BioGaia

Annual Report • Feb 4, 2021

Year-end report

JANUARY – DECEMBER 2020

FOURTH QUARTER 2020

Q4

2020

Net sales totalled SEK 187.6 million (207.6), a decrease of 10% (excluding foreign exchange effects, -4%). Product sales, net sales excluding royalty revenues, amounted to SEK 180.7 million (198.3), a decrease of 9% (excluding foreign exchange effects, -3%).

Net sales in the Paediatrics segment reached SEK 139.6 million (157.4), a decrease of 11%.

Net sales in the Adult Health segment amounted to SEK 47.3 million (49.9), a decrease of 5%.

Operating expenses amounted to SEK 94.7 million (86.1), an increase of 10%.

Operating profit decreased by 34% to SEK 45.3 million (68.1), which corresponds to an operating margin of 24% (33%). Profit after tax was SEK 38.5 million (50.9), a decrease of 24%. Earnings per share amounted to SEK 2.02 (2.91). No dilutive

effects arose. Cash flow amounted to SEK 1,177.6 million (2.8).

Cash and cash equivalents at 31 December 2020 amounted to SEK 1,467.9 million (213.8).

Key events in the fourth quarter of 2020

On 12 October 2020, BioGaia announced that sales and earnings will be negatively affected in both the third and fourth quarters of 2020 by the current Covid-19 pandemic.

On 30 October 2020, BioGaia announced that the company has carried out a directed new issue of 2.86 million class B shares at a subscription price of SEK 400 per share, whereby the company acquired proceeds of approximately SEK 1.1 billion.

On 25 November 2020, BioGaia announced that an Extraordinary General Meeting of the company held on 25 November 2020 resolved that the number of Board members shall be eight without deputies, to elect Niklas Ringby as a new Board member, that no remuneration shall be paid to Niklas Ringby, to approve the Board's decision from 30 October 2020 to issue a maximum of 1,126,354 new class B shares, thereby increasing the company's share capital by a maximum of SEK 1,126,354.

JANUARY – DECEMBER 2020

Net sales totalled SEK 747.1 million (768.3), a decrease of 3% (excluding foreign exchange effects, -2%).

Product sales, net sales excluding royalty revenues, amounted to SEK 721.5 million (743.0), a decrease of 3% (excluding foreign exchange effects, -2%).

Net sales in the Paediatrics segment reached SEK 583.1 million (600.1), a decrease of 3%.

Net sales in the Adult Health segment amounted to SEK 161.2 million(167.3), a decrease of 4%.

Operating expenses amounted to SEK 318.8 million (321.5), a decrease of 1%.

Operating profit decreased by 6% to SEK 228.2 million (242.5), which corresponds to an operating margin of 31% (32%). Profit after tax was SEK 179.7 million (187.3), a decrease of 4%.

Earnings per share amounted to SEK 10.07 (10.72). No dilutive effects arose.

Cash flow amounted to SEK 1,256.6 million (-72.3).

Cash and cash equivalents at 31 December 2020 amounted to SEK 1,467.9 million (213.8).

In accordance with the dividend policy, the Board proposes that the upcoming Annual General Meeting on 6 May 2021 approves an ordinary dividend of SEK 3.41 (3.75) per share corresponding to SEK 68.8 million (65.0). The Board further proposes a provision to the Foundation to Prevent Antibiotic Resistance of SEK 2.8 million (2.8).

Key events after the end of the fourth quarter

On 3 February 2021 the Board of BioGaia announced that the company has decided to revise the dividend policy to pay a shareholder dividend equal to 50% of profit after tax in the parent company compared to a previous 40 %.

	Oct-Dec 2020	Oct-Dec 2019
Net sales, SEK 000s	187,610	207,616
Growth in net sales	-10%	-1%
Operating profit, SEK 000s	45,250	68,106
Operating margin	24%	33%
Profit after tax, SEK 000s	38,467	50,938
Profit margin	24%	33%
Number of shares, thousands	20,196	17,336
Earnings per share, SEK 1) 2)	2.02	2.91

1) The subscription price at the directed new issue announced in October 2020 amounted to SEK 400 per share which corresponded to 94 % of the share's fair value on the date of the new issue. A bonus issue element has been taken into account in the calculation of earnings per share before and after dilutive effects, which means that the comparative figure has been recalculated. There are no other dilutive effects.

2) Key ratio defined according to IFRS. For definitions of other key ratios, see page 14.

This information is information that BioGaia AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the CEO, on 4 February 2021, at 08.00 CET.

BioGaia AB (publ.) Year-end report 2020

The Board of Directors and the CEO of BioGaia AB hereby present the year-end report for 2020.

CEO'S COMMENTS

As you know, 2020 was a very challenging year around the world. BioGaia's sales started strongly, however, with growth in line with expectations. Although the Covid-19 crisis started seriously in March, BioGaia posted a sales increase of 7% in the first quarter followed by growth of 10% in the second quarter. But in the third quarter we could see that the pandemic would have a negative impact on sales. On 12 October, we announced that we expected reduced sales and lower earnings for both the third and fourth quarters. The fact that our sales go mainly to our partners and distributors explains the slightly delayed effect on sales.

After a decrease in sales of 21% (excluding foreign exchange effects, -17%) for the third quarter, sales fell by 10% (excluding foreign exchange effects, -4%) in the fourth quarter compared to the same period last year with continued weak sales due to Covid-19 in some of our largest and oldest markets, such as Italy and Spain. Here lengthy lockdowns have affected BioGaia's sales since consumers have been unable to visit doctors and physical pharmacies, where the bulk of sales in these countries take place. On the other hand, we have seen good sales in countries where we have implemented an omnichannel strategy, such as the USA and China, something that strengthened our conviction that we need to invest further in direct consumer marketing in many of our markets.

Our sales for the full-year 2020 totalled SEK 747 million which corresponds to a decrease of 3%. We are not pleased with this and have higher ambitions but at the same time we realise that we will continue to be affected by Covid-19. We hope that gradually during 2021 we will see a reduced impact from Covid-19 and that we can once more return to favourable growth. As I have pointed out previously, the global trend towards preventive healthcare is strong and people are increasingly taking responsibility for their own health. Together with our partners we will continue to work on the development of new products as well as focusing on both physical and online sales channels in order to strengthen BioGaia's global brand.

The operating profit for 2020 is SEK 228 million, a decrease of 6% compared to 2019 and the operating margin for the year is 31% compared to 32% for 2019. Operating profit excluding other operating expenses (primarily exchange losses/gains) amounted to SEK 244.5 million, a decrease of 2%. We have partly compensated for these weaker sales with lower costs particularly for marketing and sales.

On 30 October, we announced that BioGaia had successfully carried out a directed new issue of 2.86 million class B shares for a subscription price of SEK 400 per share, whereby the company received approximately SEK 1.1 billion. The directed new issue was oversubscribed and a large number of Swedish and international institutional investors took part, including the strategic investors Cargill Inc. and EQT Public Value. The plan is to use this capital to accelerate BioGaia's growth agenda by being able to act swiftly on potential acquisition opportunities. The ongoing consolidation of the probiotic industry means there are companies in all parts of the value chain on a global level that can be of interest to BioGaia.

Eleven months into the biggest pandemic of our time, we can state that the danger is not yet over but we can discern a hope that we will get through this as a result of vaccinations. As previously, we work continuously to adapt our business to meet the challenges Covid-19 entails but also to be able to take advantage of the opportunities created by the pandemic. I would like to especially thank all BioGaia's employees, our customers and other collaboration partners because your patience and hard work during these demanding times mean that despite all the challenges we have succeeded in carrying out what we have planned. My hope is that 2021 will be a year in which the world gradually returns to normal.

Isabelle Ducellier President and CEO of BioGaia 4 February 2021

Teleconference: Investors, analysts and the media are invited to take part in a teleconference on the year-end report to be held today 4 February 2021 at 09:30 CET with CEO Isabelle Ducellier and CFO Alexander Kotsinas. To participate in the teleconference, please see Financialhearings.com for telephone numbers. The teleconference can also be followed here.

Revenue

Q4

2020

SEKm	Oct-Dec 2020	Oct-Dec 2019	Change	Jan-Dec 2020	Jan-Dec 2019	Change
Paediatrics	139.6	157.4	-11%	583.1	600.1	-3%
Adult Health	47.3	49.9	-5%	161.2	167.3	-4%
Other	0.7	0.3	115%	2.8	0.9	197%
Total	187.6	207.6	-10%	747.1	768.3	-3%
SEKm	Oct-Dec 2020	Oct-Dec 2019	Change	Jan-Dec 2020	Jan-Dec 2019	Change
EMEA	83.5	107.1	-22%	372.6	399.6	-7%
APAC	54.2	55.0	-2%	170.7	177.0	-4%
Americas	49.9	45.5	10%	203.7	191.8	6%

Jan-Dec 2020	Jan-Dec 2019	Change
583.1	600.1	-30/
161.2	167.3	-4%
2.8	0.9	197%
747.1	768.3	-30/

SEKm	Oct-Dec 2020	Oct-Dec 2019	Change	Jan-Dec 2020	Jan-Dec 2019	Change
EMEA	83.5	107.1	-22%	372.6	399.6	-7%
APAC	54.2	55.0	-2%	170.7	177.0	-4%
Americas	49.9	45.5	10%	203.7	191.8	6%
Total	187.6	207.6	-10%	747.1	768.3	-3%

SALES FOURTH QUARTER

Figures in parentheses refer to the corresponding period last year. Consolidated net sales amounted to SEK 187.6 million (207.6) which is a decrease of SEK 20 million (-10%) (excluding foreign exchange effects, -4%) compared to the fourth quarter of last year. Product sales decreased by 9% (excluding foreign exchange effects, -3%).

Sales in EMEA amounted to SEK 83.5 million (107.1), a decrease of 22%, which was mainly due to lower sales within the Paediatrics segment while sales within Adult Health increased. Sales within Paediatrics decreased primarily in Italy and Romania which was partly offset by higher sales in Germany and Turkey. The increase within Adult Health was mainly attributable to France and Finland.

Sales in APAC amounted to SEK 54.2 million (55.0), a decrease of 2%. The decrease was attributable to the Adult Health segment where sales decreased primarily in Indonesia and Hong Kong. In the Paediatrics segment sales increased mainly in China, South Korea and Australia.

Sales in the Americas totalled SEK 49.9 million (45.5), an increase of 10%, which was due to higher sales in the Paediatrics segment. The increased sales in Paediatrics were mainly attributable to the USA and Canada.

SALES JANUARY - DECEMBER

Figures in parentheses refer to the corresponding period last year. Consolidated net sales amounted to SEK 747.1 million (768.3) which is a decrease of SEK 21.2 million (-3%) (excluding foreign exchange effects, -2%) compared to the previous year. Product sales decreased by 3% (excluding foreign exchange effects, -2%).

Sales in EMEA amounted to SEK 372.6 million (399.6), a decrease of 7%, which was due to lower sales within the Paediatrics segment while sales within Adult Health increased. The lower sales within Paediatrics were mainly attributable to Italy, South Africa and Spain. The increased sales within Adult Health were mainly attributable to Belgium and France.

Sales in APAC amounted to SEK 170.7 million (177.0), a decrease of 4%. The Adult Health segment decreased while the Paediatrics segment increased. Sales within Adult Health decreased mainly in Hong Kong, China and South Korea. Within the Paediatrics segment sales increased mainly in China, Indonesia and Vietnam.

Sales in the Americas totalled SEK 203.7 million (191.8), an increase of 6%, which was due to increased sales within the Paediatrics and Adult Health segments. The increased sales within both segments were mainly attributable to the USA.

NET SALES BRIDGE FOURTH QUARTER

SEKm		Change
2019	207.6
Foreign exchange	-11.8	-6%
Organic growth	-8.2	-4%
2020	187.6	-10%

1

NET SALES BRIDGE JANUARY - DECEMBER

SEKm		Change
2019	768.3
Foreign exchange	-7.4	-1%
Organic growth	-13.8	-2%
2020	747.1	-3%

1

Paediatrics

The Paediatrics segment accounts for approximately 80% of BioGaia's total sales. BioGaia Protectis drops remain the largest product with sales in some 90 countries. Other key products within Paediatrics include BioGaia Protectis drops with vitamin D, oral rehydration solution and tablets as well as cultures to be used as ingredients in licensee products (such as infant formula) and royalty revenues for paediatric products.

SEKm	Oct-Dec 2020	Oct-Dec 2019	Change	Jan -Dec Jan-Dec 2020	2019	Change
Products	137.6	152 4	-10%	570.8	585.1	-2%
Royalties	2.0	5.0	-60%	12.3	15.0	-18%
Total	139.6	157.4	-11%	583.1	600.1	-3%

SALES FOURTH QUARTER

Figures in parentheses refer to the corresponding period last year. Sales in the Paediatrics segment amounted to SEK 139.6 million (157.4), a decrease of 11% (excluding foreign exchange effects, -6%). Product sales in Paediatrics amounted to SEK 137.6 million (152.4), a decrease of 10%.

Sales of BioGaia Protectis drops decreased slightly compared to the corresponding period last year. Sales increased in APAC and the Americas, but decreased in EMEA. In APAC, sales increased primarily in China and South Korea and in the Americas sales increased mainly in the USA and Canada. In EMEA, sales of drops decreased in Italy, Romania and South Africa which was partly offset by higher sales in Germany.

Sales of BioGaia Protectis tablets within Paediatrics decreased compared to the corresponding period last year. The decrease was due to lower sales in EMEA, APAC and the Americas, primarily in Spain, South Korea and Brazil.

583.1	600.1	-3%
12.3	15.0	-18%
570.8	585.1	-2%
2020	2019
Jan -Dec Jan-Dec		Change

SALES JANUARY-DECEMBER

Figures in parentheses refer to the corresponding period last year. Sales in the Paediatrics segment amounted to SEK 583.1 million (600.1), a decrease of 3% (excluding foreign exchange effects, -2%). Product sales in Paediatrics amounted to SEK 570.8 million (585.1), a decrease of 2%.

Sales of BioGaia Protectis drops decreased compared to the corresponding period last year. Sales increased in APAC and the Americas, but decreased in EMEA. In APAC, sales increased primarily in China and Vietnam and in the Americas sales increased mainly in the USA, Canada and Peru. In EMEA, sales of drops decreased primarily in Italy and South Africa while sales increased in Germany and Belgium.

Sales of BioGaia Protectis tablets within Paediatrics decreased compared to the corresponding period last year. The decrease was due to lower sales in APAC, EMEA and the Americas. In APAC, sales decreased mainly in South Korea which was partly offset by higher sales in Taiwan. In EMEA, sales decreased primarily in Spain and South Africa which was partly compensated by higher sales in France and Romania. Sales decreased slightly in the Americas, mainly in the USA.

Adult Health

The Adult Health segment accounts for approximately 20% of BioGaia's total sales. Sales mainly comprise BioGaia Protectis, BioGaia Gastrus, BioGaia Prodentis and BioGaia Osfortis as well as cultures as an ingredient in a licensee's dairy products.

SEKm	Oct-Dec 2020	Oct-Dec 2019	Change	Jan-Dec 2020	Jan-Dec 2019	Change
Products	42.6	45.8	-7%	148.6	157.8	-6%
Royalties	4.8	4.1	16%	12.6	9.5	32%
Total	47.3	49.9	-5%	161.2	167.3	-4%

SALES FOURTH QUARTER

Figures in parentheses refer to the corresponding period last year. Sales in the Adult Health segment amounted to SEK 47.3 million (49.9), a decrease of 5% (excluding foreign exchange effects, +1%). Product sales amounted to SEK 42.6 million (45.8), a decrease of 7%.

Sales of BioGaia Protectis tablets decreased compared to the corresponding period last year. In APAC, sales decreased in Hong Kong and Indonesia which was partly offset by higher sales in Japan. In EMEA, sales decreased mainly in Italy and South Africa.

Sales of BioGaia Gastrus increased compared to the corresponding period last year. Sales increased in APAC and EMEA. In APAC, sales increased primarily in Japan and in EMEA sales mainly increased in France.

Sales of BioGaia Prodentis increased compared to the corresponding period last year. The main sales increase was in South Korea, Japan and the USA.

Jan-Dec		Jan-Dec	Change
	2020	2019
RESERSESSESSSSSSSSSSSSSSS	148.6	157.8	-60/2
	12.6	9.5	37%
	161.2	167.3

SALES JANUARY - DECEMBER

Figures in parentheses refer to the corresponding period last year. Sales in the Adult Health segment amounted to SEK 161.2 million (167.3), a decrease of 4% (excluding foreign exchange effects, -2%). Product sales amounted to SEK 148.6 million (157.8), a decrease of 6%.

Sales of BioGaia Protectis tablets decreased compared to the corresponding period last year. Sales decreased in APAC and the Americas and rose slightly in EMEA. In APAC, sales decreased primarily in Hong Kong, China and Australia which was partly compensated by higher sales in Japan. Sales in EMEA increased primarily in Belgium which was partly counteracted by lower sales in Finland and South Africa.

Sales of BioGaia Gastrus increased compared to the corresponding period last year. Sales increased in EMEA and decreased in the Americas and APAC. In EMEA, sales increased mainly in Spain and France, In the Americas, sales decreased primarily in the USA while sales in APAC decreased mainly in China.

Sales of BioGaia Prodentis decreased compared to the corresponding period last year. Sales decreased in APAC, mainly in Japan, while they increased in EMEA and the Americas. In EMEA sales increased primarily in Germany and in the Americas sales increased in the USA.

Earnings

FOURTH QUARTER

Gross margin

Q4

2020

Figures in parentheses refer to the corresponding period last year. The total gross margin for the quarter amounted to 75% (74%). The gross margin for the Paediatrics segment amounted to 76% (76%). The gross margin for the Adult Health segment amounted to 70% (69%).

Operating expenses and operating profit

Operating expenses amounted to SEK 94.7 million (86.1), an increase of SEK 8.6 million. Excluding other operating expenses (exchange losses/gains) operating expenses increased by 1%. Operating expenses included costs for evaluation of acquisition candidates of SEK 3 million.

Selling expenses amounted to SEK 49.7 million (55.6), a decrease of 11%, mainly due to reduced marketing activities due to Covid-19. R&D expenses amounted to SEK 29.6 million (23.5), an increase of 26%. R&D expenses include costs for the subsidiaries MetaboGen AB and BioGaia Pharma AB of SEK 8.3 million (7.0). The increase in R&D expenses excluding costs for MetaboGen AB and BioGaia Pharma AB is mainly attributable to higher study expenses in the period.

Administrative expenses amounted to SEK 7.2 million (6.9), an increase of 5%.

Other operating expenses refers to exchange losses/gains on receivables and liabilities of an operating nature and amounted to SEK 8.2 million (0.1).

Operating profit amounted to SEK 45.3 million (68.1), a decrease of 34%. The operating margin was 24% (33%).

Profit after tax and earnings per share

Profit after tax amounted to SEK 38.5 million (50.9), a decrease of 24%. The effective tax rate was 15% (25%).

Earnings per share amounted to SEK 2.02 (2.91). No dilutive effects arose.

JANUARY - DECEMBER

Gross margin

Figures in parentheses refer to the corresponding period last year. The total gross margin amounted to 73% (73%). The gross margin for the Paediatrics segment amounted to 74% (74%). The gross margin for the Adult Health segment amounted to 70% (70%).

Operating expenses and operating profit

Operating expenses amounted to SEK 318.8 million (321.5), a decrease of SEK 2.7 million. Excluding other operating expenses (exchange losses/gains) operating expenses decreased by 4%.

Selling expenses amounted to SEK 171.6 million (184.3), a decrease of 7%, mainly due to reduced marketing activities as a result of Covid-19 which were partly offset by increased personnel costs due to a higher number of employees.

R&D expenses amounted to SEK 104.7 million (105.1), a decrease of 0.4%. R&D expenses include costs for the subsidiaries

MetaboGen AB and BioGaia Pharma AB of SEK 26.8 million (21.4). The decrease in R&D expenses excluding costs for MetaboGen AB and BioGaia Pharma AB is mainly attributable to lower study and travel expenses due to Covid-19 which were partly offset by higher personnel costs.

Administrative expenses amounted to SEK 26.1 million (24.6), an increase of 6%.

Other operating expenses refers to exchange losses/gains on receivables and liabilities of an operating nature and amounted to SEK 16.3 million (7.5).

Operating profit amounted to SEK 228.2 million (242.5), a decrease of 6%. The operating margin was 31% (32%).

Operating profit excluding other operating expenses (exchange losses/gains) amounted to SEK 244.5 million (250.0), a decrease of 2%.

Profit after tax and earnings per share

Profit after tax amounted to SEK 179.7 million (187.3) a decrease of 4%. The effective tax rate was 21% (23%). Earnings per share amounted to SEK 10.07 (10.72). No dilutive effects arose.

Parent Company

The Parent Company's net sales amounted to SEK 699.3 million (720.7) and profit before tax was SEK 174.7 million (199.6). Impairment was recognised of shares in a subsidiary corresponding to the group contribution for the year. The financial performance of the Parent Company is in all material respects in line with that of the Group.

Balance sheet and cash flow

BALANCE SHEET 31 DECEMBER 2020

Q4

2020

Total assets amounted to SEK 1,913.3 million (665.9). Most of the increase compared to the previous year is explained by the new issue but investments in BioGaia Production as well as higher rightof-use assets contributed to the increase.

Current assets and particularly trade receivables decreased compared to the previous year due to lower sales. Current liabilities increased compared to the start of the year. This is explained by the fact that the liability to settle the final part of the MetaboGen acquisition is expected to take place during 2021 and is thus recognised as current.

CASH FLOW FOURTH QUARTER

Cash flow amounted to SEK 1,177.6 million (2.8) for the quarter.

Cash flow from operating activities increased by SEK 37.5 million compared to the fourth quarter of last year despite a lower operating profit. The increase in cash flow in operations is due to a positive change in working capital. This is explained in particular by lower trade receivables due to lower sales.

Investments in property, plant and equipment amounted to SEK 2.0 million (12.5). Depreciation amounted to SEK 5.7 million (4.1).

Cash flow from financing activities was affected by the new issue which provided SEK 1,126.8 million net after issue costs.

CASH FLOW JANUARY - DECEMBER

Cash flow amounted to SEK 1,256.6 million (-72.3) for the full year.

Cash flow from operating activities increased by SEK 73.4 million. The increase in cash flow in operations is due to a positive change in working capital.

Investments in property, plant and equipment amounted to SEK 16.1 million (32.3). Depreciation amounted to SEK 20.5 million (15.6).

Cash and cash equivalents at 31 December 2020 amounted to SEK 1,467.9 million (213.8).

Other disclosures

EMPLOYEES

The number of employees in the Group at 31 December 2020 totalled 160 (157 at 31 December 2019).

The company has an incentive programme for all employees based on the company's sales and profit. The maximum bonus is equal to 12% of salary. Some of the bonus (a maximum of one-third) relates to a long-term incentive programme where the employee is required to reinvest the yearly paid-out compensation (after tax) in BioGaia class B shares and hold these for at least three years.

FUTURE OUTLOOK

BioGaia's goal is to create strong value growth and a good return for the shareholders. This will be achieved through a greater emphasis on the BioGaia brand, increased sales to both existing and new customers and a controlled cost level.

The long-term financial target is an operating margin (operating profit in relation to sales) of at least 34% with continued strong growth and increased investments in research, product development, brand building and the sales organisation.

BioGaia's dividend policy is to pay a shareholder dividend equal to 50% of profit after tax.

In view of the company's strong portfolio consisting of an increased number of innovative products that are sold predominantly under the BioGaia brand, successful clinical trials and an expanding distribution network that covers a large share of the key markets, BioGaia's future outlook remains bright. .

SIGNIFICANT RISKS AND UNCERTAINTIES, GROUP AND PARENT COMPANY

Significant risks and uncertainties are described in the administration report of the annual report for 2019 on pages 43 and 44 and in Notes 27 and 28. No significant changes in these risks and uncertainties are assessed to have taken place at 31 December 2020 except for the impact of the Covid-19 pandemic which is set out below.

The fourth quarter of 2020 continued to be marked by the Covid-19 pandemic and its impact on the world at large and on BioGaia. In several of our largest markets, such as Italy and Spain, we saw reduced sales during the quarter. In these countries, as in most other countries in which BioGaia operates, medical marketing is still the main business model. Due to the Covid-19 situation, our distributors' sales forces have not been able to visit doctors and pharmacy staff, which are our key target groups for medical marketing, to the same extent as previously. Furthermore, the longterm lockdown in many countries has meant that consumers have had limited opportunities to visit the principal sales channels for our products – physical pharmacies, hospitals and, in Japan, dental surgeries. BioGaia therefore sees that sales and earnings were negatively affected in the fourth quarter.

BioGaia has been forced to adapt to the current situation and to change how the company works with marketing and sales. For example, BioGaia has not taken part in international fairs and symposia, since these have been cancelled, but has instead focused more on supporting its partners with marketing material that can be used online. Furthermore, BioGaia's employees have not been able to visit customers face-to-face but have used telephone and video meetings. BioGaia has not carried out any staff reductions or layoffs due to the pandemic. Nor has BioGaia taken part in any support programme with the exception of reduced employer contributions in Sweden and a government stimulus programme in Japan.

BioGaia has a strong financial position but a prolonged pandemic can even have a negative impact on a stable company such as BioGaia. A deterioration in the financial position and ability to pay of our distribution partners can lead to longer payment times but also credit losses. Furthermore, disruptions in BioGaia's production and at external suppliers or in logistics can result in BioGaia being unable to deliver products with an ensuing loss of revenue. Depending on how drawn-out this pandemic becomes, there is a risk of a challenging start to 2021.

RELATED PARTY TRANSACTIONS

The Parent Company owns 100% of the shares in BioGaia Biologics Inc. USA, BioGaia Japan Inc, BioGaia Production AB, CapAble AB and Tripac AB. The Parent Company also owns 96% of the shares in BioGaia Pharma AB and 92% of the shares in MetaboGen AB .

Annwall & Rothschild Investment AB owns 740,668 class A shares and 100,000 class B shares, corresponding to 4.2% of the share capital and 27.9% of the voting rights in BioGaia AB. Annwall & Rothschild Investment AB is owned by Peter Rothschild and Jan Annwall. Peter Rothschild is Chairman of the Board of BioGaia AB and receives a director's fee of SEK 670,000 per year. During the quarter, Peter Rothschild received additional remuneration for significant working duties, in addition to his assignment on the Board, of SEK 225,000 in accordance with the decision of the Annual General Meeting and the Board of Directors. In addition, a dividend of SEK 3.75 per share was paid to Annwall & Rothschild Investment AB during 2020.

KEY EVENTS IN THE FOURTH QUARTER OF 2020

Launches in the fourth quarter of 2020

Distributor	Country	Product
Abbott	Uruguay	BioGaia Protectis drops, BioGaia Protectis tablets
Abbott	Chile	BioGaia Gastrus
Abbott	Bolivia	BioGaia Gastrus
BioGaia	Sweden	BioGaia Osfortis, BioGaia Prodentis
BioGaia Japan	Japan	BioGaia Prodentis MUM
Abbott	Thailand	BioGaia Gastrus, BioGaia Protectis tablets
Ewopharma	Bulgaria	BioGaia Protectis capsules
Everidis	USA	BioGaia Prodentis, BioGaia Protectis MUM capsules

Lower sales due to Covid-19. On 12 October 2020, BioGaia announced that sales and earnings will be negatively affected in both the third and fourth quarters of 2020 and that BioGaia's assessment is that this is related to the Covid-19 pandemic.

BioGaia intends to carry out a directed share issue of up to SEK 1.1 billion. On 30 October 2020, BioGaia announced its intention to carry out a directed issue of new class B shares corresponding to a value of up to SEK 1.1 billion to Swedish and international institutional investors. In the event of strong demand in the directed issue, certain major shareholders in the company – Annwall & Rothschild Investments AB and David Dangoor – have declared themselves willing to sell approximately 200,000 class B shares in BioGaia, at the same price as in the directed issue. The strategic investors Cargill Inc. and EQT Public Value have indicated interest to participate in the directed issue with significant amounts.

BioGaia has carried out a directed issue of 2.86 million class B shares, raising proceeds of SEK 1.1 billion. On 30 October 2020, BioGaia announced that BioGaia had successfully completed a directed issue of 2.86 million class B shares at a subscription price of SEK 400 per share, entailing proceeds to the company of approximately SEK 1.1 billion. The subscription price was based on an accelerated book building procedure. The directed issue was oversubscribed and a wide range of Swedish and international institutional investors participated, including the strategic investors Cargill Inc. and EQT Public Value Fund, which had previously indicated an interest to participate, as well as certain existing shareholders. In connection with the new issue, certain major shareholders, including Annwall & Rothschild Investments AB and David Dangoor, sold a total of 229,332 class B shares, at the same price as in the directed issue.

Nominating Committee ahead of the BioGaia AGM on 6 May 2021. On 3 November 2020, BioGaia announced that in accordance with the Annual General Meeting's resolution, the Nominating Committee has been appointed and consists in addition to the Chairman of BioGaia AB's Board, Peter Rothschild, of Per-Erik Andersson, appointed by the company's largest shareholder Annwall & Rothschild Investments AB, Jannis Kitsakis, appointed by the company's third largest shareholder The Fourth Swedish National Pension Fund, Caroline Sjösten, appointed by the company's fourth largest shareholder Swedbank Robur Fonder, and Sebastian Jahreskog, who through direct and indirect ownership is the company's fifth largest shareholder. All members of the Nominating Committee, except for Peter Rothschild, are independent in relation to the company and its management.

Extraordinary General Meeting of BioGaia. On 25 November 2020, BioGaia announced that the Extraordinary General Meeting of BioGaia held on 25 November 2020 had resolved as follows: that the number of Board members shall be eight without deputies to elect Niklas Ringby as a new Board member that no remuneration shall be paid to Niklas Ringby to approve the Board's resolution from 30 October 2020 to issue a maximum of 1,126,354 new class B shares, whereby the company's share capital will increase by a maximum of SEK 1,126,354.

New number of shares and votes in BioGaia. On 30 November 2020, BioGaia announced that the number of shares and votes in BioGaia AB has changed due to the directed issue of new shares completed on 25 November. Through the share issue the number of class B shares and votes in BioGaia increased by 2,860,000. On 30 November there are in total 20,196,462 shares in BioGaia, of which 740,668 are class A shares and 19,455,794 class B shares, together carrying 26,862,474 votes.

KEY EVENTS AFTER THE END OF THE FOURTH QUARTER OF 2020

No key events have occurred after the end of the fourth quarter that are not taken up in this year-end report.

Accounting policies

This interim report has been prepared for the Group in accordance with IAS 34, Interim Financial Reporting and the Swedish Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act. Disclosures in accordance with IAS 34 are provided both in notes and elsewhere in the interim report. The consolidated financial statements are presented in compliance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and the interpretations published by the IFRS Interpretations Committee (IFRIC) that have been endorsed by the European Commission for application in the EU. Unless otherwise stated below, the accounting standards applied for the Group and the Parent Company are consistent with those used in preparation of the most recent annual report. The Parent Company presents its financial statements in accordance with RFR 2, Accounting for Legal Entities, and the Annual Accounts Act, and applies the same accounting and valuation policies as in the most recent annual report. .

NEW ACCOUNTING STANDARDS

Management's assessment is that new and amended standards and interpretations will not have a material effect on the Group's financial statements for the period of initial application.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Amounts in SEK 000s)	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
	2020	2019	2020	2019
Net sales (Note 1)	187,610	207,616	747,077	768,347
Cost of sales	-47,646	-53,432	-200,159	-204,349
Gross profit	139,964	154,184	546,918	563,998
Selling expenses	-49,673	-55,594	-171,634	-184,327
Administrative expenses	-7,227	-6,883	-26,128	-24,609
Research and development expenses	-29,634	-23,515	-104,663	-105,051
Other operating expenses/operating income	-8,180	-86	-16,343	-7,500
Operating profit	45,250	68,106	228,150	242,511
Financial income	46	152	155	416
Financial expenses	-160	-52	-722	-668
Profit before tax	45,136	68,206	227,583	242,259
Tax	-6,669	-17,268	-47,853	-55,001
Profit for the period	38,467	50,938	179,730	187,258
Items that may be subsequently reclassified to profit or loss
Gains/losses arising on translation of statements of foreign operations	-292	208	-4,059	415
Comprehensive income for the period	38,175	51,146	175,671	187,673
Profit for the period attributable to:
Owners of the Parent Company	38,467	50,920	179,730	187,347
Non-controlling interests	-	18	-	-89
	38,467	50,938	179,730	187,258
Comprehensive income for the period attributable to:
Owners of the Parent Company	38,175	51,128	175,671	187,762
Non-controlling interests	-	18	-	-89
	38,175	51,146	175,671	187,673
Earnings per share
Earnings per share (SEK) 1)	2.02	2.91	10.07	10.72
Number of shares (thousands)	20,196	17,336	20,196	17,336
Average number of shares (thousands) 1)	18,997	17,474	17,855	17,474

1) The subscription price at the directed new issue announced in October 2020 amounted to SEK 400 per share which corresponded to 94 % of the share's fair value on the date of the new issue. A bonus issue element has been taken into account in the calculation of earnings per share before and after dilutive effects, which means that the comparative figure has been recalculated. There are no other dilutive effects.

.

CONSOLIDATED BALANCE SHEETS

Summary (Amounts in SEK 000s)	31 Dec	31 Dec
	2020	2019
ASSETS
Property, plant and equipment	133,904	128,747
R&D projects in progress	50,322	52,558
Goodwill	5,300	5,300
Right-of-use assets	28,861	20,295
Deferred tax assets	5,279	6,518
Other non-current receivables	39	44
Total non-current assets	223,705	213,462
Current assets excl. cash and cash equivalents	221,694	238,607
Cash and cash equivalents	1,467,883	213,831
Total current assets	1,689,577	452,438
TOTAL ASSETS	1,913,282	665,900
EQUITY AND LIABILITIES
Equity attributable to owners of the Parent Company	1,746,243	507,872
Non-controlling interests	2	2
Total equity (Note 2)	1,746,245	507,874
Deferred tax liability	11,312	10,339
Non-current liabilities	20,663	22,887
Current liabilities	135,062	124,800
TOTAL LIABILITIES AND EQUITY	1,913,282	665,900

Other current liabilities include forward exchange contracts with a fair value of SEK 2.4 million on the balance sheet date (in the corresponding period in the previous year forward exchange contracts were included in current liabilities at SEK 2.5 million). All forward exchange contracts are attributable to level 2 of the fair value hierarchy. No changed assumptions with regard to measurement have taken place compared to the 2019 Annual Report. The fair values of other receivables, cash and cash equivalents, trade payables and other liabilities are estimated to be equal to their carrying amounts (amortised cost) due to the short maturity.

CONSOLIDATED CASH FLOW STATEMENTS

	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Summary (Amounts in SEK 000s)	2020	2019	2020	2019
Operating activities
Operating profit	45,250	68,106	228,150	242,511
Depreciation/amortisation	5,685	4,078	20,530	15,593
Unrealised gains/losses on forward contracts	-2,060	0	-4,876	5,085
Other non-cash items	972	-629	1,167	-2,010
Paid tax	-20,125	-21,550	-72,092	-72,292
Interest received and paid	-194	99	-646	-253
Cash flow from operating activities before changes in working
capital	29,528	50,104	172,233	188,634
Changes in working capital	25,087	-33,000	49,023	-40,779
Cash flow from operating activities	54,615	17,104	221,256	147,855
Acquisition of property, plant and equipment	-1,991	-12,495	-16,075	-32,316
Acquisition of intangible assets	-	-2,336	-	-6,708
Cash flow from investing activities	-1,991	-14,831	-16,075	-39,024
Dividend	-	-	-65,012	-173,365
Repayment of lease liability	-1,886	558	-7,632	-4,525
Provision to the Foundation to Prevent Antibiotic Resistance	-	-	-2,800	-3,200
New issue, net	1,126,840	-	1,126,840	,,-
Cash flow from financing activities	1,124,954	558	1,051,396	-181,090
Cash flow for the period	1,177,578	2,831	1,256,577	-72,259
Cash and cash equivalents at the beginning of the period	292,385	212,953	213,831	284,962
Exchange differences in cash and cash equivalents	-2,080	-1,953	-2,525	1,128
Cash and cash equivalents at the end of the period	1,467,883	213,831	1,467,883	213,831

NOTE 1 REPORTING BY SEGMENT – GROUP

Executive Management has analysed the Group's internal reporting system and established that the Group's operations are governed and evaluated based on the following segments:

• Paediatrics segment (drops, gut health tablets, oral rehydration solution (ORS) and cultures to be used as ingredients in licensee products (such as infant formula) as well as royalty revenues for paediatric products.)

• Adult Health Segment (gut health tablets, oral health lozenges and cultures as an ingredient in a licensee's dairy products as well as royalty revenues for Adult Health products).

• Other segment (smaller segments such as revenue from packaging solutions).

For the above segments BioGaia reports revenue and gross profit, which are monitored regularly by the CEO (who is regarded as the chief operating decision maker) together with the Executive Management. There is no monitoring of the company's total assets against the segments' assets.

(Amounts in SEK 000s)	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Revenue by segment	2020	2019	2020	2019
Paediatrics	139,614	157,378	583,111	600,090
Adult Health	47,309	49,920	161,186	167,321
Other	687	319	2,780	937
Total	187,610	207,616	747,077	768,347
Gross profit by segment
Paediatrics	106,444	119,614	431,810	445,676
Adult Health	32,904	34,251	112,588	117,385
Other	617	319	2,521	937
Total	139,964	154,184	546,918	563,998
Selling, administrative and R&D expenses	-86,534	-85,992	-302,425	-313,987
Other operating expenses	-8180	-86	-16,343	-7,500
Operating profit	45,250	68,106	228,150	242,511
Net financial items	-114	100	-567	-252
Profit before tax	45,136	68,206	227,583	242,259
Sales by geographical market
APAC		19,560
Paediatrics Adult Health	22,995 30,763	35,416	82,689 86,625	72,991 103,839
Other	450	61	1,432	129
		55,038
Total APAC	54,208		170,746	176,960
EMEA
Paediatrics	70,750	97,105	312,520	346,536
Adult Health	12,517	9,699	58,894	52,229
Other	221	257	1,169	807
Total EMEA	83,488	107,062	372,583	399,573
Americas
Paediatrics	45,869	40,712	187,902	180,562
Adult Health	4,029	4,804	15,667	11,252
Other	16	-	179	-
Total Americas	49,914	45,516	203,748	191,814
Total	187,610	207,616	747,077	768,347

	Oct-Dec	Oct-Dec	Jan-Dec	Jan-Dec
Date of recognition performance obligations met on specific date (product
sales)	2020	2019	2020	2019
Paediatrics	137,636	152,378	570,829	585,090
Adult Health	42,556	45,823	148,635	157,811
Other	494	61	2,027	129
Total	180,686	198,261	721,491	743,030
Performance obligations met over time (Royalty)
Paediatrics	1,978	5,000	12,282	15,000
Adult Health	4,753	4,097	12,551	9,509
Other	193	258	753	807
Total	6,924	9,355	25,586	25,317
Total	187,610	207,616	747,077	768,347

NOTE 2 SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(Amounts in SEK 000s)	Jan-Dec 2020	Jan-Dec 2019
Opening balance	507,874	508,121
New issue, net	1,130,512	-
Dividend	-65,012	-173,365
Provision to the Foundation to Prevent Antibiotic Resistance	-2,800	-3,200
Non-controlling interests related to the acquisition of MetaboGen and CapAble	-	89
Transaction between owners related to further acquisition of shares in MetaboGen	-	-11,444
Comprehensive income for the period	175,671	187,673
Closing balance	1,746,245	507,874

LARGEST SHAREHOLDERS AT 31 DECEMBER 2020 (SOURCE: MONITOR)

		A shares	B shares	Share capital	No. of votes	Capital	Votes
1	Peter Rothschild & Jan Annwall	740,668	100,000	840,668	7,506,680	4.16%	27.94%
2	EQT		1,625,000	1,625,000	1,625,000	8.05%	6.05%
3	Fjärde AP-Fonden		1,521,584	1,521,584	1,521,584	7.53%	5.66%
4	Swedbank Robur Fonder		1,112,405	1,112,405	1,112,405	5.51%	4.14%
5	Miton Asset Management		1,003,881	1,003,881	1,003,881	4.97%	3.74%
6	Cargill Inc		600,000	600,000	600,000	2.97%	2.23%
7	TIN Fonder		531,835	531,835	531,835	2.63%	1.98%
8	Tredje AP-fonden		380,263	380,263	380,263	1.88%	1.42%
9	Didner & Gerge Fonder		376,517	376,517	376,517	1.86%	1.40%
10	Juno Investment Partners		371,038	371,038	371,038	1.84%	1.38%
	Other shareholders		11,833,271	11,833,271	11,833,271	58.59%	44.05%
	Total	740,668	19,455,794	20,196,462	26,862,474	100%	100%

Consolidated key ratios

	Jan-Dec 2020	Jan-Dec 2019
Net sales, SEK 000s	747,077	768,347
Growth of net sales	-3%	4%
Operating profit, SEK 000s	228,150	242,511
Profit after tax, SEK 000s	179,730	187,258
Return on equity	16%	37%
Return on capital employed	20%	47%
Capital employed, SEK 000s	1,757,557	518,213
Number of shares (thousands) 1)	20,196	17,336
Average number of shares (thousands)	17,855	17,474
Earnings per share, SEK 1) 2)	10.07	10.72
Equity per share, SEK 1)	97.80	29.06
Equity/assets ratio	91%	76%
Operating margin	31%	32%
Profit margin	30%	32%
Average number of employees	157	149

1) The subscription price at the directed new issue announced in October 2020 amounted to SEK 400 per share which corresponded to 94 % of the share's fair value on the date of the new issue. A bonus issue element has been taken into account in the calculation of earnings per share before and after dilutive effects, which means that the comparative figure has been recalculated. There are no other dilutive effects.

2) Key ratio defined according to IFRS.

DEFINITIONS KEY RATIOS

Key ratio	Definition/Calculation	Purpose
Return on equity	Profit attributable to the owners of the Parent Company in relation to average equity attributable to the owners of the Parent Company.	Return on equity is used to measure profit generation, over time, given the resources attributable to the owners of the Parent Company
Return on capital employed	Profit before net financial items plus financial income as a percentage of average capital employed.	Return on capital employed is used to analyse profitability, based on the amount of capital used. .
Gross margin	Gross profit as a percentage of net sales.	The gross margin is used to measure profitability.
Equity per share	Equity attributable to the owners of the Parent Company divided by the average number of shares.	Equity per share measures the company's net value per share and indicates whether a company will increase the shareholders' wealth over time
Average number of shares	Time-weighted number of outstanding shares during the year taking bonus issue elements into account.	Used to calculate equity and earnings per share.
Earnings per share (EPS)	Profit for the period attributable to the owners of the Parent Company divided by average number of shares outstanding (definition according to IFRS).	EPS measures how much of net profit is available for payment to shareholders as dividends per share.
Operating margin (EBIT margin)	Operating profit expressed as a percentage of net sales.	The operating margin is used to measure operational profitability.
Equity/assets ratio	Equity as a percentage of total assets.	A traditional measure to show financial risk expressed as the share of total assets financed by the shareholders. Shows the company's stability and ability to withstand losses
Capital employed	Total assets less interest-free liabilities and lease liabilities.	Capital employed measures the company's ability, in addition to cash and liquid assets, to meet the requirements of business operations.
Growth	Sales for the period less sales for the corresponding period of the previous year divided by sales for the previous period. Breakdown into foreign exchange and organic growth.	Shows the company's realised sales growth over time.
Profit margin	Profit before tax as a percentage of sales.	This key ratio makes it possible to compare profitability regardless of corporate income tax rate.

DEFINITIONS OF KEY RATIOS, CONTINUED

(Amounts in SEK 000s)

Return on equity	Jan-Dec 2020	Jan-Dec 2019
Profit attributable to owners of the Parent Company (A)	179,730	187,347
Equity attributable to owners of the Parent Company	1,746,243	507,872
Average equity attributable to owners of the Parent Company (B)	1,127,058	506,427
Return on equity (A/B)	16%	37%
Return on capital employed
Operating profit	228,150	242,511
Financial income	155	416
Profit before net financial items + financial income (A)	228,306	242,927
Total assets	1,913,282	665,900
Interest-free liabilities	-155,725	-147,687
Capital employed	1,757,557	518,213
Average capital employed (B)	1,137,885	516,507
Return on capital employed (A/B)	20%	47%

DEFINITION OF KEY RATIOS, CONTINUED

Equity/assets ratio 2020 2019 Equity (A) 1,746,245 507,874 Total assets (B) 1,913,282 665,900 Equity/assets ratio (A/B) 91% 76% Operating margin Operating profit (A) 228,150 242,511 Net sales (B) 747,077 768,347 Operating margin (A/B) 30% 32% Profit margin Profit before tax (A) 227,583 242,259 Net sales (B) 747,077 768,347 Profit margin (A/B) 30% 32% Equity per share Equity attributable to owners of the Parent Company (A) 1,746,243 507,872 Average number of shares (B) 17,855 17,474 Equity per share (A/B) 97.80 29.06	(Amounts in SEK 000s)	31 Dec	31 Dec

CHANGE IN SALES BY SEGMENT (INCLUDING AND EXCLUDING FOREIGN EXCHANGE EFFECTS)

		Paediatrics		Adult Health		Other		Total
	(Amounts in SEK 000s)	Oct-Dec 2020	Jan Dec 2020	Oct-Dec 2020	Jan Dec 2020	Oct-Dec 2020	Jan Dec 2020	Oct-Dec 2020	Jan Dec 2020
A	Description Previous year's net sales according to the average rate	157,377	600,089	49,920	167,321	319	937	207,616	768,347
B	Net sales for the year according to the average rate	139,614	583,111	47,309	161,186	687	2,780	187,610	747,077
C	Recognised change (B-A)	-17,763	-16,978	-2,611	-6,134	368	1,843	-20,006	-21,270
	Percentage change (C/A)	-11%	-3%	-5%	-4%	115%	197%	-10%	-3%
D	Net sales for the year according to the previous year's average rate (D)	148,450	588,290	50,288	163,429	687	2,780	199,425	754,499
E	Foreign exchange effects (C-F)	-8,836	-5,179	-2,979	-2,243	0	0	-11,815	-7,423
	Percentage change (E/A)	-6%	-1%	-6%	-1%	0%	0%	-6%	-1%
F	Organic change (D-A)	-8,927	-11,799	368	-3,892	368	1,843	-8,191	-13,848
	Organic change per cent (F/A)	-6%	-2%	1%	-2%	115%	197%	-4%	-2%

Average key exchange rates	Oct-Dec 2020	Oct-Dec 2019	Jan-Dec 2020	Jan-Dec 2019
EUR	10.32	10.66	10.54	10.59
USD	8.70	9.63	9.27	9.46
JPY	0.0862	0.0886	0.0862	0.0868

Key exchange rates on closing date	31 Dec 2020	31 Dec 2019
EUR	10.04	10.43
USD	8.19	9.32
JPY	0.0792	0.0853

Pledged assets and contingent liabilities	GROUP
(Amounts in SEK 000s)	31 Dec 2020	31 Dec 2019
Floating charges	0	2,000
Contingent liabilities	None	None

SUMMARY STATEMENT OF COMPREHENSIVE INCOME, PARENT COMPANY

PARENT COMPANY INCOME STATEMENT

(Amounts in SEK 000s)	Jan-Dec	Jan-Dec
	2020	2019
Net sales	699,349	720,730
Cost of sales	-241,555	-246,478
Gross profit	457,794	474,252
Selling expenses	-138,162	-153,320
Administrative expenses	-24,306	-23,523
R&D expenses	-84,063	-90,920
Other operating expenses	-16,943	-7,451
Operating profit	194,320	199,038
Impairment loss on shares in subsidiary	-20,756	-1,297
Net financial items	1,169	1,885
Profit before tax	174,733	199,626
Tax	-37,061	-36,948
Profit for the period	137,672	162,678

PARENT COMPANY BALANCE SHEET

Summary (Amounts in SEK 000s)	31 Dec	31 Dec
	2020	2019
ASSETS
Property, plant and equipment	6,246	6,949
Shares in group companies	4,472	6,708
Shares in associates	154,671	154,671
Non-current receivables from subsidiaries	10,835	35,835
Total non-current assets	176,224	204,163
Current assets excl. cash and cash equivalents	198,013	207,674
Cash and cash equivalents	1,419,361	153,217
Total current assets	1,617,374	360,891
TOTAL ASSETS	1,793,598	565,054
EQUITY AND LIABILITIES
Equity	1,636,587	436,216
Interest-free current liabilities	157,011	128,838
TOTAL LIABILITIES AND EQUITY	1,793,598	565,054

PARENT COMPANY CASH FLOW STATEMENT

	Jan-Dec	Jan-Dec
Summary (Amounts in SEK 000s)	2020	2019
Operating activities
Operating profit	194,320	199,038
Depreciation	3,746	1,458
Other non-cash items	1,881	-1,773
Forward exchange contracts	-4,876,	5,085
Tax paid	-59,309	-59,401
Interest received and paid	1,169	1,886
Cash flow from operating activities before changes in
working capital	136,931	146,293
Changes in working capital	47,874	-26,822
Cash flow from operating activities	184,805	119,471
Acquisition of intangible assets	-	-6,708
Acquisition of property, plant and equipment	-807	-3,189
Sale of property, plant and equipment	-	-
Acquisition of financial assets	-	-15,000
Repayment of loan from subsidiary	25,000	10,000
Cash flow from investing activities	24,193	-14,897
Dividend	-65,012	-173,364
Provision to Foundation to Prevent Antibiotic Resistance	-2,800	-3,200
New issue, net	1,126,840	-
Cash flow from financing activities	1,059,028	-176,564
Cash flow for the period	1,268,026	-71,990
Cash and cash equivalents at the beginning of the period	153,217	224,732
Exchange rate differences in cash and cash equivalents	-1,882	475
Cash and cash equivalents at the end of the period	1,419,361	153,217

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

(Amounts in SEK 000s)	Jan-Dec 2020	Jan-Dec 2019
Opening balance	436,215	450,102
Dividend	-65,012	-173,365
Provision to Foundation to Prevent Antibiotic Resistance	-2,800	-3,200
New issue, net	1,130,512	-
Comprehensive income for the period	137,672	162,678
Closing balance	1,636,587	436,215

Board member Board member CEO

AUDITOR'S REVIEW REPORT

Introduction

We have reviewed the Year-End Report of BioGaia AB (publ), for the period 1 January – 31 December 2020. The Board of Directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.

Focus and scope of review

We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review has a different focus and is substantially less in scope than an audit conducted in accordance with International Standards on Auditing (ISA) and other generally accepted auditing practices. The procedures performed in a review do not enable us to obtain a level of assurance that would make us aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion based on an audit.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the interim report is not, in all material respects, prepared for the Group in accordance with IAS 34 and the Annual Accounts Act and for the Parent Company in accordance with the Annual Accounts Act.

Stockholm, 4 February 2021

Deloitte AB

Birgitta Lööf Authorised Public Accountant

BIOGAIA AB

THE COMPANY

Q4

2020

BioGaia is an innovative Swedish healthcare company and has been a world-leader in dietary supplements with probiotics for 30 years. BioGaia develops, markets and sells probiotic products with documented health benefits. The products are primarily based on different strains of the lactic acid bacterium Limosilactobacillus* reuteri.

The Parent Company BioGaia AB's class B shares are quoted on the Mid Cap List of Nasdaq OMX Nordic Exchange Stockholm.

BUSINESS MODEL

BioGaia's business model is based on long-term collaboration with international networks within research, production and distribution.

BioGaia's revenue comes mainly from the sale to distributors of drops, tablets and capsules for gut health, oral rehydration solution (ORS), lozenges for oral health and capsules for bone health. Revenue is also earned from the sale of bacterial cultures to be used in licensee products (such as infant formula and dairy products), as well as royalties for the use of L. reuteri in licensee products.

The products are sold through pharmaceutical and nutrition companies in over 100 countries.

BioGaia has patent protection for the use of specific strains of L. reuteri and certain packaging solutions in all significant markets.

THE BIOGAIA BRAND

.

BioGaia launched its own consumer brand at the beginning of 2006. Today a number of distribution partners sell finished products under the BioGaia brand in a large number of markets. One key part of BioGaia's strategy is to increase the share of sales consisting of BioGaiabranded products. Of products (drops, tablets for gut and oral health, oral rehydration, etc.) sold in 2020, 77% (71%) were sold under the BioGaia brand including co-branding.

Some of BioGaia's distributors sell finished consumer products under their own brand names. On these products, the BioGaia brand is shown on the consumer package since BioGaia is both the manufacturer and licensor.

BioGaia's licensees add reuteri culture to their products and sell these under their own brand names. On these products, the BioGaia brand is most often shown on the package as the licensor/patent holder.

RESEARCH AND CLINICAL STUDIES

BioGaia's strains of L. reuteri are some of the world's most studied probiotics, especially in young children. To date, more than 220 clinical studies using BioGaia's strains of L. reuteri have been performed on more than 18,000 individuals of all ages.

Studies performed include:

• Infantile colic
• Antibiotic-associated diarrhoea
• Acute diarrhoea
• Gingivitis (inflammation of the gums)
• Periodontal disease
• Helicobacter pylori (the gastric ulcer bacterium)
• Low bone density

* Previously Lactobacillus.

BioGaia AB Box 3242 SE-103 64 STOCKHOLM Street address: Kungsbroplan 3, Stockholm Telephone: +46 8 555 293 00, Corporate identity number 556380-8723, www.biogaia.com