Year-End Report 2021

ChromoGenics increases its net sales and completes share issue for SEK 68.2 million, guaranteed to 80 percent, for accelerated growth.

Q4 2021

• During the fourth quarter, ChromoGenics continued to deliver the dynamic glass for the order from the Norwegian construction company Betonmast for the Gullhaugs Torg project in Oslo. By the end of the year, ChromoGenics had delivered 3,300 m² and will deliver in total around 4,000 m² of dynamic and static glass to an environmentally certified building that is under construction.
• The production of ConverLight® Dynamic, ChromoGenics’ dynamic glass, has been gradually ramped up with more deliveries to our customers since ChromoGenics began in-house production at the beginning of May, slowly at first to reduce the risk for production disruptions.
• After ChromoGenics completed the long-term tests of the in-house dynamic glass ConverLight^® Dynamic in mid-June, the top priority has been the post-inspection. Our focus is now on increasing the rate of production step by step in a quality-assured manner.
• On November 3, ChromoGenics announced that its deliveries were delayed due to material shortages and capacity limitations in the supply chain. The final deliveries to the end customer Betonmast for the Gullhaugs Torg project in Oslo were estimated to be delayed by eight weeks. Invoicing and incoming cash flow is judged to be affected to the same extent.       
• ChromoGenics also experienced disruptions in its own production process, and production was stopped for three weeks. The problem was identified, a solution was validated, and production began again at the end of November. The production stoppage did not cause additional delays in the Gullhaugs Torg project since at that point in time the supply chain was the bottleneck. Final deliveries to Vasakronan for the Hästen project, however, were delayed by an additional three weeks.
• The operating loss for Q4 2021 amounted to SEK -14.7 (-8.1) million, which was negatively impacted by around SEK 3.4 million due to extra costs associated with the production stoppage in November and additional logistics costs due to disruptions in the supply chains. 
• The action plan introduced in March 2020 to reduce the company’s operating costs continued to have a major impact in Q4 2021 with a lower cost level. Operating costs increased by around SEK 18 million compared to the corresponding period in 2020, however, due to the production increase, delivered goods and logistics. In total during the first nine months of the year, the costs savings amounted to approximately SEK 22 million.
• During the fourth quarter of the year, order intake amounted to SEK 3.2 (6.0) million. On October 5, ChromoGenics announced it had received new orders for ConverLight® Static of around SEK 1.1 million from Humlegården and others with delivery in the fourth quarter. The orders were related to an upgrade in that the glass in existing windows in two office buildings in Solna would be replaced with ConverLight® Static.
• On November 8, ChromoGenics received a new order of SEK 1.2 million for ConverLight® Dynamic glass for an office building in Bergen, Norway.
• On November 10, ChromoGenics signed an agreement for a new order together with window manufacturer LEIAB for delivery of ConverLight® Dynamic glass to a nursing home in Skara.
• Order volume for Q1 2022 amounts to SEK 14.7 (8.8) million.
• Our sales team was strengthened with an additional employee, and marketing activities were expanded. The team is now working to increase its contact with customers and raise the value of our new business opportunities and the order book with additional new business for delivery in 2022.
• 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. We have begun planning to rectify a number of faulty delivery projects.
• Net sales for Q4 2021 amounted to SEK 13.7 (2.0) million, and profit after tax for the period amounted to SEK -15.8 (-8.9) million, which corresponds to earnings per share of SEK -2.23 (-1.26), basic, including warrants (TO3) from the unit issue in December 2020.
• Cash and cash equivalents amounted to SEK 18.9 (93.4) million on December 31, 2021.

EARNINGS PERFORMANCE IN SUMMARY

EVENTS AFTER THE END OF THE PERIOD

• On January 19, 2022, ChromoGenics announced a restructuring and strengthening of its management team to accelerate the transformation to a profitable industrial company. The company has filled two prioritized roles, and both roles will be part of the management team.
• Linus Wetterlind has been named the head of sales and will start at ChromoGenics on February 1. Linus comes most recently from a position as sales manager at the world-leading glass producer Guardian Industries.
• Victor Hägglund has been named the head of supply chain and delivery and will start at ChromoGenics on February 1. His role will be to strengthen the company's business processes and secure and optimize delivery inflows and outflows.
• On February 4, ChromoGenics announced that it will start the recruitment process for a permanent CFO.
• The Board of Directors decided on February 8 to conduct a preferential rights issue of around SEK 68.2 million pursuant to authorization granted by the Annual General Meeting held on May 20, 2021.

Preferential rights issue

The Board of Directors, pursuant to the authorization granted by the Annual General Meeting held on May 20, 2021, decided on February 8 to conduct a preferential rights issue (“Preferential Issue”) in accordance with the following:

• The preferential issue amounts to around SEK 68.2 million through a new issue of units with preferential rights for the Company’s existing shareholders.
• Each share held in the Company on the record date of February 15, 2022, will receive one (1) unit right. Three (3) unit rights are entitled to subscription of one (1) unit consisting of four (4) new shares and four warrants from the series 2022/2023:1.
• The subscription price amounts to SEK 12.00 per unit, corresponding to SEK 3.00 per share. Subscription is made through simultaneous payment.
• The subscription period for the Preferential Issue is February 17–March 3, 2022.
• The Preferential Issue is guaranteed up to 79 percent of the issue amount through subscription obligations and issue guarantees from existing shareholders and external investors. The board of directors intend to secure the Preferential Issue to 80 percent of issue amount through further subscription and guarantee obligations from the management team and board of directors.

• The net proceeds, upon full subscription of the Preferential Issue, will amount to approximately SEK 58 million and are intended to finance ChromoGenics’:

Main timetable for the Preferential Issue

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 quarter, we continued to take important steps to transition from a development company to an industrial company. We have delivered our products to customers, and net sales in the quarter amounted to SEK 13.7 million, which is one of the highest levels since the company was floated in 2017.

This was achieved despite facing major challenges in material shortages, capacity limitations at our suppliers, and disruptions to our own in-house production. I would like to thank all employees, suppliers and partners for your hard work.

In the third quarter, we restarted our production with partially new logistics chains. During two quarters of in-house production, we worked to develop and refine processes and procedures, which led to costs for scrapping and material purchases. Disruptions in the logistics chain also led to significantly higher transport costs. 

However, it is clear that the quality work and the changes we made in the third quarter are starting to generate results. We are establishing processes, and structured work with continuous improvement and quality are progressing and generating results. This change became particularly clear in November when we found in our test program a deviation from production. We then stopped production, identified the problem, and validated a solution, and we were able to restart production within three weeks. I am very satisfied with the structured quality work that made this possible.

Our strategy work and business plan, which show the way to a profitable, international industrial company, are now in their final stage. To accelerate this journey, we are now making changes to the management group.

Linus Wetterlind is strengthening the sales team as the head of sales. Linus is a driven and committed sales manager with highly relevant industry competence. He comes most recently from the position of sales manager at the world-leading glass producer Guardian Industries.

Victor Hägglund will be the head of supply chain and delivery. He has several years of experience in upscaling and quality assurance in supply chains at growing manufacturing companies. The sputter operations are strategically important for the company, and the responsible manager Fredrik Rostvall will now join the management group.

During the quarter, we strengthened the sales team with another experienced business developer. We continued to expand our marketing, primarily through participation in industry-specific customer events and trade shows.

It is stimulating for the entire company to hear the fantastic response to our offer from customers, and in particular from tenants in premises where our glass contributes to a better work environment. We see that the value of new business opportunities increasing for every month that passes.

During the quarter, we signed an agreement valued at SEK 1.2 million with the Norwegian company Nordvestvinduet for delivery of dynamic glass to an office building in Bergen, Norway. We also signed an agreement with LEIAB and Osby Glas to deliver dynamic glass windows to a nursing home in Skara to improve the well-being of the residents. We are very pleased to cooperate with these quality companies on the Nordic glass market.

We see continued strong growth for the global glass market driven by population growth and urbanization, but it is clear for most people that the real estate industry must be sustainable. The industry today represents one-third of global energy consumption. Without active measures to improve the real estate sector’s energy efficiency, its global energy consumption is expected to increase 50 percent by 2050. Our solutions contribute to both increased well-being and a smaller environmental footprint.

Fredrik Fränding, CEO

For more information, please 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

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 February 8, 2022, 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 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, 08-463 83 00.