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Probi Interim / Quarterly Report 2022
3099_10-q_2022-10-21_6c11c24e-23a6-4608-960d-a8d1362c133b.pdf
Interim / Quarterly Report
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Interim report July - September 2022
Weaker growth in US
Important events during the third quarter
Financial overview
- Net sales decreased by 9% (-22% adjusted for currency effects) to SEK 145 m (159) in Q3 and decreased by 3% (-13% adjusted for currency effects) to SEK 474 m (488) for the first nine months of the year.
- The EBITDA margin was 25% (27) in Q3 and 25% (26) for the first nine months of the year.
- Weaker development in the Americas region driven by changed order patterns and a more cautious market.
- Pilot study with 132 participants in mental health completed and results expected in Q4.
EBITDA margin 25%
Jul-Sep Jan-Sep Full-year SEK m 2022 2021 2022 2021 RTM 2021 Net sales 145.1 158.9 474.3 488.1 644.3 658.2 Growth, % -8.7% -18.4% -2.8% -8.3% -2.1% -8.2% Currency adjusted growth, % -22.1% -17.0% -13.2% -1.2% -10.2% -3.3% Gross margin, % 40.6% 41.9% 42.7% 42.1% 44.2% 43.8% EBITDA 36.3 42.3 120.5 128.5 174.6 182.5 EBITDA margin, % 25.0% 26.6% 25.4% 26.3% 27.1% 27.7% Operating profit (EBIT) 14.5 23.9 58.2 75.2 92.3 109.2 EBIT margin, % 10.0% 15.1% 12.3% 15.4% 14.3% 16.6% Net income 12.4 18.5 46.4 56.9 72.6 83.1 Earnings per share before and after dilution, SEK 1.09 1.62 4.07 4.99 6.37 7.30
See note 5 for definitions of ratios not defined according to IFRS
Challenges in the Americas region
The third quarter did not meet our targets, largely explained by developments in the Americas region. In total, net sales decreased by 9% in the quarter and just under 3% for the first nine months of the year.
The EBITDA margin in Q3 was 25% (27), a result of lower net sales but also higher costs attributable to forwardlooking investments to further strengthen our commercial organization. The quarter also contained costs related to business development activities, and adjusted for these, the EBITDA margin was 26%.
Sales in the Americas region were down 11% despite strong support from the dollar. Adjusted for currency effects, sales were down 28% in the quarter. For the first nine months of the year, sales in the Americas region have decreased by 3% in total. The American market had weak development in Q3, primarily in our LiveBac® range, where we are negatively affected by missed orders from a few larger customers. In our ClinBac™ range we on the other hand have several customers who are developing positively with our products. We have continued to strengthen our commercial organization in the region to accelerate this development. Sales cycles for ClinBac™ are generally longer but result in longer term customer contracts and higher margins over time. During the next six-month period, we estimate that two to three new ClinBac™ customers will be launched in the Americas.
In Q3 we experienced disruptions in the supply chain caused by temporary raw material shortages at our manufacturing facilities in the US. This led to disruption in certain customer deliveries. The raw material shortage was global but temporary, and we have increased stock levels and validated additional suppliers to ensure access to raw materials
The EMEA region is generally developing well and we see a positive trend with most of our customers in the region. In the quarter, two new customer agreements were signed for launches in the next few months. At the same time, we note that the European launch by Perrigo has not gone according to their expectations and the contribution from this contract is currently lower than expected.
Sales in the APAC region increased by 16% in Q3. We are pleased that Sinopharm is developing according to plan and they are now in the launch or pre-launch phase of four product concepts based on Probi's probiotics, three based on ClinBac™ and one on LiveBac®.
In Q4 we are expecting the results from a recently completed clinical pilot study in mental health. This is an area with great potential and although more studies are required in the field, we see good prospects in this market segment moving forward.
We have had a challenging year, particularly in the Americas region, and our expectation is that our net sales for the full year will be slightly below previous year. We have lost contracts which will be difficult to compensate in the short-term, but we are filling our pipeline with exciting launches in the coming year. We are cautiously optimistic about 2023 and are working intensively on growing organically but also evaluating acquisitions. Our financial position is strong, and we want to use it for strategic investments. We are determined that Probi will return to growth in 2023.
Tom Rönnlund CEO
Net sales
July – September (third quarter)
During Q3, net sales amounted to SEK 145.1 m (158.9), corresponding to a decrease of SEK 13.8 m or 9%. Adjusted for currency effects, net sales amounted to SEK 123.7 m, corresponding to a decrease of 22%.
The decrease of SEK 13.8 m is explained by lower reported sales in the Americas, which decreased by SEK 14.5 m (11%), while EMEA decreased by SEK 0.8 m (3%) and APAC increased by SEK 1.4 m (16%).
The America's share of net sales in Q3 was 78%. EMEA accounted for 15% and APAC for 7%.
January – September (nine months)
Net sales amounted to SEK 474.3 m (488.1), which was 3% lower than the previous year. Adjusted for currency effects, this corresponds to a decrease of 13%. The decrease is mainly explained by a few major customers in the Americas, where sales have not occurred due to the postponement of orders, and changes in customers' product portfolios. The Americas region decreased by SEK 10.2 m (-3%). EMEA has had a positive development during the first nine months of the year, but the comparison period includes milestone-related revenue, which means that reported net sales were SEK 5.3 m lower (-6%). Adjusted for these, the sales increase was 3% in the region. Sales in APAC increased by SEK 1.7 m (4%) for the first nine months of the year.
Net sales per segment
| Jul-Sep | Jan-Sep | |||||
|---|---|---|---|---|---|---|
| SEK m | 2022 | 2021 | Change, % | 2022 | 2021 | Change, % |
| Americas | 112.5 | 127.0 | -11.4% | 346.4 | 356.7 | -2.9% |
| EMEA | 22.4 | 23.1 | -3.0% | 88.0 | 93.3 | -5.7% |
| APAC | 10.2 | 8.8 | 15.9% | 39.9 | 38.2 | 4.5% |
| Net sales | 145.1 | 158.9 | -8.7% | 474.3 | 488.1 | -2.8% |
Earnings
Operating profit (EBIT)
The operating profit for Q3 amounted to SEK 14.5 m (23.9), which corresponds to a decrease of SEK 9.4 m or 39%. Adjusted for currency effects, the operating profit was SEK 10.1 m.
Sales and marketing expenses amounted to SEK 23.7 m (20.8), where the increase mainly is explained by changed exchange rates but also increased customer activities.
Research and development costs were lower than the previous year and amounted to SEK 6.9 m (9.4), which is mainly explained by how the phasing of various research projects runs over the year.
Administrative expenses increased by SEK 1.3 m compared to the previous year and amounted to SEK 13.8 m (12.5). The increase is explained by costs of SEK 1.1 m connected with business development activities.
Operating profit
| Jul-Sep | Jan-Sep | |||||
|---|---|---|---|---|---|---|
| SEK m | 2022 | 2021 | Change, % | 2022 | 2021 | Change, % |
| Gross profit Americas | 40.6 | 50.7 | -19.9% | 131.6 | 133.0 | -1.1% |
| Gross profit EMEA | 12.2 | 11.6 | 5.2% | 47.1 | 50.6 | -6.9% |
| Gross profit APAC | 6.0 | 4.2 | 42.9% | 23.8 | 21.8 | 9.2% |
| Gross profit | 58.9 | 66.5 | -11.4% | 202.5 | 205.4 | -1.4% |
| Sales and marketing expenses | -23.7 | -20.8 | 13.9% | -73.8 | -64.9 | 13.7% |
| Research and development expenses | -6.9 | -9.4 | -26.6% | -26.5 | -27.8 | -4.7% |
| Administration expenses | -13.8 | -12.5 | 10.4% | -44.2 | -37.6 | 17.6% |
| Other operating income | 0.1 | 0.1 | 0.0% | 0.2 | 0.1 | 100.0% |
| Operating profit (EBIT) | 14.5 | 23.9 | -39.3% | 58.2 | 75.2 | -22.6% |
Financial result
The financial result for Q3 amounted to SEK 0.9 m (-0.4). Net financial items excluding exchange rate results amounted to SEK -0.1 m (-0.4) and consisted mainly of interest on leasing contracts. The exchange rate result amounted to SEK 1.0 m (0.0) in Q3 and refers to the translation of cash and cash equivalents in foreign currency.
The period's profit for the quarter amounted to SEK 12.4 m (18.5). The tax cost was SEK 3.0 m (5.1).
Earnings per share
Earnings per share for Q3 amounted to SEK 1.09 (1.62).
Operating segments
Probi's operating segments are based on a geographical division and consist of the Americas (North and South America), EMEA (Europe, the Middle East and Africa) and APAC (Asia and the Pacific).
Americas
Net sales in the Americas decreased by 11% and amounted to SEK 113 m. Adjusted for currency effects, net sales amounted to SEK 92 m, corresponding to a decrease of 28% in Q3.
During the quarter, there were disruptions in the supply chain due to temporary raw material at the manufacturing facilities in US. This meant disruption to parts of our customer deliveries.
In addition, the region is affected by a generally more cautious market sentiment. Continued fluctuations between the quarters are also expected in future as larger customers' order patterns are very important for the individual quarter.
The gross margin in Q3 was 36% (40). The lower gross margin compared to the previous year is due to a lower sales volume.
| Jul-Sep | Jan-Sep | |||||
|---|---|---|---|---|---|---|
| SEK m | 2022 | 2021 | Change, % | 2022 | 2021 | Change, % |
| Net Sales | 112.5 | 127.0 | -11.4% | 346.4 | 356.7 | -2.9% |
| Cost of goods sold | -72.0 | -76.3 | -5.6% | -214.8 | -223.7 | -4.0% |
| Gross profit | 40.6 | 50.7 | -19.9% | 131.6 | 133.0 | -1.1% |
| Gross margin | 36.1% | 39.9% | -3.8 ppt | 38.0% | 37.3% | 0.7 ppt |
EMEA
Net sales in EMEA decreased by 3% compared to the previous year to SEK 22 m (23).
The region is generally developing well and we see a positive trend with most of our customers. In Q3, two new customer contracts were signed with customers in Germany and Italy. At the same time,
Perrigo's launch has not met expectations and the contribution is lower than expected.
The gross margin for Q3 was 55% (50). The higher gross margin is due to a favorable product mix.
| Jul-Sep | Jan-Sep | |||||
|---|---|---|---|---|---|---|
| SEK m | 2022 | 2021 | Change, % | 2022 | 2021 | Change, % |
| Net Sales | 22.4 | 23.1 | -3.0% | 88.0 | 93.3 | -5.7% |
| Cost of goods sold | -10.2 | -11.5 | -11.3% | -40.9 | -42.7 | -4.2% |
| Gross profit | 12.2 | 11.6 | 5.2% | 47.1 | 50.6 | -6.9% |
| Gross margin | 54.6% | 50.2% | 4.4 ppt | 53.5% | 54.2% | -0.7 ppt |
APAC
Development in the region continues to strengthen. Net sales increased by 16% in Q3 to SEK 10 m (9).
The partnership with Sinopharm Foreign Trade is developing according to plan. They are now in the launch or pre-launch phase of four product concepts, three of which are based on ClinBac™ and one on LiveBac®.
Developments in the region are expected to continue to fluctuate significantly as individual customer orders have major effects on quarterly outcomes. We remain positive about the outlook for the region based on the current sales pipeline.
The gross margin was higher than the previous year and amounted to 59% (48) and was driven by a favorable product mix.
| Jul-Sep | Jan-Sep | |||||
|---|---|---|---|---|---|---|
| SEK m | 2022 | 2021 | Change, % | 2022 | 2021 | Change, % |
| Net Sales | 10.2 | 8.8 | 15.9% | 39.9 | 38.2 | 4.5% |
| Cost of goods sold | -4.2 | -4.6 | -8.7% | -16.1 | -16.4 | -1.8% |
| Gross profit | 6.0 | 4.2 | 42.9% | 23.8 | 21.8 | 9.2% |
| Gross margin | 59.0% | 47.7% | 11.3 ppt | 59.6% | 57.1% | 2.5 ppt |
Cash flow and cash and cash equivalents
Cash flow from operating activities before changes in working capital decreased to SEK 38.0 m (42.7) in Q3 due to a lower operating profit.
Working capital increased during Q3, mainly due to reduced accounts receivable, and the cash flow from operating activities was SEK 72.7 m (2.4).
Cash flow from investment activities amounted to SEK -14.1 m (-64.6) and mainly consisted of investments in tangible assets. The comparison period included an investment in Blis Technologies of SEK 55.9 m.
Cash flow from financing activities was -3.9 MSEK (-4.6), which consisted mainly of amortization of leasing liabilities.
The period's change in cash and cash equivalents amounted to SEK 62.5 m (-65.1) and cash and cash equivalents amounted to SEK 328.1 m (195.9) at the end of the period.
Investments
During Q3, investments in intangible assets amounted to SEK 3.5 m (1.7), of which SEK 1.1 m (1.1) related to patents, SEK 0.5 million (0.6) related to capitalized development expenses and SEK 1.9 m (0.0) related to IT systems. Investments in tangible assets amounted to SEK 10.5 m (7.0), and mainly related to investments in the manufacturing unit in Redmond.
Employees
At the end of the period, Probi had 165 (177) employees, of which 52% (50) were women. The average number of employees during the quarter was 170 (179).
Transactions with related parties
During Q3, Probi reported SEK 1.9 m (0.8) in revenue from its largest shareholder, Symrise, and costs amounted to SEK 0.0 m (0.0). No other transactions with related parties occurred during the reporting period.
Significant risks and uncertainties
In February 2022, Russia initiated an invasion of Ukraine. Probi has limited exposure to Russia and Ukraine, and the company's assessment is that the effects at both supplier and customer levels are limited. The cost increases that have arisen in connection with increased inflation are mainly compensated by price increases to the customer. However, there may be a delayed effect until the price increase takes full effect depending on the agreed terms. As Probi's manufacturing units are in the USA, the European energy crisis has had a limited impact on the company.
In connection with Covid-19, it is mainly the risks surrounding changing consumer trends and the company's supply of goods that have become relevant. Other risks and uncertainties to which Probi's operations are exposed are described on pages 48–49 of the annual report for 2021.
Parent company
During Q3, the parent company's operating income amounted to SEK 62.6 m (66.5). The profit for the period was SEK 21.4 m (14.7) and the increase was due to a better operating profit and net financial items. Investments in tangible and intangible assets amounted to SEK 2.5 million (1.7). For further details, please see the information for the Group.
Financial calendar
| Year-end report 2022 | January 27, 2023 |
|---|---|
| Interim report Q1 2023 | April 26, 2023 |
| Annual General Meeting 2023 | May 4, 2023 |
| Interim report Q2 2023 | July 18, 2023 |
| Interim report Q3 2023 | October 24, 2023 |
| Year-end report 2023 | January 26, 2024 |
Invitation to teleconference
Probi's interim report for Q3 2022 is published on October 21, 2022, at 8:00 a.m. On the same day at 10:00 a.m., a telephone conference will be held with Tom Rönnlund, CEO and Henrik Lundkvist, CFO, who will present the report. The conference call can be accessed on +46 (0)8 56 64 27 06. The presentation is available at www.probi.com and www.financialhearings.com.
Contact
Tom Rönnlund, CEO Telephone: +46 (0)46 286 89 40 E-mail: [email protected]
Henrik Lundkvist, CFO Telephone: +46 (0)46 286 89 41 E-mail: [email protected]
Assurance by the Board of Directors
The Board of Directors and CEO declare that this interim report provides a true and fair overview of the parent company's and Group's operations, financial position and results, and describes the significant risks and uncertainties facing the parent company and the Group.
Lund, October 21, 2022
Jean-Yves Parisot Chairman of the Board Jörn Andreas Board member
Irène Corthésy Malnoë Board member
Charlotte Hansson Board member
Malin Ruijsenaars Board member
Tom Rönnlund CEO
This interim report has not been subject to review by the company's auditors.
Consolidated statement of comprehensive income
| Jul-Sep | Jan-Sep | |||||
|---|---|---|---|---|---|---|
| SEK 000 | Notes | 2022 | 2021 | 2022 | 2021 | |
| Net sales | 2 | 145,075 | 158,867 | 474,303 | 488,142 | |
| Cost of goods sold | 3 | -86,223 | -92,326 | -271,847 | -282,733 | |
| Gross profit | 58,852 | 66,541 | 202,456 | 205,409 | ||
| Sales and marketing expenses | -23,689 | -20,809 | -73,821 | -64,950 | ||
| Research and development expenses | -6,941 | -9,416 | -26,499 | -27,789 | ||
| Administration expenses | -13,831 | -12,454 | -44,194 | -37,651 | ||
| Other operating income | 73 | 53 | 249 | 131 | ||
| Operating profit (EBIT) | 14,464 | 23,915 | 58,191 | 75,150 | ||
| Financial income | 515 | 36 | 627 | 98 | ||
| Financial expenses | -634 | -457 | -1,897 | -1,375 | ||
| Exchange result financing activities | 4 | 1,002 | 44 | 1,665 | 156 | |
| Financial result | 883 | -377 | 395 | -1,121 | ||
| Earnings before income taxes | 15,347 | 23,538 | 58,586 | 74,029 | ||
| Income taxes | -2,982 | -5,084 | -12,231 | -17,152 | ||
| Net income | 12,365 | 18,454 | 46,355 | 56,877 | ||
| Other comprehensive income | ||||||
| Components to be reclassified to net income | ||||||
| Exchange rate differences resulting from the translation | 87,554 | 28,302 | 206,392 | 61,285 | ||
| of foreign operations | ||||||
| Cash flow hedge (currency hedges) | -238 | — | — | — | ||
| Income taxes payable on these components | 59 | — | — | — | ||
| Total components to be reclassified to net income | 87,375 | 28,302 | 206,392 | 61,285 | ||
| Components not to be reclassified to net income | ||||||
| Equity instruments at fair value through OCI | 4,207 | 9,463 | -14,356 | 9,463 | ||
| Total components not to be reclassified to net income | 4,207 | 9,463 | -14,356 | 9,463 | ||
| Sum of other comprehensive income | 91,582 | 37,765 | 192,036 | 70,748 | ||
| Total comprehensive income | 103,947 | 56,219 | 238,391 | 127,625 | ||
| Number of outstanding shares at end of the reporting period |
11,394,125 | 11,394,125 | 11,394,125 | 11,394,125 | ||
| Average number of shares | 11,394,125 | 11,394,125 | 11,394,125 | 11,394,125 | ||
| Earnings per share before and after dilution | 1.09 | 1.62 | 4.07 | 4.99 |
Consolidated statement of financial position
| SEK 000 | 30 September 2022 |
31 December 2021 |
|---|---|---|
| ASSETS | ||
| Capitalized development cost | 26,446 | 32,096 |
| Customer base | 272,338 | 239,887 |
| Technology and other intangible assets | 119,386 | 111,411 |
| Goodwill | 376,953 | 307,011 |
| Property, plant and equipment | 143,905 | 91,940 |
| Right-of-use assets | 72,652 | 74,739 |
| Interests in other entities | 86,845 | 101,201 |
| Deferred tax assets | 352 | 301 |
| Non-current assets | 1,098,877 | 958,586 |
| Inventories | 111,476 | 93,822 |
| Trade receivables | 96,701 | 119,060 |
| Other assets and receivables | 8,327 | 9,684 |
| Cash and cash equivalents | 328,117 | 251,017 |
| Current assets | 544,621 | 473,583 |
| Total assets | 1,643,498 | 1,432,169 |
| EQUITY AND LIABILITIES | ||
| Total equity | 1,489,119 | 1,265,541 |
| Deferred tax liabilities | 15,358 | 13,359 |
| Provisions | 15,358 | 13,359 |
| Non-current lease liabilities | 59,998 | 62,733 |
| Other non-current liabilities | 5,840 | 4,748 |
| Non-current liabilities | 65,838 | 67,481 |
| Trade payables | 28,730 | 46,244 |
| Current lease liabilities | 17,459 | 14,856 |
| Other current liabilities | 26,994 | 24,688 |
| Current liabilities | 73,183 | 85,788 |
| Total liabilities | 154,379 | 166,628 |
| Total equity and liabilities | 1,643,498 | 1,432,169 |
Consolidated changes in equity
| SEK 000 | Share capital |
Other contri butions received |
Cumulative translation differences |
Hedging reserve |
Fair value reserve |
Accumulat ed profit |
Total equity |
|---|---|---|---|---|---|---|---|
| Opening balance, 1 Jan 2021 | 58,221 | 600,205 | -58,034 | — | — | 514,811 | 1,115,203 |
| Net income | — | — | — | — | — | 56,877 | 56,877 |
| Other comprehensive income |
— | — | 70,748 | — | — | — | 70,748 |
| Total Comprehensive Income |
— | — | 70,748 | — | — | 56,877 | 127,625 |
| Dividends | — | — | — | — | — | -12,534 | -12,534 |
| Total transactions with shareholders |
— | — | — | — | — | -12,534 | -12,534 |
| Closing balance, 30 Sep 2021 | 58,221 | 600,205 | 12,714 | — | — | 559,154 | 1,230,294 |
| Opening balance, 1 Jan 2022 58,221 600,205 29,414 — -7,721 585,422 1,265,541 Net income — — — — — 46,355 46,355 Other comprehensive — — 206,392 — -14,356 — 192,036 income Total Comprehensive — — 206,392 — -14,356 46,355 238,391 Income Dividends — — — — — -14,812 -14,812 Total transactions with — — — — — -14,812 -14,812 shareholders Closing balance, 30 Sep 2022 58,221 600,205 235,806 — -22,077 616,964 1,489,119 |
SEK 000 | Share capital |
Other contri butions received |
Cumulative translation differences |
Hedging reserve |
Fair value reserve |
Accumulat ed profit |
Total equity |
|---|---|---|---|---|---|---|---|---|
Consolidated cash flow statement
| Jul-Sep | Jan-Sep | ||||
|---|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 | |
| Net income | 12,365 | 18,454 | 46,355 | 56,877 | |
| Adjustments to reconcile net income to cash from operating activities |
|||||
| Income taxes | 2,981 | 5,085 | 12,231 | 17,152 | |
| Interest result | 98 | 398 | 1,197 | 1,190 | |
| Amortization, depreciation and impairment of non-current assets |
21,861 | 18,395 | 62,304 | 53,304 | |
| Other non-cash expenses and income | 662 | 352 | 1,643 | 1,932 | |
| Cash flow before working capital changes | 37,967 | 42,684 | 123,730 | 130,455 | |
| Change in trade receivables and other current assets | 38,014 | -41,125 | 39,999 | -23,672 | |
| Change in inventories | 8,027 | 5,426 | 1,596 | 8,461 | |
| Change in trade payables and other current liabilities | -8,216 | -3,751 | -19,344 | -16,404 | |
| Income taxes paid | -3,097 | -883 | -14,862 | -16,109 | |
| Cash flow from operating activities | 72,695 | 2,351 | 131,119 | 82,731 | |
| Payments for investing in intangible assets | -3,530 | -1,695 | -7,699 | -5,759 | |
| Payments for investing in interests in other entities | — | -55,891 | — | -55,891 | |
| Payments for investing in property, plant and equipment | -10,541 | -7,009 | -37,401 | -21,133 | |
| Divestments of tangible assets | — | — | 20 | — | |
| Cash flow from investing activities | -14,071 | -64,595 | -45,080 | -82,783 | |
| Interest paid | -624 | -1,532 | -1,853 | -2,369 | |
| Interest received | 214 | — | 224 | — | |
| Repayments for lease obligations | -3,501 | -3,104 | -10,093 | -9,212 | |
| Dividends paid | — | — | -14,812 | -12,534 | |
| Cash flow from financing activities | -3,911 | -4,636 | -26,534 | -24,115 | |
| Cash flow for the period | 54,713 | -66,880 | 59,505 | -24,167 | |
| Effects of changes in exchange rates | 7,787 | 1,747 | 17,595 | 4,516 | |
| Change in cash and cash equivalents | 62,500 | -65,133 | 77,100 | -19,651 | |
| Cash and cash equivalents at opening balance | 265,617 | 261,034 | 251,017 | 215,552 | |
| Cash and cash equivalents at closing balance | 328,117 | 195,901 | 328,117 | 195,901 |
Parent company's condensed financial statements
| Jul-Sep | Jan-Sep | ||||
|---|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 | |
| Operating revenue | 62,600 | 66,456 | 215,599 | 213,181 | |
| Operating costs | -14,841 | -18,704 | -58,500 | -63,866 | |
| Gross profit | 47,759 | 47,752 | 157,099 | 149,315 | |
| Operating profit (EBIT) | 20,445 | 18,612 | 60,525 | 59,329 | |
| Result from financial income and expenses | 5,489 | 57 | 37,650 | 42,529 | |
| Income before tax | 25,934 | 18,669 | 98,175 | 101,858 | |
| Net income | 21,435 | 14,740 | 85,052 | 89,303 |
| Jul-Sep | Jan-Sep | ||||
|---|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 | |
| Net income | 21,435 | 14,740 | 85,052 | 89,303 | |
| Sum of other comprehensive income | — | — | — | — | |
| Total comprehensive income | 21,435 | 14,740 | 85,052 | 89,303 |
| SEK 000 | 30 September 2022 |
31 December 2021 |
|---|---|---|
| ASSETS | ||
| Non-current assets | 1,046,859 | 1,065,635 |
| Current assets | 293,614 | 214,212 |
| Total assets | 1,340,473 | 1,279,847 |
| EQUITY AND LIABILITIES | ||
| Equity | 1,310,288 | 1,240,049 |
| Current liabilities | 30,185 | 39,798 |
| Total equity and liabilities | 1,340,473 | 1,279,847 |
Notes
1. Accounting and valuation principles
The Group
This interim report has been prepared in accordance with IAS 34 Interim Financial Reporting and the Swedish Annual Accounts Act. The condensed financial statements in the interim report are covered on pages 9-16. Disclosures in accordance with IAS 34 Interim Financial Reporting are provided both here and elsewhere in the interim report. The ESMA guidelines on alternative performance measures apply.
The accounting principles applied when these consolidated accounts were prepared have been applied consistently for all periods presented, unless otherwise stated. Complete accounting principles can be found on pages 65–68 of the annual report for 2021.
The parent company's functional currency is Swedish kronor (SEK), which is also the reporting currency for both the parent company and the Group. All amounts stated are rounded to the nearest thousand kronor unless otherwise stated.
Amounts and figures in parentheses refer to comparative figures for the corresponding period of the previous year. Amounts are expressed in Swedish kronor (SEK), thousands (TSEK) or millions (SEK million) according to the unit stated.
Parent company
The parent company applies the same accounting principles as the Group apart from IFRS 16 "Leasing" and with the exceptions and additions that appear in RFR 2 "Accounting for legal entities". The interim report complies with the Annual Accounts Act.
2. Revenue from contracts with customers
A breakdown by category of the Group's net sales from contracts with customers is presented below:
| Jul-Sep 2022 | Jul-Sep 2021 | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK 000 | Americas | EMEA | APAC | Total | Americas | EMEA | APAC | Total |
| Goods | 110,950 | 21,411 | 10,231 | 142,592 | 125,584 | 22,249 | 8,761 | 156,594 |
| Royalty | 1,593 | 990 | — | 2,583 | 1,451 | 822 | — | 2,273 |
| Net sales | 112,543 | 22,401 | 10,231 | 145,075 | 127,035 | 23,071 | 8,761 | 158,867 |
| Jan-Sep 2022 | Jan-Sep 2021 | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK 000 | Americas | EMEA | APAC | Total | Americas | EMEA | APAC | Total |
| Goods | 341,511 | 85,671 | 39,865 | 467,047 | 352,415 | 83,570 | 38,154 | 474,139 |
| Royalty | 4,863 | 2,293 | — | 7,156 | 4,292 | 9,711 | — | 14,003 |
| Net sales | 346,374 | 87,964 | 39,865 | 474,303 | 356,707 | 93,281 | 38,154 | 488,142 |
3. Currency translation from operating activities
The following table shows the exchange gains and losses from operating activities that are recognized under costof goods sold:
| Jul-Sep | Jan-Sep | ||||
|---|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 | |
| Exchange gains operating activities | 1,824 | 735 | 6,165 | 1,794 | |
| Exchange losses operating activities | -833 | -254 | -2,763 | -1,214 | |
| Exchange result operating activities | 991 | 481 | 3,402 | 580 |
4. Currency translation from financial activities
The following table shows the exchange gains and losses from financing activities that are recognized in the financial results:
| Jul-Sep | Jan-Sep | ||||
|---|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 | |
| Exchange gains financing activities | 1,980 | 101 | 4,090 | 822 | |
| Exchange losses financing activities | -978 | -57 | -2,425 | -666 | |
| Exchange result financing activities | 1,002 | 44 | 1,665 | 156 |
5. Definition of alternative performance indicators not defined in IFRS
Probi presents certain financial key performance indicators (KPIs) in the interim report that are not defined according to IFRS. Probi believes that these indicators provide valuable supplementary information to investors and the company's management. Since not all companies calculate alternative KPIs in the same way, these are not always comparable to indicators used by other companies. However, these indicators should not be considered as a substitute for financial indicators required in accordance with IFRS. The following alternative KPIs are reported in the interim report:
Operating profit (EBIT)
The operating profit (EBIT) is defined as the profit before financial income, expenses and tax for the period and is used as a measure of the company's profitability.
| Jul-Sep | Jan-Sep | |||
|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 |
| Net income | 12,365 | 18,454 | 46,355 | 56,877 |
| Income taxes | 2,982 | 5,084 | 12,231 | 17,152 |
| Financial result | -883 | 377 | -395 | 1,121 |
| Operating profit (EBIT) | 14,464 | 23,915 | 58,191 | 75,150 |
EBITDA
EBITDA is defined as the operating profit (EBIT) before depreciation and impairment and is used as a measure of the company's profitability.
| Jul-Sep | Jan-Sep | |||
|---|---|---|---|---|
| SEK 000 | 2022 | 2021 | 2022 | 2021 |
| Operating profit (EBIT) | 14,464 | 23,915 | 58,191 | 75,150 |
| Depreciation and amortization | 21,861 | 18,395 | 62,304 | 53,304 |
| EBITDA | 36,325 | 42,310 | 120,495 | 128,454 |
| Other alternative KPIs | Definition/Basis of calculation | Purpose |
|---|---|---|
| Gross margin | Defined as gross profit divided by net sales |
Used to measure product profitability |
| EBITDA margin | Defined as EBITDA divided by net sales |
Used to measure the company's profitability before depreciation and impairment of tangible and intangible assets |
| Currency-adjusted net sales growth |
Defined as net sales for the year translated at the preceding year's exchange rates divided by the preceding year's net sales |
Used to measure underlying net sales growth |
| RTM | Rolling twelve months. Refers to full-year figure for the last four quarters |
Gives an indication of developmentwithout having to wait for the comparative period next year |
| Operating margin | Defined as the operating profit divided by net sales |
Used to measure the company's profitability |
About Probi
Probi® is a global Group that focuses exclusively on research, manufacturing and delivery of probiotics in dietary supplements and food. The company has expertise in managing live bacteria from research through all stages of the manufacturing process and is dedicated to making the health-promoting benefits of probiotics available to people around the world. Since the company was founded in 1991 at Lund University in Sweden, Probi has expanded its operations to more than 40 markets and holds more than 400 patents worldwide. Probi had sales of SEK 658 m in 2021. Probi's shares are listed on Nasdaq Stockholm, Mid-cap, and there were around 3,800 shareholders on December 31, 2021.
