Vita 34 sees first signs of stabilization in core business after war-related weaker first quarter – Yahoo Finance UK

DGAP-News: Vita 34 AG / Key word(s): Quarter ResultsVita 34 sees first signs of stabilization in core business after war-related weaker first quarter 31.05.2022 / 18:30 The issuer is solely responsible for the content of this announcement.

Vita 34 sees first signs of stabilization in core business after war-related weaker first quarter - Group revenues tripled to EUR 15.5 million as a result of the merger with PBKM FamiCord- EBITDA amounted to EUR -1.1 million as a result of further investments into new expanding activities and one-off events-Number of recurring revenues client increased to more than 230.000, contributing EUR 5.7 million of revenues- Special effect from IFRS 15 in first quarter at forecast level of about EUR 2.0 million with increasingly good prospect of effective countermeasures in upcoming quarters

Leipzig, 31 May 2022 - As expected, Vita 34 AG (ISIN: DE000A0BL849; WKN: A0BL84), the leading cell bank in Europe and third largest in the world, has started the new year 2022 impacted by a weaker market environment. In addition to the peak of the Omicron wave so far, which already had a negative impact on sales development in the final quarter of 2021, the Ukraine conflict in particular led to weakened demand behavior primarily in the Eastern European markets. The special effect from IFRS 15 also had a negative impact on earnings development, as forecast.

Group revenues increased significantly and almost tripled to EUR 15.5 million (Q1 2021: EUR 5.2 million) as a result of the merger with PBKM FamiCord. The reasons for the sales development falling short of the possibilities were mainly a decline in demand from new customers that was still clearly perceptible at the start of the year, which was for the most part due to the Omicron wave. With the onset of the armed conflict between Russia and Ukraine, this decline in demand then intensified significantly once again, as numerous potential customers in Eastern European markets, but also in the DACH region, remained both more cautious in their consumer spending and increasingly reconsidered additional medical services. The significant increase in inflation throughout Europe also reinforced this trend.

To counteract the decline in earnings, cost-cutting and cost-postponing measures were implemented to a certain extent. However, the company deliberately refrained from taking far-reaching measures in the personnel area so that it could quickly return to its growth path as soon as the general environment improved again. Furthermore, Vita 34 continued investments into its new expanding business areas Cell & Gene Therapies and CDMO. Consequently, earnings before interest, taxes, depreciation and amortization (EBITDA) were down year-on-year at EUR -1.1 million (Q1 2021: EUR 0.9 million). The decline was exacerbated by the high special effect from the harmonization of accounting in accordance with IFRS 15 (revenue recognition), as forecast. This amounted to EUR 2.0 million in the first three months of 2022. Furthermore, some one-off costs of EUR 0.5 million related to the business combination and severance payments occurred.

"Everyone of us has been caught cold by the political and economic changes of recent months, so it's only understandable that consumers are reconsidering or even postponing non-urgent spending,"explains Jakub Baran, CEO of Vita 34 AG. "Yet we shall also not forget that penetration of stem cell banking is still pretty low in Europe compared to US and selected countries in Asia. The growth potential is there without a doubt. Especially in Germany, the UK and Turkey. Furthermore, these turbulent times shall also shake some weaker competitors off the market trying to compete with us by offering high discounts."

The key figures for business development are as follows:

IFRS, in EUR 000

Q1

Q1

12M

2022

2021*

Group revenues

15,480

5,201

197.7%

Gross profit

3,592

3,021

18.9%

EBITDA

-1,064

871

-222.2%

EBITDA margin [%]

-6.9

16.7

EBIT

-3,192

134

-2,491.2%

Result for the period

-2,937

-169

1,638.1%

Earnings per share [in EUR]

-0.18

-0,04

350.0%

Operating cash flow

423

1,047

-59.6%

Cash and cash equivalents (vs. 31 Dec. 2021)

31,924

33,298

-4.1%

* Prior-year figures adjusted. The adjustments are explained in Note 2.3 of the Annual Report 2021.

Against the backdrop of continued investments in the new expanding business areas Cell & Gene Therapies and CDMO cash and cash equivalents decreased by 4.1 percent to EUR 31.9 million compared to year-end 2021. Consequently, also operating cash flow decreased to EUR 0.4 million.

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Vita 34 sees first signs of stabilization in core business after war-related weaker first quarter - Yahoo Finance UK