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Q1 2021: Good growth in the first quarter

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Significant events during the first quarter

  • Net sales increased by 9% (20% adjusted for currency changes) to SEK 171 m (158).
  • EBITDA margin was 28% (19%).
  • First deliveries related to the Pan-European agreement with Perrigo, which includes the launch of Probi's ClinBac™ concept in 14 European countries.
  • Strategic partnership with the Chinese pharmaceutical company China National Pharmaceutical Foreign Trade Corporation (Sinopharm Foreign Trade) a wholly owned subsidiary of China National Pharmaceutical Group Corporation (Sinopharm) for the launch of three of Probi's ClinBac™ concepts in China.
  • New bone health study in collaboration with La Trobe University in Australia to investigate the effects of Probi® Osteo on Australian women.

CEO Comments

A good start to 2021

We started the year with good growth of 9% and reached net sales of SEK 171 m. Underlying growth was even stronger and currency-adjusted growth in the first quarter was 20%. The EBITDA margin was 28%, a clear strengthening against the weak first quarter of last year. The improvement comes from both a stronger gross margin and lower operating expenses during the quarter.

The Americas region continues to develop well with currency-adjusted growth of 22%. However, the weakening of the US dollar had significant currency effects and the increase in net sales remained at 6%. We are seeing continued good demand for our products in all health areas. In 2020, we signed several new customer contracts within the ClinBac™ range and we expect a continued increase in that part of our product portfolio in the future.

Particularly pleasing this quarter was the performance in the EMEA region, where net sales increased by 19%. The region therefore reported its strongest quarter ever. Here we can see the clear effects in that we have succeeded in building new customer relationships that strengthen our position in the region. During the quarter, we delivered the first orders to Perrigo, which over time will launch three new products based on Probi's concept in gastric and immune health.

The APAC region also recovered after a weak second half of 2020 and net sales increased by 5%. Our new team in the region has been established and we have high hopes that the region will grow again. During the quarter, we entered into a partnership with one of China's largest pharmaceutical companies, China National Pharmaceutical Foreign Trade Corporation (Sinopharm Foreign Trade). The collaboration is an important success for Probi in the region. With a strong position in China and its scientific focus, Sinopharm Foreign Trade will not only contribute to the establishment of Probi's products, but also create market credibility for our product portfolio in the country and region.

After a 2020 with pandemic-related challenges to initiate clinical studies, we have now been able to resume a high level of activity in research and development. We intend to increase our investments in R&D during the year and have, among others, started a study in collaboration with La Trobe University in Australia to investigate the effects of Probi® Osteo on Australian women.

Last year, the fluctuation between quarters increased as a consequence of the uncertainty following the outbreak of Covid-19. We expect a continued relatively high fluctuation between quarters this year as well. Underlying demand is good and according to industry statistics, continued global growth for probiotic products is expected. From Probi’s viewpoint, we continue to see our opportunities brightly and we have started 2021 with several new customer collaborations that we will continue to develop in the coming years. Our growth agenda is fixed despite the different circumstances with continued restrictions in society.

After a year of the pandemic, interest in self-care may never have been greater than it is now. At the same time, we want to return to a more normal situation as soon as possible. I am convinced that what we have seen over the past year has created a genuinely increased interest in health products and that Probi is perfectly positioned for that development.

Tom Rönnlund

CEO

Invitation to teleconference

Probi's interim report for Q1 2021 will be published on April 23, 2021 at 8.00 am. On the same day at 10.00, a teleconference will be held with Tom Rönnlund, CEO and Henrik Lundkvist, CFO, who will present the report. The conference call can be accessed on +46 (0)8 50 55 83 68. The presentation is available at www.probi.com and www.financialhearings.com

Contact

Tom Rönnlund, CEO, Telefon: +46 (0)46 286 89 40, E-mail: trd@probi.com
Henrik Lundkvist, CFO, Telefon: +46 (0)46 286 89 41, E-mail: henrik.lundkvist@probi.com

This information is information that Probi AB is obliged to make public pursuant to the EU Market Abuse Regulation. The Information was submitted for publication, through the agency of the CEO and CFO, on April 23, 2021 at 08:00 CET. This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording prevails.

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