Interim Report January-March 2022

ChromoGenics increased its net sales and completed a rights issue for SEK 54.4 million to accelerate growth

Q1 2022

• In Q1 2022, ChromoGenics’ net sales amounted to SEK 8.5 (1.6) million, an increase of SEK 6.9 million compared to the corresponding quarter in 2021.
• The operating loss for Q1 2022 amounted to SEK -16.8 (-9.8) million. Earnings were burdened by approximately SEK 3.9 million due to reduced delivery capacity from subcontractors that led to increased costs and other disruptions in the supply chains that resulted in additional increases to logistics costs. 
• During Q1 2022, we continued our deliveries of the dynamic glass for the order from the Norwegian construction company Betonmast for the Gullhaugs Torg project in Oslo. On March 31, 2022, about 99 percent, or 4,030 m², had been delivered out of a total of around 4,060 m² of dynamic and static glass to an environmentally certified building that is under construction. During the second quarter, the glass’s control system will be installed and tested before ChromoGenics has completed the delivery.
• Around ninety percent of the deliveries to Vasakronan for the Hästen project in Uppsala, which were delayed at the end of 2021, have been completed and the glass’s control system is being adjusted.
• Production of ConverLight® Dynamic, ChromoGenics' dynamic glass, continued during the quarter with several deliveries to our customers.
• A major challenge during Q1 2022 was to manage material shortages at a couple of our subcontractors and their production capacity. We also experienced disruptions in our logistics chain, which led to higher costs to ship material. We therefore had to reduce our own production rate for several weeks.
• The war in Ukraine is affecting ChromoGenics through volatile exchange rates, higher energy prices, higher inflation and a lower supply of goods. Uncertainty about general economic development and the economy has increased.
• The Board of Directors decided on February 8 to conduct a rights issue of around SEK 68.2 million pursuant to authorization granted by the Annual General Meeting held on May 20, 2021.
• The rights issue, which ended on March 3, was subscribed for approximately SEK 28.9 million with the support of unit rights and approximately SEK 1.0 million without support of unit rights. The remainder, corresponding to approximately SEK 24.5 million, was subscribed for by issue guarantors in accordance with the issue guarantee agreements entered into with the Company. ChromoGenics thus received SEK 54.4 million before issue expenses. The Swedish Companies Registration Office registered the issue on March 30, 2022.
• For the period January–March 2022, profit after tax amounted to SEK -17.6 (-10.7) million, which corresponds to earnings per share of SEK -1.03 (-1.51), basic, including warrants (TO4) from the unit issue in March 2022.
• Order intake for Q1 2022 amounted to SEK 0.8 (24.7) million. The order volume for Q2 2022 amounts to around SEK 6.8 (24.1) million.
• On January 19, 2022, ChromoGenics announced a restructuring and strengthening of its management team to accelerate the transformation to a profitable industrial company. On February 1, Linus Wetterlind started as Head of Sales. He comes most recently from a role as Sales Manager at the world-leading glass manufacturer Guardian Industries. At the same time, Victor Hägglund started as Head of Supply Chain and Delivery with the intention of strengthening the Company's business processes and securing and optimizing the Company's inbound and outbound deliveries.
• Some customers have glass that was delivered before ChromoGenics started its in-house production and would like the glass to be replaced within the coming year. Production on a number of faulty delivery projects has begun.
• Cash and cash equivalents amounted to SEK 49.4 (69.2) million on March 31, 2022.

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EARNINGS PERFORMANCE IN SUMMARY

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EVENTS AFTER THE END OF THE PERIOD

• On April 21, 2022, ChromoGenics announced it received a new order for ConverLight® Static of approximately SEK 1.4 million for an office property in Uppsala with delivery in the spring of 2022.
• On May 13, ChromoGenics announced that it received its first order from Germany for an office property, which is its first order on the German market with a new partner.
• A holder of TO3 warrants redeemed them for shares, increasing the number of shares by 3,098 and share capital by SEK 619.20.
• A guarantor in the most recent rights issue chose to receive compensation in the form of shares instead of cash. At the beginning of May, the company made a private placement of 80,000 shares for the guarantor, which increased the number of shares to 35,266,585 and share capital to SEK 7,053,316.40.
• On May 18, the company announced it received a new order for ConverLight® Dynamic of approximately SEK 1.1 million to the town hall in Nannestad north of Oslo, in Norway.

Comments from the CEO

ChromoGenics is a proptech company that contributes to more sunlight and well-being indoors and decreases the impact of the real estate industry on the climate.

During the first quarter of 2022, we continued to take important steps toward our goal of growing from a development company into an industrial company that delivers quality products. During the quarter, we mainly delivered dynamic products, and net sales amounted to SEK 8.5 million, which is one of the better net sales levels since the company was floated in 2017.

This was achieved despite challenges with material shortages and capacity constraints at our subcontractors, which has led to significantly higher costs during the quarter but also disruptions to our own production. We have seen a significant improvement in shipping since April. We are also seeing an improved production outcome and reduced scrapping in our production, two factors that negatively affected earnings during the first quarter.

The global uncertainty is affecting us through continued cost increases on raw materials, particularly for glass. However, we have been affected less than many other suppliers of building materials and see good opportunities to compensate for cost increases.

During the first quarter, we completed the delivery of dynamic and static glass to Gullhaugs Torg 5 in Oslo, Norway, except for a few pieces of glass. We also began delivery and installation of the glass's control system. The control system is wireless and draws its energy from a solar panel mounted on the glass, which simplifies design and installation. Everyone involved is really proud of the building, which will be inaugurated in the fall of 2022.

We also manufactured and delivered dynamic glass for an office building in Uppsala, a nursing home in Skara and an office property in Bergen, Norway.

To accelerate the journey toward becoming a profitable international industrial company, we made changes to the organization and management team.  Linus Wetterlind is strengthening the sales team as the head of sales. Linus is a driven and committed sales manager with relevant industry competence. He comes most recently from the position of sales manager at the world-leading glass producer Guardian Industries.

Victor Hägglund took over as the head of supply chain and delivery. He has many years of experience in upscaling and quality assurance of supply chains at manufacturing growth companies as well as implementation and optimization of business systems. The sputter operations are strategically important for the company, and the responsible manager Fredrik Rostvall will now join the management group.

We are seeing good growth in business opportunities in not only Sweden and Norway, but also Denmark, Finland, Germany and Switzerland. Our order book has weakened, however, and the focus is on converting business opportunities into booked orders. We are also expanding our sales network in collaboration with competent partners.

During the quarter, we signed a letter of intent with the Finnish company Finnglass Oy. Finnglass is a quality supplier of advanced glass solutions for real estate. Production and quality meet a high standard and complement us well, particularly their extensive experience in glass lamination and the manufacturing of glass with electrical functions. Finnglass also successfully sells advanced glass solutions in the global market, and we look forward to a close collaboration.

After the end of the quarter, we also concluded our first agreement for deliveries to Germany, a large and growing market for dynamic glass. With this agreement, we take the next step in our strategy to focus our business on the development and delivery of the dynamic function. Our partners in Germany are responsible for glass deliveries, IGU manufacturing and installation. An important step for our future growth and scalability.

Fredrik Fränding, CEO

Contact:
Fredrik Fränding, CEO
Tel: +46(0)72 249 24 62
Lars Ericsson, CFO & Head of Communications
Tel: +46 (0)18 430 0430
E-mail: info@chromogenics.com   
ChromoGenics ChromoGenics

CEO Fredrik Fränding will present the interim report together with Infront Direkt on Friday May 20 at 16.00 via the link: https://youtu.be/HBNB0LxMHcY

This information constitutes information that ChromoGenics AB (publ) is obliged to disclose in accordance with the EU Market Abuse Regulation. The information was submitted by the above-mentioned contact persons for publication on May 19, 2022, at 08:30 CET.

About ChromoGenics
ChromoGenics is a proptech company that produces dynamic glass for real estate. The company’s product ConverLight® Dynamic, controls indoor comfort with high daylight transmission, great view and solar heat blocking and thereby reduces cost of cooling. ConverLight® Dynamic is based on a patented solution where electrochromic coatings are laminated in plastic film and then laminated between glass. The plastic film is easy to transport, so long shipments of bulky glass can be avoided. ChromoGenics also offers static glass, ConverLight® Static, and the ConverLight® Energy facade glass solution. ChromoGenics’ stock was listed on Nasdaq First North Growth Market in 2017 and has supplied glass technology to several major real estate companies.

ChromoGenics originates from world-leading research at Ångströmlaboratoriet at Uppsala University. The company’s production facility in Uppsala has been partially financed with conditional loans from Energimyndigheten (Energy Authority) in Sweden. ChromoGenics’ share (CHRO) is listed on Nasdaq First North Growth Market with Erik Penser Bank as Certified Adviser: certifiedadviser@penser.se