AI assistant
Probi Interim / Quarterly Report 2023
3099_10-q_2023-10-24_559a4d9c-4c74-4b5e-b9d7-99e1578f7156.pdf
Interim / Quarterly Report
Open in viewerOpens in your device viewer
Interim report July-September 2023
New strategic focus and improved sales trend
Important events during the third quarter
- Net sales increased by 8% (6% adjusted for currency effects) to SEK 156 m (145).
- The EBITDA margin amounted to 18% (25) or 20% adjusted for items affecting comparability.
- New strategic focus areas and financial targets.
- New clinical study in metabolic health shows clear benefits with Probi's bacterial strains, which opens up a new health area.
- Third clinical trial of HEAL9™ published, strengthens evidence of improved cognitive performance.
Important events after the end of the period
- Launch of Probi® Sensia, a new concept in mental health based on HEAL9™.
- Per Lindblad will take over as new CFO on November 1, after Henrik
- Lundkvist announced his resignation in July.
| SEK | |
|---|---|
| 156 | m |
| Net sales | |
EBITDA-margin 18%
Financial overview
| Jul-Sep | Jan-Sep | Full-year | ||||
|---|---|---|---|---|---|---|
| SEK m | 2023 | 2022 | 2023 | 2022 | RTM | 2022 |
| Net sales | 156.0 | 145.1 | 471.6 | 474.3 | 615.5 | 618.3 |
| Growth, % | 7.6% | -8.7% | -0.6% | -2.8% | -0.4% | -6.1% |
| Currency adjusted growth, % | 5.9% | -22.1% | -5.4% | -13.2% | -7.3% | -16.7% |
| Gross margin, % | 32.8% | 40.6% | 36.3% | 42.7% | 36.4% | 41.3% |
| EBITDA | 28.2 | 36.3 | 88.4 | 120.5 | 104.1 | 136.3 |
| EBITDA margin, % | 18.1% | 25.0% | 18.7% | 25.4% | 16.9% | 22.0% |
| Operating profit (EBIT) | 4.0 | 14.5 | 16.6 | 58.2 | 9.0 | 50.6 |
| EBIT margin, % | 2.6% | 10.0% | 3.5% | 12.3% | 1.5% | 8.2% |
| Net income | 6.4 | 12.4 | 19.4 | 46.4 | 13.7 | 40.6 |
| Earnings per share before and after dilution, SEK | 0.56 | 1.09 | 1.70 | 4.07 | 1.20 | 3.57 |
See note 5 for definitions of ratios not defined according to IFRS
This information is information that Probi AB is obliged to make public pursuant to the EU Market Abuse. The information was submitted for publication, through the agency of the CEO and CFO, on October 24, 2023 at 08:00 CET. This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording prevails.
Strong confidence with new business plan and new financial targets
The overall sales development in Q3 improved with a growth of 8% (6% adjusted for currency effects) while the EBITDA margin was 18%. All regions showed growth compared to the previous year. For the nine-month period, net sales were on par with last year. Profitability was affected by one-off effects linked to e.g. the remediation program in manufacturing and recruitment costs for strategic positions. Adjusted for this, profitability was 20% for the period. Our previous assessment of the full year results remains for both sales and profitability.
By region, EMEA reported growth in the quarter driven by a positive performance of the BTC business in the Swedish market. APAC also performed well, with growth primarily coming from the Chinese market. The development in the Americas was stable, which is positive considering that we have experienced some caution in the American market for some time.
After intensive work on evaluating our strategy, we can now present an updated strategy "Probi Reinforced" and new financial targets. We aim to achieve sustainable and profitable growth by striving for excellence in four key strategic focus areas.
The first strategic focus is Commercial Execution & Customer Centricity. By improving our customers' experience and extending our internal customer understanding, we will work to expand our global base of key account customers, grow our position on our science-based products, and focus on Tier 1 markets.
The second focus is Pioneering Science & Innovation. We will continue being first in probiotics by ensuring a continuous rate of market-relevant innovations, enhanced speed to market, and by expanding our range of clinically documented offerings.
The third focus, Providing Differentiated Quality Solutions, refers to the competitive edge of delivering products through the entire value chain, from concentrated
probiotic ingredients to finished consumer product. We will focus on long-term improvement of the gross margins by optimizing our internal manufacturing processes and through supply chain effectiveness.
The fourth focus, and a foundation for successful implementation of the strategy is People with a Shared Purpose and Passion for Probiotics. We are aiming for a healthy, thriving organization driven by our shared goal to provide probiotics for healthier lives and a healthier planet.
We have set ambitious new financial targets and aim to achieve a CAGR of 6% over the next five years and gradually increase the profitability to, or over, 25% EBITDA by 2028. By region we estimate that APAC will have the highest percentage growth, followed by EMEA. The growth is expected to come from new products and innovations and from current, as well as new customers.
We have noticed a certain stabilization in the market and increased interest from customers. Meanwhile, we have more work to do to optimize our manufacturing and gain efficiencies. Our sales cycles are long as well, and the process from a new concept launch to revenue can take months and sometimes years. Therefore, 2024 will be a transitional year with modest expectations on increased growth and profitability.
I have spent a lot of time meeting our organization and our customers in recent months, and I am today more convinced than ever that Probi is a credible and committed partner that offers exceptional products providing significant and relevant benefits to many people. Clarity in our purpose, strategy and direction will help us come back to growth and we will continue to be First in Probiotics.
Anita Johansen CEO
Interim report July-September 2023
Net sales
July – September (third quarter)
During Q3, net sales amounted to SEK 156.0 m (145.1) corresponding to an increase of SEK 10.9 m or 8%. Adjusted for currency effects, net sales amounted to SEK 153.6 m, corresponding to an increase of 6%.
The increase of SEK 10.9 m is explained by higher sales in the Americas, which increased by SEK 3.2 m (3%), EMEA which increased by SEK 5.0 m (22%) and APAC which increased by SEK 2.8 m (27%).
The share of total net sales in the Americas during Q3 was 74%. EMEA accounted for 18% and APAC 8%.
January – September (nine months)
Net sales amounted to SEK 471.6 m (474.3), which is a decrease of 1%. Adjusted for currency effects, this corresponded to a decrease of 5%. The decrease is mainly explained by the fact that sales in EMEA were SEK 18.3 m (-21%) lower than the previous year as a result of a weaker underlying market, and at the same time as a major customer postponed its orders due to the reduction of its buffer stock. The Americas region increased by SEK 4.8 m (1%), but adjusted for currency effects, the region decreased by 5% due to a weaker market. Sales in APAC increased by SEK 10.8 m (27%).
Net sales per segment
| Jul-Sep | Jan-Sep | ||||||
|---|---|---|---|---|---|---|---|
| SEK m | 2023 | 2022 | Change, % | 2023 | 2022 | Change, % | |
| Americas | 115.7 | 112.5 | 2.8% | 351.2 | 346.4 | 1.4% | |
| EMEA | 27.4 | 22.4 | 22.3% | 69.7 | 88.0 | -20.8% | |
| APAC | 13.0 | 10.2 | 27.5% | 50.7 | 39.9 | 27.1% | |
| Net sales | 156.0 | 145.1 | 7.5% | 471.6 | 474.3 | -0.6% |
Earnings
Operating profit/loss (EBIT)
The operating profit for Q3 amounted to SEK 4.0 m (14.5), corresponding to a decrease of SEK 10.5 m. Adjusted for currency effects, the operating profit was SEK 4.2 m. The reduced operating profit was due to a lower gross margin together with higher sales costs.
Sales and marketing costs amounted to SEK 25.8 m (23.7), where the increase is explained by increased customer activities and increased marketing expenses to support the Swedish BTC business.
Research and development expenses were slightly higher than last year and amounted to SEK 7.7 m (6.9).
Administration expenses were at the same level as last year and amounted to SEK 13.8 m (13.8).
Operating profit/loss
| Jul-Sep | Jan-Sep | ||||||
|---|---|---|---|---|---|---|---|
| SEK m | 2023 | 2022 | Change, % | 2023 | 2022 | Change, % | |
| Gross profit Americas | 27.3 | 40.6 | -32.8% | 100.7 | 131.6 | -23.5% | |
| Gross profit EMEA | 16.9 | 12.2 | 38.5% | 39.5 | 47.1 | -16.1% | |
| Gross profit APAC | 6.9 | 6.0 | 15.0% | 30.7 | 23.8 | 29.0% | |
| Gross profit | 51.2 | 58.9 | -13.1% | 171.0 | 202.5 | -15.6% | |
| Sales and marketing expenses | -25.8 | -23.7 | 8.9% | -85.7 | -73.8 | 16.1% | |
| Research and development expenses | -7.7 | -6.9 | 11.6% | -27.0 | -26.5 | 1.9% | |
| Administration expenses | -13.8 | -13.8 | 0.0% | -41.6 | -44.2 | -5.9% | |
| Other operating income | 0.0 | 0.1 | 0.0% | 0.0 | 0.2 | -100.0% | |
| Operating profit (EBIT) | 4.0 | 14.5 | -72.4% | 16.6 | 58.2 | -71.5% |
Financial result
The financial result for Q3 amounted to SEK 2.1 m (0.9). Net financial items excluding exchange rate results amounted to SEK 1.7 m (-0.1) and consisted mainly of interest on bank balances and leasing contracts. The exchange rate result amounted to SEK 0.4 m (1.0) in Q3 and refers to the translation of cash and cash equivalents into foreign currency.
Profit/loss for the period
The period's profit for the quarter amounted to SEK 6.4 m (12.4). Tax for the period amounted to SEK 0.3 m (-3.0).
Earnings per share
Earnings per share for Q3 amounted to SEK 0.56 (1.09).
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 increased by 3% and amounted to SEK 116 m. Adjusted for currency effects, net sales amounted to SEK 113 m, corresponding to an increase of 1% in the quarter.
Despite a challenging underlying market, the performance in the region was relatively stable with a steady order intake.
The region's sales organization was strengthened during Q3, which is expected to lead to positive effects in future development.
The gross margin for Q3 was 24% (36) and was in line with the previous quarter as a result of inefficiencies in the manufacturing process.
| Jul-Sep | Jan-Sep | |||||
|---|---|---|---|---|---|---|
| SEK m | 2023 | 2022 | Change, % | 2023 | 2022 | Change, % |
| Net Sales | 115.7 | 112.5 | 2.8% | 351.2 | 346.4 | 1.4% |
| Cost of goods sold | -88.4 | -72.0 | 22.8% | -250.4 | -214.8 | 16.6% |
| Gross profit | 27.3 | 40.6 | -32.8% | 100.7 | 131.6 | -23.5% |
| Gross margin | 23.6% | 36.1% | -12.5 ppt | 28.7% | 38.0% | -9.3 ppt |
EMEA
Net sales in EMEA increased by 22% in Q3 to SEK 27 m compared to SEK 22 m last year.
The increased sales in the quarter mainly come from a positive development of the BTC business on the Swedish market, as a result of the company's takeover of the distribution of the Probi® brand and increased investments in marketing and
communication. The market share for Probi® in Sweden has increased since taking over distribution.
The gross margin for Q3 was 62% (55) and is explained by a favorable product mix.
| Jul-Sep | ||||||
|---|---|---|---|---|---|---|
| SEK m | 2023 | 2022 | Change, % | 2023 | 2022 | Change, % |
| Net Sales | 27.4 | 22.4 | 22.3% | 69.7 | 88.0 | -20.8% |
| Cost of goods sold | -10.4 | -10.2 | 2.0% | -30.2 | -40.9 | -26.2% |
| Gross profit | 16.9 | 12.2 | 38.5% | 39.5 | 47.1 | -16.1% |
| Gross margin | 61.7% | 54.5% | 7.2 ppt | 56.7% | 53.5% | 3.2 ppt |
APAC
Net sales in APAC developed well and increased by 27% to SEK 13 m. The increase is mainly explained by the continued strong development in the Chinese market.
The region is expected to continue to be characterized by growth and is judged to be the relatively strongest growing region in future. However, the performance will continue to be characterized by fluctuations between the quarters.
The gross margin in Q3 was 53% (59). The decrease was due to an unfavorable product mix.
| Jul-Sep | Jan-Sep | ||||||
|---|---|---|---|---|---|---|---|
| SEK m | 2023 | 2022 | Change, % | 2023 | 2022 | Change, % | |
| Net Sales | 13.0 | 10.2 | 27.5% | 50.7 | 39.9 | 27.1% | |
| Cost of goods sold | -6.1 | -4.2 | 45.2% | -20.0 | -16.1 | 24.2% | |
| Gross profit | 6.9 | 6.0 | 15.0% | 30.7 | 23.8 | 29.0% | |
| Gross margin | 52.8% | 58.8% | -6.0 ppt | 60.6% | 59.6% | 1.0 ppt |
Cash flow and cash and cash equivalents
Cash flow from operating activities before changes in working capital decreased to SEK 28.8 m (38.0) in Q3 as a result of a lower operating profit.
Working capital increased slightly during Q3 as a result of higher accounts receivable and the cash flow from operating activities amounted to SEK 16.9 m (72.7).
Cash flow from investment activities amounted to SEK -13.1 (-14.1) and mainly consisted of investments in intangible and tangible fixed assets.
Cash flow from financing activities was SEK -4.1 m (-3.9), and mainly consisted of amortization of leasing liabilities.
The period's cash flow was SEK -0.3 m (54.7) and cash and cash equivalents amounted to SEK 300.8 m (328.1).
Investments
During Q3, investments in intangible fixed assets amounted to SEK 6.0 m (3.5), of which SEK 1.3 m (1.1) related to patents, SEK 1.4 m (0.5) to capitalized development expenses and SEK 3.3 m (1.9) to IT systems. Investments in tangible fixed assets amounted to SEK 7.2 m (10.5), which mainly related to investments in the manufacturing unit at Redmond.
Employees
At the end of the period, Probi had 168 (165) employees, of which 51% (52) were women. The average number of employees during Q3 amounted to 162 (170).
Transactions with related parties
During Q3, Probi reported SEK 3.7 m (1.9) 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 launched an invasion of Ukraine. Probi has a 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 increases take full effect depending on the agreed terms. Other risks and uncertainties to which Probi's operations are exposed are described on pages 48–49 of the annual report for 2022.
Parent company
During Q3, the parent company's operating income amounted to SEK 62.8 m (79.6). The profit for the period was SEK 2.2 m (51.3) and the decrease was due to a lower operating profit and a lower financial result due to lower dividends from the subsidiaries. For further details, please see the information for the Group.
Financial calendar
| January 26, 2024 |
|---|
| April 23, 2024 |
| May 7, 2024 |
| July 16, 2024 |
| October 22, 2024 |
| January 28, 2025 |
Invitation to teleconference
Probi's interim report for Q3 2023 was published on October 24, 2023, at 8:00 a.m. On the same day at 10:00 a.m., a teleconference is held with Anita Johansen, CEO and Henrik Lundkvist, CFO, who will present the report. The telephone conference can be accessed via the link
https://conference.financialhearings.com/teleconference/?id=5001162. The presentation is available at www.probi.com and www.financialhearings.com.
Contact
Anita Johansen, CEO Tel: +46 (0)46 286 89 48 E-mail: [email protected] Henrik Lundkvist, CFO Tel: +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 24, 2023
Jean-Yves Parisot Chairman of the Board Jörn Andreas Board member
Irène Corthésy Malnoë Board member
Charlotte Hansson Board member
Malin Ruijsenaars Board member
Anita Johansen 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 | 2023 | 2022 | 2023 | 2022 | ||
| Net sales | 2 | 156,030 | 145,075 | 471,566 | 474,303 | ||
| Cost of goods sold | 3 | -104,801 | -86,223 | -300,613 | -271,847 | ||
| Gross profit | 51,229 | 58,852 | 170,953 | 202,456 | |||
| Sales and marketing expenses | -25,849 | -23,689 | -85,713 | -73,821 | |||
| Research and development expenses | -7,654 | -6,941 | -27,050 | -26,499 | |||
| Administration expenses | -13,768 | -13,831 | -41,587 | -44,194 | |||
| Other operating income | 31 | 73 | 5 | 249 | |||
| Operating profit (EBIT) | 3,989 | 14,464 | 16,608 | 58,191 | |||
| Financial income | 2,248 | 515 | 5,519 | 627 | |||
| Financial expenses | -503 | -634 | -1,564 | -1,897 | |||
| Exchange result financing activities | 4 | 362 | 1,002 | 989 | 1,665 | ||
| Financial result | 2,107 | 883 | 4,944 | 395 | |||
| Earnings before income taxes | 6,096 | 15,347 | 21,552 | 58,586 | |||
| Income taxes | 299 | -2,982 | -2,143 | -12,231 | |||
| Net income | 6,395 | 12,365 | 19,409 | 46,355 | |||
| Other comprehensive income | |||||||
| Components to be reclassified to net income | |||||||
| Exchange rate differences resulting from the translation of foreign operations |
-928 | 87,554 | 38,500 | 206,392 | |||
| Cash flow hedge (currency hedges) | — | -238 | — | 0 | |||
| Income taxes payable on these components | — | 59 | — | 0 | |||
| Total components to be reclassified to net income | -928 | 87,375 | 38,500 | 206,392 | |||
| Components not to be reclassified to net income | |||||||
| Equity instruments at fair value through OCI | -1,362 | 4,207 | -2,489 | -14,356 | |||
| Total components not to be reclassified to net income | -1,362 | 4,207 | -2,489 | -14,356 | |||
| Sum of other comprehensive income | -2,290 | 91,582 | 36,011 | 192,036 | |||
| Total comprehensive income | 4,105 | 103,947 | 55,420 | 238,391 | |||
| 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 | 0.56 | 1.09 | 1.70 | 4.07 |
The period's results as well as comprehensive income is attributable in its entirety to the parent company's shareholders. There is no dilution effect, as the company has no outstanding convertible loans or warrants.
Consolidated statement of financial position
| SEK 000 | 30 September 2023 |
31 December 2022 |
|---|---|---|
| ASSETS | ||
| Capitalized development cost | 23,850 | 24,782 |
| Customer base | 235,953 | 248,452 |
| Technology and other intangible assets | 101,810 | 109,251 |
| Goodwill | 367,484 | 353,887 |
| Property, plant and equipment | 161,895 | 146,806 |
| Right-of-use assets | 55,943 | 65,546 |
| Interests in other entities | 78,021 | 80,510 |
| Deferred tax assets | 303 | 357 |
| Non-current assets | 1,025,259 | 1,029,591 |
| Inventories | 131,388 | 116,245 |
| Trade receivables | 113,802 | 89,295 |
| Other assets and receivables | 18,356 | 11,051 |
| Cash and cash equivalents | 300,847 | 323,706 |
| Current assets | 564,393 | 540,297 |
| Total assets | 1,589,652 | 1,569,888 |
| EQUITY AND LIABILITIES | ||
| Total equity | 1,451,176 | 1,410,567 |
| Deferred tax liabilities | 3,550 | 13,833 |
| Provisions | 3,550 | 13,833 |
| Non-current lease liabilities | 43,488 | 53,601 |
| Other non-current liabilities | 5,691 | 5,480 |
| Non-current liabilities | 49,179 | 59,081 |
| Trade payables | 30,198 | 34,424 |
| Current lease liabilities | 17,636 | 16,667 |
| Other current liabilities | 37,913 | 35,316 |
| Current liabilities | 85,747 | 86,407 |
| Total liabilities | 138,476 | 159,321 |
| Total equity and liabilities | 1,589,652 | 1,569,888 |
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 2022 | 58,221 | 600,205 | 29,414 | — | -7,721 | 585,422 | 1,265,541 |
| Net income | — | — | — | — | — | 46,355 | 46,355 |
| Other comprehensive income | — | — | 206,392 | 0 | -14,356 | — | 192,036 |
| Total Comprehensive Income | — | — | 206,392 | 0 | -14,356 | 46,355 | 238,391 |
| Dividends | — | — | — | — | — | -14,812 | -14,812 |
| Total transactions with shareholders |
— | — | — | — | — | -14,812 | -14,812 |
| Closing balance, 30 Sep 2022 | 58,221 | 600,205 | 235,806 | 0 | -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 |
|---|---|---|---|---|---|---|---|
| Opening balance, 1 Jan 2023 | 58,221 | 600,205 | 169,322 | — | -28,412 | 611,232 | 1,410,567 |
| Net income | — | — | — | — | — | 19,409 | 19,409 |
| Other comprehensive income | — | — | 38,500 | — | -2,489 | — | 36,011 |
| Total Comprehensive Income | — | — | 38,500 | — | -2,489 | 19,409 | 55,420 |
| Dividends | — | — | — | — | — | -14,812 | -14,812 |
| Total transactions with shareholders |
— | — | — | — | — | -14,812 | -14,812 |
| Closing balance, 30 Sep 2023 | 58,221 | 600,205 | 207,822 | — | -30,901 | 615,829 | 1,451,176 |
Consolidated cash flow statement
| Jul-Sep Jan-Sep |
|||||
|---|---|---|---|---|---|
| SEK 000 | 2023 | 2022 | 2023 | 2022 | |
| Net income | 6,395 | 12,365 | 19,409 | 46,355 | |
| Adjustments to reconcile net income to cash from | |||||
| operating activities | |||||
| Income taxes | -299 | 2,981 | 2,143 | 12,231 | |
| Interest result | -1,745 | 98 | -3,955 | 1,197 | |
| Amortization, depreciation and impairment of non-current assets | 24,182 | 21,861 | 71,777 | 62,304 | |
| Other non-cash expenses and income | 230 | 662 | 65 | 1,643 | |
| Cash flow before working capital changes | 28,763 | 37,967 | 89,439 | 123,730 | |
| Change in trade receivables and other current assets | -14,296 | 38,014 | -27,549 | 39,999 | |
| Change in inventories | 7,452 | 8,027 | -10,791 | 1,596 | |
| Change in trade payables and other current liabilities | -244 | -8,216 | 1,424 | -19,344 | |
| Income taxes paid | -4,728 | -3,097 | -13,828 | -14,862 | |
| Cash flow from operating activities | 16,947 | 72,695 | 38,695 | 131,119 | |
| Payments for investing in intangible assets | -5,972 | -3,530 | -16,345 | -7,699 | |
| Payments for investing in property, plant and equipment | -7,164 | -10,541 | -20,310 | -37,401 | |
| Divestments of tangible assets | 4 | 0 | 15 | 20 | |
| Cash flow from investing activities | -13,132 | -14,071 | -36,640 | -45,080 | |
| Interest paid | -513 | -624 | -1,595 | -1,853 | |
| Interest received | 277 | 214 | 1,019 | 224 | |
| Repayments for lease obligations | -3,842 | -3,501 | -11,274 | -10,093 | |
| Dividends paid | — | — | -14,812 | -14,812 | |
| Cash flow from financing activities | -4,078 | -3,911 | -26,662 | -26,534 | |
| Cash flow for the period | -263 | 54,713 | -24,607 | 59,505 | |
| Effects of changes in exchange rates | -247 | 7,787 | 1,748 | 17,595 | |
| Change in cash and cash equivalents | -510 | 62,500 | -22,859 | 77,100 | |
| Cash and cash equivalents at opening balance | 301,357 | 265,617 | 323,706 | 251,017 | |
| Cash and cash equivalents at closing balance | 300,847 | 328,117 | 300,847 | 328,117 |
Parent company's condensed financial statements
| Jul-Sep | Jan-Sep | ||||
|---|---|---|---|---|---|
| SEK 000 | 2023 | 2022 | 2023 | 2022 | |
| Operating revenue | 62,814 | 62,600 | 207,598 | 215,599 | |
| Operating costs | -16,756 | -14,841 | -52,588 | -58,500 | |
| Gross profit | 46,058 | 47,759 | 155,010 | 157,099 | |
| Operating profit (EBIT) | 16,354 | 20,445 | 54,127 | 60,525 | |
| Result from financial income and expenses | 1,185 | 5,489 | 3,009 | 37,650 | |
| Income before tax | 17,539 | 25,934 | 57,136 | 98,175 | |
| Net income | 13,644 | 21,435 | 44,655 | 85,052 |
| Jul-Sep | Jan-Sep | |||||
|---|---|---|---|---|---|---|
| SEK 000 | 2023 | 2022 | 2023 | 2022 | ||
| Net income | 13,644 | 21,435 | 44,655 | 85,052 | ||
| Sum of other comprehensive income | — | — | — | — | ||
| Total comprehensive income | 13,644 | 21,435 | 44,655 | 85,052 |
| SEK 000 | 30 September 2023 |
31 December 2022 |
|---|---|---|
| ASSETS | ||
| Non-current assets | 1,037,588 | 1,042,975 |
| Current assets | 319,486 | 299,369 |
| Total assets | 1,357,074 | 1,342,344 |
| EQUITY AND LIABILITIES | ||
| Equity | 1,330,373 | 1,300,531 |
| Current liabilities | 26,701 | 41,813 |
| Total equity and liabilities | 1,357,074 | 1,342,344 |
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 10-17. 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 2022.
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 2023 | Jul-Sep 2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK 000 | Americas | EMEA | APAC | Total | Americas | EMEA | APAC | Total |
| Goods | 114,116 | 27,050 | 13,016 | 154,182 | 110,950 | 21,411 | 10,231 | 142,592 |
| Royalty | 1,541 | 307 | — | 1,848 | 1,593 | 990 | — | 2,583 |
| Net sales | 115,657 | 27,357 | 13,016 | 156,030 | 112,543 | 22,401 | 10,231 | 145,075 |
| Jan-Sep 2023 | Jan-Sep 2022 | |||||||
|---|---|---|---|---|---|---|---|---|
| SEK 000 | Americas | EMEA | APAC | Total | Americas | EMEA | APAC | Total |
| Goods | 346,180 | 68,073 | 50,691 | 464,944 | 341,511 | 85,671 | 39,865 | 467,047 |
| Royalty | 4,988 | 1,634 | — | 6,622 | 4,863 | 2,293 | — | 7,156 |
| Net sales | 351,168 | 69,707 | 50,691 | 471,566 | 346,374 | 87,964 | 39,865 | 474,303 |
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 | 2023 | 2022 | 2023 | 2022 | |
| Exchange gains operating activities | 109 | 1,824 | 2,790 | 6,165 | |
| Exchange losses operating activities | -1,213 | -833 | -3,065 | -2,763 | |
| Exchange result operating activities | -1,104 | 991 | -275 | 3,402 |
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 | 2023 | 2022 | 2023 | 2022 |
| Exchange gains financing activities | 870 | 1,980 | 2,764 | 4,090 |
| Exchange losses financing activities | -508 | -978 | -1,775 | -2,425 |
| Exchange result financing activities | 362 | 1,002 | 989 | 1,665 |
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/loss (EBIT)
The operating profit/loss (EBIT) is defined as the profit/loss before financial income, expenses and tax for the periodand is used as a measure of the company's profitability.
| Jul-Sep | Jan-Sep | |||
|---|---|---|---|---|
| SEK 000 | 2023 | 2022 | 2023 | 2022 |
| Net income | 6,395 | 12,365 | 19,409 | 46,355 |
| Income taxes | -299 | 2,982 | 2,143 | 12,231 |
| Financial result | -2,107 | -883 | -4,944 | -395 |
| Operating profit (EBIT) | 3,989 | 14,464 | 16,608 | 58,191 |
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 | 2023 | 2022 | 2023 | 2022 |
| Operating profit (EBIT) | 3,989 | 14,464 | 16,608 | 58,191 |
| Depreciation and amortization | 24,181 | 21,861 | 71,776 | 62,304 |
| EBITDA | 28,170 | 36,325 | 88,384 | 120,495 |
| 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 development without 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 around 400 patents worldwide. Probi had sales of SEK 618 m in 2022. Probi's shares are listed on Nasdaq Stockholm, Mid-cap, and there were around 3,700 shareholders on December 31, 2022.
