BioGaia AB: Interim report third quarter January – September 2023

THIRD QUARTER 2023

Figures in parentheses refer to the corresponding period last year, unless otherwise specified.

• Net sales amounted to SEK 317.7 million (257.7), an increase of SEK 60.0 million, or 23% (excluding foreign exchange effects, 17%).
• Net sales in the Paediatrics segment amounted to SEK 255.8 million (205.7), a change of 24% (excluding foreign exchange effects an increase of 18%).
• Net sales in the Adult Health segment amounted to SEK 59.2 million (50.5), an increase of 17% (excluding foreign exchange effects, an increase of 11%).
• Operating expenses amounted to SEK 116.3 million (92.0), an increase of SEK 24.3 million (26%). Operating expenses, excluding items affecting comparability, increased by 26% to SEK 116.3 million (92.0).
• Operating profit increased by 28% to SEK 119.5 million (93.7), which corresponds to an operating margin of 38% (36%).
• Adjusted operating profit increased by 28% to SEK 119.5 million (93.7), which corresponds to an adjusted operating margin of 38% (36%).
• Profit after tax amounted to SEK 101.5 million (79.5), an increase of 28%.
• Earnings per share amounted to SEK 1.01 (0.79) before and after dilution[1].
• Cash flow amounted to SEK 88.4 million (37.3).
• Cash and cash equivalents at 30 September 2023 amounted to SEK 1,452.5 million (1,402.4 at 30 September 2022).

Key events in the third quarter of 2023

5 July. A clinical study with Protectis was shown to increase SARS-CoV-2 antibody titres when 28 days or more had elapsed from vaccination.

2 August. BioGaia´s Board of Directors announced that Theresa Agnew had been appointed as the new Chief Executive Officer (CEO).

7 August. A paper written by a team of researchers from the University of Gothenburg and BioGaia published in the journal Nature reported a novel method to overcome oxygen sensitivity to beneficial resident bacteria in the human gut, which are significantly reduced in metabolic conditions and cardiovascular disease.

25 September. Theresa Agnew began as CEO. 
 

JANUARY – SEPTEMBER 2023      

Figures in parentheses refer to the corresponding period last year, unless otherwise specified.

• Net sales amounted to SEK 998.7 million (829.7), an increase of SEK 169.1 million, or 20% (excluding foreign exchange effects, 13%).
• Net sales in the Paediatrics segment amounted to SEK 793.5 million (661.0), an increase of 20% (excluding foreign exchange effects, 12%).
• Net sales in the Adult Health segment amounted to SEK 198.8 million (165.5), an increase of 20% (excluding foreign exchange effects, an increase of 13%).
• Operating expenses amounted to SEK 362.2 million (303.6), an increase of SEK 58.6 million (19%). Operating expenses, excluding items affecting comparability, increased by 20% to SEK 361.1 million (300.3).
• Operating profit increased by 25% to SEK 362.6 million (290.3), which corresponds to an operating margin of 36% (35%).
• Adjusted operating profit increased by 24% to SEK 363.7 million (293.6), which corresponds to an adjusted operating margin of 36% (35%).
• Profit after tax amounted to SEK 298.0 million (234.3), an increase of 27%.
• Earnings per share amounted to SEK 2.95 (2.32) before and after dilution[1].
• Cash flow amounted to SEK -33.6 million (-101.8). Cash flow includes dividends of SEK 292.8 million (301.3).

Key events after the end of the third quarter

16 October. BioGaia announced that results for the third quarter exceeded market expectations.
 

[1] Key ratio defined according to IFRS. For definitions of other key ratios, see page 16.

 

CEO’s comments

When this strong financial report is published, I will have held the role as BioGaia's CEO for a month. In this short time, I have gained a positive feeling for the professionalism and passionate corporate culture that characterises the company – which is ultimately confirmed by this financial report.

During the quarter, we increased net sales by 23% compared to the corresponding quarter last year. Operating profit increased by 28% to SEK 120 million and the operating margin was 38%. Sales grew in all market regions. In EMEA, sales grew by 25% in the quarter, partly due to quarterly variations for individual orders. In APAC, sales grew by 17% mainly due to strong demand in China, a recovery in Japan and the favourable performance of other markets, such as Korea and Vietnam. In the Americas, sales grew by 25% due to good performance in the US and Canada (our direct markets), but also due to strong demand in South and Latin America. In the US and Canada, growth is driven by online sales, where Amazon continues to be an important sales channel. In general, we see that direct sales through our subsidiaries have proven to be successful. In these markets, we can focus more intently on our own products, launch a broader selection of our product portfolio and further strengthen the BioGaia brand. At the same time, our partnerships with our distributors are extremely valuable to us and during the quarter, we expanded our partnership with our distributor Abbott to also include the Middle East. We have had positive experiences with Abbott as a collaborative partner in several other markets, and the Middle East is a growing and attractive region for BioGaia.

The Paediatric segment increased by 24% and the Adult segment increased by 17%. Despite the uncertain global outlook, high inflation, and weak economic development, we see resilience for our Protectis drops and our other products. During the quarter, we launched several products from our existing product portfolio in order to expand our market. For example, we launched Prodentis Kids on the Swedish market, a product that is already available on the US market and where we have seen growing demand for oral health products such as this.

During the quarter, we reached an important and exciting milestone in the development of next-generation probiotics. In an article published in the journal Nature, a team of researchers from BioGaia and the University of Gothenburg reported a novel method to overcome oxygen sensitivity to beneficial resident bacteria in the human gut, which are significantly reduced in metabolic conditions and cardiovascular disease. We will continue to develop next-generation probiotics to replace missing bacteria in individuals with an increased risk of developing these diseases.

BioGaia’s continued double-digit growth demonstrates one of the company’s strengths, and was one of the reasons why I accepted the role as CEO. With my background of leading life science and consumer health brands, I hope that I can contribute to BioGaia’s continued success based on the company’s existing strategy and future opportunities. It is exciting to lead a company where the focus is on sustainable growth through high-quality science, research and development. This will help us to achieve BioGaia’s vision to become the most trusted probiotic brand in the world.

I look forward to continuing BioGaia’s growth journey in the global context where more and more people are prioritising their own and their children’s health.

Theresa Agnew
President and CEO, BioGaia
20 October 2023
 

You find the complete report with tables in the attached PDF or on https://www.biogaia.com/investors/financial-reports/

Teleconference:
Investors, analysts and the media are invited to take part in a teleconference on the interim management statement to be held today, October 20, 2023, at 09:30 a.m. CEST with CEO Theresa Agnew and CFO Alexander Kotsinas. More information about the teleconference is available here: https://financialhearings.com/event/46022

Follow us:
Subscribe to BioGaia’s press releases here
LinkedIn here

Contacts:
Alexander Kotsinas, CFO
Email: alexander.kotsinas@biogaia.com
Phone: +46 735 00 11 11

Mikaela Idermark Stern, Corporate Communications
Email: mikaela.idermark.stern@biogaia.com
Phone: +46 730 95 61 50

About BioGaia
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 or via own distribution in over 100 markets. The class B share of the Parent Company BioGaia AB is quoted on the Mid Cap segment of Nasdaq Stockholm. biogaia.com

This disclosure contains information that BioGaia is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person set out above, at 08:00 a.m. CEST on October 20, 2023.

Tags: