BioGaia publ : AB – Year-end report 2019

Comments from the CEO:
'Sales in the fourth quarter of 2019 decreased by 1%, mainly due to reduced royalties from Nestlé and delivery problems. Product sales increased by 6% due to favourable growth primarily for the Paediatrics segment with a sales growth of 10%. The operating margin reached 33% despite lower sales and our increased investments in the subsidiaries MetaboGen and BioGaia Pharma.

'We started the year knowing that Nestlé had terminated the royalty agreement for Growing Up Milk and we understood that it would be difficult to achieve our normal growth rate. The plan to compensate for this within other areas succeeded. Product sales for the full year rose 12% while total sales increased by 4%. This despite suffering serious delivery delays in the third and fourth quarters due to problems at one of our suppliers. The problem with delivery delays from our supplier in Belgium eased steadily during the fourth quarter,' says Isabelle Ducellier, President and CEO of BioGaia

Fourth quarter 2019
(Figures in parentheses and comparative figures in the text refer to the corresponding period of last year. The comparative figures in the balance sheet refer to 31 December 2018).

• Net sales totalled SEK 207.6 million (209.7), a decrease of 1% (excluding foreign exchange effects, 5%). Product sales, net sales excluding royalty revenues, amounted to SEK 198.3 million (187.6), an increase of 6% (excluding foreign exchange effects, 2%).
• Net sales in the Paediatrics segment reached SEK 157.4 million (158.0), a decrease of 0.4%. Product sales within Paediatrics amounted to SEK 152.4 million (139.1), an increase of 10%.
• Net sales in the Adult Health segment amounted to SEK 49.9 million (49.1), an increase of 2%.
• Operating profit amounted to SEK 68.1 million (75.1), a decrease of 9%.
• Profit after tax was SEK 50.9 million (57.0), a decrease of 11%.
• Earnings per share totalled SEK 2.94 (3.29). No dilutive effects arose.
• Cash flow amounted to SEK 2.8 million (26.9).

Key events in the fourth quarter of 2019

• On 10 October, BioGaia announced that BioGaia had suffered from delivery delays from one of its external suppliers which will affect sales and earnings in both the third and fourth quarters of 2019.
• On 15 October, BioGaia announced that a published study shows that BioGaia Gastrus tablets are effective as an adjunct in patients with Helicobacter pylori infections.

Key events after year-end 2019

• No key events occurred after the end of the period.

Full year 2019

• Net sales totalled SEK 768.3 million (741.9), an increase of 4% (excluding foreign exchange effects, -2%). Product sales, net sales excluding royalty revenues, amounted to SEK 743.0 million (662.1), an increase of 12% (excluding foreign exchange effects, 7%).
• Net sales in the Paediatrics segment reached SEK 600.1 million (596.5), an increase of 1%. Product sales within Paediatrics amounted to SEK 585.1 million (523.5), an increase of 12%.
• Net sales in the Adult Health segment amounted to SEK 167.3 million (141.7), an increase of 18%.
• Operating profit amounted to SEK 242.5 million (277.4).
• Operating profit excluding revaluation of a former associate shareholding amounted to SEK 242.5 million (270.4)¹, a decrease of 10%.
• Profit after tax amounted to SEK 187.3 million (207.2)¹, a decrease of 10%.
• Earnings per share totalled SEK 10.81 (11.99)¹. No dilutive effects arose.
• Cash flow amounted to SEK -72.3 million (-22.9). Cash and cash equivalents at 31 December 2019 amounted to SEK 213.8 million (285.0).
• The Board proposes that the upcoming Annual General Meeting on 7 May 2020 approves an ordinary dividend according to the policy of SEK 3.75 (4.05) per share and an extraordinary dividend of SEK 4.25 (5.95) per share making a total dividend of SEK 8.00 (10.00) per share, corresponding to SEK 138.7 million (173.4).
• The Board further proposes that the upcoming Annual General Meeting approves a provision to the Foundation to Prevent Antibiotic Resistance of SEK 2.8 million (3.2).

1) Excluding revaluation of former associate shareholding in MetaboGen of SEK 7.0 million.

Teleconference: Investors, analysts and the media are invited to take part in a teleconference on the year-end report to be held today 6 February 2020 at 9:30 CET with CEO Isabelle Ducellier. To participate in the teleconference, please see https://financialhearings.com/event/12158
for telephone numbers. The teleconference can also be followed at https://tv.streamfabriken.com/biogaia-q4-2019.

This information is information that BioGaia AB is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the CEO, on 6 February 2020 at 08:00 CET.

This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording shall prevail.