Vita 34 records moderate upward trend in the second quarter
DGAP-News: Vita 34 AG / Key word(s): Half Year Results/Half Year Report
Vita 34 records moderate upward trend in the second quarter
– Revenues in the first half of the year show significant increase to EUR 32.1 million due to fully consolidated results coming from business combination with PBKM FamiCord
– As expected, EBITDA of EUR -2.6 million still significantly impacted by further investments in R&D, newly developing CDMO area and harmonization effects under IFRS 15
Leipzig, 30 August 2022 – Vita 34 AG (ISIN: DE000A0BL849; WKN: A0BL84), the leading cell bank in Europe and the third largest in the world, was able to benefit from a moderate upward trend in the further course of the first half of the year after an overall weaker start to the year. Although overall business development still falls short of potential, the company anticipates an improvement in the situation in the second half of the year.
As in the first quarter, revenues of EUR 32.1 million in the first six months were around three times as high as in the same period of the previous year (H1 2021: EUR 10.5 million) as a result of the merger with PBKM FamiCord. The reasons for the overall nevertheless restrained business development lie in a clearly perceptible decline in demand from new customers. At the beginning of the year, this was mainly related to the Omicron wave and was significantly exacerbated in the following months by the Ukraine conflict and the emerging energy price-driven crisis. Reluctance on the part of potential customers remained unchanged both in the Eastern and Southern European markets as well as in the DACH region. Since the middle of the second quarter, there has been a moderate upward trend in demand.
The intensified decline in demand from March onwards also had a correspondingly significant impact on the development of earnings. As the company deliberately refrained from implementing far-reaching cost-cutting measures in the personnel area and only implemented cost-cutting and cost-shifting measures to a certain extent and continued to invest in R&D and newly developing CDMO area, earnings before interest, taxes, depreciation and amortization (EBITDA) were negative at EUR -2.6 million (H1 2021: EUR 1.7 million). The negative trend was reinforced by a series of special effects amounting to around EUR 5 million, the extent of which was in line with forecast expectations. In addition to expenses for the business combination, restructuring and severance payments, this mainly includes the forecast special effect from the harmonization of accounting under IFRS 15 (revenue recognition) of around EUR 4 million in the first half of the year.
The key figures for business development are as follows:
The strong increase in inflation throughout Europe in recent months has also been reflected in a significant rise in prices for production-relevant raw materials and equipment, as well as in increased personnel costs. At the same time, however, the company managed to implement price increases in some markets to at least partially compensate for the increased cost base.
“We managed to increase the number of new contracts by an upper single-digit percentage compared to Q1 2022. We assess this trend as a good basis for the second half of the year. Provided that the general economic environment does not deteriorate significantly further,” explains Jakub Baran, CEO of Vita 34 AG.” In addition, we assumed in our annual forecast that we would be able to implement necessary measures in connection with IFRS-15 in the second half of the year and thus adequately counteract the special effect from the harmonization of accounting. We are pleased that we have now reached an agreement on this point. On the basis of an external opinion contractual adjustments while fully implemented will again enable us to account for our new customer contracts on the basis of economically realistic scenarios. Contrary to our original expectations, this will be reflected in our figures essentially from the fourth quarter onwards and only to a small extend in the third quarter. Nevertheless, this step will have a significant positive effect on our profitability from now on.”
At the same time, the company continues to expect that the extensive investments made in the new expanding CDMO business area will result in the first sales from the fourth quarter of 2022 onwards.
Yesterday, the Company published a statement on the need to adjust its forecast. According to this, the contract changes introduced will essentially have a positive effect on consolidated sales and earnings from the fourth quarter onwards and only to a small extend in the third quarter. Accordingly, the third quarter is the last quarter in which this temporal shift has an impact on the revenue and EBITDA forecast in the form of a non-cash negative accounting effect of EUR about -2.5 million. In addition, contrary to the original planning, major location measures in individual markets will now already be completed in the second half of 2022. These underlying steps will add up to a one-off special effect of EUR -1.5 million in the course of the year. Against the backdrop of the aforementioned effects and the continuing difficult market environment, the forecast ranges for consolidated sales were adjusted to EUR 65 to 72 million (previously: EUR 68 to 75 million) and for EBITDA to EUR -6.0 to -3.0 million (previously: EUR -2 to +1 million) in the course of the publication of August 29, 2022.
Vita 34 was founded in Leipzig in 1997 and is today by far the leading cell bank in Europe and the third largest worldwide. As the first private cord blood bank in Europe and a pioneer in cell banking, the company has since been offering collection logistics, processing and storage of stem cells from umbilical cord blood, umbilical cord tissue and other postnatal tissue as a full-service provider for cryopreservation. Customers from around 50 countries have already provided for the health of their family with more than 850,000 units of stored biological materials at Vita 34.
30.08.2022 CET/CEST Dissemination of a Corporate News, transmitted by DGAP – a service of EQS Group AG.
|Company:||Vita 34 AG|
|Deutscher Platz 5a|
|Listed:||Regulated Market in Frankfurt (Prime Standard); Regulated Unofficial Market in Berlin, Dusseldorf, Hamburg, Munich, Stuttgart, Tradegate Exchange|
|EQS News ID:||1431449|
|End of News||DGAP News Service|