Q1 2024: Steady Progress in a Transitional Year

Important events during the first quarter

• Underlying sales were overall as expected, despite Q1 coming in 12% below Q1 LY (11% adjusted for currency effects) to SEK 152 m (172). The reduction compared to LY is primarily due to positive one-time effects from delayed deliveries in the Americas as a result of a severe snowstorm at the end of 2022. Additionally, APAC was affected by timing shifts in orders during the quarter.
• The EBITDA margin amounted to 15% (28). Adjusted for the above-mentioned snowstorm the comparison year margin is 23%.
• A new study showing synergistic benefits in Probi’s and Clasado’s joint synbiotic immune health concept was published in the International Journal of Nutritional Sciences.
• Probi was selected as a finalist in the annual NutraIngredients Awards for its pioneering Probi^® Sensia concept, improving cognition, mood and sleep.
• Probi strengthened its brand position in the Nordic regions, by expanding the B2C operations into Denmark through a partnership with Matas.
• Probi attained silver status from EcoVadis, for its performance in sustainability.

CEO Comments: Steady Progress in a Transitional Year

The start of 2024 has been characterized by a whirlwind of activities and events, largely fueled by our strategic revamp introduced in the later part of 2023. Our sales were relatively stable and in line with our expectations for this transitional year, looking beyond some disadvantageous comparatives in Americas. In terms of efficiency, we are beginning to see encouraging signs of improvement in our manufacturing optimization program, which is an important step in strengthening our currently strained profitability. More has to be done before we reach our goals, but I am pleased with our progress in the first quarter, and we are taking steady steps in the right direction.

Commercially we have achieved several notable highlights. In March, our team in North America attended Expo West reporting significant interest in our recently launched Probi^® Sensia offering, as well as our new synbiotic solutions and combination products. Probi’s commercial team does a fantastic job gaining traction with existing key customers, as well as new ones. This applies to all regions, and we are currently seeing major activity and momentum in our sales and marketing initiatives overall, with more new customers signed up and further discussions underway. Moreover, several product launches took place through distribution partners, and additional customer launches are planned for 2024 and next year.

Probi’s B2C business model, initially launched in Sweden and Norway, will now also be expanded to the Danish market through a commercial e-commerce collaboration with Matas, which is Denmark’s largest beauty, personal care and health products retailer. Since the Swedish B2C launch a year ago, Probi has successfully managed to grow its market share. We are now ready to further elevate the Probi brand on the Nordic market, enhancing our category leadership and broadening our market presence.

In terms of scientific advancements, our collaboration with Clasado has progressed well. The R&D teams involved in our partnership have worked closely together to add further evidence of the synergistic benefits of combining our products. At the end of the quarter, we were proud to announce the publication of our findings in the International Journal of Nutritional Sciences, clearly demonstrating that the combination of Probi’s Defendum^® probiotics and Clasado’s prebiotic can have an even greater benefit than either ingredient alone. Moreover, we recently learned that Probi has been selected as a finalist for the NutraIngredients Awards 2024 for our research on the LpHEAL9 strain in our Probi^® Sensia psychobiotic. These accomplishments not only bolster our existing product range, but also confirm Probi's ability to deliver pioneering and innovative solutions anchored in scientific excellence.

As we progress into 2024, I remain firmly committed to cultivating a robust and adaptable organization united by a common purpose. Our primary focus is on establishing the optimal conditions for commercial success and sustainable profitable growth, in accordance with our outlined goals for 2024-2028. We are already witnessing positive developments from our strategic and operational revamps. As previously communicated, 2024 will be a transitional year with modest expectations on increased growth and profitability. While the financial outcomes are not expected in the immediate future, I am, however, confident that we are heading in the right direction.

Anita Johansen
CEO

Invitation to teleconference

Probi’s interim report for Q1 2024 was published on April 23, 2024, at 8:00 a.m. On the same day at 10:00 a.m., a teleconference is held with Anita Johansen, CEO and Per Lindblad, CFO, who will present the report. The telephone conference can be accessed via the link https://ir.financialhearings.com/probi-q1-report-2024.

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]
Per Lindblad, CFO, Tel: +46 (0)46 286 89 41, E-mail: [email protected]

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 April 23, 2024 at 08:00 CET. This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording prevails.