BioGaia AB - Interim report January 1 – June 30, 2018

Comments from the Managing Director: 
“Our second quarter performance was very strong, with growth of 29% (26%, after foreign exchange effects) compared to the same quarter of last year. Thanks to solid growth in both the Pediatrics and Adult Health segments, we achieved sales of over SEK 200 million for the first time ever. Geographically, growth was strong across all three regions, EMEA, Asia Pacific and the Americas. At the same time, we would like to communicate that we foresee significantly lower royalty revenues from Nestlé as a consequence of the ongoing negotiations of our royalty agreement which terminates at the end of the year” says Sebastian Schröder, Acting Managing Director of BioGaia. 

Second quarter 2018
(Figures in parentheses and comparative figures in the text refer to the corresponding period of last year. The comparative figures in the balance sheet refer to December 31, 2017).

• Net sales amounted to SEK 200.9 million (156.0), an increase of 29% (excluding foreign exchange effects, 26%).
• Net sales in the Pediatrics segment reached SEK 168.5 million (132.1), an increase of 28%.
• Net sales in the Adult Health segment amounted to SEK 32.1 million (23.0), an increase of 39%.
• Operating profit, excluding revaluation of the former associate shareholding in MetaboGen, was SEK 72.9 million (61.2), an increase of 19%. The company has changed an accounting standard as of 1 January 2018, which means that foreign exchange gains/losses attributable to forward contracts are recognized in operating profit or loss (previously in financial items). These amounted to SEK -4.6 million (+1.5). With an unchanged standard, operating profit would have increased by 30%.
• Profit after tax was SEK 62.8 million (47.2), an increase of 33%. Excluding revaluation of the former associate shareholding in MetaboGen, profit after tax was up by 18%.
• Earnings per share totaled SEK 3.62 (2.72). No dilutive effects arose.
• The period’s cash flow was SEK -133.9 million (-117.3). Cash flow includes dividends of SEK 156.0 million (130.0).

Key events in the second quarter of 2018

• BioGaia invests further in MetaboGen and increases its holding to 62%. (See also “Key events after the end of the second quarter”.)
• Axel Sjöblad, former Managing Director, leaves his post. Isabelle Ducellier will be the new Managing Director with effect from 5 November 2018.
• A study showing that Lactobacillus reuteri reduces bone loss in older women is published in the highly reputed Journal of Internal Medicine.  

January 1 – June 30, 2018 

• Net sales amounted to SEK 357.5 million (297.2), an increase of 20% (no material dilutive effects arose).
• Net sales in the Pediatrics segment reached SEK 300.2 million (242.8), an increase of 24%.
• Net sales in the Adult Health segment amounted to SEK 56.5 million (49.5), an increase of 14%.
• Operating profit, excluding revaluation of the former associate shareholding in MetaboGen, was SEK 129.1 million (117.3), an increase of 10%. The company has changed an accounting standard as of 1 January 2018, which means that foreign exchange gains/losses attributable to forward contracts are recognized in operating profit or loss (previously in financial items). These amounted to SEK -13.6 million (+1.8). With an unchanged standard, operating profit would have increased by 24%.
• Profit after tax was SEK 105.9 million (90.1), an increase of 18%. Excluding revaluation of the former associate shareholding in MetaboGen, profit after tax was up by 10%.
• Earnings per share totaled SEK 6.14 (5.20). No dilutive effects arose.
• The period’s cash flow was SEK -94.1 million (-39.8). Cash and cash equivalents at June 30, 2018, amounted to 215.5 million (305.9).

Key events after the end of the second quarter

• BioGaia´s royalty agreement with Nestlé, from the sales of growing up milk with Lactobacillus reuteri for children over one year, will be terminated at the end of the year. Nestlé has communicated that they wish to limit the scope of the agreement, which then would result in significantly lower royalty revenue.
• BioGaia invests an additional 30% in MetaboGen for SEK 27.8 million. The shareholding in MetaboGen now amounts to 92%. 

Teleconference: Investors, analysts and the media are invited to take part in a teleconference on the interim report that will be held today, August 17, 2018, at 9:30 a.m. with Acting Managing Director Sebastian Schröder.

To participate in the teleconference, please see https://www.biogaia.com/investors/financial-calendar/ for telephone numbers.

The teleconference can also be followed at: https://tv.streamfabriken.com/biogaia-q2-2018 

This information is information that BioGaia AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the acting Managing Director, at 17 August 2018, 8:00 CET.

This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording shall prevail.

For additional information contact: 
Sebastian Schröder, Acting Managing Director, BioGaia AB, telephone 46 8-555 293 00/+46 70-994 58 74
or Margareta Hagman, Executive Vice President, BioGaia AB, telephone 46 8-555 293 00/+46 708-72 82 33

BioGaia AB Box 3242, SE-103 64 STOCKHOLM 
Street address: Kungsbroplan 3A, Stockholm
Telephone: 46 8-555 293 00, Corp. Identity no. 556380-8723 www.biogaia.com

BioGaia is an innovative Swedish healthcare company that develops, markets and sells probiotic products with documented health benefits. The products are sold through local distribution partners in around 100 countries worldwide. The class B share of the Parent Company BioGaia AB is quoted on the Mid Cap segment of Nasdaq Stockholm. www.biogaia.com

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