BioGaia AB: Interim Management Statement - January - March 2023
FIRST QUARTER 2023Figures in parentheses refer to the corresponding period last year, unless otherwise specified.
- Net sales amounted to SEK 365.8 million (283.9), an increase of SEK 82.0 million, or 29% (excluding foreign exchange effects, 19%).
- Net sales in the Paediatrics segment amounted to SEK 306.0 million (222.5), an increase of 37% (excluding foreign exchange effects, 27%).
- Net sales in the Adult Health segment amounted to SEK 56.6 million (60.8), a decrease of 7% (excluding foreign exchange effects a decrease of 14%).
- Operating expenses amounted to SEK 114.5 million (106.9), an increase of SEK 7.6 million (7%). Operating expenses, excluding items affecting comparability, increased by 10% to SEK 112.1 million (102.2).
- Operating profit increased by 55% to SEK 148.0 million (95.3), which corresponds to an operating margin of 40% (34%). Adjusted operating profit increased by 50% to SEK 150.4 million (100.0), which corresponds to an adjusted operating margin of 41% (35%).
- Profit after tax amounted to SEK 115.9 million (76.3), an increase of 52%.
- Earnings per share amounted to SEK 1.15 (0.76) before and after dilution.
- Cash flow amounted to SEK 93.7 million (85.8).
- Cash and cash equivalents at 31 March 2023 amounted to SEK 1,580.8 million (SEK 1,571.7 million at 31 March 2022).
- On 29 March, BioGaia announced that the company's CEO Isabelle Ducellier intends to leave the company and take up employment with another company. Isabelle Ducellier will remain in her position until 30 September 2023.
- On 31 March, BioGaia announced that the company is launching a probiotic skin ointment for infants and children, Aldermis.
- 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 women before and during pregnancy.
 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.
Following on from another record year in 2022, when sales passed SEK 1 billion, our multi-year growth has continued with a very strong first quarter when we reported net sales of SEK 366 million. This is an increase of 29% compared with the year-earlier period (19% excluding changes in foreign exchange rates) driven by two regions, the Americas and APAC. When we concluded 2022, our five markets with direct sales accounted for about one quarter of total sales. Now with the addition of direct sales in Canada, we can realise important synergies with the USA market.
In the Americas, we can see continued growth of 64%, driven by BioGaia Canada, the new subsidiary that was established following the termination of the agreement with our former distributor Ferring. As I have said, we can already see operating synergies with BioGaia USA and our online channels. BioGaia USA has continued its double-digit growth, driven by sales via Amazon. For the first time in the history of BioGaia in the USA, we sold for more than USD 1 million via Amazon during a single month. We also decided to launch our own first cosmetic probiotic product, Aldermis, a skin ointment for infants and children with dry and sensitive skin, as a good complement to our Paediatrics product portfolio. LATAM is overperforming thanks to the successful regional launch of Gastrus and the continuing success of our Protectis drops in Brazil.
With net sales of SEK 81 million, the APAC region is once again growing with an impressive sales increase of 72%, mainly due to the reopening of China after another wave of Covid. South Korea, the Philippines, Malaysia and Thailand also made significant contributions to total growth. Sales on Amazon Japan noted a strong upswing during the first quarter supported by a number of influencer campaigns in conjunction with the relaunch of BioGaia Prodentis. As a result, the product was ranked number one in Amazon Japan's Drugstore category for a whole week. This success reinforces our conviction that the implementation of our omnichannel strategy with Amazon is working and will be highly beneficial in many more Amazon marketplaces worldwide.
After a surge in sales of 52% in EMEA in 2022 due to the recovery from Covid, sales of SEK 143 million during the first quarter represents a year-on-year decrease of 5%. Some inventory accumulation also occurred during the fourth quarter prior to the price increase.
Excellent results in Turkey, Poland, France and Belgium, as well as a slowdown in Italy (following very strong growth in 2022) and Romania are also events worthy of note.
Despite cautious consumer spending during times of high inflation and the concern about the future economic outlook, demand for clinically proven probiotics products remains healthy.
It is also worth noting that BioGaia's financial situation is very robust, and during times such as these with limited access to new capital in the biotech sector, we have no such needs in order to drive our growth, develop new products, finance possible acquisitions, and continue to disburse attractive dividends.
Lastly, as announced on 29 March, I have, with mixed feelings, decided to leave BioGaia and instead join Orkla as CEO of the Orkla Health portfolio company. To ensure a smooth transition, I will remain in my current position until the end of September 2023. I am leaving a BioGaia that is in a good position to develop into the world's most trusted probiotic brand, led by a highly competent and completely dedicated team around the world. I have no doubt that BioGaia will continue on its successful journey. I am deeply grateful for these five years of intensive transformation from a business-to-business company to a business-to-consumer company.
President and CEO BioGaia
5 May 2023
Teleconference: Investors, analysts and the media are invited to take part in a teleconference on the interim management statement to be held today, 5 May 2023, at 9:30 a.m. CEST with CEO Isabelle Ducellier and CFO Alexander Kotsinas. More information about the teleconference is available here: https://financialhearings.com/event/46020.
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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 May 5, 2023.