Interim Report January-March 2021

ChromoGenics received an order of SEK 23.3 million from Norway

Q1 2021

• In the first quarter, order intake amounted to SEK 24.7 (7.4) million, an increase of 234 percent compared to the corresponding period in 2020. An order totaling SEK 23.3 million and with delivery in the fall of 2021 was received in March from Betonmast Oslo AS in Norway for the products ConverLight® Dynamic and ConverLight® Paragon ECO for installation in an environmentally certified building that is being built at Gullhaugs Torg 5 in Oslo, Norway. Repeat customer Humlegården placed an order of around SEK 0.8 million for an office building in Solna.
• The order volume for Q2 2021 amounts to SEK 24.1 (10.2) million.
• ChromoGenics continued to be impacted by both the coronavirus pandemic and the ongoing adjustments to the sputtering machines during the quarter, which resulted in delayed orders from several of the company’s customers. Several customers are waiting until it is possible for us to deliver dynamic glass with film produced in-house before they place their orders. Invoicing was postponed until later in 2021.
• Net sales for Q1 2021 amounted to SEK 1.6 (5.2) million, and earnings amounted to SEK -10.7 (-19.5) million, which corresponds to earnings per share of SEK -1.51 (-3.51), basic, including the warrants (TO3) from the unit issue in December 2020.
• The action plan introduced in March 2020 to reduce the company’s operating costs continued to have a major impact in Q1 2021. Operating costs decreased to around SEK 12.9 million compared to the corresponding quarter in 2020.
• Operating profit/loss for the first three months of 2021 amounted to SEK -9.8 (-18.7) million, which is an improvement of SEK 8.9 million compared to the corresponding period in 2020.
• Cash and cash equivalents amounted to SEK 69.2 (61.2) million on March 31, 2021.
• Two machines for advanced surface coating (sputtering machines) have been installed in the company’s premises in Uppsala and are fundamental for future operations. Work during the quarter focused on establishing a stable sputtering process for nickel oxide through the start of seven different long-term tests of glass and their related control systems. The initial sustainability tests have shown good results. 
• On March 3, TopRight Nordic AB submitted an unsolicited public bid to the shareholders and warrant holders of the TO-3 series in ChromoGenics. On March 10, the Board of Directors of ChromoGenics issued a statement regarding the offer, in which it unanimously decided to advise shareholders and warrant holders against accepting the bid offer. 
• An important part of ChromoGenics’ investment for the future and development is the ongoing implementation of a new business system that supports the production process and the development into an industrial company.       

Events after the end of the period

• On May 4, ChromoGenics announced that it will start production of ConverLight® Dynamic, ChromoGenics’ dynamic glass. The results of the conducted tests are so positive that ChromoGenics decided to start limited production, even if the ongoing long-term tests have not yet been fully completed.  Production will be started slowly to reduce the risk of production disruptions. The process for tungsten oxide was established at the end of 2020, and the process for nickel oxide is now also in place. The company has now established stable sputtering processes.

• On May 10, ChromoGenics communicated that it would start a recruitment process to be able to increase its delivery capacity by expanding the production shifts for ConverLight® Dynamic. 

A word from the CEO

ChromoGenics has now started production of ConverLight® Dynamic. The rate of production will be slow to avoid disruptions. The start of production was enabled by the establishment of the necessary sputtering processes despite the ongoing coronavirus pandemic. Our employees have done a fantastic job getting the equipment to work and establishing the processes. The pandemic limited the planned support from various suppliers from Europe and the world to digital meetings.

During the quarter, a lot of work was performed to prepare for the much-awaited start of production. In addition to developing and testing the nickel and tungsten processes that came out of the sputter, we also reviewed other processes to secure our delivery capacity. To create a good structure, we also started the implementation of our new ERP system, Monitor, during the quarter and continued to work with the transition to becoming an industrial company.

The installation of Sputter II is still under way but has been delayed somewhat due to the greater focus placed on developing and securing the process for the dynamic glass for ConverLight® Dynamic.

Net sales during the quarter amounted to SEK 1.6 million and refer primarily to the sale of ConverLight® Static with some sales of ConverLight® Energy. During the quarter, ChromoGenics received a large order of around SEK 23.3 million for a project at Gullhaugs Torg in Oslo and orders from Vasakronan and Humlegården and several smaller orders that together amount to around SEK 1.2 million. Deliveries for these projects will start before the summer.

We must now increase the rate of production to increase our delivery capacity and meet the growing demand on the market. This means, initially, that the speed in the sputtering processes will be gradually increased for nickel oxide and tungsten oxide and that new employees will be recruited for both the production of sputtered material and the lamination operations. We will then implement new processes in the sputter with the goal of cutting costs. For example, a process for indium tin oxide (ITO) will be established. This is a cornerstone in ChromoGenics’ dynamic products and in the long run could lead to significantly lower material costs for these products.

During the rest of 2021, the focus will be on production, quality and increased capacity. But we will also focus on developing our business. An important goal is to formulate the sustainable future hub strategy, which means that our products can be distributed in a cost-efficient and climate-smart manner to different parts of the world. The strategy creates leverage for ChromoGenics in the growth phase that awaits.

Leif Ljungqvist, CEO

For more information, please contact:
Leif Ljungqvist, CEO: +46 70 594 94 01
Lars Ericsson, CFO & Head of Communications: +46 (0)18 430 0430
E-mail: info@chromogenics.com
http://www.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 20, 2021, 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 that controls the conveyance of heat and light. The company’s unique ConverLight™ technology offers sustainable solar protection for increased indoor comfort and energy efficiency. ConverLight^® also helps properties meet environmental certification. Commercial sales to real estate projects in Scandinavia began in 2016.

ChromoGenics is based in Uppsala and is a spin-off from the world-class research at the Ångström Laboratory at Uppsala University. The company’s production facilities 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 Erik Penser Bank AB is the Certified Adviser.