BioGaia AB (publ)

Hi, this is Theresa Agnew. We're here for our Q1 results. In Q1, our sales were 370 million sec, which is an increase of 1%, primarily driven by growth in Asia Pacific and Europe, Middle East, Africa. This is despite record high sales in Q1 of 2023. So we were lapping the strongest quarter we've ever had at Biogaia. Sales in EMEA increased by 13%, and in Asia Pacific increased by 6%, while the Americas region decreased by 14%. Our EBIT of 143 million SEC decreased by 3%, and our EBIT margin for Q1 is at 39%. We had a number of key events and launches in the quarter. In France, we launched BioGaia Predentis. In BioGaia Canada, we launched a new skin health product called BioGaia Aldermis. We had previously launched Aldermis in the U.S. in 2023, and due to the success of that launch, we decided then to launch in Canada in March of 2024. The U.S. business also launched a new product range called BioGaia Nurture and Grow, which focuses on gut health, immune health, and oral health. Our sales by segment. For the pediatrics business, our sales decreased by 4%. This is primarily due to the Americas, mainly in the U.S., where last year we had sales of the Gerber product, where Gerber has discontinued the BioGaia products. So now we are lapping that discontinuation in 2023. As well as Brazil, we had a phasing of large orders in Q4 of 2023. So lower orders in Q1 in Brazil. Our adult sales increased by 32%. And this is mainly due to our sub-brand gastrous in the US and Spain. as well as predentists in the US and Germany. In terms of the regions, as I said before, Europe, Middle East, Africa increased by 13%. This was mainly in Spain, South Africa, the UAE. in Asia Pacific increased by 6%, primarily in Indonesia, Japan and Thailand. And as I said previously, America has decreased by 14%, mainly Brazil, Mexico and the US. And now Alex will take you through the specifics on the financials.

Thank you, Theresa. So to summarize, Like we heard, we had a total revenue of 370 million, which is 1% growth compared to the same quarter in the previous year. And we have an operating profit of 143 million, which is a 3% decline compared to the same quarter in the last year. The margin was 39% and the earnings per share at 1.21 SEC per share. Operating cash flow at 52 million versus 98 million last year. If we look at the organic growth, we had an organic growth of 2% and we had a negative currency effect of 1%. So the currency effect in the quarter was quite small. Moving on to the gross margin, our overall margin was stable at 72%. Within pediatrics, margin increased from 73% to 75%, and within adult health, it declined from 63% to 57%. The main reason for the variations in the margin, especially in adult health, is changes in the product mix. So, for example, we had, as we mentioned previously, we had a quite large increase in sales in, for example, Prodentis and Gastros. And those products have slightly lower gross margin than, for example, the protective tablets. So that explains that mix change in the quarter, explains why the margin is somewhat lower for the adult segment. Moving on to the operating expenses. Our operating expenses increased with 7%. If we look at the different lines, we see that our sales and marketing costs grew 9%. mainly due to a higher activity level within different markets. As for the R&D costs, these costs grew 34%. However, we have to remember they grew from a lower base. Due to that, we had quite low cost last year and the year before due to COVID restrictions on clinical studies. We're more normalizing the cost now. That is why costs are increasing within R&D. Look at the administration. The cost grew with 42%. The cost here include expenses for the litigation in Italy. And we have a total of extraordinary costs of about 5 million, which has hit mainly this line of admin costs. Then we have a line called other OPEX, which was a positive of 12 million versus 2 million last year. And this is due to increase in exchange gains. So we have, so to speak, a negative cost here. So total OPEX then, 122 million. And then if you exclude adjustments of 5 million, we have an OPEX of 118 million versus 112. So it grew 5% if you would deduct the one-off items. Look at the P&L to summarize then. Sales grew 1%. OPEC 7% and EBIT minus 3%. We have a margin of 40%, 39% and excluding the one offs, a margin of 40% versus 41 last year. Looking at the cash flow, cash flow from operating activities decreased by 47% to 52 million versus 98. And this is mainly due to higher costs in working capital due to increased receivables. There is nothing special, it's more normal fluctuations within the quarter and between the quarters that make this. So we will see in the coming quarter that cash flow from those receivables will come in. And then cash flow for the period then 41 million and cash at the end of the period of 1.6 billion SEK. And as we announced before, we will pay out dividends that will be decided by our annual general meeting today. There will be some dividends payments of 6.9 SEK per share and a total of approximately 700 million out of that cash position of 1.6 billion SEK. And with that, I hand over to Theresa for some concluding remarks.

So in summary, despite record high sales in our same period, Q1 2023, our Q1 sales grew 1%. Our region of Europe, Middle East, Africa is back to growth with an increase of 13% due to some of the markets we discussed, such as UK, Spain, and United Arab Emirates. Asia-Pacific continues on its solid growth trajectory with 6% growth. in markets such as Japan, Thailand, and Indonesia. And we also saw continuing growth in China, as we also saw in 2023. America's sales decreased by 14%, as discussed, mainly due to Brazil, Mexico, and US. As we said, the US sales were negatively affected by the discontinuation of the Gerber products, and Brazil's sales were negatively affected by the inventory buildup in Q4 of 2023. due to the launch of our Protectis Easy Dropper, which is a novel innovation, and the Brazilian market is very excited about that launch for this year. Our operating expenses grew by 7%, as Alex detailed, and our EBIT margin holds at 39%. So we will take any questions that you have.