Veg of Lund AB: Interim Report, January - March 2021

Focus on the upcoming launch of DUG^®

January–March 2021
• Net sales amounted to TSEK 84 (38).
• Operating profit before depreciation and amortization (EBITDA) amounted to TSEK -2,164 (-6,887), and EBIT amounted to TSEK -2,282 (-6,997).
• Net profit amounted to TSEK -2,270 (-7,052).

Significant events January–March 2021
• Veg of Lund signed an agreement with a South Korean distributor to launch the company’s products.
• The company raised bridge financing of up to MSEK 9 and issued warrants.
• The company signed an agreement with a sales broker in the United States in preparation of the establishment in the North American market.
• In this year’s edition of the World Food Innovation Awards, the company’s plant-based alternative to milk of animal origin, the potato-based beverage DUG^®, won first prize in the category Best Allergy-Friendly Product.
• Cecilia Lindwall was appointed new CEO of the company and will take up position no later than 30 June 2021. Thomas Olander will remain as CEO until Cecilia Lindwall takes up her assignment and will subsequently remain a member of the board.

Significant events after the period
• Emma Källqvist is employed as new CFO as from 1 July 2021.
• A directed issue of 357,162 new shares was carried out following a lender's request for loan conversion.

Summary of the Group’s indicators

    
A word from the CEO

Preparations for the launch of DUG^®
With a difficult year behind us, we are now seeing a number of indications that the tide is turning, for parts of the global economy as well as for Veg of Lund. Regrettably, many are still suffering from COVID-19, but as the rate of vaccinations increases and the summer approaches, there are plans to return to more normal conditions. In recent weeks, England, one of our most important markets, has taken a clear path towards a new everyday life. For Veg of Lund, this implies that we can look forward to launching DUG^®, our new plant-based beverage and alternative to milk of animal origin and other plant-based beverages. We are thus able to offer a beverage that is functionally equivalent to any other milk while also being the most sustainable option on the market. I look forward to presenting DUG^® to many final consumers in English coffee shops and stores in a few weeks.

The product has already attracted the attention of the international food industry. At this year’s World Food Innovation Awards, DUG^® was nominated in four categories. We were announced as the winner in one of them, Best Allergy-Friendly Product, and received a special award in the category Best Plant-Based Beverage. A total of 276 products from 22 countries participated in the international jury-decided award. It is a great recognition for our work and our unique product. We are pleased to have won in the Best Allergy-Friendly Product category, but no less delighted and proud to also be the runner-up to the food giant Nestlé in the important category of Best Plant-Based Beverage, where we received special recognition.

Launching to three markets in the near term
The launch of DUG^® is one of the most important milestones in the history of Veg of Lund, and we have made careful preparations. The new website, dugdrinks.com, is the heart of our marketing effort. There we have gathered all the information about the different versions, the climate footprint, the contents, and the genius of the choice of potatoes. The site even conveys the taste of DUG^®!

The taste and packaging have been developed in collaboration with experts, the climate footprint has been determined, and we have contracted various partners as retailers. We will launch sales in England, with a focus on London, where we are cooperating with a number of established operators.

The Swedish market is also important for Veg of Lund, and we expect to reach consumers in Stockholm and Malmö before the end of the second quarter 2021. Read more about the products and the launch at dugdrinks.com and in our social channels.

The third strategic market is the United States. In order to strengthen our presence from the second half of 2021, Veg of Lund has signed an agreement with Organic Food Brokers, an established sales broker specialized in sales of food in the United States. Ross Schold, Executive Vice President of the sales broker, with more than 20 years of experience in purchasing, sales and brand development, will lead the work to establish Veg of Lund and our products.

In China, we are planning to implement the launch in the same way as in London, Stockholm and Malmö. Starting in Shanghai, consumers will be able to purchase DUG^® in selected coffee shops and grocery stores.

Sales
During the quarter, Veg of Lund’s net sales increased to TSEK 84 (38) due to increased sales to China.

The market
The interest in plant-based food is a growing global trend. The long-term growth in demand for plant-based foodstuffs and focus on sustainability and health imply a continued positive opportunity for Veg of Lund and our products.

The COVID-19 crisis continues, and we note that restrictions are being partially lifted in our markets. As a consequence, it is Veg of Lund's assessment that a high degree of flexibility will be essential, for example if circumstances change due to the planned vaccination efforts.

Cecilia Lindwall takes position as CEO and Emma Källqvist as CFO
The Board of Directors of Veg of Lund has appointed Cecilia Lindwall the new CEO of the company. Cecilia Lindwall has held managerial positions in major food companies, most recently as marketing manager within Skånemejerier and before that in corresponding roles within, among others, Orkla Foods and Mars Nordic, and she has a Master of Science in Business Administration from Lund University. She will take up the position as CEO no later than 30 June 2021.

We also welcome Emma Källqvist as new CFO and member of the management team, starting 1 July 2021. Emma’s most recent position was at the auditing company KPMG in Malmö, where she worked for the past ten years. I look forward to working alongside Cecilia, Emma and the rest of the team in my role as a member of the board of Veg of Lund.

We are on the brink of an exciting period to generate future growth, with both existing and new products. Among them, DUG^® will contribute the most value. We are looking forward to be able to meet consumers and customers, and to enhanced development and marketing cooperation.

Thomas Olander,
CEO and co-founder


For more information, please contact:

Thomas Olander, CEO
Tel: +46 709 359 863
E-mail: thomasolander@vegoflund.se 

Malmö, 12 May 2021
Veg of Lund AB
The Board of Directors
 

This information is such that Veg of Lund AB (publ) is obligated to disclose pursuant to the EU Market Abuse Regulation and the Market Securities Act. The information was submitted for publication, through the agency of the contact person set out below, at 8:00 a.m. CEST on 12 May 2021.


About Veg of Lund
Veg of Lund develops unique plant-based foods meeting consumers’ demands for taste and sustainability. The company has roots in research at Lund University and owns patented methods for developing new food categories in the fast-growing market for plant-based foods. Veg of Lund’s climate-smart and tasty products are sold in Europe and Asia under the DUG^® and MyFoodie^® brands. The company’s shares were listed on the Nasdaq First North Growth Market under ticker VOLAB. Read more at ir.vegoflund.se. Eminova Fondkommission AB is the company’s Certified Adviser and can be contacted via telephone: +46 8 684 211 10 or e-mail: adviser@eminova.se.