BioGaia AB: Year-end report January – December 2024

FOURTH QUARTER 2024

(Figures in parentheses refer to the corresponding period last year, unless otherwise specified).

• Net sales amounted to SEK 364.8 million (297.8), an increase of SEK 67.1 million, or 23% (excluding foreign exchange effects an increase of 24%).

• Net sales in the Pediatrics segment amounted to SEK 270.3 million (220.0), an increase of 23% (excluding foreign exchange effects an increase of 24%).

• Net sales in the Adult Health segment amounted to SEK 91.7 million (76.4), an increase of 20% (excluding foreign exchange effects an increase of 21%).

• Operating expenses amounted to SEK 155.1 million (144.9), an increase of SEK 10.3 million (7%). There were no items affecting comparability in the quarter.

• Operating profit increased by 28% to SEK 103.4 million (80.5), which corresponds to an operating margin of 28% (27%).

• There were no items affecting comparability in the quarter.

• Profit after tax amounted to SEK 81.9 million (67.4), an increase of 22%.

• Earnings per share amounted to SEK 0.81 (0.67) before and after dilution[1].

• Cash flow amounted to SEK 99.3 million (100.2).

• Cash and cash equivalents at 31 December 2024 amounted to SEK 1,224.0 million (1,544.2).
   

Key events in the fourth quarter of 2024
 

On November 4, BioGaia announced that Anatom Holding AG, a Switzerland-based investment firm, has acquired 4,979,813 class B shares in BioGaia AB following the exit of EQT Public Value fund.

On December 5, BioGaia announced the launch of BioGaia Gastrus PURE ACTION, a clean ingredient, double-strength, FODMAP-friendly probiotic designed to support individuals with sensitive stomachs.
 

JANUARY – DECEMBER 2024
 

(Figures in parentheses refer to the corresponding period last year, unless otherwise specified).

• Net sales amounted to SEK 1,422.7 million (1,296.5), an increase of SEK 126.2 million, or 10% (excluding foreign exchange effects an increase of 11%).

• Net sales in the Pediatrics segment amounted to SEK 1,093.3 million (1,013.5), an increase of 8% (excluding foreign exchange effects an increase of 9%).

• Net sales in the Adult Health segment amounted to SEK 321.3 million (275,2), an increase of 17% (excluding foreign exchange effects an increase of 18%).

• Operating expenses amounted to SEK 607.4 million (507.1), an increase of SEK 100.3 million (20%). Operating expenses, excluding items affecting comparability, increased by 9% to SEK 553.1 million (505,9).

• Operating profit decreased by 4% to SEK 423.4 million (443.1), which corresponds to an operating margin of 30% (34%).

• Adjusted operating profit increased by 8% to SEK 477.6 million (444.2), which corresponds to an adjusted operating margin of 34% (34%).

• Items affecting comparability primarily include an impairment loss attributed to the MetaboGen acquisition of SEK 51.2 million. Furthermore, items affecting comparability also includes litigation fees in connection with the termination of the distribution agreement in Italy of SEK 2.1 million.

• Profit after tax amounted to SEK 351.4 million (365.4), a decrease of 4%.

• Earnings per share amounted to SEK 3.48 (3.62) before and after dilution[1].

• Cash flow amounted to SEK -330.6 million (66.6). Cash flow includes dividends of SEK 696.8 million (292.8).

• The Board proposes that the upcoming Annual General Meeting on 7 May 2025 approves an ordinary dividend according to policy of SEK 1.95 (1.90) per share, plus an extra dividend of SEK 4.95 (5.00) per share resulting in a total dividend of SEK 6.90 (6.90) per share, corresponding to SEK 698.0 million (696.8).

• The Board further proposes a provision to the Foundation to Prevent Antibiotic Resistance of SEK 5.0 million (4.4).
   

Key events after the end of the fourth quarter of 2024
 

On January 16, BioGaia announced that it terminated the distribution contract with its partner in France to take the business direct.

On February 4, BioGaia announced that the results for the fourth quarter would exceed market expectation.

[1] Key ratio defined according to IFRS. For definitions of other key ratios, see page 17 in the complete report.

CEO’S COMMENTS
 

Another year of strong growth

During my first year with BioGaia, I have experienced the strength of the company’s business platform and distribution network, its excellent reputation within the medical community, and the strength of the BioGaia brand. I see our opportunities and challenges, as well as the way forward to sustain continued strong long-term growth. 2024 has been a dynamic and rewarding year, and one where we have also created new growth opportunities for the business.

As we close the books for 2024, we can proudly state that we have achieved another year of strong growth, with all of our regions showing positive results. This is despite external economic and geopolitical challenges, as well as other global uncertainties. Net sales for 2024 reached SEK 1,422.7 million, representing a solid increase of 10% compared to the previous year. Adjusted for currency effects, this increase was 11%. For the fourth quarter, net sales reached SEK 364.8 million, an increase of 23% (24% excluding foreign exchange effects) and an operating margin of 28% (27%). Importantly, we have maintained robust operating margins while continuing to invest in the expansion of our direct distribution business to over 30% of our sales, reinforcing the foundation for sustainable growth.

Increased interest in our adult products with continued strength of our pediatrics segment

The Pediatric segment had solid growth with an increase of 8% during the year, with both Protectis drops and Protectis chewables in growth.  Our Adult segment increased by 17% with standout performances for our products Prodentis and Gastrus tablets. For our adult business, we will continue to focus on the gut health and oral health areas where we see an increasing opportunity for penetration of our products.

Growth across regions with stronger performance in APAC and Americas

In 2024, we achieved significant growth in online sales across most key markets. In the USA, we delivered excellent results and robust performance in the quarter and for the year, despite challenges from Nestlé's discontinuation of the BioGaia licensed (Baby Drops) product in 2023. In Canada, our online sales have also seen substantial growth, particularly through Amazon. We have seen a strong uptick in Prodentis sales in Canada throughout the year and in the quarter.

Similarly, in the APAC region, we are driving online sales growth through effective digital marketing and successful campaigns, particularly in South Korea and China. We successfully launched our direct markets in Australia and New Zealand, and within just half a year, they have achieved success. Protectis drops are now available in major pharmacies and grocery stores, and their proven efficacy and safety have been well-received by doctors and midwives.

Latin America performed well in the fourth quarter driven by increased sales in Brazil, thanks to effective product promotions and increased marketing efforts. Overall, the Latin America region has achieved double-digit growth for both the quarter and the year.

The Europe, Middle East and Africa region achieved strong growth in the quarter and a smaller percentage for the year, despite challenges that persist in some markets. In Italy, we have experienced transitional delays with our local distributor, Recordati and an increase in local market competition. We have now built a growth plan in collaboration with our Italian partner and we are in full swing on execution of that plan. In France, we recently terminated our distribution contract with our local partner and are preparing to take our business direct later this year. The UK continues to grow, with expanded distribution in wholesalers and pharmacies such as Boots. Finland is growing strongly and taking market share – we are the market leader in probiotic baby drops and we are growing in digestive health.

Gastrus demonstrates effective IBS symptom relief

This year, we published two clinical studies demonstrating that our gut health product, Gastrus, a combination of two L. reuteri strains, can effectively improve irritable bowel syndrome (IBS) symptoms. One study conducted in Mexico and Chile with 140 participants confirmed a clear improvement in IBS scores and anxiety levels after six weeks of treatment. The second study, conducted in Sweden with 75 participants with IBS-D, showed that Gastrus reduced inflammation, a key symptom of the condition. IBS is a prevalent disorder, affecting over 10% of the global population, and addressing its symptoms is crucial for improving quality of life.

Product launch within adult gut health

In the fourth quarter, we launched BioGaia® Gastrus® PURE ACTION, a clean-label swallowable capsule that is a FODMAP Friendly formula developed with consumer unmet needs in mind. Formulated with patented probiotic strains L. reuteri DSM 17938 and L. reuteri ATCC PTA 6475, the product supports individuals with occasional digestive issues and sensitive stomachs. It is vegan-friendly and free from sweeteners, lactose, and gluten. This addition to BioGaia’s portfolio is a good complement to BioGaia® Gastrus® chewables and offers another clinically proven solution for improved gut health and quality of life.

Building trust through dual marketing: healthcare professionals and consumers        

This year, we strengthened our dual marketing strategy, which leverages both medical marketing and consumer marketing. By employing these complementary approaches, we effectively convey the scientific benefits of our products while simultaneously enhancing brand awareness and building trust with healthcare professionals and consumers alike.

We have participated in leading medical congresses to raise brand awareness, strengthened our global network of researchers and healthcare professionals, educated stakeholders on the health benefits of probiotics, and showcased our research and products. Key congresses where we had a strong presence include Probiotics, Prebiotics, Postbiotics in Pediatrics (PPPP), the European Society for Paediatric Gastroenterology, Hepatology, and Nutrition (ESPGHAN), United European Gastroenterology (UEG), the World Congress of Pediatric Gastroenterology, Hepatology, and Nutrition (WCSPGHAN), and the European Pediatric Association (EPA/UNEPSA).

To enhance global brand awareness and drive conversion among consumers, we built a new, comprehensive digital consumer campaign in 2024. This global initiative, developed in close collaboration with several of our direct markets, highlights two key product areas: gut health and oral health, reinforcing our commitment to improving well-being worldwide.

A solid foundation for sustainable growth

We remain focused on building BioGaia into a stronger global business. Investments in groundbreaking biotics science, new product development, commercial activities, digital transformation, consumer insights, and operational optimization underpin our strategy. Our commitment to delivering long-term value through innovation, targeted marketing, and sustainable growth remains unwavering.

Looking ahead, we are confident in our ability to navigate challenges and drive growth above industry. BioGaia is well-positioned to capture opportunities in the evolving global health landscape.

Theresa Agnew
President and CEO, BioGaia
February 12, 2025

You find the complete report with tables in the attached PDF or on https://www.biogaiagroup.com/investors/reports-and-presentations/financial-reports

Teleconference:
Investors, analysts, and the media are invited to take part in a teleconference on the interim management statement to be held today, February 12, 2025, at 09:30 a.m. CET with CEO Theresa Agnew and CFO Alexander Kotsinas. More information about the teleconference is available here: https://financialhearings.com/event/50228.

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Contacts:
Alexander Kotsinas, CFO
Email: [email protected]
Phone: +46 735 00 11 11

Mikaela Idermark Stern, Corporate Communications
Email: [email protected]
Phone: +46 730 95 61 50

About BioGaia
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. biogaiagroup.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. CET on February 12, 2025.