ChromoGenics delivers dynamic glass to the head office of the Swedish National Board of Housing, Building & Planning

Quarter 1, 2024

• ChromoGenics' net sales for Q1 2024 amounted to SEK 2.8 (5.8) million. The decrease can be primarily linked to the completion of two major projects in the first quarter of the previous year, Franska skolan i Copenhagen and Duvan in Uppsala, for which there was no equivalent this year.
• Order intake in the first quarter amounted to SEK 2.2 (2.4) million, and the decrease can be primarily linked to the challenging market conditions and the uncertainty in the real estate & construction market that have prevailed since the fall of 2023. The company's products are complex, and the customers' decision-making process is taking longer due to the current market conditions. An increase in uncertainty on the market leads to delays in decision times for investments, which is having a negative impact on the company's order level and net sales.
• During the first quarter, the company manufactured and delivered most of the dynamic glass which through an order from Skanska, is to be delivered to the new head office of the Swedish National Board of Housing, Building and Planning in Karlskrona. 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 OUTSTANDING and Energiklass A.
• Operating profit/loss after depreciation/amortization for the period amounted to SEK -12.1 (-12.1) million. Despite weak revenue in the period of SEK 3.3 million and increased costs for depreciation of SEK 0.2 million, the company is successfully maintaining unchanged earnings, primarily through an increase in cost savings.
• Profit/loss for the period before tax amounts to SEK -13.6 (-13.1) million, and the decrease of SEK 0.5 million is due to increased depreciation/amortization of SEK 0.5 million after the company changed during the quarter its depreciation period for parts of its property, plant and equipment.

Key events during the first quarter in 2024

• ChromoGenics introduces a savings program and adjusts its cost structure to meet market challenges and ensure long-term growth. The measures will lead to a decrease in personnel and other measures to enhance efficiency. ChromoGenics intends to continue developing sales and marketing efforts while ensuring long-term production capabilities to effectively scale up delivery capacity as needed. (March 25, 2024)

• The Company's Board of Directors decided to conduct a directed share issue of 2,505,885 shares for a total of approximately SEK 16 million, subject to subsequent approval by the General Meeting. The subscription price amounted to SEK 6.44 per share and was determined based on an accelerated bookbuilding procedure. The subscribers in the directed issue consist of existing shareholders, including the company's two largest shareholders, Färna Invest AB and Parment Förvaltning AB, and all shareholding Board members. (March 5, 2024)

• ChromoGenics announces that it has started production of dynamic glass for the new head office of the Swedish National Board of Housing, Building and Planning in Karlskrona. The building is a pilot project headed by Skanska and sets an entirely new standard for future sustainable office properties, with the choice of dynamic glass falling to ChromoGenics' latest innovation, ConverLight. (February 19, 2024)

 

Events after the end of the reporting period

• ChromoGenics announced that it held an Extraordinary General Meeting, at which the Meeting resolved to approve the Board's decision as mentioned above on directed issues of shares and therewith related proposals. The Extraordinary General Meeting also resolved in accordance with the proposal of the Board of Directors to amend the share capital limits in the company's Articles of Association and reduce the share capital in order to decrease the quota value of the shares. (April 5, 2024)

 

• ChromoGenics wins its first order in the USA & North America with the delivery of dynamic glass to an exclusive villa project in Colorado. The villa, which will emphasize sustainability and energy efficiency, will feature windows supplied by ChromoGenics' German partner, ENERsign. The glass is being manufactured in collaboration with Arnold Glass, a well-respected German glass supplier. The manufacture of windows, project management and installation is being handled by ENERsign, a German company specialized in exclusive and energy-efficient window solutions. The order value is estimated to SEK 750,000. (April 2, 2024)

Comments from the CEO

The weak economic conditions in the construction and real estate sectors, have affected us during the quarter both in Sweden and in other markets. The office market is particularly impacted, while public buildings are performing better. Activity levels were low at the beginning of the quarter but have improved in March and April. The weak order intake during the quarter is a result of this. The difference from previous quarters is that we won a larger project during those quarters. Our goal is to win at least two larger projects per quarter, which may not be far away as market conditions improve.

We continue to invest in digital marketing, which has resulted in several concrete project inquiries and customers from new markets. Digital marketing combined with collaborations with regional glass companies is a cost-effective and scalable way for us to reach new markets.

A result of this work is the Jay Road project in the USA. The project is delivered by ENERsign, a German manufacturer of high-performance energy-efficient windows. The glass is supplied by ChromoGenics in collaboration with Arnold Glass, a renowned German glass supplier. Together, we create an innovative solution with market-leading performance and sustainability. Arnold Glass is an interesting partner. The company is well-regarded, employs 800 people, has sales companies in several markets, and its own facade contracting.

The World's Largest Curved Dynamic Glass for Boverket's New Headquarters

We have now produced all the dynamic glass for Boverket's new headquarters in Karlskrona. The project consists of flat facade glass and curved corner glass. Production has gone well: high production yield, low scrap rates, great aesthetics, and on-time deliveries. We are very proud of the result. The flat glass is currently being installed, and the curved glass will be delivered during Q2, 2024.
 

The curved glass for the Boverket project is unique in the world and has received a lot of attention. We are the only supplier who can manufacture curved electrochromic glass, thanks to our foil-based technology. We have therefore had visits from one of the global leaders in the glass industry, several customers, and notably the leading glass advisors in the Nordics, ACC. This creates good opportunities for future business.

ConverLight offers architects unique flexibility in the choice of glass, shape, size, and glass build up. This, combined with the market's lowest CO2 footprint, creates unique advantages.

Cost-Savings Program Implemented

Over the past year, we have achieved significant improvements in production, resulting in increased efficiency and higher production capacity. We are proud of these improvements, but unfortunately, the order intake has not developed as well. We are therefore implementing a cost-saving program that includes a reduction in staff by approximately 30%. We are reviewing all company costs with the aim of reducing our non-raw material-related costs by SEK 1 million per month. The savings will begin to have an effect from the third quarter, with the goal of reaching full effect from the beginning of 2025.

Despite the cost-saving program, we will continue to develop sales and marketing. We retain sufficient production capacity in the short term and ensure the competence required to scale up delivery capacity.

Thanks to the efficiency increase in production, we will have available capacity in our sputter production for a long time. This is a production process with many applications, such as manufacturing new high-performance materials in collaboration with the Swedish base industry. We are exploring the possibilities of manufacturing and selling thin films for, among other things, battery technology and energy-saving coatings. We believe this type of manufacturing can complement our core business well and strengthen profitability.

During the quarter, we have worked in various ways to strengthen the company's financial position. We are grateful that our major shareholders have chosen to support the company through a directed issue. We have also continued working on seeking other types of financing.

We have now produced all the dynamic glass for Boverket's new headquarters in Karlskrona. The project consists of flat facade glass and curved corner glass. Production has gone well: high production yield, low scrap rates, great aesthetics, and on-time deliveries. We are very proud of the result. The flat glass is currently being installed, and the curved glass will be delivered during Q2, 2024.

The market for dynamic glass is expected to be worth USD $6 billion by 2035, up from approximately USD $200 million today. Our technology can address significant barriers to broad market penetration: short lead times and easy installation from local suppliers, flexibility in glass choice, shape, and construction. And a cost comparable to traditional solar protection when volume has developed. Production is running well, and we see great opportunities in the market.

Fredrik Fränding, CEO
Uppsala 5/23/2024

This report is available for download at https://chromogenics.com/sv/pressmeddelanden/

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 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 May 23, at 8:30 AM CET.