BioGaia AB (publ)

Welcome to Biogea Q3 report for 2025. For the first part of the conference call, the participants will be in listen-only mode. During the questions and answers session, participants are able to ask questions by dialing pound key 5 on their telephone keypad. Now I will hand the conference over to CEO Teresa Agnew and CFO Alexander Katsinas. Please go ahead.

Hi, this is Teresa Agnew, CEO of BioGaia. We are here to present our Q4 results. So first off, our financial highlights. We had strong organic growth for the quarter of 32%. We had an EBIT margin of 27% and overall free cash flow at 77 million SACs. In terms of an overall summary, for the year, we hit 1.5 billion SEC, an increase of 14% in organic growth compared to last year, and overall 8% growth adjusted for currency effects. In the fourth quarter, as I said, we had 32% organic growth and 21% including currency effects. We did experience some order variability in the fourth quarter, as is typical across some of our quarters, and that was approximately 35 million SEC. Our overall operating profit for the quarter was 121 million SEC, which is an increase of 17%, and our EBIT margin, as I said, was 27% for the quarter. In terms of our strategy, we have three strategic pillars. Our first is what we call grow the core. And these are our core health areas of which gut health, colic is a part of that, for instance. oral health and immune health are our three core health areas that we focus on through our marketing and commercial excellence. Our second strategic area is what we call expansion through direct markets. So I'll talk about this a little bit in terms of how we have been expanding our business. through new direct markets in 2025. And then our third strategic pillar is what we call breakthrough innovation. So think about this as market creation opportunities for probiotics, where probiotics are not used regularly. And the foundations that underpin our strategy are, of course, our people and culture, investing for profitable growth, digital as an enabler of our business in terms of how we go to market with our omnichannel approach, as well as digitizing our business internally for more productivity and efficiency. One of our foundations, which has been a foundation for many years, is driven by science. It's a key differentiator of who we are as a brand and in our products. And then finally, sustainable solutions, where we're focused on sustainability in multiple areas, packaging, raw materials, and so forth. How did we deliver on our strategy? So in terms of our first area, Grow the Core, we're driving growth, as you saw, in both the pediatric and adult segments for the quarter as well as for the year. We're investing in marketing and selling activities to drive very strong growth in the direct markets. And we are growing ahead in our direct markets, so strong double-digit growth versus our partner markets. We continue to roll out new products. So we launched a product called Gastris Pure Action in the fourth quarter of 2024. And so in 2025, we continue to roll that out across a number of countries. And I'm very happy to report that in Q4, this product really set a record. It is the third highest growth contributor in terms of million sec to our business. So it's doing extremely well in the markets where we've launched. And then, finally, in Q3, we launched Alibaba. Prevent is fresh breath. We launched that in the U.S. market and have also been rolling that out in Q4 and will continue to do so in 2026. So these two product launches have been very beneficial for us in terms of driving our growth and we'll continue to roll them out in more markets in 2026. In terms of our second strategic area expansion through direct markets, our direct market sales now in Q4 represent 40 percent of our of our sales. And as I said, are growing ahead of our partner markets. So this has been a change, you know, over the last two years in terms of, you know, our sales used to be around 30%. Now it's 40% driven by our direct markets. We launched in France in 2025 and also the Netherlands. So those two markets are doing well. France had a strong Q4 sales with record sales. Australia, we had launched in 2024, and that market in particular is doing very well for us. Our protectors drops are now number one in the market in Australia, whereas they previously were not with our previous partner. And in 2025, we had record sales in our U.S. market, 316 million SEC, which this represents 30% organic growth. So very strong performance by our U.S. market, as well as our Canadian market, also a strong double-digit growth. In the terms of breakthrough innovation, in 2025, we established a new subsidiary called BioGuy New Sciences with a strong focus on skin health. We have our probiotic ointment that we had launched and now is rolling out to more markets in 2025 and is also doing well where we launched it. So this is our overall how we've delivered on our strategy in Q4 as well as in 2025. In terms of our product launches, as you can see, we had a lot of product launches in Q4. So this lists all the different countries where we have launched different products, whether it be Phyrex Drops, which is one of our immune health products, Predentis Fresh Breath Losages, as I mentioned, Gastris products, Predentis products, so various new launches. across markets in Q4. And as you see here, we've highlighted the markets where we rolled out gastrous pure action, which I mentioned in Q4. Some of the key events that we have talked about in the quarter, in October, we announced a study on a new patented strain, which is called BGR46, and that was published in a journal called Beneficial Microbes. Also in October, we talked about a study on a new bacteria for us, that actually produces serotonin. So this is a first for bacteria. So more to come on this. This is a preclinical discovery. So we'll be doing more work on this in the future. And as you know, serotonin dramatically affects the brain in terms of mood and overall well-being of mental health. And then just recently in February, we announced that our fourth quarter results exceeded our market expectations. And the board is proposing an ordinary dividend according to our policy and also an extra dividend for a total dividend of four SEC per share. And overall, when you look at the business for Q4, as I said, we had 32% overall organic growth in the quarter. For pediatrics, 34%. For adult, 27%. So pediatrics represents about 75% of our overall revenue. And in the quarter, we saw some significant increases for protectors drops in China as well as France. And also in the quarter for adults, we saw significant increases in gastrous as well as predentives, mainly in the USA. And in the chart, you can see our quarterly variations over the last two years. So you can see the various fluctuations. Sometimes we'll have, you know, more orders from partners in one quarter, less orders from partners in another quarter. And in terms of our sales per segment, I mentioned pediatric and adult for the quarter, but overall for the year, we had organic growth in pediatrics of 11% and 22% in adult health. So both of these areas growing very well overall for the quarter as well as for the year in 2025. In terms of our regions, For Europe, Middle East, Africa, in the quarter, we grew 34%. And this is organic growth. And in terms of the year, we grew 1% in Europe, Middle East, Africa. A couple comments here. For the quarter, we saw some increases in sales in France and Eastern Europe, as well as in Italy. But also overall for the year, we took our business direct starting in April and So in Q1, you know, we had much lower orders from our partner, and also we had a period of time where our partner sells through their inventory. So then it takes a while then for our sales in the direct market to build. So that's also what impacted the overall year for EMEA, as well as Germany. So we're now taking Germany direct. We've now launched that in Q1, Germany and Austria. So same thing in 2025. We see our distributor partner have less orders, so we have less overall sales, and then we start to see that pick up. So we will see the continuing decline of those orders from our partner in in the beginning part of this year, 2026, and then start to see the sales grow for Germany in the second half of 2026. So for Asia Pacific, for the quarter, organic growth of 46%. Overall for the year, 19% organic growth. Very strong for the quarter in China and the Philippines. We also had some quarterly variations for China in terms of orders in the quarter for Q4. So overall, Asia-Pac doing extremely well in terms of overall growth. Strong performance, as I said, China, Philippines, as well as Indonesia for the year. For the Americas, for the quarter, we saw 20% organic growth, and overall for the year, 22% organic growth. So in the Americas, as I said, U.S. is a standout market for us in terms of growth, so 30% overall organic growth for the year. In addition, we saw strong growth in Guatemala as well. And as we've discussed previously, especially in the U.S., We had increased our marketing investments to drive our overall brand awareness and equity and expand our market share. And we successfully did that in 2025. So now I will turn it over to Alex to go through the financials in more detail.

Thank you, Teresa. So if we start to summarize, we had a sales growth, as we heard, of 21% from $365 million to $441 million. And we had a growth in gross profit of 25% to a gross margin of 74% compared to 71% in the same quarter last year. Our EBIT increased with 17% and the EBIT margin was 27% versus 28% in the same quarter last year. As we heard, we had a total sales growth of 21%. However, we had considerable negative currency effects of minus 11%, so that our organic growth was 32% in the quarter. In terms of gross margins, we had an overall gross margin of 74% in the quarter compared to 71% one year ago. If we look at the two segments, pediatrics increased its margin from 72% last year to 76%. This is mainly due to mix effects, both geographic mix effects and some product effects, and also that we have done some price increases continuously here. And if we look at the adult, we saw a slightly lower margin of 64% in the quarter versus 67%. This is really only related to some variation in some larger order mix effect that we had in the quarter. And as you can see, for year-to-date, our adult health margin was 66%, higher than in the quarter, and also substantially higher than compared to the full year last year. So for the full year, we had an increase of our gross margin to 73%. versus 72 one year ago, driven both by increases in margin, both in pediatrics and adult health. If we move on to the operating expenses, our total expenses were 203 million in the quarter versus 155 million one year ago, which was an increase of 31%. We didn't really have any adjustments in the quarter where we had it for the full year. For the sales and marketing, our costs increased 21%, basically in line with the sales increase. R&D costs increased 9%, administration 8%, and then we had negative currency effects of 6 million in the quarter. If you look at the full year, we had a cost increase of 18%. However, there were some one-offs in the same last year, in the previous year, in 2024. We had a write-down of an impairment for the metapodium acquisition, which affected the R&D costs. So if you normalize for that, our OPEX increased with 29%. For the full year, the sales and marketing also increased in line with what it did in the quarter, 21%. And our administration cost increased 14%. And we had considerable negative currency effects of 40 million for the full year last year, which obviously affected our margin negatively. And this is mainly an effect of the weakening dollar versus the Swedish crown. Moving on to the next, to summarize the profit and loss, we had a total sales of 441 million, OPEX of 203 million, and an EBIT 121 million, which then was a margin of 27% versus 28% last year, and an earnings per share of 0.98 versus 0.81. And as we heard Teresa mention, for the full year, total sales of 1.54 billion SEC, an increase of 8%, and an EBIT that was slightly lower, 3% lower, due to the higher operating expenses. And an EPS for the full year of 3.29 versus 3.48 last and the previous year. In terms of our cash flow, We had a cash flow from operating activities before changes in working capital of 109, an improvement of 14 million. The changes in working capital were, however, in the quarter negative, 25 million, compared to plus 9 million in the same quarter last year. This is mainly due to an increased number of receivables because we had a lot of sales in the later part of the quarter. So this will normalize in the first quarter this year. There is no one-off special effects. It's more an effect of the fact that some of the sales came later in the quarter. For example, those orders that the one-off orders that we mentioned. Cash flow from operating activities then at 84 million versus 103 in the same quarter last year. We had very, very low investment, cash flow from investments in the quarter, basically zero. Some cash flow from financing activities minus seven, and a total cash flow in the period of 77 million. And the cash at the end of the period of 800 million. And for the full year, we had a cash flow from operating activities of 307 million. And we had a cash flow for the period of minus 407, mainly then due to the negative cash flow from financing of the dividends, which were approximately 700 million that we paid out last year. So with that, I hand over to Theresa for some final remarks.