Year-End Report January 1– December 31, 2023

Fri, Mar 08, 2024 08:30 CET

ChromoGenics wins prestigious project from Skanska – Swedish National Board of Housing, Building and Planning’s new head office

Q4 2023

ChromoGenics’ order intake for Q4 2023 was SEK 6.6 (2.8) million, an increase of SEK 3.8 million compared to the corresponding period the previous year. During the second half of 2023, the company has improved order intake significantly compared to the previous quarter. For example, during the fall the company received an assignment from Skanska to deliver dynamic glass to the Swedish National Board of Housing, Building and Planning's new head office in Karlskrona, which was designed by Sandell Sandberg. The project is significant since the goal is to certify the property in accordance with several strict environmental standards such as NollC02, Well Platinum, BREEAM SE EXCELLENT and Energiklass A. The value of the order volume at the end of the fourth quarter was SEK 11.3 million.

ChromoGenics’ net sales amounted to SEK 2.5 (3.5) million in the past quarter. The decrease can be associated with weaker order intake during the first half of 2023 due to the challenging market situation and the uncertainty on the property market. The company's products are specially made and complex, which means that customers’ decision processes take time, and given the elevated uncertainty on the market, this unavoidably leads to longer decision times for investments, which had a negative impact on the company’s sales.

Operating profit before depreciation/amortization amounted in the period to SEK -13.2 (-10.4) million, where the weaker development of SEK 2,8 million is explained by SEK 3.3 million less in income combined with an increase in external costs of SEK -1.9 million, but which in part is reduced by lower costs for input goods of SEK 1.5 million and decreased personnel costs of SEK 0.9 million.

Profit/loss for the period before tax amounts to SEK -16.6 (-12.4) million, and the decrease of SEK 4.2 million is explained primarily by weaker operating profit before depreciation/amortization of SEK 2.8 million, but in addition there is an increased depreciation charge of SEK 1.1 million after the company changed during the quarter its assessment of the depreciation period for parts of its property, plant and equipment.

Earnings performance in summary

Important events in quarter 4, 2023

ChromoGenics announces that it will deliver ConverLight dynamic glass to an office building in Sweden. The total order value is expected to be approximately SEK 6 million. The ConverLight product is based on advanced technology where an electrochromic film is laminated into glass to be able to regulate the intensity of the sun's rays and heat conveyance into properties. The solution improves the indoor environment and well-being and decreases energy consumption, operating costs and the impact of the property on the climate. (December 5, 2023)

ChromoGenics announces the outcome of exercised warrants of series TO 6 that were issued in conjunction with ChromoGenics’ rights issue announced on May 17, 2023 Warrants for series TO 6 were subscribed to approximately 0.25 percent. ChromoGenics will receive approximately SEK 51 thousand before issue expenses. (November 22, 2023)

ChromoGenics and Smartglass International in Ireland announced they had signed a letter of intent regarding manufacturing, marketing and distribution of the dynamic glass ConverLight® Dynamic. Smartglass International is a respected manufacturer and supplier of smart glass solutions and serves the European and North American markets. The company has delivered more than 4,000 projects in 35 countries. ChromoGenics expects the cooperation with Smartglass International to facilitate development of the European and the North American markets. (October 27, 2023)

Events after the end of the reporting period

In a pioneer project with high requirements on environmental performance, Skanska is building the new head office for the Swedish National Board of Housing, Building and Planning in Karlskrona. The building is a pilot project and sets an entirely new standard for sustainable office properties of the future, where the choice of dynamic glass fell to ChromoGenics’ most recent innovation, ConverLight. This order was previously communicated in a press release from the company on 10/15/2023, in which the project name and the companies involved were not specified. The order was included in order intake in Q3 2023. (February 19, 2024)

Chromogenics has successfully completed a directed share issue of approximately SEK 16 million. The board of directors of ChromoGenics AB (publ) has,5th March, subject to subsequent approval by the extraordinary general meeting on 5 April 2024, resolved on a directed issue of 2,505,885 shares. The subscribers in the directed issue consist of existing shareholders, including the Company's two largest shareholders Färna Invest AB and Parment Förvaltning AB. The proceeds from the directed issue will mainly be used to strengthen the sales organisation, intensify partnership dialogues and finance the Company's working capital. In connection with the directed issue, ChromoGenics has also entered into loan agreements, on market terms, of a total of SEK 7 million, SEK 5 million with Parment Förvaltning AB, of which SEK 2.5 million is intended to be set off against shares in connection with the Directed Issue, and SEK 2 million with Bengt Josefsson Utveckling Aktiebolag.( March, 2024)

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.

The Swedish National Board of Housing, Building and Planning chooses ConverLight

The low activity level in the construction and real estate market continued during the quarter in both Sweden and other markets where we are active. Despite the challenging market conditions, we improved order intake compared to the fourth quarter of last year.

Order intake for the second half of 2023 is significantly better than for the first half. We are also seeing that the investments we are making in digital marketing are having an effect on new contacts and concrete requests outside of the Nordic region. We will continue this work.

Our school project in Copenhagen, Ny Prins Henriks Skole, is receiving a lot of attention. The visit by the Danish Queen and its building’s recognition as Construction Project of the Month in Denmark has led to good publicity, including an article in the magazine Byggeri. The project also is being visited by many architects who want to know more about how to sustainably create the best possible conditions for teaching without using air conditioning.

Knowledge about ConverLight is also increasing in Germany. The key industry magazine GlasWelt decided in March 2024 to publish an article about one of our projects and our cooperation with local German glass companies.

During the fall, we agreed with Skanska on the delivery of dynamic glass to the Swedish National Board of Housing, Building and Planning’s new head office in Karlskrona. This is a very important reference project for us. The project noted early that the glass facade caused some of the largest carbon emissions. To achieve the extremely high sustainability targets thus required new innovative solutions, and the choice fell to ConverLight. We are very proud over the opportunity to help set the standard for sustainable offices of the future.

The project places high demands on us; in part, we will deliver the world's largest curved electrochromic glass. We also completed the finetuning of our darker product, ConverLight 65, which will be delivered to the Swedish National Board of Housing, Building and Planning and is in demand in Europe.

The strict requirements in the project with the Swedish National Board of Housing, Building and Planning has resulted in costs during the fourth quarter linked to product preparations and finetuning. We have now begun production of the glass for the Swedish National Board of Housing, Building and Planning and determined that the work has generated the intended result. Production is stable, product performance is good, and we are looking forward to a fantastic reference project.

Cost focus continues

We have not successfully offset the lower sales through lowered costs. We had high one-off costs during the quarter linked to audits and legal services that we are not expecting in the future. However, we need to continue to review our cost structure.

The cost of raw material in relation to net sales has improved and continues to be in focus. The gross margin must, and can, be improved further, but the company is now making a good gross profit on completed sales. Sales must now increase, along with gross profit.

During the quarter we worked with different ways to strengthen the company's financial position. For example, we applied to the EIC Accelerator program, which we believe suits us well and potentially could provide a substantial capital contribution.

A group of the company's large owners also injected capital through a directed share issue and loans, for which we are very grateful.

Dynamic glass is a key component in creating energy-efficient and environmentally friendly properties of the future. Thanks to the company's unique technology, our CO2 footprint is significantly lower than other alternatives, which was why Skanska chose us for the Swedish National Board of Housing, Building and Planning’s new head office. Being able to also offer the Swedish National Board of Housing, Building and Planning’s employees a fantastic view and work environment creates both satisfied personnel and an attractive property that increases in value.

ChromoGenics possesses a sputtering facility that is unique in its kind, both in terms of performance and capacity. We have recently conducted an external valuation of the facility supporting the book value in excess of 90 MSEK. The production of electrochromic materials and ITO has significantly improved, and the production process is robust and stable.

The largest sputtering facility in Northern Europe, along with our unique expertise in the field, is of interest to several other Swedish industrial companies. Thanks to the progress in our own production, we have had capacity to proceed with several funded development projects, where we develop new innovative products on behalf of Swedish industrial companies. Thin films and sputtered materials have the potential to create significant value and new innovative products within the Swedish base-industry. We see opportunities for new revenue streams in due course and hope to provide more details on these projects later in the year.

Fredrik Fränding, CEO

For more information, please contact:

Fredrik Fränding, CEO: +46 72 249 24 62
Anne-Marie Gullman, CFO & Head of Investor Relations: +46 76 136 01 15

This report, together with previously published interim reports, is available in its entirety on the company’s website.

https://chromogenics.com/financial-reports/

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 March 8, 2024 at 8:30 AM CET.

ABOUT CHROMOGENICS

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.

info@chromogenics.com
Certified Adviser: Vator Securities