Special items reflected in a significant decline in earnings despite operating success in fiscal year 2021

0

DGAP-News: Vita 34 AG / Key word(s): Annual results
Vita 34 AG: special items reflected in a significant decline in profits despite operational success in fiscal year 2021
30.04.2022 / 23:45
The issuer is solely responsible for the content of this announcement.

Special items reflected in a significant decline in earnings despite operating success in fiscal year 2021

– Revenue of 28.4 million euros after the first consolidation of PBKM FamiCord up 44.5% compared to the previous year as of November 8
– EBITDA after special effects down sharply to €0.8 million
Core operational activity weakened at the end of the year under the effect of the Omicron wave
– Significant increase in cash and cash equivalents as a basis for new expansion initiatives

Leipzig, April 30, 2022 – Vita 34 AG (ISIN: DE000A0BL849; WKN: A0BL84), the first cell bank in Europe and the third in the world, closed the year 2021 with a purely operational commercial development towards the end of the year, but nevertheless globally positive. In the context of the merger with PBKM FamiCord, the Group has reached new heights in terms of revenues and profits in the past financial year. A number of one-time special effects resulted in negative earnings performance at the net income level.

Group revenues increased by 44.5% to EUR 28.4 million (2020: EUR 19.7 million), with the results of the PBKM FamiCord subgroup being consolidated for just under two months. In the context of the Omicron wave, which reached new highs at the end of 2021, the positive development of the first nine months of 2021 could not fully continue in the fourth quarter. Vita 34 and PBKM FamiCord both experienced a general slowdown in new customer activity. Earnings before interest, taxes, depreciation and amortization (EBITDA) decreased significantly by 83.5% to EUR 0.8 million (2020: EUR 4.9 million). Although the core business of the combined company made a clearly positive contribution to the result at the EBITDA level of EUR 7.3 million. However, a number of special effects resulted in offsetting tendencies to a large extent.

The declared costs for legal and professional advice, the preparation and implementation of the capital increase and the exchange of shares, including the squeeze-out, amounted to 2.7 million euros. At the same time, at the level of the PBKM FamiCord sub-group, additional expenses amounting to EUR 1.0 million during the consolidation period in the two new expansion areas had a negative impact on the result of the consolidation period.

However, the most significant effect results from the harmonization of accounting under IFRS 15 (revenue recognition). For the PBKM subgroup, this leads to significantly lower reporting of revenue and profit contributions. With the application of the Vita 34 accounting guidelines, which according to current opinion and practice in Germany should be strictly oriented to the so-called legal principle for the interpretation of IFRS 15, revenue recognition of the PBKM sub-group had to be adjusted for both past and current cases. According to this principle, turnover can only be recognized at the beginning of the customer contract for sufficiently secure terms and conditions of the contract with customers. Consequently, income and profits previously recognized in the first year of the contract are recognized pro rata temporis in subsequent periods over the duration of the contract. Due to the retroactive recognition of this effect, which is also required for the initial consolidation of PBKM, additional positive contributions to revenue and profit will be recognized in future periods. The effect on the result of the harmonization of accounting according to IFRS 15 amounts to -€1.6 million for the 2021 financial year and has no impact on liquidity.

Against the background of the aforementioned effects, earnings before interest and taxes (EBIT) decreased significantly to EUR -3.1 million (2020: EUR 2.0 million). The result for the period amounts to -3.9 million EUR (2020: 1.4 million EUR)

The key figures for business development are as follows:

IFRS, in KEUR

12M

12M

12M

2021

2020*

Revenue

28,419

19,668

44.5%

Gross profit on revenue

12,438

11,256

10.5%

EBITDA

814

4,936

-83.5%

EBITDA margin [%]

2.9%

25.1%

EBIT

– 3,071

1,973

-255.7%

Result for the period

– 3,926

1,439

-372.8%

Earnings per share [in EUR]

– 0.63

0.35

-278.1%

Operating cash flow

2.727

3,531

-22.8%

Cash and cash equivalents (vs. Dec. 31, 2020)

33,298

10,396

220.3%

*Previous year figures adjusted for the effects of the harmonization of accounting under IFRS 15 (revenue recognition)

The fundamentally positive development of the operating activities over the full year resulted in an operating cash flow of 2.7 million euros (2020: 3.5 million euros). Although this was also down 22.8%, the drop was considerably less than the drop in earnings. In the context of the cash acquired as part of the business combination with PBKM FamiCord, cash and cash equivalents increased significantly and amounted to €33.3 million at the end of 2021 (December 31, 2020: 10, 4 million euros). Its stable financial base provides the company with an optimal basis for future accelerated growth in its core business as well as in the expanding new business areas of cell and gene therapies (including CAR-T) and CDMO. that is, the service business for established pharmaceutical companies. companies around the world.

“It cannot be denied that the merger of Vita 34 and PBKM FamiCord is accompanied by considerable growth”, explains Jakub Baran, CEO of Vita 34 AG. “However, as by far the largest cell bank in Europe, we now have brand new opportunities to shape our industry, establish new products and services, and thereby position Vita 34 in a much broader and more powerful way. We are more than certain that our investments today will result in an even more attractive market position for Vita 34 in the future and establish the company in new and even more attractive markets.”

The current economic environment, especially with regard to Russia’s attack on Ukraine and the effects of the pandemic situation, has led to a downward trend in new customer activity in the new fiscal year 2022 to this day. While at the turn of the year – the peak of the Omicron wave – it was mainly negatively affected by COVID-19, in recent weeks the uncertainties mainly related to the war have led to a change in the demand for customers, which should result in weaker development of Vita 34 in 2022. The company plans to dynamically adjust marketing and sales costs in 2022 based on market developments. However, research and development projects, where significant progress is expected, will continue with undiminished intensity in 2022.

Consequently, the Management Board considers that Vita 34 should be able to post more attractive growth rates in the medium and long term. The current financial year 2022 will therefore essentially be a year of transition, during which the emphasis will be placed on the integration of all the companies of the new group into the Group and thus the preparation of the company for the next growth spurt.

With regard to the effects of accounting harmonization under IFRS 15 described above, the Management Board expects that with appropriate adjustments to the terms and conditions of customer contracts, it will once again be possible to recognize a greater share significant portion of sales entered into longer-term contracts from the second half.

Based on a current assessment in the context of a tense economic environment, the Management Board thus expects consolidated revenue of between 68 and 75 million euros for the full year 2022. Despite the first cost reduction measures already undertaken – mainly in the areas of marketing, production, and the post-merger integration process – the Management Board currently anticipates a significant drop in results. In this context, it should be emphasized that the ongoing initiatives in the field of cell and gene therapies as well as in the field of CDMOs will have a significant negative impact on the expected financial results. As a result, earnings before interest, taxes, depreciation and amortization (EBITDA) should be between -2 and 1 million euros. The estimate is based on a constant exchange rate of the euro against the Polish zloty and other currencies (HUF, RON, TRY, GBP) compared to March 31, 2022. The effects of potential acquisitions envisaged in 2022, including including the resulting transaction costs, as well as other non-recurring effects are not included in the forecast. With regard to the effects of accounting harmonization under IFRS 15 described above in the PBKM sub-group segment and in section 3 of the notes to the consolidated financial statements, the management board assumes that, subject to the appropriate adjustments to terms and conditions of customer contracts, it will once again be possible to recognize a higher volume of revenue on contracts newly concluded at the start of the contract from the second half. A corresponding revenue volume has been assumed for the forecast.

Due to the difficult economic environment, the management expects a moderate decline in sales and EBITDA for Vita AG itself.

The Board of Directors of Vita 34 AG will be available to institutional investors, analysts and press representatives on May 4 at 11:30 a.m. in a video conference for further explanations on business development. Registration for this is done by e-mail via Investor Relations Services ([email protected]).

Contact:
Ingo Middelmenne
Investor Relations
Vita 34 SA
Telephone: +49 (0341) 48792 – 0
Mobile: +49 (0174) 9091190
Email: [email protected]

Company profile

Vita 34 was founded in Leipzig in 1997 and is today by far the leading cell bank in Europe and the third in the world. As the first private umbilical cord blood bank in Europe and a pioneer in cell banking, the company has since offered the logistics for the collection, processing and storage of stem cells from umbilical cord blood, umbilical cord tissue and other postnatal tissues as a full service provider for cryopreservation. Based on the expansion of the business model in 2019, Vita 34 also intends to offer the storage of immune cells from peripheral blood as well as stem cells derived from adipose tissue in the future. Endogenous cells are a valuable starting material for medical cell therapy and are kept alive in liquid nitrogen vapors. Customers from around 50 countries have already ensured the health of their families with more than 850,000 units of biological material stored at Vita 34.

30.04.2022 Dissemination of a Corporate News, transmitted by the DGAP – a service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

DGAP distribution services include regulatory announcements, financial/corporate news and press releases.
Archive at www.dgap.de

Share.

Comments are closed.