Q4 2021: Strong development in EMEA, Americas affected by customer dynamics

Significant events during the fourth quarter

• Net sales decreased by 8% (-9% adjusted for currency effects) to SEK 170 m (185).
• The EBITDA margin was 32% (25%).
• Strong performance in EMEA and APAC during the quarter, while the Americas continued to be affected by earlier communicated customer dynamics.

Significant events during full-year 2021

• Net sales decreased by 8% (-3% adjusted for currency effects) to SEK 658 m (717).
• The EBITDA margin was 28% (27%).
• Several important partnerships were entered during the year, including Oriflame and Sinopharm Foreign Trade.
• The pan-European launch with Perrigo contributed to strong growth in EMEA
• Acquisition of shares in the New Zealand company Blis Technologies linked to a long-term strategic partnership.
• The Board of Directors proposal to the 2022 Annual General Meeting is for a dividend of SEK 1.30 (1.10) per share corresponding to SEK 14.8 m (12.5) for the 2021 financial year.

CEO Comments

A year of both challenges and strong development

Our fourth quarter largely reflects our performance in the whole of 2021. Total net sales for the year decreased by 3% adjusted for currency effects and can be completely explained by the performance in the Americas region. We did not entirely meet our long-term financial profitability target during the year, but given the lower sales volumes, an EBITDA margin of 28% is satisfactory. We ended the year with an improved EBITDA margin of 32% in Q4, which can largely be explained by a favorable product mix and increased volumes in our own manufacturing facilities.

During the year, the regional performance went in different directions. The Americas region had a challenging year compared to a strong 2020, which was affected by positive demand driven by Covid-19. During the year, we lost orders from two major customers and despite hopes of regaining ground here later in the year, we have to state that they will probably not return soon. These two customers accounted for around SEK 50 m of the deficit compared to 2020 over the year. All in all, this meant that the region experienced a challenging year with an exchange rate adjusted decrease in sales of 8%. The last quarter was certainly in line with the previous quarter but decreased by 19% adjusted for currency effects against the strong Q4 of 2020. We believe that the turbulence we have seen in the region in 2021 is temporary and the development going forward will be more stable.

The EMEA region performed well in 2021 and delivered its strongest year ever with growth of 17%. The year also ended strongly with growth of 27% in Q4. During the year, we built up important key customers and signed agreements with new customers, which we expect will develop strongly in the long term. We are therefore optimistic about future developments in the region.

The APAC region ended the year well and achieved year-on-year growth of 6%. Comparative figures for the second half of 2020 were weak due to stock accumulation during the first half of 2020. The region continues to be a priority market for Probi, and we see good opportunities for continued growth through new customers in 2021 and a strong pipeline of potential new customers.

To improve our research capacity and competitiveness, we also initiated a thorough rebuild and upgrade of our laboratory in Lund in 2021 and plan to move in during the first half of 2022. This is an important investment for us that strengthens our ability in pre-clinical research and lead to greater opportunities for product development.

After completing most of the upgrade of our manufacturing facilities in the USA, we have worked on streamlining and stabilizing production in parallel with the technological transfer from Blis Technologies. During the latter half of 2021 we have experienced some supply chain issues, but we expect this to stabilize in 2022. Greater production capacity is expected to have a positive effect on our margins in the future.

Overall, 2021 was a good but also a challenging year. We do not know what the world has to offer in 2022, but with a number of exciting partnerships underway, greater production capacity and a completely new laboratory on the starting blocks, I feel very confident about the future. We stand by our financial targets and together with all our fantastic employees, I am convinced that we will achieve them.

Tom Rönnlund
CEO

Invitation to teleconference
Probi's Year-end report for 2021 was published on February 2, 2022 at 8.00 a.m. 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 56 64 27 03. The presentation is available at www.probi.com and www.financialhearings.com

Contact
Tom Rönnlund, CEO, Tele: +46 (0)46 286 89 40, E-mail: trd@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 and the Swedish Securities Market Act. The information was submitted for publication, through the agency of the CEO and CFO, on February 2, 2022 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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