BioGaia AB: Interim Management Statement January - June 2023
SECOND QUARTER 2023Figures in parentheses refer to the corresponding period last year, unless otherwise specified.
- Net sales amounted to SEK 315.2 million (288.1), an increase of SEK 27.1 million, or 9% (excluding foreign exchange effects, 2%).
- Net sales in the Paediatrics segment amounted to SEK 231.7 million (232.7), a change of 0% (excluding foreign exchange effects a decrease of 7%).
- Net sales in the Adult Health segment amounted to SEK 83.0 million (54.2), an increase of 53% (excluding foreign exchange effects, an increase of 43%).
- Operating expenses amounted to SEK 131.4 million (104.6), an increase of SEK 26.8 million (26%). Operating expenses, excluding items affecting comparability, increased by 25% to SEK 132.7 million (106.0).
- Operating profit declined by 6% to SEK 95.0 million (101.3), which corresponds to an operating margin of 30% (35%).
- Adjusted operating profit declined by 6% to SEK 93.8 million (99.9), which corresponds to an adjusted operating margin of 30% (35%).
- Profit after tax amounted to SEK 80.5 million (78.5), an increase of 3%.
- Earnings per share amounted to SEK 0.80 (0.78) before and after dilution .
- Cash flow amounted to SEK -215.7 million (-224.9). Cash flow includes dividends of SEK 292.8 million (301.3).
- Cash and cash equivalents at 30 June 2023 amounted to SEK 1,369.6 million (1,356.3 at 30 June 2022).
Key events in the second quarter of 2023
On 26 April, BioGaia presented the preliminary results for the first quarter of 2023.
On 27 April, BioGaia announced that the company is launching the Prenatal Care product for expecting mothers as well as women planning to conceive.
FIRST HALF 2023Figures in parentheses refer to the corresponding period last year, unless otherwise specified.
- Net sales amounted to SEK 681.0 million (571.9), an increase of SEK 109.1 million, or 19% (excluding foreign exchange effects, 11%).
- Net sales in the Paediatrics segment amounted to SEK 537.7 million (455.2), an increase of 18% (excluding foreign exchange effects, 10%).
- Net sales in the Adult Health segment amounted to SEK 139.6 million (115.0), an increase of 21% (excluding foreign exchange effects, an increase of 13%).
- Operating expenses amounted to SEK 245.9 million (211.6), an increase of SEK 34.4 million (16%). Operating expenses, excluding items affecting comparability, increased by 18% to SEK 244.8 million (208.3).
- Operating profit increased by 24% to SEK 243.0 million (196.6), which corresponds to an operating margin of 36% (34%).
- Adjusted operating profit increased by 22% to SEK 244.2 million (199.9), which corresponds to an adjusted operating margin of 36% (35%).
- Profit after tax amounted to SEK 196.5 million (154.8), an increase of 27%.
- Earnings per share amounted to SEK 1.95 (1.53) before and after dilution .
- Cash flow amounted to SEK -122.0 million (-139.1). Cash flow includes dividends of SEK 292.8 million (301.3).
Key events after the end of the second quarter
On 5 July, BioGaia announced that the company's probiotic Protectis increases SARS-CoV-2 antibody response in adults.
 In view of the 5:1 share split, which took place in May 2022, historical key ratios based on the number of shares have been restated.
BioGaia's net sales for the quarter increased 9% compared with the year-earlier quarter, and the operating margin amounted to 30%. Sale growth for the quarter was lower than in prior quarters due to normally occurring quarterly fluctuations in order intake in our three regions. In this case, it was also due to the timing of when the various market areas lifted pandemic restrictions and replenished stocks. In APAC, which is still recovering following the easing of Covid restrictions, we are seeing strong growth. Sales in EMEA declined, while Americas continued its positive performance.
To gain a better overview of results, we should look at the first half of the year. Net sales for the first half of 2023 amounted to SEK 681 million, an increase of 19% compared with the year-earlier period. This was driven by the impressive performance in APAC, up +33%, driven by China after Covid restrictions were lifted and South Korea with the successful online initiatives conducted there. We also need to add Americas, where our subsidiaries in the USA and Canada are continuing to make strong progress, and Brazil with its focus on our Protectis products. After a successful 2022 for EMEA with sales growth of 52%, our sales growth for the first half of 2023 was lower, primarily due to weak results in France, Italy and Spain following a very strong comeback last year after Covid restrictions were eased. The sales trend to our consumers remains strong.Highlights in the quarter worth mentioning:
Our efforts to increase the visibility and sales of our products on Amazon generated healthy results in all seven of our market areas. Three major local influencers in Japan promoted our oral health product BioGaia Prodentis, which had a direct positive effect on our sales via Amazon in Japan. This meant that in Japan we can now see that our well-established oral health products are now being sold online after having previously mainly been available via dental clinics. This should be seen as another clear example of the strength of our omnichannel strategy.
We have just obtained IQVIA data (life science market data) in Finland, and BioGaia Protectis drops have achieved a market share of 31% after only 18 months of sales directly on the Finnish market and now under our own brand name. This is the result of the robust sales efforts of our local team and the trust shown in the product by Finnish pharmacists, who only recommend probiotics with published clinical evidence.
We ended a study into whether Protectis increased SARS-CoV-2 antibody response in adults. The results suggested that Protectis may improve long-term protection against breakthrough infections after vaccination. The same type of antibodies that are increased by our probiotics in this study have previously been shown to be protective against other breakthrough infections. The study was recently published online in the scientific journal Gut Microbes.
This is my final quarterly report before I leave BioGaia. I would therefore like to thank all of my colleagues for the fantastic journey that we embarked on in 2018, taking us from being a business-to-business company to a business-to-consumer company. I would also like to thank our shareholders for their confidence in our company. BioGaia has some of the best clinically proven probiotic products and one of the strongest global brands in the industry, if not the strongest. And not to mention an effective team of highly talented and motivated employees. Furthermore, we have several ongoing research projects and studies that are opening up new areas for probiotics. Based on these internal and external factors, I am convinced that this is only the beginning of BioGaia's journey. I am proud to have played a part in better positioning BioGaia so that the company can continue to increase its market share in the probiotics market.
President and CEO BioGaia
21 July 2023
You find the complete report with tables in the attached PDF or on https://www.biogaia.com/investors/financial-reports/
Investors, analysts and the media are invited to take part in a teleconference on the interim management statement to be held today, July 21, 2023, at 09:30 a.m. CEST with CEO Isabelle Ducellier and CFO Alexander Kotsinas. More information about the teleconference is available here: https://financialhearings.com/event/46021
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BioGaia is an innovative Swedish healthcare company that develops, markets, and sells probiotic products with documented health benefits. The products are sold through local distribution partners or via own distribution in over 100 markets. The class B share of the Parent Company BioGaia AB is quoted on the Mid Cap segment of Nasdaq Stockholm. biogaia.com (https://www.biogaia.com/)
This disclosure contains information that BioGaia is obliged to make public pursuant to the EU Market Abuse Regulation (EU nr 596/2014). The information was submitted for publication, through the agency of the contact person set out above, at 08:00 a.m. CEST on July 21, 2023.