DGAP-News: Vita 34 again increases sales and margins in the third quarter

Vita 34 again increases sales and margins in the third quarter

• Revenues of EUR 16.6 million in the first nine months of 2021, up 11.7 percent on previous year
• Adjusted EBITDA up 16.1 percent to EUR 5.1 million
• Adjusted EBITDA margin at 30.4 percent, following on from previous records

Leipzig, 11 November 2021 - Vita 34 AG (ISIN: DE000A0BL849; WKN: A0BL84), one of the largest cell banks in Europe, continued to grow significantly in the third quarter of 2021 in an unchanged good market environment. At the same time, operating profitability continued to increase, building on the high levels achieved before the pandemic.

Revenues in the first nine months increased by 11.7 percent to EUR 16.6 million (9M 2020: EUR 14.9 million), slightly above plan. As in previous quarters, sustained high demand was evident, particularly in the DACH region, largely due to optimal conversion of marketing spend. "Once again, it has been shown that our very high marketing expenditures, but combined with a strategy that is optimally aligned with the market, are the key to disproportionately high revenue and earnings growth by historical standards," explains Dr. Wolfgang Knirsch, CEO of Vita 34 AG. "Accordingly, we will maintain the high marketing expenditures in the future and further professionalize our approaches."

In addition to new business, however, it was primarily contract extensions that provided positive impetus to revenues and earnings. Since the beginning of 2020, prepayment contracts with terms of mostly 20 years have been ending to a greater extent and are due to be converted into annual payment contracts. Currently, the number of contract extensions is around 80 percent of the number of new contracts. Only around four percent of customers currently decide not to continue their contracts. In the coming years, this effect will continue to contribute to a constant increase in recurring revenues and have a disproportionately positive impact on earnings.

"Before the forthcoming merger with PBKM, it is once again very clear how healthy Vita 34 is already developing on an independent basis," emphasizes CEO Dr. Wolfgang Knirsch. "The merger will promote this development disproportionately. The two companies complement each other perfectly in their focus, and there is hardly any overlap in market coverage. The combined group will have a much stronger impact on the overall market than either company has been able to do on a stand-alone basis to date."

Looking at the first nine months, earnings before interest, taxes, depreciation and amortization (EBITDA) were down 13.6 percent year-on-year at EUR 3.7 million (9M 2020: EUR 4.3 million). By contrast, EBITDA adjusted for the special effect of the merger with PBKM was up 16.1 percent year-on-year at EUR 5.1 million (9M 2020: EUR 4.4 million). At 30.4 percent for the nine-month period and 32.4 percent in the third quarter, the adjusted EBITDA margin was on a par with the most profitable quarters before the outbreak of the pandemic. "There is no question that the special effects from the intended merger with PBKM represent a not inconsiderable additional burden for us. And costs are to be expected here again in the fourth quarter," underlines Andreas Schafhirt, CFO of Vita 34. "The better we prepare this important step today, the smoother and faster the transition and integration phase will be." The management boards of both companies see the transaction progressing according to plan so far, following the completion of the exchange offer on 2 November. At the end of the exchange offer, the proportion of shares tendered for exchange exceeded the transaction's minimum acceptance threshold of 95 percent.

The key figures on business development are as follows:

Transaction costs also had an impact on operating cash flow. In addition, increased investment costs in warehouse logistics were reflected in a decline. At EUR 2.9 million, operating cash flow was 7.8 percent below the previous year (9M 2020: EUR 3.1 million). A similar percentage decline of 7.3 percent was also reflected in cash & cash equivalents, which amounted to EUR 9.6 million at the end of the quarter (31.12.2020: EUR 10.4 million).

The problem of a shortage of production-relevant preliminary products, which is generally emerging in the economy as a whole, is only an issue for Vita 34 to a very limited extent. It is correct that the company has recorded a slight increase in purchase prices. In the overall context, however, this cost increase does not contribute noticeably to a higher burden. Nevertheless, the company has decided to maintain a higher inventory of production-related materials in the coming quarters as a precautionary measure.

Contact:
Ingo Middelmenne
Investor Relations
Vita 34 AG
Phone: +49 (0341) 48792 - 0
Mobile: +49 (0174) 9091190
Email: ingo.middelmenne@vita34.de

Company profile
Vita 34 was founded in 1997 in Leipzig and is today one of the leading cell banks in Europe. As Europe's first private cord blood bank and a pioneer in cell banking, the company has since offered collection logistics, processing and storage of stem cells from umbilical cord blood and tissue 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 and stem cells from autologous fat in the future. Endogenous cells are a valuable starting material for medical cell therapy and are kept alive at temperatures around minus 200 degrees Celsius so that they can be used as part of a treatment if required. More than 247,000 customers from more than 20 countries have already provided for their family's health with a cell depot at Vita 34.