+400 percent and -53 percent are two key figures for the first quarter 2023.Net sales grew by 400 percent to TSEK 1,822 compared with the corresponding quarter in 2022. At the same time, the negative EBITDA was halved in comparison to the previous year's quarter. These are the first signs of how our updated strategy is becoming visible in the results.
New strategy is starting to reflect in the results
January-
- Net sales amounted to TSEK 1,822 (455).
-
Operating profit before depreciation and amortization (EBITDA) amounted to TSEK
-8,278 (-17,712), and EBIT amounted to TSEK -8,330 (-17,764). - Net profit amounted to TSEK -8,617 (-17,999).
Significant events January-
Veg of Lund signs an agreement with the leading health food wholesaler of premium products in theUnited Kingdom .Veg of Lund moves its headquarters toLund , establishing a Swedish office for the entire business.-
The Swiss food chain
Migros launches DUG across 486 stores. Veg of Lund entersGermany with a distribution partner.-
Chairman of the Board Håkan K. Pålsson steps down from the Board at his own request.
Eva Tornberg is appointed as Chair of the Board until the Annual General Meeting inJune 2023 .
Significant events after the period
Salling Group inDenmark launches DUG in 101 Fotex and Bilka stores during May.Veg of Lund takes up loans of MSEK 7 with conversion options from existing shareholders and board memberEva Tornberg .
Summary of the Group's indicators (see definitions on page 15)
TSEK | Q1 2023 | Q1 2022 | Full year 2022 |
Net sales | 1,822 | 455 | 2,541 |
Gross margin, % | 12 | 19 | 2 |
EBITDA | -8,278 | -17,712 | -42,580 |
EBITDA margin, % | Neg. | Neg. | Neg. |
Operating profit (EBIT) | -8,330 | -17,764 | -42,787 |
EBIT margin, % | Neg. | Neg. | Neg. |
Net profit for the period | -8,617 | -17,999 | -45,279 |
Profit margin, % | Neg. | Neg. | Neg. |
Basic and diluted earnings per share, SEK | -0.35 | -1.47 | -3.41 |
Solidity, % | -29 | 52 | 35 |
Equity per share, SEK | -0.10 | 0.61 | 0.26 |
Balance sheet total | 8,392 | 14,881 | 18,071 |
Cash flow from operating activities | -8,386 | -9,419 | -33,677 |
Average number of employees | 7 | 9 | 9 |
A word from the CEO
New strategy is starting to reflect in the results
+400 percent and -53 percent are two key figures for the first quarter 2023.
Net sales grew by 400 percent to TSEK 1,822 compared with the corresponding quarter in 2022. At the same time, the negative EBITDA was halved in comparison to the previous year's quarter. These are the first signs of how our updated strategy is becoming visible in the results. Cost-efficient growth, through geographic expansion of existing products, while we simultaneously develop our patent portfolio for the future.
Our international journey has started
A launch with
In addition to
Our German distributor is continuing the dialogue with interested partners. Chains of stores and coffee shops are the channels that are relevant for the near future.
April marked the starting point of our newly recruited international salesmanager, who will lead the European expansion going forward. As a consequence, the number of ongoing discussions relating to new, potential collaborations has already multiplied many times over, and I expect them to have an impact on the bottom line already in the second half of 2023. Many of these discussions were opened at our booths at IFE (International Food & Drink Event) and London Coffee Show. During these events the response was unanimous: our new recipe is really good--in terms of flavour as well as in how well it works in coffee.
Beyond
License discussions are progressing
Moreover, we are continuing the licensing discussions with a number of partners relating to our entire product portfolio: potato drink, smoothies, ice cream, and meat analogues. The most advanced discussion relates to
Entering license agreements have a somewhat longer lead-time than other businessmodels and I look forward to it starting to show in our result possibly already end 2023 but more importantly during 2024.
In
The food industry segment, which includes sales of DUG Unsweetened in bulk, is clearly growing in
In
Continued product and patent expansion
At the same time as we focus on commercializing our consumer ready products, we continue the work to further expand the product and patent portfolio.
Our approach is to choose business model product by product. The most likely products to launch next is various forms of cream. Cooking cream, crème fraiche and whipped cream. These will be incoroporated under the DUG brand and offered to industrial and retail customers during the fourth quarter of 2023.
The different forms of cream have the same unique properties as our potato drink. Sustainable, allergen friendly and helps to build food with a neutral taste. The products have already been demanded by the market and we plan to incorporate them into our already existing production and supply chain.
The ice cream is, apart from market-adapting flavoring, ready for commercialization and the ambition is to offer it through license agreements. Especially our Asian relationships have shown interest in this particular product and work on flavoring has begun with potential licensees.
Our agreement with
The year is off to a good start.
We have a product portfolio that is up to date and more products in pipeline.
We have already entered new markets in a good, more profitable way, and have more discussions ongoing.
Much remain to be done but we have a good start and look forward to moving into 2023 and making the year something significantly different to 2022.
I'm convinced that this will be the case and hope to show it in the results quarter by quarter.
CEO
Financial overview
Development of sales
First quarter 2023
During the first quarter,
Operating expenses
Other external expenses
Other external expenses amounted to TSEK -6,693 (-15,995) for the first quarter. The expenses mostly comprise sales and marketing costs of TSEK -3,023.
The period was burdened by an impairment loss of TSEK 572 on potato beverage based on the old recipe.
Personnel expenses
Personnel expenses for the first quarter amounted to TSEK -1,820 (-1,874).
Depreciation/amortization
Depreciation/amortization for the first quarter amounted to TSEK -52 (-52), mostly attributable to amortization of intangible assets.
Profit
Operating profit (EBIT)
Operating profit for the first quarter 2023 amounted to TSEK -8,330 (-17,764) as a result of retrenchment and prioritization of costs.
Net financial items
The financial profit for the first quarter amounted to TSEK -287 (-235) and mainly comprised interest related to bridge loans and convertible bonds.
Net profit for the period
Net profit for the first quarter amounted to TSEK -8,617 (-17,999).
Earnings per share
Earnings per share for the first quarter amounted to
Cash flow, investments and financial position
Cash flow
Cash flow during the first quarter 2023 amounted to TSEK -6,698 (-6,432). Cash flow from operating activities amounted to TSEK -8,386 (-9,419).
Investments
During the first quarter, investments in intangible assets amounted to TSEK 163 (111), relating to the company's patent application processes. No investments in property, plant and equipment were made during the quarter. No investments in financial fixed assets were made during the year (--).
Change in cash and cash equivalents
Cash and cash equivalents decreased by TSEK 6,698 (-6,436) during the quarter, to TSEK 1,587 (6,737).
Capital position
The Board of Directors continues to actively pursue and evaluate various financing options to ensure the long-term financing and optimal capital structure of the company.
Equity
The group's total equity amounted to TSEK -2,437 (7,806) at the end of the quarter, and equity per share amounted to
The parent company
In addition to sales in
First quarter 2023
During the first quarter 2023, net sales increased to TSEK 1,469 (1.308), of which TSEK 415 (1,221) represented intra-group sales. Net profit for the period amounted to TSEK -6,000 (-10,171). Investments in tangible and intangible fixed assets amounted to TSEK 163 (111).
For other matters, see the information provided for the group.
The share and the shareholders
For the period January-
As of
Trading in the share
Total liquidity in the share during the first quarter of 2023 amounted to MSEK 10 (39,1). The number of transactions for the same period totaled 4,267 (2,151,348). The average volume per transaction increased to 1,590 (264) shares. The average daily turnover for the
Ownership structure on
Number of | Share of capital and votes, % | |
2,185,337 | 8.88% | |
Anders Färnqvist | 2,000,000 | 8.12% |
1,472,006 | 5.98% | |
Avanza Pension | 833,751 | 3.39% |
Anders Hättmark through company | 801,329 | 3.26% |
800,000 | 3.25% | |
Torbjörn Malmsjö | 637,766 | 2.59% |
Nordnet Pensionsförsäkring | 547,002 | 2.22% |
Försäkringsbolaget | 263,177 | 1.07% |
231,916 | 0.94% | |
Other shareholders | 14,845,340 | 60.30% |
Total | 24,617,624 | 100.00% |
Other disclosures
Employees
The average number of employees in the group amounted to 7 (9) during the quarter.
Annual General Meeting 2023
The Annual General Meeting for the financial year 2022 will be held at the company's premises at Scheelevägen 22,
Dividend
The Board of Directors proposes to the Annual General Meeting that no dividend be paid for the financial year 2022 (-).
Dividend policy
Upcoming publication dates
Interim Report April-
Interim report July-
Year-end report 2023 15 February 2024
Significant related-party transactions
During the first quarter 2023, the company's related-party transactions totaled TSEK 180 (273). All transactions were conducted on market conditions.
Accounting principles
The interim report is prepared in accordance with the Swedish Annual Accounts Act as well as the Swedish Accounting Standards Board BFNAR 2012:1 annual report and consolidated (K3).
Significant risks and uncertainties
The risks and uncertainties that
Effects of the war in
The war in
Certified Adviser
Certified adviser for the company is
Assurance
The Board of Directors and the CEO confirm that this interim report provides a true and fair view of the group's and the parent company's operations, position and performance and describes material risks and uncertainties faced by the parent company and the companies belonging to the group.
Lund, Sweden,
Eva Tornberg
Chairman of the Board
Rolf Bjerndell Anders Gustafsson Anders Hättmark
Director Director Director
Roger Johansson Linda Neckmar Fredrik Carling
Director Director Chief Executive Officer
This report has not been reviewed by the company's auditors.
Consolidated income statement
TSEK | Q1 2023 | Q1 2022 | Full year 2022 |
Net sales | 1,822 | 455 | 2,541 |
Other operating income | 61 | 89 | 1,638 |
Total income | 1,883 | 544 | 4,179 |
|
|
|
|
Operating expenses |
|
|
|
Cost of goods sold | -1,599 | -370 | -2,500 |
Other external expenses | -6,693 | -15,955 | -35,524 |
Personnel expenses | -1,820 | -1,874 | -8,609 |
Depreciation, amortization and impairment | -52 | -52 | -207 |
Other operating expenses | -49 | -57 | -126 |
Operating profit (EBIT) | -8,330 | -17,764 | -42,787 |
|
|
|
|
|
|
|
|
Interest income and similar items | 52 | 268 | 630 |
Interest expense and similar items | -339 | -503 | -3,122 |
Result from financial items | -287 | -235 | -2,492 |
|
|
|
|
Profit before tax (EBT) | -8,617 | -17,999 | -45,279 |
|
|
|
|
Taxes | - | - | - |
Net profit for the period | -8,617 | -17,999 | -45,279 |
|
|
|
|
Number of shares | 24,617,624 | 12,815,201 | 24,617,624 |
Average number of shares | 24,617,624 | 12,237,466 | 13,293,494 |
Basic and diluted earnings per share, SEK | -0.35 | -1.47 | -3.41 |
Profit for the period and total comprehensive income are fully attributable to the shareholders of the parent company.
The company has three warrant programmes, 2020/2023, 2021/2024, and TO2. More details on the first two programmes are provided in the Annual Report for the financial year 2022.
Series TO2 warrants
On
The warrants allotted free of charge to the shareholders in the Company are issued as part of the Company's long-term financing plan and can raise additional proceeds of approximately MSEK 10.8-21.7 before issuance costs.
All shareholders in Veg of Lund on the record date,
Consolidated statement of financial position
TSEK |
| 31 March 2023 | 31 Mar 2022 | 31 Dec 2022 |
ASSETS |
|
|
|
|
|
|
|
|
|
Intangible assets |
|
|
|
|
Capitalized expenditure for development |
| 0 | 132 | 33 |
Patents, trademarks and licences |
| 1,854 | 1,543 | 1,709 |
Total intangible assets |
| 1,854 | 1,675 | 1,742 |
|
|
|
|
|
Property, plant and equipment |
|
|
|
|
Equipment, tools, fixtures and fittings |
| 22 | 28 | 23 |
Total property, plant and equipment |
| 22 | 28 | 23 |
|
|
|
|
|
Non-current financial assets |
|
|
|
|
Non-current financial receivables |
| 15 | 15 | 15 |
Total non-current financial assets |
| 15 | 15 | 15 |
|
|
|
|
|
Total non-current assets |
| 1,891 | 1,718 | 1,780 |
|
|
|
|
|
Inventory, etc. |
|
|
|
|
Finished trade goods |
| 1,059 | 2,052 | 1,128 |
Raw materials |
| 421 | 1,253 | 1,441 |
Advances for goods and services |
| 696 | - | - |
Total inventory, etc. |
| 2,176 | 3,305 | 2,569 |
|
|
|
|
|
Current receivables |
|
|
|
|
Trade receivables |
| 1,511 | 1,506 | 342 |
Other receivables |
| 630 | 920 | 4,405 |
Prepaid expenses and accrued income |
| 597 | 695 | 698 |
Total current receivables |
| 2,738 | 3,121 | 5,445 |
|
|
|
|
|
Cash and cash equivalents |
| 1,587 | 6,737 | 8,277 |
|
|
|
|
|
Total current assets |
| 6,501 | 13,163 | 16,291 |
|
|
|
|
|
TOTAL ASSETS |
| 8,392 | 14,881 | 18,071 |
TSEK |
| 31 Mar 2023 | 31 Mar 2022 | 31 Dec 2022 |
EQUITY AND LIABILITIES |
|
|
|
|
|
|
|
|
|
Shareholder's equity |
|
|
|
|
Share capital |
| 1,576 | 820 | 1,576 |
Other contributed capital |
| 112,022 | 86,702 | 112,207 |
Other equity |
| -116,035 | -79,716 | -107,413 |
Total equity |
| -2,437 | 7,806 | 6,370 |
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
Financial liabilities |
| 4,117 | - | 3,847 |
Trade payables |
| 4,100 | 3,389 | 4,100 |
Other current liabilities |
| 458 | 335 | 423 |
Accrued expenses and prepaid income |
| 2,154 | 3,351 | 3,331 |
Total current liabilities |
| 10,828 | 7,075 | 11,701 |
|
|
|
|
|
Total liabilities |
| 10,828 | 7,075 | 11,701 |
|
|
|
|
|
TOTAL EQUITY AND LIABILITIES |
| 8,392 | 14,881 | 18,071 |
Consolidated changes in equity
|
|
|
|
|
|
| |||
TSEK | Share capital | Other contributed capital | Other equity including net profit | Total | |||||
The beginning of the period, | 1,576 | 112,207 | -107,413 | 6,370 | |||||
New issuance | - | -185 | - | -185 | |||||
Convertible bonds issued | - | - | - | - | |||||
Exercise of warrants | - | - | - | - | |||||
Issuance of warrants | - | - | - | - | |||||
Translation differences | - | - | -5 | -5 | |||||
Net profit for the period |
|
| -8,617 | -8,617 | |||||
The end of the period, | 1,576 | 112,022 | -116,035 | -2,437 | |||||
|
|
|
|
|
|
| ||
TSEK | Share capital | Other contributed capital | Other equity including net profit for the year | Total | ||||
The beginning of the period, | 782 | 80,642 | -61,895 | 19,529 | ||||
New issuance | 775 | 22,215 | - | 22,990 | ||||
Convertible bonds issued | - | 7,015 | - | 7,015 | ||||
Exercise of warrants | 19 | 1,148 | - | 1,167 | ||||
Issuance of warrants | - | 1,187 | - | 1,187 | ||||
Translation differences | - | - | -239 | -239 | ||||
Net profit for the period | - | - | -45,279 | -45,279 | ||||
The end of the period, | 1,576 | 112,207 | -107,413 | 6,370 | ||||
Consolidated statement of cash flows
TSEK | Q1 2023 | Q1 2022 | Full year 2022 |
Cash flow from operating activities |
|
|
|
Operating profit | -8,330 | -17,764 | -42,787 |
Adjustment for non-cash items | 52 | 52 | 378 |
Paid taxes | -10 | - | - |
Paid interest | -291 | -41 | -838 |
Cash flow from operating activities | -8,579 | -17,753 | -43,247 |
|
|
|
|
Changes in working capital |
|
|
|
Changes in operating receivables | -235 | 4,715 | 6,591 |
Changes in operating payables | 427 | 3,619 | 2,979 |
Cash flow from operating activities | -8,387 | -9,419 | -33,677 |
|
|
|
|
Investing activities |
|
|
|
Investment in intangible assets | -163 | -111 | -499 |
Investment in property, plant and equipment | - | - | - |
Investment in financial assets | - | - | - |
Cash flow from investing activities | -163 | -111 | -499 |
|
|
|
|
Financing activities |
|
|
|
Issues and other contributed capital | 3,370 | 6,535 | 20,570 |
Issuance expenses | -1,519 | -437 | -3,871 |
Warrants | - | - | 1,167 |
Amortization | - | -3,000 | -7,000 |
Borrowings | - | - | 18,380 |
Cash flow from financing activities | 1,851 | 3,098 | 29,246 |
|
|
|
|
CASH FLOW FOR THE YEAR | -6,699 | -6,432 | -4,930 |
|
|
|
|
Cash and cash equivalents at beginning of the year | 8,277 | 13,173 | 13,173 |
Currency effect in cash and cash equivalents | 9 | -4 | 34 |
Cash and cash equivalents at the end of the year | 1,587 | 6,737 | 8,277 |
Parent company's condensed financial statements
TSEK | Q1 2023 | Q1 2022 | Full year 2022 | |||||||
Net sales | 1,469 | 1,308 | 4,725 | |||||||
Other operating income | 61 | 90 | 1,638 | |||||||
Total income | 1,531 | 1,398 | 6,363 | |||||||
Cost of goods sold | -1,249 | -1,316 | -4,642 | |||||||
Other external expenses | -4,304 | -8,067 | -23,780 | |||||||
Personnel expenses | -1,592 | -1,845 | -7,980 | |||||||
Depreciation, amortization and impairment | -52 | -52 | -207 | |||||||
Other operating expenses | -49 | -57 | -128 | |||||||
Operating profit (EBIT) | -5,716 | -9,939 | -30,370 | |||||||
Net financial items | -285 | -232 | -20,106 | |||||||
Profit before tax (EBT) | -6,000 | -10,171 | -50,476 | |||||||
Net profit for the period | -6,000 | -10,171 | -50,476 | |||||||
|
|
|
| |||||||
TSEK | 31 Mar 2023 | 31 Mar 2022 | Full year 2022 |
| ||||||
Assets |
|
|
|
| ||||||
Intangible assets | 1,854 | 1,675 | 1,742 |
| ||||||
Property, plant and equipment | 22 | 28 | 23 |
| ||||||
Non-current financial assets | 8,021 | 15,623 | 5,806 |
| ||||||
Total non-current assets | 9,897 | 17,326 | 7,571 |
| ||||||
Inventory, etc. | 1,352 | 2,491 | 1,505 |
| ||||||
Current receivables | 1,880 | 2,455 | 4,564 |
| ||||||
Cash and cash equivalents | 1,074 | 6,430 | 7,570 |
| ||||||
Total current assets | 4,306 | 11,376 | 13,639 |
| ||||||
Total assets | 14,203 | 28,702 | 21,210 |
| ||||||
|
|
|
|
| ||||||
Equity and liabilities |
|
|
|
| ||||||
Shareholder's equity | 5,006 | 25,235 | 11,191 |
| ||||||
Current liabilities | 9,197 | 3,467 | 10,019 |
| ||||||
Total equity and liabilities | 14,203 | 28,702 | 21,210 |
| ||||||
|
|
|
|
|
| |||||
Definitions and glossary
In general | All amounts in tables are stated in SEK thousands unless otherwise specified. Amounts in brackets refer to the corresponding period in the preceding year unless otherwise specified. | ||||
Definitions of indicators | Veg of Lund's definitions of a number of alternative performance measures not defined or specified under BFNAR ("Alternative Performance Measures") are set out below. Veg of Lund has made the assessment that these alternative performance measures are used by some investors, securities analysts and other stakeholders to supplement other measures of performance and financial position. Unless otherwise specified, these alternative performance measures have not been subject to audit and are not to be considered separately or as an alternative to indicators calculated in accordance with BFNAR. These Alternative Performance Measures, as defined by Veg of Lund, are not to be compared with other indicators with similar names used by other companies. This is because these alternative performance measures are not always defined in the same way, and other companies may calculate them in a different way to Veg of Lund. | ||||
Margins | Definition/Calculation | Purpose | |||
Gross margin, % | Gross profit in relation to net sales. | Used to measure product profitability. | |||
EBITDA margin, % | EBITDA in relation to net sales. | The company considers the EBITDA margin to be a useful indicator, together with increase of net sales, to monitor value creation. | |||
EBIT margin, % | Operating profit in relation to net sales. | The company considers the operating margin to be a useful indicator, together with net sales growth, to monitor value creation. | |||
Profit margin, % | Net profit for the period in relation to net sales. | Indicator that shows how much value accrues to shareholders in the company. | |||
Return | Definition/Calculation | Purpose | |||
Solidity, % | Equity in relation to total assets. | The company has chosen to present the indicator Solidity as it demonstrates the status of the company as a going concern. | |||
Data per share | Definition/Calculation | Purpose | |||
Number of shares | Number of shares outstanding at the end of the reporting period. |
| |||
Average number of shares | Weighted average of the number of shares outstanding during the period plus a weighted number of shares that would be added if all dilutive potential shares were converted to shares. |
| |||
Equity per share | Equity divided by the number of shares outstanding after dilution. | Measure that shows the owners' share of Veg of Lund's total net assets per share. | |||
Basic and diluted earnings per share, SEK | Net profit for the period divided by the average number of shares outstanding before and after dilution. |
| |||
Other definitions | Definition/Calculation | Purpose | |||
Net sales | The company's revenue from ordinary operations. |
| |||
EBITDA | Operating profit excluding depreciation and impairment losses of property, plant and equipment and intangible assets.
| The company has chosen to include the indicator EBITDA as it demonstrates the underlying operating performance with the effect of depreciation removed, which, since depreciation refers to historical investments, results in a more comparable performance measure over time. | |||
Operating profit (EBIT) | Operating profit before financial items. |
| |||
Net profit | Net profit or loss for the year. |
| |||
Balance sheet total | The total of all the company's assets. |
| |||
Cash flow from operating activities | Cash flow from operating activities, including change in working capital, before cash flow from investing and financing activities. | Cash flow from operating activities is used to measure the cash flow generated by the operations before investments and financing. | |||
Average number of employees | Average number of employees in the company during the period. |
| |||
|
|
| |||
Veg of
Business concept
Veg of Lund shall develop a product portfolio of patented products under the Company's consumer brand DUG, as an ingredient for the food industry and the catering industry, and by licensing the Company's patented emulsion technology. With a flexible business model, the company aims to address the market for plant-based food at a worldwide level.
Objectives
Economic and financial objectives
Veg of Lund's economic objective is to expand into new markets at a fast pace by means of its hybrid model.
The company's financial objective is to achieve net sales of MSEK 420 with a positive operating result by 2025.
For more information, please contact:
Fredrik Carling, Chief Executive Officer
Tel: +46 703 121 942
E-mail: fredrik.carling@vegoflund.se
DUG Smoothie was introduced on the Swedish market in
For more information about our delicious, healthy, and creamy potato-based beverages,
visit dugdrinks.com.
Fredrik CarlingCEO, Veg of Lund
fredrik.carling@vegoflund.se
Veg of
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