Eevia Health Plc Interim Report Quarter 4 - 2021

Significant events after December 31, 2021:

• A new Chief Manufacturing Officer, Harri Salo, commenced a new management position in the production organization at the beginning of January, Q1-21. Harri Salo has a strong track record as an operational manager in several companies last 18 years. We communicated the new hire in a press release on January 10, 2022.
• Eevia doubled its chromatography capacity on February 20^th, by adding two new chromatography columns with a total of 1600 liter resin capacity. Eevia now holds a resin capacity of 4.000 liters and six columns. The added chromatography capacity will support both yield improvement and throughput (productivity through increased capacity)

Proposal for the distribution of the result:

The Board of Directors proposes that the result for 2021 is carried forward to 2022. Accordingly, the Board of Directors proposes that no dividend is distributed for the financial    year 2021

Eevia Health Plc

Eevia Health Plc, founded in March 2017, addresses significant health problems with bioactive compounds extracted from plant materials. The materials are primarily wild-harvested from the pristine Finnish and Swedish forests near or above the Arctic Circle. The extracts are sold B2B as ingredients to dietary supplements and food brands globally. These global brands utilize the ingredients in their consumer product formulas.

Eevia Health is a fast-growing Finnish manufacturer of 100% organically certified plant extracts. Although a significant product; Elderberry extract, is made from cultivated berries, most of Eevia's other raw materials, such as bilberry, lingonberry, Chaga-mushroom, and pine bark, are wild-harvested in a sustainable fashion. Eevia's branded ingredients are organically certified. Our portfolio includes vital products such as Feno-Myrtillus® 36 Organic (high concentrate bilberry extracts with 36% anthocyanins) and Fenoprolic® 70 Organic (pine bark extracts with 70% oligomeric proanthocyanidins).  

Eevia Health operates a modern green-chemistry production facility in Finland. The factory operates near the raw material harvest areas. A uniquely short value chain enables an environmentally friendly carbon footprint, competitive pricing, and extreme transparency. Eevia listed its shares at Spotlight Stock Market in Sweden in June 2021, with the short name EEVIA.

To learn more, please visit  www.eeviahealth.com or follow Eevia Health on LinkedIn @EeviaHealth. 

Comments from our CEO

In two to three years, I expect that we will look back at 2021 as the year of adolescence for Eevia Health.

2021 came with significant milestones for the Company in organizational development, production capacity, business systems, and information technology. In addition, it made considerable leaps in customer size, quality, and incoming prospects; and, importantly, it was a year of vital improvements in professionalism and reporting.

In 2021, we almost tripled our workforce; in certain areas, we tripled production capacity (as the picture to the right illustrates). Furthermore, we implemented new advanced business systems, such as ERP and business intelligence systems. We strengthened our capability for preventive maintenance through new routines and the implementation of a modern surveillance and control system (Spotilla.fi). Finally, we added our first large multi-year contract, worth c. MSEK 100 in revenue, and we listed the Company's shares on Spotlight Stock Market.

We often recognize adolescence by the excitement of fast growth and disruption, growth pains, unexpected challenges, and sometimes frustration. Eevia Health certainly experienced all of these during the year, with the fourth quarter of 2021 being no exception.

Firstly, in Q4-21, it became even more evident that Eevia Health faces significant market opportunities in the next few years. We saw a surge in requests for quotes and sales contracts from leads, prospects, and customers during the quarter despite meager marketing efforts. The high level of interest demonstrates the position Eevia Health is moving into and the depth of the nutraceutical market.

We still have a significant sales order backlog. Due to the production disruptions experienced during the year, Eevia needed to delay deliveries to customers. The delays have forced us to remain cautious in accepting new orders, carefully managing the incoming demand from customers, and increasing inquiries. In November, we visited customers in the USA. The trip provided encouraging confirmations about the strength of the market for nutraceuticals and our market position. We expect the US market to remain a strong driver of our growth in the next few years.

On the other hand, Q4 served us specific unexpected production challenges too. While the start of Q4 showed improvements in production volumes compared to Q3, productivity and yields remained a challenge throughout the quarter. These challenges were further amplified by discrepancies between internationally accepted measurement method standards for expressing the amount of bioactive in a key product manufactured by Eevia. Analytical issues led to delays in shipments of products produced during the quarter, and hence a delay in realized sales.

Strong investigative efforts by Eevia experts resolved the misalignment in the measurement method. The Company is looking to recover the economic effects of the misalignment in 2022 and propose improvements to the United States Pharmacopeia monograph for these methods.

Following the installation of new equipment, lower productivity rates resulting from a natural learning curve are to be expected. The Eevia-team identified the root causes of the manufacturing challenges in late Q4, and we are implementing a plan for mitigating these causes. We continue to show improvements in our manufacturing processes as we speak and expect to improve both yields (margins) and productivity during the first half-year of 2022.

All in all, 2021 was a transformational year. Eevia Health was a very different company exiting 2021 than entering it. I expect 2022 to be the first year of young adulthood for Eevia Health, with new competitive advantages and continued rapid growth.

I am sincere in my conviction that we are in the process of building a unique and competitive international ingredients business. We are committed to delivering over MEUR 25 in turnover in 2024, with over 40% gross margin and EBITDA above 15% of turnover. I thank all colleagues, customers, and shareholders for your trust and patience, and I look forward to enjoying a positive development in 2022.

Sincerely yours,

Stein Ulve

CEO

Key ratios

The table below shows the critical ratios for January to December 2021 and 2020:

The Share

The total current number of shares amounts to 15,973,356 shares. Eevia has only one share series.

At the Annual General Meeting in June 2021, the shareholders resolved to authorize the Board of Directors to decide on the issuance of options to key employees. The AGM approved a maximum number of 706,000 shares for this option program. Based on this authorization, the Board has distributed 200,000 share options so far.

Annual general meeting 2022 and Financial Statement for 2021

The Board is arranging for the Annual General Meeting 2022 on June 21, 2022, and the Financial Statement for the year 2021 will be published on the Company's website (www.eeviahealth.com) 3 weeks before the meeting at the latest.

Future Reports