Q3 2024: Tangible improvement in operations

Important events during the third quarter

• Net sales in Q3 amounted to SEK 143.7 m, corresponding to a decrease of 7.9% compared to last year (-5.1% adjusted for currency effects).
• The EBITDA margin was 20.1%, corresponding to an increase of 2.0 %-points compared to last year.
• Probi successfully implemented a new global ERP system, streamlining operations and enhancing efficiency across key business functions.
• A new study suggests that consuming Probi's proprietary probiotic strain HEAL9^® may serve as a potential therapeutic option for mitigating mild cognitive impairment and Alzheimer’s disease.
• In September, Blis Technologies Limited (BLIS) announced to the Stock Exchange (NZX) that a key customer of BLIS has improperly filed a patent application for its BLIS K12™ and M18™ fermentation processes, thereby unduly disclosing confidential information. In the short term, it is not expected that the circumstances will materially affect the distribution and manufacturing by Probi of BLIS strains. Currently, it is not possible to make any assessment of future long-term impact, if any. 

Important events after the end of the period

• Probi’s new unique food supplement Probi Sense, focused on cognitive function and mental well-being, was commercially launched in the Nordics.
• Probi started collaboration on a research project with Global BHP BrainTrust and FINGERS Brain Health Institute, aimed at reducing dementia risk in women.

CEO Comments

Tangible improvement in operations

The third quarter was impacted by regional fluctuations, with certain markets performing as expected, while others faced challenges. Sales in the Americas saw a slight decline, whereas EMEA showed a stable development. In APAC, our smallest but most promising growth segment, progress fell short of expectations, primarily due to deteriorated macroeconomic dynamics in China. Looking at our overall year-to-date sales progress, we are currently tracking on par with last year’s performance.

Despite the slowdown in China, we continue to engage heavily with current and new potential customers in the Asian region, preparing for improved conditions as product implementation cycles in our industry are quite long. In September we arranged a very successful customer workshop in Bangkok with many customers participating from across APAC. We also exhibited at the Vitafoods Asia trade show, an ideal platform to showcase our latest innovations.

Initiatives to drive sales growth remain our primary focus, closely integrated with continuing operational improvements to enhance efficiency. By streamlining processes and optimizing resources, we aim to not only drive top-line revenue and improved margins, but also create a more agile and resilient organization. Our optimization efforts in the US internal processes and production-related procedures over the past year are now yielding tangible results, with improvements already visible. Overall, we are continuing to make meaningful strides in our transition to reshape and elevate Probi – enhancing our operational capabilities, strengthening and reinventing our market presence, and building a more customer-driven organization focused on creating state-of-the-art advanced biotic solutions.

A part of our strategic revamp includes new branding, and in the Nordic B2C segment we have already started rolling out updated products, available through pharmacies. This also includes the recent commercial Nordic launch of our unprecedented solution for improved cognitive function and mental well-being: Probi^® Sense.

This past year has been a pivotal period of internal transformation aimed at unlocking our potential and delivering increased value to our customers and stakeholders. While we are proud of the progress made so far, we recognize that the journey is ongoing, and further work remains as we continue this transformation. We are committed to maintaining a steady course, with a focus on long-term growth and sustainable success, ensuring that Probi can flourish and seize new opportunities as they arise.

Anita Johansen

CEO

Invitation to teleconference

Probi’s interim report for Q3 2024 was published Tuesday October 22, 2024, at 8:00 a.m. On the same day at 10:00 a.m., a teleconference will be held with Anita Johansen, CEO and Per Lindblad, CFO, who will present the report. If you wish to participate via webcast please use the following link: https://ir.financialhearings.com/probi-q3-report-2024.

The presentation is available at www.probi.com and www.financialhearings.com.

Contact
Anita Johansen, CEO, Tel: +46 (0)72-399 48 21, E-mail: anita.johansen@probi.com
Per Lindblad, CFO, Tel: +46 (0)73-851 29 60, E-mail: per.lindblad@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 October 22, 2024 at 08:00 CET. This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording prevails.