Eevia Health Plc Year End Report - 2023
Eevia Health Plc ("Eevia" or "The Company") is releasing its year-end financial report for the full year of 2023, as well as for Quarter 4, 2023.
Summary of financial development 2023:
SIGNIFICANT IMPROVEMENT IN EBITDA
The EBITDA for 2023 came in positive at KEUR 753, an improvement of KEUR 1 312 from 2022 (KEUR – 559). 2023 is the first full year with positive EBITDA in the Company’s history.
The improvement came from an increase of KEUR 461 in gross margin, an increase in other operating income with KEUR 127, reduced personnel cost of KEUR 378, and reduced overhead of KEUR 349.
The balance sheet also saw a transformation in 2023. Strong operating cash flow from improved net working capital and EBITDA was used to pay down MEUR 0.6 in short-term loans and to reduce customer prepayments by MEUR 1.5.
IMPROVED FINANCIAL CONTROL
A year ago, we promised a strong focus on improving yields and margins, on leaning the operations, executing cost reductions, and streamlining production. We kept our promises. Eevia onboarded a new business controller in Q3-23 who quickly improved financial control and risk management, as well as better utilization of our ERP system.
We developed a more agile company in protecting financial performance. Despite lower revenues, gross profit in Q4-23 was KEUR 355, an increase of 2% from KEUR 347 in Q3-23.
STRONG UNDERLYING CUSTOMER GROWTH
The Company’s largest customer temporarily paused purchasing in June 2023, due to high stock levels. Nevertheless, Eevia delivered significant underlying revenue growth in the second half of 2023 (H2-23), adding MEUR 1.2 in sales from other clients, up 64% from H2-22.
In November, a global analytical service partner informed it had provided erroneous analytical lab reports for some time. These reports were subsequently corrected by the firm. However, the errors forced Eevia to relabel several batches, which led to some product returns from customers as well as a temporary delay in new order confirmations and deliveries. The problem is solved.
STRONG OPERATING CASH FLOW FOR THE YEAR
Eevia improved operating cash flow by MEUR 2.1 in 2023 compared to 2022. The full-year operating cash flow was positive with KEUR 1 252, up from KEUR – 886 in 2022. This development came from improved EBITDA and a reduction of the inventory.
Cash flow from operations was positive with KEUR 115 in Q4-23 compared to KEUR - 929 in Q4-22, and up from a negative operational cash flow of KEUR – 1 023 in Q3-23. The improvement in operating cash flow stems primarily from changes in working capital in the period.
FINANCIAL DEVELOPMENTS
FULL-YEAR 2023
• Net sales for 2023 came in at KEUR 4 928, a decrease from KEUR 5 910 in 2022.
• The gross margin1 for the full year 2023 ended at 58% or KEUR 2 8692, which is up 19% from KEUR 2 409 in 2022.
• For 2023, Eevia’s EBITDA came in at positive KEUR 753, an improvement of KEUR 1 312 from the full year
of 2022, which ended with a negative EBITDA of KEUR - 559. Hence, 2023 is the first full year with positive EBITDA in the Company’s history. The improvement came from an increase of KEUR 461 in gross margin, an increase in other operating income with KEUR 127, a reduced personnel cost of KEUR 378, and a reduced overhead of KEUR 349.
• The full-year operating cash flow was positive with KEUR 1 252 up from KEUR – 886 in 2022. The improvement of MEUR 2,1 in operating cash flow came from improved EBITDA and a reduction of the inventory.
• In 2023, Eevia secured a new commercial credit of MEUR 0.5 and an equity issue of MEUR 1.9.
FOURTH QUARTER 2023:
• Net sales2 decreased from KEUR 917 in Q3-23 to KEUR 317 in Q4-23. Net sales adjusted for product returns were KEUR 560. Compared to Q4-22, adjusted net sales were down by KEUR 860, from KEUR 1 420.
• Gross profit in Q4-23 was KEUR 242. The gross profit3 adjusted for product returns in Q4-24 was KEUR 355, an increase of 2% from KEUR 347 in Q3-23 and down 63% from KEUR 966 in Q4-22. The adjusted gross margin4 was 63% in Q4-23, up from 38% in Q3-22, but down from 68% in Q4-22. The improvement since Q3-23 is due to a changing product mix. There was no effect on gross margin from side-stream products in Q4-23.
• EBITDA in Q4-23 was KEUR - 148 compared to KEUR 2 in Q3-23 and KEUR 17 in Q4-22. The reduction in EBITDA between Q3-23 and Q4-23 was KEUR 150, mainly stemming from lower turnover.
• The net result for Q4-23 was negative KEUR - 388 compared to KEUR - 317 in Q3-23 and KEUR - 512 in Q4-22.
• Cash flow from operations was positive with KEUR 115 in Q4-23 compared to negative KEUR -929 in Q4-22, and up from a negative cash flow of KEUR -1 023 in Q3-23. The improvement in operating cash flow stems primarily from changes in working capital in the period.
1) For maintaining simplicity and ease for external financial analysis, the gross margin for the full year is unadjusted, ie. including credit notes from product returns and non-recurring items. Hence, it is reported net sales less materials cost.
2) Sales revenues excluding trading revenues.
3) See the adjustment calculations of gross profit in the segmentation table on page 11.
4) Gross profit in % of net sales.
This disclosure contains information that EEVIA HEALTH PLC is obliged to make public according to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person, on February 14, 2024.
For further information, please contact:
Stein Ulve, CEO, Eevia Health Plc
Email: stein.ulve@eeviahealth.com
Telephone: +358 400 22 5967
INFORMATION ABOUT EEVIA HEALTH PLC
Eevia Health Plc, founded in March 2017, addresses significant health problems with bioactive compounds extracted from plant materials. The materials are primarily wild harvested from the pristine Finnish and Swedish forests near or above the Arctic Circle. The extracts are sold B2B as ingredients in dietary supplements and food brands globally. These global brands utilize the ingredients in their consumer product formulas.
Eevia Health is a manufacturer of 100% organically certified plant extracts. Although a significant product, Elderberry extract, is made from cultivated berries, most of Eevia’s other raw materials, such as bilberry, lingonberry, chaga-mushroom, and pine bark, are wild-harvested in a sustainable fashion.
Eevia Health operates a modern green-chemistry production facility in Finland. Manufacturing natural ingredients near the raw material harvest areas, Eevia offers a short value chain with an environmentally friendly carbon footprint, competitive pricing, and extreme transparency. Eevia listed its shares at Spotlight Stock Market in Sweden in June 2021, with the short name (ticker) EEVIA.
To learn more, please visit www.eeviahealth.com or follow Eevia Health on LinkedIn@EeviaHealth.