Q1 2023: Positive one-off effects contributed to growth

Important events during the first quarter

• Net sales increased by 11% (2% adjusted for currency effects) to SEK 172 m (155).
• The EBITDA margin amounted to 28% (25).
• Positive one-off effects totaling SEK 18 m regarding postponed orders from Q4 2022.
• Takeover of the distribution of our own brand Probi^® in Sweden from April 1, 2023. New market organization established.
• First commercial batch of spores produced.
• Anita Johansen appointed CEO of Probi on March 30. Von Carlson took over as the new VP of Operations on March 27.

CEO Comments

A strengthened organization will see growth return

With good help from exchange rates and one-off effects, we started the year with growth of 11% and an EBITDA margin of 28%. Growth amounted to 2% adjusted for currency effects, and postponed orders from Q4 had a one-off effect of SEK 18 m. Sales in the various regions have varied greatly during the quarter and do not provide a fully representative picture of the underlying position. Our assessment is that net sales for the first half of the year will be on par with or slightly below last year.

During Q1, the EMEA region was impacted by sell-out of stock by our former distributor in Sweden, affecting net sales, and decreasing in total in the region by 33% compared to the previous year. From April 1, we will distribute our own brand Probi^® in Sweden. We have received a very good response so far and are satisfied with the contract negotiations that have been completed. Our sales are expected to pick up at the end of Q2, as a number of customers have purchased safety stock in connection with this transition. In general there is a certain cautiousness in the EMEA region’s markets, but at the same time it is a stable region consisting of many long-term contract customers.

The APAC region delivered its strongest ever quarter with growth of 55%. At the same time, the fluctuations between the quarters are high and our assessment is that net sales will be at last year’s level for the first six months. The growth potential in the region remains high with China as the driving force expanding its share of the region's sales even though Australia remains the largest market.

In the Americas region, we increased net sales by 18% during Q1, driven by currency effects and the postponed orders of SEK 18 m from Q4. Adjusted for this, growth was negative. The underlying development is mainly due to a slowdown in the market, where we saw a lower order frequency from our customers.

I was appointed CEO of Probi on March 30, which is a huge honor. At the same time, it means that we will start recruiting a new VP R&D. During Q1, we also strengthened management with a new VP of Operations, Von Carlson. He has a solid background in the production of probiotics from several companies, including DuPont Biosciences. After a couple of years of major investments in our manufacturing, we are entering a new phase where one of Von's most important missions will be to optimize our internal processes to increase efficiency. Against the background of our weak sales trend, we are also reviewing how we best meet our customers' needs and how we can become more efficient internally.

The results of our Gut-brain study are being finalized for publication. In dialogue with our customers, we have noted significant interest in this area and the publication of the study will give us the scientific support to be able to launch a new Gut-brain product, which we plan to do in the autumn.

We have not lived up to our goals and at the same time find ourselves in a challenging period. It is my top priority to get Probi back on the path to growth. Together with my management, I will invest a lot of time in improving our own processes and working methods. It will show us the way back to growth.

Anita Johansen
CEO
 

Invitation to teleconference

Probi's interim report for Q1 2023 will be published on April 26, 2023, at 8:00 a.m. On the same day at 10:00 a.m., a telephone conference will be held with Anita Johansen, CEO and Henrik Lundkvist, CFO, who will present the report. The telephone conference can be accessed via the link https://conference.financialhearings.com/teleconference/?id=200639.  The presentation is available at www.probi.com and www.financialhearings.com.
 

Contact

Anita Johansen, CEO, Telephone: +46 (0)46 286 89 48, E-mail: anita.johansen@probi.com
Henrik Lundkvist, CFO, Tele: +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 26, 2023 at 08:00 CET. This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording prevails.