Q4 2023: Eventful quarter caps transformative year
Important events during the fourth quarter
- Net sales increased by 8% (9% adjusted for currency effects) to SEK 156 m (144).
- The EBITDA margin amounted to 12% (11) or 15% adjusted for items affecting comparability.
- Probi launchd Probi® Sensia, a brand new product concept in mental health.
- Probi launched two new scientifically proven synbiotic solutions together with Clasado Biosciences at Supply Side West in Las Vegas.
- Per Lindblad took over as CFO on November 1st.
- The Board of Directors proposed a dividend for the fiscal year 2023 of a total of SEK 14,8m, corresponding to SEK 1,30 per share.
Important events during the full year 2023
- Anita Johansen was appointed CEO.
- Probi established its own B2C market organization and took over the distribution and sales of the Probi® brand in Sweden. Probi also expanded into Norway.
- Probi strengthened its position in North America by becoming sole distributor of BLIS K12™ and BLIS M18™ in the US and Canada.
- Probi launched the spore-forming probiotic Weizmannia coagulans GX-1, a Probi strain with high stability fit for beverages and confectionary type formats.
- Probi published results of the 3rd clinical study on HEAL9™ in gut-brain area.
- Probi was granted 23 new patents in 2023.
CEO Comments
Concluding a year of decisive and transformative action
Rounding off my first year leading Probi it is clear that 2023 was recognized by both challenges and remarkable achievements. I am particularly proud of the launch of our new concept Probi® Sensia, as well as the partnership with Clasado Biosciences around Synbiotics – both marking historical milestones for Probi.
Overall, 2023 was a tough year characterized by a general market softness, especially in the North American market. Our sales totaled SEK 628 m, an increase of 1.5% compared to the previous year (-2.0% adjusted for currency effects). A stabilization of the market was seen throughout the second half of 2023, and in the fourth quarter our sales amounted to SEK 156 m, which was 8.4% higher than the same period last year (9.1% adjusted for currency effects).
By region, the full-year result in North America was on par with last year. EMEA declined, mainly due to the reduction of safety stock levels with some of our B2B customers. In APAC the full-year growth was an impressive 26%, and we see further potential to grow.
Probi’s EBITDA margin for the full year was 17.1%. Adjusted for costs affecting comparability, the profitability amounted to 20.4%. The reduced margin primarily relates to our ongoing optimization program in manufacturing, which adds some temporary expenses as we address certain unwanted inefficiencies and prioritize long-term improvements. The program is progressing, and we are confident that this is a worth-while investment that will gradually contribute to greater profitability over time.
Q4 was largely characterized by “Probi Reinforced”, our new strategic direction alongside revised financial targets for 2024-2028. In general, we have put a lot of effort into strengthening our strategy and organizational capabilities for the coming years. These initiatives are expected to start coming into effect by 2025, as 2024 is expected to mainly be a transitional year.
In terms of commercialization, several major events took place in Q4. First, we hosted a 2-day customer workshop in Thailand for APAC customers and partners. Later in October we exhibited at the leading event for food supplements, Supply Side West, in Las Vegas. At both events we introduced new innovations that underline our ability as pioneers in probiotics.
Probi launched Probi® Sensia, a whole new concept within cognitive health, based on a strong clinically proven effect. We also launched two new synbiotic solutions in partnership with Clasado Biosciences, combining their scientifically proven prebiotic with the extensively studied strains of Probi Defendum® and Probi Digestis®. These new concept launches in cognitive health and synbiotics represent major milestones for the company and holds significant commercial potential.
The initial feedback from our customers has been very positive. Sales cycles to implement new ingredients into our customers brands however are long, and our teams will continue supporting these key launches with activities throughout 2024.
Additionally, several changes were made to reinforce the organization over the year. During Q4 we further strengthened our new management team with CFO Per Lindblad. He has highly relevant financial and business development experience from specialty ingredients industries, including probiotics, and his contributions will be important in further developing our business.
Overall, we have laid a strong foundation and readied the organization for accelerated growth in the coming years. Our focus remains steadfast on innovation, customer focus, and achieving operational excellence on our continued journey. As we now enter a new chapter I am filled with optimism, looking forward to continuing pushing boundaries and pioneering the probiotics market with effective solutions that improve people’s health.
Anita Johansen
CEO
Invitation to teleconference
Probi's interim report for Q4 2023 was published on January 26, 2024, at 8:00 a.m. On the same day at 10:00 a.m., a teleconference is held with Anita Johansen, CEO and Per Lindblad, CFO, who will present the report. The telephone conference can be accessed via the link https://conference.financialhearings.com/teleconference/?id=50047274. The presentation is available at www.probi.com and www.financialhearings.com.
Contact
Anita Johansen, CEO, Tel: +46 (0)46 286 89 48, E-mail: anita.johansen@probi.com
Per Lindblad, CFO, Tel: +46 (0)46 286 89 41, E-mail: per.lindblad@probi.com
This information is information that Probi AB is obliged to make public pursuant to the EU Market Abuse. The information was submitted for publication, through the agency of the CEO and CFO, on January 26, 2024 at 08:00 CET. This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording prevails.