Q4 2022: Fourth quarter impacted by one-off items

Important events during the fourth quarter

• Net sales decreased by 15% (-27% adjusted for currency effects) to SEK 144 m (170) in Q4. Snowstorms in the USA delayed deliveries to the value of SEK 18 m in net sales.
• The EBITDA margin amounted to 11% (32) in Q4. Adjusted for the delayed deliveries and one-off items, the EBITDA margin was 24%.
• Probi will take over the distribution of its own brand Probi® from April 1, 2023.
• Purchase of strain rights from American partners for faster commercialization of spores.
• The Board appointed Anita Johansen as Interim CEO. New recruitment is underway.

Important events during the full year 2022

• Net sales decreased by 6% (-17% adjusted for currency effects) to SEK 618 m (658).
• The EBITDA margin amounted to 22% (28).
• The technology transfer of BLIS products started with the first commercial production batch of BLIS K12.
• New skin care product developed based on by-product from the production process, contributing to reduced environmental costs and less environmental impact.
• Pilot study on Gut-Brain with 132 participants completed.
• The Board of Directors proposal to the 2023 Annual General Meeting is for a dividend of SEK 1.30 (1.30) per share corresponding to SEK 14.8 m (14.8) for the 2022 financial year.

CEO Comments

Important measures to increase growth and profitability

My first 50 days as interim CEO of Probi have been intense. Probi is a fantastic company with great potential and I feel extremely honored to have been entrusted to lead this company. At the same time, we have several challenges to deal with, within both our own operations and on the market.

We round off 2022 and can summarize an extremely turbulent year in the outside world, which of course also left its mark on our business. Sales totaled SEK 618 m, a decrease of 6% compared to the previous year. Adjusted for currency effects, this decrease was 17%. The last quarter was negatively affected by the snowstorms that paralyzed parts of the USA at the end of December, which meant that we had to postpone some major deliveries with a value of SEK 18 m until 2023. Sales in Q4 amounted to SEK 144 m, which was 15% lower than the previous year.

In Q4, we saw one-off costs of around SEK 12 m, of which SEK 8 m were personnel-related and the rest business development costs. The reported EBITDA margin for the full year amounted to 22%, but adjusted for one-off costs and the delayed orders, this EBITDA margin was about 25%.

Both the Americas and EMEA saw weak development in 2022. There were specific reasons for some individual customers, but at the same time market sentiment is more cautious in both regions linked to macroeconomic developments. We assess that even in 2023 there will continue to be some caution in the market.

For the APAC region, we saw promising development in 2022 with a revenue increase of 10%. In the region, we have primarily grown in China despite the Covid restrictions prevailing during the year. As these have now been eased, we see opportunities for increasing our activities, provided that the spread of the disease does not create new obstacles.

For a couple of years, we have made major investments in our manufacturing facility at Redmond. While we have made great progress, we concluded during the autumn that further improvements and investments would be required to optimize our manufacturing process. One of my key priority areas in 2023 will be to continue to improve operations and benefit from our investments in our manufacturing facility.

The pandemic has presented challenges for us in running clinical studies. That's why it's very pleasing that at the end of the year we completed a pilot study on Gut-Brain. This is a wide-ranging health area with great potential in a number of exciting niches. We are now preparing publication of the study and for the product launch in 2023.

In 2023, we will also launch a completely new product category – spores. At the end of the year, we bought the right to the strain from our partners, which means that we can drive product development and commercialization significantly faster. Spores is an area with great commercial potential, for example in the USA.

We were obviously not satisfied with 2022’s growth and profitability and we have initiated a number of measures to reverse this trend. My main priorities in 2023 will be to secure production capacity, increase growth and by that also profitability, make sure that we have the right resources in the right places and that we succeed with our new product launches to contribute to our long-term growth.

Anita Johansen
Interim CEO

Invitation to teleconference
Probi's year-end statement 2022 is published on January 27, 2023 at 8:00 a.m. On the same day at 10:00 a.m., a telephone conference will be held with Anita Johansen, Interim 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=5004780. The presentation is available at www.probi.com and www.financialhearings.com.

Contact
Anita Johansen, Interim CEO, Telephone: +46 (0)46 286 89 48, E-mail: [email protected]
Henrik Lundkvist, CFO, Tele: +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 Regulation. The information was submitted for publication, through the agency of the CEO and CFO, on January 27, 2023 at 08:00 CET. This is a translation of the Swedish version of the interim report. When in doubt, the Swedish wording prevails.