnings.
  • Cash and cash equivalents amounted to SEK 61.2 (43.0) million on March 31, 2020.
  • The Board of Directors decided on February 7 to conduct a preferential share issue of SEK 100.6 million before issue expenses pursuant to authorization granted by the extraordinary general meeting on December 18, 2019. The new share issue was completed in March 2020 and brought in SEK 62.7 million net to the company after issue expenses.
  • On March 25, ChromoGenics announced layoffs and furloughs of staff due to the coronavirus pandemic and continued deficiencies in purchased electrochromic film. Work is continuing on the installation of the acquired sputtering machines that will provide stable quality in the future, and we expect the machines to be taken into production in the summer.
  • During Q1, orders of SEK 7.4 million were received from Vasakronan, Humlegården and a school in Enköping. Order volume for Q2 2020 amounts to SEK 10.2 million.
2020 2019   2019
SEK million Jan-Mar Jan-Mar Jan-Dec
Net sales 5,2 10,7 45,2
EBITDA -17,0 -13,6 -67,0
Net income -19,5 -16,3 -77,9
EPS before dilution, SEK -0,04 -0,25 -0,34
EPS after dilution, SEK -0,04 -0,25 -0,34
Cash and bank end of the period 61,2 43,0 24,9

 

Events after the end of the period

  • Since April 1, 2020, after announcing layoffs and furloughs, ChromoGenics reduced the working hours of 70 percent of its staff to 40 percent.

  • After the end of the period, orders of around SEK 0.8 million were received, including for a building in central Trollhättan.

Comments from the CEO

At the same time as we were completing the preferential share issue in March, the objective of which was to accelerate ChromoGenics’ growth, the coronavirus pandemic was unrolling in full force. The entire operations ground to a halt in about one week as orders from our customers were delayed. Due to the uncertainty about where the market was headed, we were quickly forced to take proactive measures. The Board of Directors has therefore decided on an action plan to keep running costs down. Seventy percent of our staff have been working forty percent of their normal hours since April 1, and some employees will leave the company. We are also reviewing agreements and costs and strengthening the quality organization with new procedures.

A number of our customers are large property owners that place repeat orders for our products. The large orders expected in the spring of 2020 have been delayed, which has pushed the company’s order intake and invoicing for the year. ChromoGenics’ net sales in 2020 are therefore expected to be lower than the net sales in 2019.

The company’s current supplier of electrochromic film has continued to have problems delivering quality material, which has affected ChromoGenics’ possibilities for delivering products in the past quarter. Our delivery problems have had a negative impact on the company and resulted in significant direct and indirect additional costs. We have therefore decided to freeze purchases from the foreign supplier until further notice.

We are now placing considerable focus on the assembly and installation of the two new sputtering machines and the two smaller research machines for sputtering. During the first quarter, the assembly progressed largely according to plan toward the goal of final, refined production of sputter-deposited electrochromic film during the first six months of 2020. The schedule was negatively impacted during the second half of March when a number of foreign consultants were called home due to the ongoing coronavirus pandemic. In-house staff members have recovered some of this lost time through their own efforts over the past few weeks, and we expect to have refined production before the summer vacation period.

Through the acquisition of the sputtering machines, ChromoGenics gains its own primary sputtering capacity under its own quality assurance with qualified machinery. This will serve as the basis for the company’s dynamic products. Our entire production process and the dynamic products also become significantly more sustainable from an environmental perspective. By investing in its own sputtering machines, ChromoGenics will be able to control the entire production process, which creates conditions for developing into the natural first choice for the central component in the dynamic glass of the future. We are thereby creating a stable industrial structure with a focus on delivery of laminated performance glass.

Despite the difficult situation due to the coronavirus, we receive questions daily about our products, which means that the market is increasingly become aware about the glass technology ChromoGenics has developed. The key to ChromoGenics’ success is gaining customers’ trust for our unique offer in performance glass for buildings. The company works constantly to meet customer demands on function, quality, environmental gains, and property-related financial gains. This is what holds the operations together and is a determining factor in ChromoGenics’ future development.

ChromoGenics’ unique and competitive business idea is to produce and deliver dynamic sputtered film to various production units/glass producers for installation and delivery of final glass products to end customers. We are now intensifying our efforts to build up a partner network around this concept. Strict process and quality control and significant production capacity make rapid international expansion possible, with the main focus in the immediate future on Scandinavia, where we have an established sales organization. Several initiatives have also targeted the rest of Europe.

Our continued long-term goal is to achieve annual deliveries of at least 100,000 m2 of ConverLight® Dynamic electrochromic film. Given the current market demand, the company’s comprehensive facade concept, the technology’s competitive economies of scale, and the secured long-term, in-house production capacity, I believe we will achieve this goal.

Jerker Lundgren, CEO

Contact:
Jerker Lundgren, CEO
Lars Ericsson, CFO and Head of Communications
Tel: +46 (0)18 430 0430
E-mail:
info@chromogenics.com

This information constitutes such information that ChromoGenics AB (publ) 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 14, 2020, at 08:30 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.


About ChromoGenics
ChromoGenics offers dynamic glass with controllable heat- and light transmission and static glass with world leading performance. The company’s unique technology ConverLight® provides sustainable solar control for increased indoor comfort and energy efficiency. ConverLight also contributes to Green Building certifications. In 2016 the company started commercial sales to real estate projects in Scandinavia.

ChromoGenics is located in Uppsala, Sweden, and the technology is derived from the world leading research center at Ångström Laboratory at Uppsala University. The plant has been partly financed by a conditional loan from the Swedish Energy Agency. ChromoGenics share (CHRO) is listed on Nasdaq First North Growth Market with Erik Penser Bank as Certified Adviser, e-mail: certifiedadviser@penser.se, tel.: +46 (0) 8 463 83 00.

 http://www.chromogenics.com

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