Quarterly Report • May 10, 2016
Quarterly Report
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Interim management statement 1 January – 31 March 2016 (10 pages)
(Figures in brackets refer to the same period of last year. The comparative figures in the balance sheet refer to 31 December 2015.)
"Compared to the same period of last year, the first quarter of 2016 showed a varied palette of sales successes in Canada and the USA, modest development in Europe and declining sales in Asia and Rest of World. The highlights included the successful launch of our new Easy Dropper, which will eventually replace the glass bottles for our drops, and two meta-analyses that confirm the effectiveness of BioGaia ProTectis in colic and the effectiveness of BioGaia ProDentis in periodontitis. At the end of the period we distributed the shares in IBT to our shareholders, and since that time IBT is an independent company that is listed on Nasdaq First North," says Axel Sjöblad, Managing Director of BioGaia AB.
Net sales amounted to SEK 133.9 million (138.8), a decrease of SEK 4.9 million (4%).
Net sales in the Paediatrics business area reached SEK 108.1 million (115.3)1), a decrease of SEK 7.2 million (6%).
Net sales in the Adult Health business area amounted to SEK 21.1 million (19.8), an increase of SEK 1.3 million (7%).
Operating profit was SEK 46.1 million (52.6), a decrease of SEK 6.5 million (12%). Excluding expenses in the former subsidiary IBT, operating profit was SEK 51.3 million (56.3).
Profit after tax was SEK 33.6 million (43.2), a decrease of SEK 9.6 million (22%).
Earnings per share totalled SEK 1.95 (2.50).
The period's cash flow was SEK -4.8 million (37.8). Cash and cash equivalents at 31 March 2016 amounted to SEK 221.5 million (226.9). BioGaia's former subsidiary IBT was distributed to BioGaia's shareholders on 29 March 2016. Excluding IBT, the period's cash flow was SEK 39.0 million.
BioGaia distributed the shares in IBT on 29 March 2016 in accordance with the resolution of the extraordinary general meeting.
New meta-analysis confirms the effectiveness of BioGaia ProTectis in colic.
Meta-analysis confirms the effectiveness of BioGaia ProDentis in periodontal disease.
Agreement for the sale of BioGaia ProDentis in Hong Kong.
BioGaia guarantees rights issue in IBT.
Yet another meta-analysis confirms the effectiveness of BioGaia ProTectis in colic.
1) A minor reallocation between the segments was made in the previous year's sales in order to achieve better comparability with the year's figures.
Teleconference: You are welcome to take part in a teleconference on the interim management statement that will be held today at 9:30 a.m. by Managing Director Axel Sjöblad. To participate in the teleconference please see www.biogaia.com/agenda. You can also follow the presentation at http://financialhearings.nu/?160510/biogaia.
BioGaia has published this information in accordance with the Swedish Securities Act. The information was issued for publication on 10 May 2016, 8.00 a.m.
This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording shall prevail.
Figures in brackets refer to the same period of last year. The comparative figures in the balance sheet refer to 31 December 2015.
We hereby present BioGaia AB's interim management statement for the period from 1 January to 31 March 2016. A description of the company's operations is provided on page 10.
On 1 March I took up duties as Managing Director of BioGaia. Thanks to the fact that I had been able to work alongside Peter Rothschild since the last week of January, I was well prepared to take over the responsibility.
During my first months I have met with the majority of our partners in Canada, the USA, South America, Europe, Africa and Asia. These meetings have given me a nuanced picture of how much our partners appreciate our products and what they expect from us as supplier.
I have combined the partner discussions with internal meetings with my management team and a large number of my employees, and these talks have given me a good understanding of both our strengths and opportunities for development.
Thanks to the clear feedback provided by our partners and my employees, I have already been able to start a gradual process of change in BioGaia in which we will continue to grow our business with our strengths as a foundation and springboard.
For the first quarter we achieved sales of SEK 133.9 million (138.8), which is a decrease of SEK 4.9 million (4%) compared to the same period of last year. I am disappointed that we didn't reach further, but at the same time glad that we are growing and have returned to a revenue above SEK 130 million after the weak fourth quarter of 2015.
Compared to the same period of last year, the first quarter of 2016 showed a varied palette of sales successes in Canada and the USA, modest development in Europe and declining sales in Asia and Rest of World. The highlights included the successful launch of our new Easy Dropper, which will eventually replace the glass bottles for our drops, and two meta-analyses that confirm the effectiveness of BioGaia ProTectis in colic and the effectiveness of BioGaia ProDentis in periodontal disease. At the end of the period we distributed the shares in IBT to our shareholders, and since that time IBT is an independent company that is listed on Nasdaq First North.
For the past rolling 12-month period, our sales were up by 11% (excluding foreign exchange effects, 5%) compared to the same period of last year. BioGaia has now reached a sales level from which we are working towards the next stage of growth.
Gross margin rose from 70% to 71%, driven by increased royalty revenue from Nestlé's sales of Growing Up Milk for children older than one year.
R&D expenses amounted to SEK 18.7 million (18.9) (excluding IBT, SEK 13.6 million (15.3)). The decrease is explained by lower external R&D expenses as a result of delayed studies. Since investments in clinical studies are critical for sustained growth, our ambition is to get a number of studies started during the year, after which these expenses are expected to increase.
Our operating profit was SEK 46.1 million (52.6) (excluding IBT, SEK 51.3 million (56.3)). Despite a decrease in operating profit, which of course is not satisfactory, operating margin was 34% (excluding IBT, 38%), which exceeds our target of 30%.
In Europe the sales of drops and oral health products increased. We launched Gastrus in Spain, which is an important step for this new product. It is also worth noting that Verman in Finland made a strong start to the year after a weak fourth quarter of 2015.
In the USA and Canada, it was highly satisfying to note that our sales were up by 62%. We are still at a low level, but all of our
partners reported healthy growth. Sales of both drops and tablets for children increased.
Sales in Asia declined, which can be regarded as a disappointment. The strong growth in South Korea could not compensate for a weak quarter in Hong Kong and Indonesia.
In Rest of World, sales fell by 37% with lower sales of both drops and tablets. The main explanations for this are the previously communicated inventory levels in Brazil and slow development in South Africa following the takeover of our distributor, although this is expected to increase our sales in a longer perspective. In Brazil, our partner Aché reports that sales to consumers are showing continued strong development. In view of this, I am counting on new deliveries to Aché by the fourth quarter at the latest.
Nestlé continues to purchase lower culture volumes for infant formula, which is impacting our sales but not our profit, since the margin on these sales is low. It is encouraging that Nestlé's sales of Growing Up Milk for children older than one year are showing sustained strong growth, which means that our royalty revenue for this product portfolio has continued to increase.
Throughout the rest of the year my top priorities will be to continue working with our anticipated future growth markets in Japan, the USA, the UK, China and India, our expansion of the existing product portfolio, the rollout of ProDentis and Gastrus and the launch of Easy Dropper.
Consolidated net sales amounted to SEK 133.9 million (138.8), a decrease of SEK 4.9 million (4%) compared to the same period of last year.
Most of the company's sales are denominated in foreign currency, primarily EUR but also USD, CHF and JPY. With unchanged exchange rates compared to the same period of last year, net sales would have been SEK 0.2 million lower. Changes in foreign exchange rates affect both income and expenses. With unchanged exchange rates, operating profit would have been SEK 0.1 million higher.
For the past 12-month period, net sales were up by 11% (excluding foreign exchange effects, 5%).
Net sales in BioGaia's core area Paediatrics amounted to SEK 108.1 million (115.3) 1), a decrease of SEK 7.2 million (6%) (excluding foreign exchange effects 6%). This is mainly due to lower sales of oral health tablets and cultures for infant formula.
Overall sales of drops were largely unchanged compared to the same period of last year. Sales of drops increased in North America and Europe but decreased in Asia and Rest of World.
Total sales of oral health tablets in Business Unit Paediatrics were down compared to the same period of last year. Tablet sales rose in Asia and North America but declined in other markets.
Sales of cultures for infant formula were lower than in the same period of last year.
Royalty revenue from Nestlé for the use of L. reuteri in Growing Up Milk for children older than one year increased compared to the same period of last year.
For the past 12-month period, sales in Business Unit Paediatrics increased by 13% (excluding foreign exchange effects, 6%)1).
Net sales in Business Unit Adult Health amounted to SEK 21.1 million (19.8), an increase of SEK 1.3 million (7%) (excluding foreign exchange effects, 6%) compared to the same period of last year. The increase is mainly due to higher sales of Gastrus and ProDentis.
Gastrus has recently been launched in Europe (Italy and Spain) and in the USA. As earlier, Gastrus is also sold in Asia (Japan and South Korea).
Sales of oral health products were up in all markets except Asia, where they fell slightly.
Sales of digestive health tablets in Business Unit Adult Health were largely unchanged compared to the same period of last year.
For the past 12-month period, sales in Business Unit Adult Health increased by 2% (excluding foreign exchange effects, sales decreased by 1%).
Net sales in Business Unit New Business amounted to SEK 4.6 million (3.6) 1), an increase of SEK 1.0 million. Business Unit New Business is included in "Other" in the segment reporting.
Business Unit New Business includes royalty revenue of SEK 3.5 million (2.8) 1) from the collaboration agreement that was signed with Nestlé in March 2014. The royalty revenue amounts to a total of SEK 92.0 million for the period 2014-2017 and is distributed between Paediatrics and New Business. Under the agreement, BioGaia has undertaken to carry out clinical studies on children and develop new products in new areas. BioGaia will recognize the royalty revenue in pace with completion of the projects. At 31 March 2016, BioGaia had recognized revenue of SEK 46.3 million of a total of SEK 92 million, of which SEK 28.1 million in Business Unit New Business and SEK 18.2 million in Business Unit Paediatrics.
SALES BY GEOGRAPHICAL MARKET IN THE FIRST QUARTER
Net sales in Europe were up by SEK 1.3 million (1%) to SEK 93.3 million. For the past 12-month period, sales increased by 3%.
Net sales in the USA and Canada rose by SEK 3.8 million (62%) to SEK 9.9 million. For the past 12-month period, sales increased by 16%.
Net sales in Asia decreased by SEK 0.1 million (1%) to SEK 13.5 million. For the past 12-month period, sales increased by 24%.
Net sales in Rest of World decreased by SEK 9.9 million (37%) to SEK 17.2 million. For the past 12-month period, sales increased by 30%.
Of total finished consumer products, (drops, digestive health tablets, oral health tablets, oral rehydration solution, etc.) 57% (56%) 2) were sold under the BioGaia brand, including co-branding, during the first quarter.
Gross profit amounted to SEK 94.8 million (97.8), which is a decrease of SEK 3.0 million (3%) compared to the same period of last year. The total gross margin rose from 70% to 71%.
Gross margin for Business Unit Paediatrics strengthened from 69% to 71%. This is due to increased royalty revenue for the use of bacteria cultures in infant formula products for children older than one year (with a 100% margin) and lower sales of cultures for infant formula with a very low margin.
Gross margin for Business Unit Adult Health fell from 71% to 64%. This is partly because Gastrus has a lower margin during the launch period, and partly because the margin on tablets has decreased slightly as a result of higher costs for bacteria cultures.
Total operating expenses including other expenses rose by 7% to SEK 48.6 million compared to the same period of last year. Operating expenses include expenses for the subsidiary IBT totalling SEK 5.2 million (3.7). Excluding these, the increase in operating expenses would have been 4%.
For the past 12-month period, total operating expenses increased by 13% (excluding the subsidiary IBT, 5%).
Selling expenses decreased compared to the same period of last year by SEK 1.7 million (7%) and amounted to SEK 23.1 million (24.8), which is equal to 17% (18%) of net sales. It was primarily personnel and agency expenses that declined compared to the same period of last year. For the past 12-month period, selling expenses were down by 1% and excluding expenses in IBT by 4%.
Administrative expenses amounted to SEK 5.6 million (4.9), which is equal to 4% (4%) of net sales. The increase of SEK 0.7 million (13%) is explained by higher personnel costs. For the past 12 month period, the Group's administrative expenses increased by 1%.
R&D expenses are reported at SEK 18.7 million (18.9), which is equal to 14% (14%) of net sales. Excluding IBT, R&D expenses and amounted to SEK 13.6 million (15.3). The decrease of SEK 1.7 million (11%) is due to lower external R&D expenses as a result of delayed studies. For the past 12-month period, R&D expenses increased by 16% (excluding IBT, R&D expenses decreased by 2%).
Other operating income/expenses refer to foreign exchange gains/losses on operating receivables and liabilities. These amounted to SEK -0.9 million during the quarter, compared to SEK +3.3 million in the first quarter of last year.
Operating profit was SEK 46.1 million (52.6), a decrease of SEK 6.5 million (12%) and operating margin was 34% (38%). Excluding the subsidiary IBT, operating profit was SEK 51.3 million (56.3) and operating margin was 38% (41%).
Profit before tax was SEK 45.6 million (55.9), a decrease of SEK 10.3 million (18%) compared to the same period of last year. Net financial items include a foreign exchange loss of SEK 0.5 million on forward exchange contracts in EUR and USD. The figures for the previous year included a corresponding foreign exchange gain of SEK 3.3 million.
At 31 March 2016 the company had outstanding forward exchange contracts for EUR 11.7 million at an average exchange rate of SEK 9.34 and USD 1.4 million at an average exchange rate of SEK 8.49. Forward exchange contracts amounting to EUR 6.5 million and USD 1.4 million will mature for payment in 2016 and EUR 5.2 million in 2017. The actual exchange gain/loss depends on the exchange rate on the maturity date of the contracts.
Profit after tax was SEK 33.6 million (43.2), a decrease of SEK 9.6 million (22%).
The tax rate for the Group was 26% (23%). The Group pays tax on profits in the Swedish companies. Since IBT is no longer a subsidiary, no group contributions can be paid to the subsidiary and the tax rate is therefore higher.
The loss in Japan is not deductible against the Swedish profits. Tax loss carryforwards in the Japanese subsidiary amounted to SEK 32.2 million at 31 March 2016. The deferred tax asset for these has not been recognized, since a sustainable profit level has not yet been shown in the Japanese subsidiary.
Earnings per share were SEK 1.95 (2.50).
Cash flow for the period amounted to SEK -4.8 million (37.8). BioGaia's former subsidiary IBT was distributed to BioGaia's shareholders on 29 March 2016. At that time, IBT's cash and cash equivalents amounted to SEK 37.6 million.
Excluding IBT, cash flow for the period amounted to SEK 39.0 million.
The Group's cash and cash equivalents at 31 March 2016 amounted to SEK 221.5 million (226.9). The proposed dividend to the upcoming AGM amounts to SEK 86.7 million.
Consolidated equity at 31 March 2016 amounted to SEK 380.0 million (395.8). The Group's equity/assets ratio was 84% (84%).
The Board of Directors of BioGaia AB proposes that the upcoming AGM approve an ordinary dividend of SEK 3.03 per share and an extraordinary dividend of SEK 1.97 per share, for a total dividend of SEK 5.00 per share. This corresponds to total dividends of SEK 86.7 million.
Investments in property, plant and equipment totalled SEK 1.5 million (3.3), of which SEK 1.5 million (3.1) refers to TwoPac AB.
Investments in capitalized development expenditure amounted to SEK 0.0 million (2.3). The investments in 2015 referred to development of a product for the NEC project in the subsidiary IBT AB. Since IBT is no longer a subsidiary in BioGaia Group, there is no capitalized development expenditure in the Group.
Net sales in the wholly owned subsidiary in Japan reached SEK 5.0 million (4.3). Operating loss in the Japanese subsidiary was SEK -0.9 million (-0.9).
TwoPac AB is a wholly owned subsidiary of BioGaia that manufactures and develops products exclusively for BioGaia. Among other things, TwoPac produces drops for BioGaia.
Net sales in TwoPac amounted to SEK 13.7 million (13.9). Operating profit was SEK 2.2 million (3.5). Profit after tax was SEK 1.6 million (2.6). Operating expenses in the company are increasing, which is due to higher personnel and amortization/depreciation expenses.
CapAble, which is owned 90.1% by BioGaia AB and 9.9% by the CapAble's President, was started in November 2008 to manufacture and sell the patented LifeTop Cap. Net sales in CapAble totalled SEK 0 million (0) during the period. Operating profit amounted to SEK -0.9 million (-0.7).
Net sales in the Parent Company reached SEK 129.7 million (134.5) million and profit before tax was SEK 49.2 million (58.9). Cash flow in the Parent Company totalled SEK 34.3 million (-27.6).
| Distributor/licensee | Country | Product |
|---|---|---|
| Abbott/Recalcine | Chile | ProDentis oral health tablets |
| Alimentary Health | Ireland | LifeTop Straw (CapAble AB) |
| Baltic Business Partners | Lithuania | ProDentis oral health tablets |
| Biovagen | Vietnam | Tablets |
| Casen/Recordati | Spain | Gastrus digestive health tablets, Easy Dropper1) |
| DongSung | South Korea | Easy Dropper1) |
| Italchimici | Italy | Easy Dropper1) with vitamins D and K |
| Noos | Italy | Easy Dropper1) with vitamins D and K |
| Verman | Finland | Easy Dropper1) |
1) New user-friendly package for drops
An extraordinary general meeting on 18 March 2016 resolved to distribute the shares in the subsidiary IBT to BioGaia's shareholders. At the end of March IBT was listed on First North. As of 29 March 2016, IBT is no longer part of the BioGaia Group.
The operating loss in IBT for the period up to 29 March 2016 is consolidated in the BioGaia Group and amounted to SEK -5.2 million (-3.7) million.
The analysis evaluated 17 studies on treatments for colic, of which L. reuteri ProTectis was the only probiotic. Only one other product was found to be effective. Simethicone, a drug often prescribed for colic, was shown to have no effect.
The systematic review and meta-analysis was published online by researchers Tracey Harb and colleagues at the University of Queensland, Australia, in Journal of Pediatric Gastroenterology and Nutrition on 14 December 2015.
A systematic review of probiotics as an adjunct to treatment of periodontitis showed that Lactobacillus reuteri ProDentis was the only probiotic that was effective in patients with chronic periodontitis.
The meta-analysis is the first for probiotics in periodontal treatment. Only four studies, all using Lactobacillus reuteri ProDentis, were eligible for inclusion in the systematic review. As no other probiotic products qualified, the analysis concludes that Lactobacillus reuteri ProDentis is the only probiotic that gives significant additional pocket reduction in moderate and deep pockets when used in combination with standard treatment of chronic periodontitis. In the studies, Lactobacillus reuteri ProDentis showed a statistically significant improvement compared to standard treatment only.
The systematic review and meta-analysis was published online by researchers Olivier Huck and colleagues at Department of Periodontology, Dental Faculty, University of Strasbourg, France, in Journal of Periodontology 11 March 2016.
At the end of April BioGaia signed an exclusive agreement with BioWellTech Co Ltd for the rights to sell BioGaia Prodentis in Hong Kong. The launch is planned to take place in the third quarter of 2016.
IBT's prospectus for the upcoming rights issue was published on 27 April. To ensure the rights issue, BioGaia has guaranteed the issue up to an amount of SEK 38 million. Through the guarantee, BioGaia wishes to give IBT and its shareholders favourable circumstances for a successful share issue, the proceeds of which will be used for clinical studies to be started in the near future.
In the event that BioGaia's guarantee is utilized, the holding will be handled as a financial asset and sold on an appropriate occasion.
At the beginning of May, yet another systematic review was presented that further strengthened the proof of the effectiveness of ProTectis in infantile colic.
This new, eighth review included four studies on L. reuteri ProTectis. The analysis combined raw data from these studies (Individual Participant Data Meta-Analysis, IPDMA), a method that yields more reliable estimates of treatment effect compared to meta-analyses based on published data only. The analysis was undertaken according to the methods recommended by Cochrane.
The systematic review and meta-analysis was presented at the PAS (Pediatric Academic Societies) meeting in Baltimore, USA, on 1 May 2016.
The number of employees in the Group at 31 March 2016 was 101 (98). The number of employees for the previous year includes the four employees in IBT.
Significant risks and uncertainties are described in the administration report on pages 6 and 7 and in Notes 29 and 30 in the annual report for 2015. No significant changes in these risks and uncertainties are assessed to have taken place at 31 March 2016.
This interim management statement has in all material aspects been prepared in accordance with Nasdaq OMX Stockholm's Guidelines for preparing interim management statements. Disclosures according to IAS 34 Interim Financial Reporting are provided both in the notes and in other parts of the interim management statement. The accounting standards applied in the consolidated profit and loss account and balance sheet are consistent with those used in preparation of the most recent annual report. The financial statements and segment information are consistent with the presentation used in the interim reports presented in compliance with IAS 34, in order to achieve comparability in presentation between quarters. The interim management statement contains, among other things, comments from the Managing Director, although this is not a requirement according to Nasdaq OMX Stockholm's Guidelines for preparing interim management statements. This information is nonetheless considered important in meeting the users' needs.
The applied accounting policies correspond to those described in the annual report for 2015. A number of standards and interpretations have been published but have not yet gone into effect. These are not assessed to have any significant impact on the profit or financial position of the Group or the Parent Company aside from increased disclosures.
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 financial target is a sustainable operating margin (operating profit in relation to sales) of at least 30% 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 40% of profit after tax.
In view of the Company's strong portfolio consisting of an increased number of innovative products that are sold under the BioGaia brand to a growing extent, successful clinical trials and an expanding distribution network that covers a large share of the key markets, BioGaia's future outlook is bright.
1) A minor reallocation between the segments was made in the previous year's sales in order to achieve better comparability with the year's figures. 2) An adjustment of the previous year's percentage has been made since the definition between partner brand and co-branding has been changed.
| Statements of comprehensive income – Group | |||||
|---|---|---|---|---|---|
| (Amounts in SEK 000s) | Jan-Mar | Jan-Mar | Jan-Dec | April 2015- | April 2014- |
| 2016 | 2015 | 2015 | March 2016 | March 2015 | |
| Net sales | 133,853 | 138,846 | 483,241 | 478,248 | 432,033 |
| Cost of sales | -39,079 | -41,010 | -146,657 | -144,726 | -140,635 |
| Gross profit | 94,774 | 97,836 | 336,584 | 333,522 | 291,398 |
| Selling expenses | -23,111 | -24,765 | -93,735 | -92,081 | -95,529 |
| Administrative expenses | -5,589 | -4,925 | -501 | -1,165 | -19,003 |
| Research and development expenses | -13,621 | -15,291 | -71,257 | -69,587 | -52,568 |
| Shares of profit of associates | -233 | - | -65 | -298 | - |
| Profit from discontinued operations (dividend) | -5,162 | -3,686 | -20,615 | -22,091 | -8,647 |
| Other operating income/expenses | -923 | 3,401 | 1,773 | -2,551 | 10,023 |
| Operating profit | 46,135 | 52,570 | 152,184 | 145,749 | 125,674 |
| Interest income | 10 | 143 | 331 | 198 | 1,682 |
| Foreign exchange gain/loss, forward contracts | -541 | 3,184 | 5,107 | 1,382 | -3,485 |
| Financial expenses | -37 | -33 | -269 | -273 | -138 |
| Profit before tax | 45,567 | 55,864 | 157,353 | 147,056 | 123,733 |
| Tax | -11,986 | -12,634 | -36,062 | -35,414 | -29,481 |
| PROFIT FOR THE PERIOD | 33,581 | 43,230 | 121,291 | 111,642 | 94,252 |
| Items that will be reclassified to profit or loss | |||||
| Gains/losses arising on translation of the financial | |||||
| statements of foreign operations | -341 | 682 | 462 | -561 | 1,154 |
| Comprehensive income for the period | 33,240 | 43,912 | 121,753 | 111,081 | 95,406 |
| Profit for the period attributable to: | |||||
| Owners of the Parent Company | 33,865 | 43,230 | 121,408 | 112,043 | 93,429 |
| Non-controlling interests | -284 | 0 | -117 | -401 | 823 |
| 33,581 | 43,230 | 121,291 | 111,642 | 94,252 | |
| Comprehensive income for the period attributable to: | |||||
| Owners of the Parent Company | 33,524 | 43,912 | 121,870 | 111,482 | 94,583 |
| Non-controlling interests | -284 | 0 | -117 | -401 | 823 |
| 33,240 | 43,912 | 121,753 | 111,081 | 95,406 | |
| Earnings per share | |||||
| Basic earnings per share (average number of shares), SEK | 1.95 | 2.50 | 7.01 | 6.47 | 5.41 |
| Diluted earnings per share, SEK | 1.95 | 2.50 | 7.01 | 6.47 | 5.41 |
| Number of shares, thousands | 17,336 | 17,271 | 17,336 | 17,336 | 17,271 |
| Average number of shares, thousands | 17,336 | 17,271 | 17,309 | 17,325 | 17,271 |
| Number of outstanding warrants, thousands Number of outstanding warrants with a dilutive effect, thousands |
- - |
87 - |
- - |
- - |
87 - |
| Number of shares after dilution, thousands | 17,336 | 17,271 | 17,309 | 17,325 | 17,271 |
| CONSOLIDATED STATEMENTS OF FINANCIAL POSITION |
31 Mar | 31 Dec | 31 Mar |
|---|---|---|---|
| (Amounts in SEK 000s) | 2016 | 2015 | 2015 |
| ASSETS | |||
| Intangible assets | - | 16,225 | 8,405 |
| Property, plant and equipment | 83,741 | 83,934 | 74,787 |
| Investments in associates | 7,702 | 7,936 | 4,000 |
| Total non-current assets | 22 | 22 | 23 |
| Current assets excl. cash and cash equivalents | 91,465 | 108,117 | 87,215 |
| Cash and cash equivalents | 138,869 | 138,179 | 138,630 |
| Total current assets | 221,494 | 226,882 | 249,953 |
| Total current assets | 360,363 | 365,061 | 388,583 |
| TOTAL ASSETS | 451,828 | 473,178 | 475,798 |
| EQUITY AND LIABILITIES | |||
| Equity attributable to owners of the Parent Company | 380,046 | 395,851 | 388,404 |
| Non-controlling interests | -18 | -18 | 99 |
| Total equity | 380,028 | 395,833 | 388,503 |
| Provision for deferred tax | 351 | 351 | 192 |
| Other provisions | - | - | 3,900 |
| Interest-free current liabilities | 71,449 | 76,994 | 83,203 |
| TOTAL EQUITY AND LIABILITIES | 451,828 | 473,178 | 475,798 |
| Pledged assets | 2,253 | 2,690 | 12,345 |
| CONSOLIDATED CASH FLOW STATEMENTS | Jan-Mar | Jan-Mar | Jan-Dec |
| (Amounts in SEK 000s) | 2016 | 2015 | 2015 |
| Operating activities | |||
| Operating profit | 46,135 | 52,570 | 152,184 |
| Depreciation/amortization | 1,690 | 1,267 | 6,548 |
| Other non-cash items | 679 | -1,252 | -813 |
| 48,504 | 52,585 | 157,919 | |
| Gains/losses on realized forward exchange contracts | -290 | 437 | 2,203 |
| Paid tax | -12,323 | -14,464 | -50,124 |
| Interest received and paid | -26 | 110 | 63 |
| Cash flow from operating activities before changes in working capital |
35,865 | 38,668 | 110,061 |
| Changes in working capital | -1,508 | 4,707 | 7,440 |
| Cash flow from operating activities | 34,357 | 43,375 | 117,501 |
| Acquisition of intangible assets | - | -2,330 | -10,150 |
| Acquisition of property, plant and equipment | -1,495 | -3,265 | -17,780 |
| Acquisition of financial assets | - | - | -4,000 |
| Cash flow from investing activities | -1,495 | -5,595 | -31,930 |
| Dividends | - | - | -86,355 |
| Distribution of shares in IBT | -37,629 | - | - |
| New share issue, warrant programme | - | - | 15,844 |
| Cash flow from financing activities | -37,629 | 0 | -70,511 |
| Cash flow for the period | -4,767 | 37,780 | 15,060 |
| Cash and cash equivalents at beginning of period | 226,882 | 210,666 | 210,666 |
| Exchange difference in cash and cash equivalents | -621 | 1,507 | 1,156 |
| Cash and cash equivalents at end of period | 221,494 | 249,953 | 226,882 |
| Jan-Mar | Jan-Mar | Jan-Dec | |
|---|---|---|---|
| 2016 | 2015 | 2015 | |
| At beginning of period | 395,833 | 344,591 | 344,591 |
| Dividends | - | - | -86,355 |
| Distribution of shares in IBT | -49,045 | - | - |
| New share issue, warrant programme | - | - | 15,844 |
| Comprehensive income for the period | 33,240 | 43,912 | 121,753 |
| At end of period | 380,028 | 388,503 | 395,833 |
| Jan-Mar | Jan-Mar | Jan-Dec | Apr 2015- Mar |
Apr 2014- Mar |
|
|---|---|---|---|---|---|
| Revenue by segment – business unit | 2016 | 2015 | 2015 | 2016 | 2015 |
| Paediatrics | 108,056 | 115,250 | 389,561 | 382,367 | 339,818 |
| Adult Health | 21,096 | 19,763 | 74,667 | 76,000 | 74,172 |
| Other | 4,701 | 3,833 | 19,013 | 19,881 | 18,043 |
| Total | 133,853 | 138,846 | 483,241 | 478,248 | 432,033 |
| Jan-Mar | Jan-Mar | Jan-Dec | Apr 2015- |
Apr 2014- |
|
| Gross profit by segment – business unit | 2016 | 2015 | 2015 | Mar 2016 |
Mar 2015 |
| Paediatrics | 76,753 | 80,030 | 266,391 | 263,114 | 224,633 |
| Adult Health | 13,596 | 14,128 | 51,907 | 51,375 | 49,420 |
| Other | 4,425 | 3,678 | 18,286 | 19,033 | 17,345 |
| Total | 94,774 | 97,836 | 336,584 | 333,522 | 291,398 |
| Jan-Mar | Jan-Mar | Jan-Dec | Apr 2015- |
Apr 2014- |
|
| Revenue by geographical market | 2016 | 2015 | 2015 | Mar 2016 |
- Mar 2015 |
| Europe | 93,294 | 92,000 | 284,729 | 286,023 | 279,006 |
| USA and Canada | 9,869 | 6,120 | 35,231 | 38,980 | 33,579 |
| Asia | 13,536 | 13,623 | 52,130 | 52,043 | 41,878 |
| Rest of World | 17,154 | 27,103 | 111,151 | 101,202 | 77,570 |
| Total | 133,853 | 138,846 | 483,241 | 478,248 | 432,033 |
| (Amounts in SEK 000s) | Jan-Mar | Jan-Mar | Jan-Dec |
|---|---|---|---|
| 2016 | 2015 | 2015 | |
| Net sales | - | - | - |
| Selling expenses | - | - | -2,600 |
| Research and development expenses | -5,101 | -3,581 | -17,974 |
| Other operating income/expenses | -61 | -105 | -41 |
| Operating profit | -5,162 | -3,686 | -20,615 |
| Financial expenses | -2 | -4 | -9 |
| Profit for the period | -5,164 | -3,690 | -20,624 |
| Jan-Mar | Jan-Mar | ||
| Cash flow from discontinued operations: | 2016 | 2015 | |
| (Amounts in SEK 000s) | |||
| Operating activities | -6,781 | 2,376 | |
| Investing activities | - | -2,330 | |
| Total cash flow | -6,781 | 46 |
| CONSOLIDATED KEY RATIOS 1) | Jan-Mar | Jan-Mar | Jan-Dec |
|---|---|---|---|
| 2016 | 2015 | 2015 | |
| Net sales, SEK 000s | 133,853 | 138,846 | 483,241 |
| Operating profit, SEK 000s | 46,135 | 52,570 | 152,184 |
| Profit after tax, SEK 000s | 33,581 | 43,230 | 121,292 |
| Return on | |||
| - average equity | 9% | 12% | 33% |
| - average capital employed | 12% | 14% | 42% |
| Capital employed, SEK 000s | 380,379 | 392,595 | 396,184 |
| Number of shares, thousands | 17,336 | 17,271 | 17,336 |
| Average number of shares, thousands | 17,336 | 17,271 | 17,309 |
| Number of outstanding warrants, thousands Average number of outstanding warrants with a dilutive effect, thousands |
- - |
87 - |
- - |
| Average number of shares after dilution, thousands | 17,336 | 17,271 | 17,309 |
| Basic earnings per share, SEK | 1.95 | 2.50 | 7.01 |
| Diluted earnings per share, SEK | 1.95 | 2.50 | 7.01 |
| Basic equity per share, SEK | 21.92 | 22.49 | 22.87 |
| Diluted equity per share, SEK | 21.92 | 22.49 | 22.87 |
| Equity/assets ratio | 84% | 82% | 84% |
| Operating margin | 34% | 38% | 31% |
| Profit margin | 34% | 40% | 33% |
| Average number of employees | 103 | 97 | 102 |
1) The definitions of key ratios correspond to those in the annual report.
The Parent Company holds 100% of the shares in BioGaia Biologics Inc. USA, BioGaia Japan Inc., TwoPac AB and Tripac AB. The Parent Company holds 90.1% of the shares in CapAble AB.
On 29 March 2016, the shares in IBT were distributed to BioGaia's shareholders (see above).
Annwall & Rothschild Investment AB holds 740,668 class A shares and 759,332 class B shares, which is equal to 8.7% of the share capital and 34.1% of the votes in BioGaia AB. Annwall & Rothschild Investment AB is owned by Peter Rothschild, Group President of BioGaia, and Jan Annwall, a member of the Board of BioGaia AB. No transactions with the company have taken place during the period.
| 10 May 2016 | 9:30 a.m. Teleconference on the interim management statement for Q1 2016 with Axel Sjöblad, Managing Director of BioGaia AB |
|---|---|
| 10 May 2016 | 4:00 p.m. Annual General Meeting at Lundqvist & Lindqvist Konferens, Klarabergsviadukten 90, Stockholm. |
| 17 August 2016 | Interim report 1 January – 30 June 2016 |
| 25 October 2016 | Interim management statement 1 January – 30 September 2016 |
| 10 February 2017 | Year-end report 2016 |
Axel Sjöblad Managing Director
This interim management statement has not been examined by the company's independent auditor.
BioGaia is a healthcare company that develops, markets and sells probiotic products with documented health benefits. The products are primarily based on different strains of the lactic acid bacterium Lactobacillus reuteri (Reuteri) in combination with unique packaging solutions that make it possible to create probiotic products with a long shelf life.
The class B share of the Parent Company BioGaia AB is quoted on the Mid Cap list of Nasdaq OMX Nordic Exchange Stockholm.
BioGaia has 101 employees, of whom 34 are based in Stockholm, 29 in Lund, 27 in Eslöv, three in Raleigh, USA, seven in Hiroshima, Japan, and one in Shanghai, China.
BioGaia's revenue comes mainly from the sale of drops, digestive health tablets, oral rehydration solution (ORS) and oral health products to distributors, but also of revenue from the sale of bacteria cultures to be used in licensee products (such as infant formula and dairy products), as well as royalty revenue for the use of Lactobacillus reuteri in licensee products and sales of delivery systems such as straws and caps.
The products are sold through nutrition and pharmaceutical companies in around 90 countries worldwide.
BioGaia holds patents for the use of Lactobacillus reuteri and certain packaging solutions in all major markets.
At the beginning of 2006 BioGaia launched its own consumer brand and today there are a number of distribution partners that sell finished products under the BioGaia brand in a large number of markets. One central part of BioGaia's strategy is to increase the share of sales consisting of BioGaia-branded products.
Some of BioGaia's distributors sell finished consumer products under their own brand names. For 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.
BioGaia's strains of Lactobacillus reuteri are some of the world's most well researched probiotics, especially in young children. To date, 155 clinical studies using BioGaia's human strains of Lactobacillus reuteri have been performed on around 13,000 individuals of all ages. The results have been published in 136 articles in scientific journals.
Studies have been performed on:
Publication of clinical trial results is a key success factor for BioGaia. The International Committee of Medical Journal Editors has initiated a policy requiring clinical investigators to deposit information about trial design into an accepted clinical trials registry before the onset of patient enrolment, and this has now become a prerequisite for publication of trial outcomes in major medical journals. ClinicalTrials.gov is a registry of clinical trials provided by the U.S. National Institutes of Health and BioGaia encourages all clinicians working with BioGaia products to register their trials on this site. Many of the trials are registered at an early stage, which means that some of the registered trials will not be performed as planned. Consequently, BioGaia takes no responsibility for ensuring that the registered trials reach completion or are successfully reported in the register or the scientific literature. When clinical trial results of significance for the company's operations do become available, BioGaia will report these through press releases.
Latest press releases from BioGaia:
2016-05-02 Yet another meta-analysis confirms the effectiveness of BioGaia's probiotic in infantile colic 2016-04-27 BioGaia guarantees rights issue in IBT 2016-04-27 IBT's results for the first quarter of 2016
BioGaia AB Box 3242. SE-103 64 STOCKHOLM Street address: Kungsbroplan 3A, Stockholm Telephone: +46 8 555 293 00, Corp. identity no. 556380-8723 www.biogaia.com For additional information, contact: Axel Sjöblad, Managing Director, BioGaia AB, telephone +46 8-555 293 00 Margareta Hagman, Executive Vice President, BioGaia AB, telephone +46 8-555 293 00
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