===== SIDA 1 ===== Q1 2024 1 BioGaia AB (publ.) Interim management statement, January – March 2024 Interim Management Statement January – March 2024 ===== SIDA 2 ===== Q1 2024 2 BioGaia AB (publ.) Interim management statement, January – March 2024 Jan – Mar 2024 For balance sheet items, figures in parentheses refer to year -end 2023 figures. For income statement and cash flow items, they refer to the same period last year. Net sales amounted to SEK 369.8 million ( 365.8), an increase of SEK 4.0 million, or 1% (excluding foreign exchange effects, 2%). Net sales in the Pediatrics segment amounted to SEK 292.3 million (306.0), a decrease of 4% (excluding foreign exchange effects a decrease of 4%). Net sales in the Adult Health segment amounted to SEK 74.8 million (56.6), an increase of 32% (excluding foreign exchange effects an increase of 33%). Operating expenses amounted to SEK 122.6 million ( 114.5), an increase of SEK 8.1 million (7%) . Operating expenses, excluding items affecting comparability, increased by 5% to SEK 117.6 million ( 112.1). Operating profit decreased by 3% to SEK 143.2 million ( 148.0), which corresponds to an operating margin of 39% (40%). Adjusted operating profit decreased by 1% to SEK 148.2 million (150.4), which corresponds to an adjusted operating margin of 40% (41%). Profit after tax amounted to SEK 121.8 million ( 115.9), an increase of 5%. Earnings per share amounted to SEK 1. 21 (1.15) before dilution and SEK 1.21 (1.15) after dilution .1) Cash flow amounted to SEK 40.9 million ( 93.7). Cash and cash equivalents amounted to SEK 1,5 91.4 million (1,5 44.2). Key events after the end of the first quarter No key events that are not mentioned in this interim management statement took place after the end of the first quarter. FIRST QUARTER 2024 Jan – Mar 2024 Jan – Mar 2023 Net sales, SEK 000s 369,796 365,821 Growth in net sales 1% 29% Operating profit, SEK 000s 143,183 147,998 Operating margin 39% 40% Profit after tax, SEK 000s 121,847 115,945 Number of shares, thousands , before dilution 100,982 100,982 Number of shares, thousands , after dilution 100,992 100,982 Earnings per share, before dilution, SEK 1) 1.21 1.15 Earnings per share, after dilution, SEK 1) 1.21 1.15 1) Key ratio defined according to IFRS. For definitions of other key ratios, see page 17. Operating margin 39 % Change in sales 1 % 2 % excl. FX Net sales 370 SEK million Operating profit 143 SEK million This information is information that BioGaia 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, at 08.00 a.m. CET on 7 May 2024. ===== SIDA 3 ===== Q1 2024 3 BioGaia AB (publ.) Interim management statement, January – March 2024 Embarking on a dynamic year ahead After a strong record year for 2023, the first quarter shows overall good results with a strong Operating Margin of 39% and Net Sales of SEK 369.8 (365.8) a Sales Growth of 1% (2% excluding foreign exchange effects) impacted by some one -time events related to the 4 th quarter last year including prelaunch inventory build -up in Brazil and impact of Nestle’s Gerber stopping the sales of their Gerber/BioGaia co-branded product. Our region Asia Pacific continued its positive performance and sales increased in EMEA by 13%. Sales declined in Latin America and declined slightly in North America for reasons mentioned above. The Pediatric segment decreased by 4% compared to the previous year. The Adult segment is growing by 32% compared to the previous year, and our products Gastrus, Prodentis, and Protectis tablets stand out with strong performances. Thriving activity in our market areas EMEA increased sales by 13% driven by the UK, France, Spain, and Eastern Europe. In the UK, we launched BioGaia Protectis Baby Drops 5ml into the UK’s biggest Pharmacy chain, Boots both in -store and online. In addition, we are now in over 1,000 independent pharmacies in the UK. We have launched a successful Continuous Professional Development learning module for healthcare professionals which has led to an increased motivation to recommend our product by 38% among midwives, pharmacists, and general practit ioners within the UK. Sales in t he APAC region, driven by China, Indonesia, and Japan , grew by 6% during the quarter. In China, our digital marketing efforts continue to be successful, particularly sales through live streams on diverse marketplaces and social platforms such as JD, Tmall, and TikTok. Meanwhile, in Japan, our primary focus lies within the dental consumer market, where we see that our omnichannel strategy is developing successfully. In the Americas, we had several product launches during the quarter. In the USA, we launched a new product, Nurture & Grow, which is a triple -benefit, once -daily probiotic, that eases digestive discomfort, provides immune support, and promotes healthy gums & teeth. In 2023, we did a pilot launch in the USA of our first probiotic skin health product, Aldermis which is a skin ointment for infants and children to treat dry and sensitive skin. Due to successful results in the USA, we decided to launch Aldermis in Canada this quarter. In Canada, our most recent direct market, sales are accelerating rapidly. With the launch of Aldermis, Canada broadened its product assortment towards consumers. In addition, Canada relaunched Prodentis with mint flavor for adults a nd introduced Prodentis apple flavor for kids. So far, these products are available on two e -commerce channels, Amazon and Well.ca. To support the launches of Prodentis, Canada partnered with multiple dental associations and key opinion leaders, developed an accredited educational program, and launched a series of virtual clinic learning sessions. In the USA, we had a slight decrease in sales in the quarter as mentioned mainly due to Gerber’s decision to discontinue the sale of their co -branded Gerber/BioGa ia products in the 4 th quarter last year to concentrate solely on their own products. Meanwhile, we have continued strong growth (38%) on Amazon in the USA. In Latin America, we had a decline in sales in Brazil as mentioned due to prelaunch stocking in t he 4th quarter. At the same time, Chile, where we have Abbott as our partner, stands out with good results. We were delighted to convene with our Latin America partners during a regionally organized workshop in the quarter. Additionally, we conducted a speaker t raining session with healthcare professionals, focusing particularly on new evidence of additional product benefits for Gastrus. A solidified strategic framework Going into 2024, we have further solidified our strategic framework and focus on the three strategic pillars for the company: Grow the core, Expansion through direct markets, and Breakthrough innovation. The first strategic pillar: Grow the core means focusing on our existing strong product portfolio within gut health, immune health, and oral health with further strengthened marketing and commercial excellence, launching new products and line extensions, a nd through our omnichannel approach. Our second strategic pillar: Expansion through direct markets, means that we want to continue to grow our existing direct business model that we have successfully introduced in the USA, Canada, UK, Finland, and Japan, a nd continue to expand our direct distribution model to consumers. This strategy has been very successful to date and gives us more flexibility when it comes to product launches, marketing our products, and collecting and analyzing insights and consumer beh aviors. Our third strategic pillar: Breakthrough innovation, is critical for our future long -term growth and creation of new market opportunities. As a probiotics company at the forefront of microbiome research, it is essential that we keep innovating and launching new products, for additional indications and health areas beyond our core. I am confident that this solidified strategic framework will continue to guide us to take actions and decisions to create value, allocate resources toward achieving our goals, and sustain long -term success in a competitive landscape. As we navigate the ever -evolving landscape of health and wellness, I remain confident in our collective ability to drive meaningful impact and sustained growth. We will continue to make evidence -based targeted investments in marketing, sales, and innovatio n with the intention of continuing the growth of our pediatric and adult products. BioGaia AB (publ.) Interim management statement 2024 The Board of Directors and the CEO of BioGaia AB hereby present the interim management statement for the period 1 January – 31 March 2024. CEO’s comment Theresa Agnew President and CEO, BioGaia 7 May 2024 Teleconference: Investors, analysts, and the media are invited to take part in a teleconference on the interim management statement to be held today, 7 May 2024, at 09:30 a.m. CEST with CEO Theresa Agnew and CFO Alexander Kotsinas. More information about t he teleconference is available here https://financialhearings.com/event/49309 . ===== SIDA 4 ===== Q1 2024 4 BioGaia AB (publ.) Interim management statement, January – March 2024 Consolidated net sales amounted to SEK 369.8 million ( 365.8), which is an increase of SEK 4.0 million, or 1% (excluding foreign exchange effects, 2%). Over the past 12 -month period, sales rose 10%. Sales in EMEA amounted to SEK 161.5 million ( 143.3), an increase of 13%, which was due to higher sales mainly in the Adult health segment. Sales increased mainly in Spain , South Africa and the United Arab Emirates . Sales in APAC amounted to SEK 85.8 (80.8), an increase of 6%, which was due to higher sales in the Pediatrics segment. Sales increased mainly in Indonesia, Japan, and Thailand . Sales in Americas totaled SEK 122.5 million ( 141.7), down 14% due to decreased sales in the Pediatrics segment. Sales mainly decreased in Brazil , Mexico and USA. In USA sales were negatively affected by the discontinuation of the Gerber products . In Brazil sales were negatively impacted by the inventory build -up in the fourth quarter of 2023 due to the launch of Easy Dropper in Brazil. SALES FIRST QUARTER Revenue SEKm Jan – Mar Jan – Mar Change 2024 2023 Pediatrics 292.3 306.0 -4% Adult Health 74.8 56.6 32% Other 2.7 3.3 -17% Total 369.8 365.8 1% SEKm Jan – Mar Jan – Mar Change 2024 2023 EMEA 161.5 143.3 13% APAC 85.8 80.8 6% Americas 122.5 141.7 -14% Total 369.8 365.8 1% Net sales bridge f irst quarter SEKm Change 2023 365.8 Foreign exchange -3.6 -1.0% Organic growth 7.6 2.1% 2024 369.8 1.1% ===== SIDA 5 ===== Q1 2024 5 BioGaia AB (publ.) Interim management statement, January – March 2024 Sales in the Pediatrics segment amounted to SEK 292.3 million (306.0), a decrease of 4% (excluding foreign exchange effects a decrease of 4%). Over the past 12 -month period, sales rose 5%. Sales of BioGaia Protectis drops decreased compared to the corresponding period last year. Sales decreased in Americas (mainly in Brazil and USA) while sales increased in APAC and EMEA. Sales of BioGaia Protectis tablets within Pediatrics decreased compared to the corresponding period last year. Sales decrease d in Americas and APAC, mainly in Brazil and South Korea. SALES FIRST QUARTER SEKm Jan – Mar 2024 Jan – Mar 2023 Change Pediatrics 292.3 306.0 -4% The Pediatrics segment accounts for approximately 80% of BioGaia’s total sales. BioGaia Protectis drops remain the most sold product and are sold in more than 1 00 countries. Other key products within the Pediatrics segment include Protectis tablets , Pharax , oral rehydration solution as well as cultures to be used as ingredients in licensee products. Pediatrics ===== SIDA 6 ===== Q1 2024 6 BioGaia AB (publ.) Interim management statement, January – March 2024 Sales in the Adult Health segment amounted to SEK 74.8 million (56.6), an increase of 32% (excluding foreign exchange effects , 33%). Over the past 12 -month period, sales rose 30%. Sales of BioGaia Protectis tablets increased compared to the corresponding period last year. Sales increased in EMEA and Americas , mainly in South Africa and Peru. Sales of BioGaia Gastrus increased compared to the corresponding period last year. Sales increased in all regions , mainly in USA and Spain. Sales of BioGaia Prodentis increased compared to the corresponding period last year. Sales increased in Americas and EMEA, mainly in USA and Germany . SALES FIRST QUARTER SEKm Jan – Mar 2024 Jan – Mar 2023 Change Adult Health 74.8 56.6 32% The Adult Health segment accounts for approximately 20% of BioGaia’s total sales. Sales mainly comprise BioGaia Protectis, Bi oGaia Gastrus, BioGaia Prodentis, BioGaia Osfortis, as well as cultures as an ingredient in a licensee’s dairy products and Nutrace utics’ own products. Adult Health ===== SIDA 7 ===== Q1 2024 7 BioGaia AB (publ.) Interim management statement, January – March 2024 Gross margin The total gross margin amounted to 72% (72%). The gross margin for the Pediatrics segment amounted to 7 5% (73%) and for the Adult Health segment to 57% (63%). Operating expenses and operating profit Operating expenses amounted to SEK 122.6 million (1 14.5), an increase of SEK 8. 1 million ( 7%). Operating expenses, excluding items affecting comparability, increased by 5% to SEK 117.6 million (112.1). Items affecting comparability in the quarter primarily include litigation fees in connection with the termination of the distribution agreement in Italy . Selling expenses amounted to SEK 9 6.0 million (88. 1), an increase of 9%, mainly due to higher costs for sales and marketing activities. R&D expenses amounted to SEK 2 5.1 million ( 18.7), an increase of 34%. Administrative expenses amounted to SEK 13.9 million ( 9.8), an increase of 42%. The increase in administrative expenses was primarily due to litigation fees in connection with the termin ation of the distribution agreement in Italy . Other operating income refers to exchange gains on receivables and liabilities of an operating nature and amounted to SEK 12.5 million (2.1). Operating profit amounted to SEK 143.2 million ( 148.0), a decrease of 3%. The operating margin was 39% (40%). Adjusted operating profit amounted to SEK 148.2 million ( 150.4), a decrease of 1%. The adjusted operating margin was 40% (41%). Net financial items amounted to SEK 10.4 million ( 2.6). Net financial items were impacted by the adjustment of the value of the earn -out in relation to Nutraceutics in the amount of SEK -1.2 million (-1.5). Profit after tax and earnings per share Profit after tax amounted to SEK 121.8 million (1 15.9), an increase of 5%. The effective tax rate was 2 1% (23%). Profit after tax is impacted by a non -taxable financial expense or income from the adjustment of the value of the additional purchase price. The effective tax rate in the same quarter last year was higher due to impact on profit before tax from subsidiaries in tax jurisdictions with higher tax rates . Earnings per share amounted to SEK 1.21 (1.15) before dilution and SEK 1.21 (1.15) after dilution . FIRST QUARTER Earnings ===== SIDA 8 ===== Q1 2024 8 BioGaia AB (publ.) Interim management statement, January – March 2024 Key events in the first quarter of 202 4 Launches in the first quarter of 202 4 Distributor Country Product Pediact France BioGaia Prodentis Eczacibasi Turkey BioGaia Protectis tablets BioGaia Canada Canada BioGaia Aldermis BioGaia USA USA BioGaia Nurture & Grow MTC Pharma Vietnam BioGaia Pro dentis tablets with new flavor ( apple) Balance sheet 31 March 2024 Total assets amounted to SEK 2, 480.0 million (2, 333.2). Goodwill from the acquisition of Nutraceutics was adjusted for currency translation. The financial liability for the additional purchase price was value adjusted. For more information, see Note 3. Compared with 31 December 2023 , receivables and payables increased whereas inventory is at approximately the same level. Cash and cash equivalents amounted to SEK 1,5 91.4 million (1,544.2). Cash flow first quarter Cash flow amounted to SEK 40.9 million ( 93.7). Cash flow from operating activities amounted to SEK 51.9 million (98.4). The decrease in cash flow from operat ing activities was mainly due to lower operating profit and increase d receivables . Investments amounted to SEK 8.8 million ( 1.3). The increase was primarily attributable to investments in BioGaia Production. Other disclosures Employees The number of employees in the Group at 31 March 2024 totaled 211 (211 at 31 March 2023). The company has an incentive program for all employees based partly on the company’s sales and profit and partly on individual targets. The maximum bonus is equal to 12% of annual salary. In addition to this program, BioGaia has also implemented a subscription warrants program as resolved by the 2021 Annual General Meeting. The program involves the issue of a maximum of 365,000 warrants where each warrant shall entitle the holder during the period from 6 July 2024 through 6 November 2024 to subscribe for fi ve (previously one before the 2022 share split) new Class B share in BioGaia for a subscription price per share that amounts to SEK 115.6 (previously SEK 578.2 before the 2022 share split). A total of 89,730 warrants were subscribed for in the program and on 31 March 2024 following repurchases only 71 850 remains. Future outlook BioGaia’s goal is to create strong value growth and a good return for its shareholders. This will be achieved through a greater emphasis on the BioGaia brand, online sales, increased sales to both existing and new customers and a controlled cost level. The long -term financial target is an operating margin (operating profit in relation to sales) of at least 34% with continued strong growth and increased investments in research, product development, brand building and the sales organization. BioGaia’s dividend policy is to pay a shareholder dividend equal to 50% of profit after tax in the Group excluding non -recurring items. For the coming years BioGaia intends to give extra dividends of 50 % to 100% of profit after tax in the Group excluding non-recurring items, provided that the future cash flows are in line with BioGaia’s projections. In view of the company’s strong portfolio consisting of an increased number of innovative products that are sold predominantly under the BioGaia brand, successful clinical trials and a strong distribution network that covers a large share of key markets fo r BioGaia, BioGaia’s future outlook remains bright. Significant risks and uncertainties – Group and Parent Company Significant risks and uncertainties are described in the administration report of the annual report for 2023 on pages 109 and 110 and in Notes 2 6 and 27. No significant changes in these risks and uncertainties are assessed to have taken place at 31 March 2024. Related party transactions Annwall & Rothschild Investment AB owns 3,703,340 class A shares and 500,000 class B shares, corresponding to 4.2% of the share capital and 27.9% of the voting rights in BioGaia AB. Annwall & Rothschild Investment AB is owned by Peter Rothschild and Jan Annwall. Peter Rothschild is Chairman of the Board of BioGaia AB and receives a director’s fee of SEK 730,000 per year. During the quarter, Peter Rothschild received additional remuneration for significant working duties, in addition to his assignment on the Board, of SEK 150,000 in accordance with the decision of the Annual General Meeting and the Board of Directors. Balance sheet and cash flow ===== SIDA 9 ===== Q1 2024 9 BioGaia AB (publ.) Interim management statement, January – March 2024 Key events after the end of the first quarter of 202 4 No key events that are not mentioned in this interim management statement took place after the end of the first quarter. Accounting policies This interim management statement was prepared in all material respects in accordance with Nasdaq OMX Stockholm’s guidance for preparing interim management statements. Disclosures according to IAS 34 Interim Financial Reporting are provided both in notes and elsewhere in the interim management statement . The accounting policies applied in the consolidated income statement and balance sheet are consistent with the accounting policies applied in preparation of the most recent annual report. The financial accounts and segment information correspond to the statements used in interim financial reporting prepared in accordance with IAS 34 to provide comparability in the presen tation between quarters. The interim management statement includes a Message from the CEO, even if this is not a requirement of Nasdaq Stockholm’s guidance. The information is nevertheless deemed important in satisfying user needs. New accounting standards Management’s assessment is that new and amended standards and interpretations that came into force in 202 4 have not had a material effect on the Group’s financial statements. Management’s assessment is that new and amended standards and interpretations that have not yet come into effect will not have a material effect on the Group’s financial statements for th e period of initial application. ===== SIDA 10 ===== Q1 2024 10 BioGaia AB (publ.) Interim management statement, January – March 2024 (Amounts in SEK 000s) Jan – Mar Jan – Mar Jan – Dec Apr 2023 – Apr 2022- 2024 2023 2023 Mar 2024 Mar 2023 Net sales (Note 1) 369,796 365,821 1,296,506 1,300 ,481 1,185,923 Cost of sales -103,967 -103,309 -346,316 -346,974 -323,690 Gross profit 265,829 262,512 950,190 953,507 862,233 Selling expenses -95,982 -88,114 -363,256 -371,124 -336,877 Administrative expenses -13,926 -9,773 -39,249 -43,402 -38,528 Research and development expenses -25,114 -18,684 -106,776 -113,206 -100,585 Other operating incom e 12,511 2,057 2,194 12,648 27,919 Other operating expenses -135 - - -135 - Operating profit 143,18 3 147,998 443,103 438,28 8 414,162 Financial income 11,961 2,758 41,532 50,735 90,529 Financial expenses -1,545 -195 -15,801 -17,151 -3,884 Profit before tax 153,599 150,561 468,834 471,872 500,807 Tax -31,752 -34,616 -103,482 -100,618 -87,386 Profit for the period 121,84 7 115,945 365,352 371,254 413,421 Gains/losses arising on translation of the statements of foreign operations 15,868 -1,079 -9,762 7,185 21,455 Comprehensive income for the period 137,715 114,866 355,590 378,439 434,876 Profit for the period attributable to: Owners of the Parent Company 121,84 7 115,945 365,352 371,254 413,421 Non-controlling interests – – – – 121,84 7 115,945 365,352 371,254 413,421 Comprehensive income for the period attributable to: Owners of the Parent Company 137,715 114,866 355,590 378,439 434,876 Non-controlling interests – – – – 137,715 114,866 355,590 378,439 434,876 Earnings per share Earnings per share before dilution, (SEK) *) 1.21 1.15 3.62 3.68 4.09 Earnings per share after dilution, (SEK) *) 1.21 1.15 3.62 3.68 4.09 Number of shares (thousands) 100,982 100,982 100,982 100,982 100,982 Average number of shares before dilution, (thousands) *) 100,982 100,982 100,982 100,982 100,982 Average number of shares after dilution, (thousands) *) 100,992 100,982 100,982 100,985 100,982 *) In view of the 5:1 share split, which took place in May 2022, historical key ratios based on the number of shares have been restated. Summary of consolidated statements of comprehensive income ===== SIDA 11 ===== Q1 2024 11 BioGaia AB (publ.) Interim management statement, January – March 2024 (Amounts in SEK 000s) 31 Mar 31 Mar 31 Dec 2024 2023 2023 Assets R&D projects in progress 46,231 46,128 46,230 Goodwill 175,026 170,084 165,174 Right -of-use assets 33,412 10,614 36,156 Property, plant, and equipment 183,191 141,679 177,172 Financial assets 28,013 25,793 28,013 Deferred tax assets 9,983 7,170 5,964 Deposits 51 49 48 Total non -current assets 475,907 401,517 458,757 Current assets excl. cash and cash equivalents 412,684 341,664 330,240 Cash and cash equivalents 1,591,393 1,580,822 1,544,192 Total current assets 2,004, 077 1,922,486 1,874,432 Total assets 2,479,984 2,324,003 2,333,189 Equity and liabilities Equity attributable to owners of the Parent Company 2,168,058 2,086,866 2,030,342 Non-controlling interests 2 2 2 Total equity 2,168,060 2,086,868 2,030,344 Deferred tax liability 15,248 12,532 15,179 Non-current liabilities 92,821 38,328 91,932 Current liabilities 203,855 186,275 195,734 Total liabilities and equity 2,479,984 2,324,003 2,333,189 Consolidated balance sheets ===== SIDA 12 ===== Q1 2024 12 BioGaia AB (publ.) Interim management statement, January – March 2024 (Amounts in SEK 000s) Jan – Mar Jan – Mar Jan – Dec 2024 2023 2023 Operating activities Operating profit 143,183 147,998 443,103 Depreciation/amortization 5,742 6,519 25,281 Other non -cash items -1,479 -44 -1,478 Taxes -36,439 -34,995 -80,294 Interest received and paid 11,662 2,562 40,461 Cash flow from operating activities before changes in working capital 122,669 122,040 427,073 Changes in working capital -70,742 -23,606 -1,108 Cash flow from operating activities 51,927 98,434 425,965 Investing activities Purchase of property, plant, and equipment -8,773 -1,279 -48,568 Purchase of intangible assets -1 -53 -146 Purchase of financial assets - - -2,221 Cash flow from investing activities -8,774 -1,332 -50,935 Financing activities Dividend - - -292,849 Repayment of lease liability -2,282 -2,943 -10,755 Provision to Foundation to Prevent Antibiotic Resistance - - -4,400 Repurchase of warrants – -417 -417 Cash flow from financing activities -2,282 -3,360 -308,421 Cash flow for the period 40,871 93,742 66,609 Cash and cash equivalents at the beginning of the period 1,544,192 1,488,366 1,488,366 Exchange difference in cash and cash equivalents 6,330 -1,286 -10,783 Cash and cash equivalents at the end of the period 1,591,393 1,580,822 1,544,192 Summary consolidated statement of changes in equity (Amounts in SEK 000s) Jan – Mar Jan – Mar Jan – Dec 2024 2023 2023 Opening balance 2,030,344 1,972,418 1,972,418 New issue and repurchase of warrants , -417 -417 Dividend - - -292,849 Provision to Foundation to Prevent Antibiotic Resistance - - -4,400 Comprehensive income for the period 137,715 114,866 355,590 Closing balance 2,168,060 2,086,868 2,030,344 Consolidated cash flow statements ===== SIDA 13 ===== Q1 2024 13 BioGaia AB (publ.) Interim management statement, January – March 2024 Executive Management has analyzed the Group’s internal reporting and determined that the Group’s operations are monitored and evaluated based on the following segments: – Pediatrics segment (drops, gut health tablets, oral rehydration solution (ORS) and cultures to be used as ingredients in licensee products (such as infant formula). – Adult Health segment (gut health tablets, oral health lozenges and cultures as an ingredient in a licensee’s dairy products, Nutraceutics own products as well as royalty revenues for Adult Health products). – Other segment (smaller segments such as royalty from packaging solutions). For the above segments BioGaia reports revenue and gross profit, which are monitored regularly by the CEO (who is regarded as the chief operating decision maker) together with the Executive Management. There is no monitoring of the company’s total assets and liabilities against the segments’ assets and liabilities. Note 1. Reporting by segment – Group (Amounts in SEK 000s) Jan – Mar Jan – Mar Jan – Dec Apr 2023 - Apr 2022 - 2024 2023 2023 Mar 2024 Mar 2023 Revenue by segment Pediatrics 292,278 305,957 1,013,522 999,844 951,792 Adult Health 74,819 56,613 275,230 293,436 226,062 Other 2,700 3,251 7,753 7,202 8,069 Total 369,797 365,821 1,296,506 1,300,482 1,185,923 Gross profit by segment Pediatrics 220,371 224,403 760,128 756,098 706,172 Adult Health 42,758 35,535 183,136 190,358 149,040 Other 2,700 2,574 6,925 7,050 7,020 Total 265,829 262,512 950,189 953,507 862,232 Selling, administrative, R&D expenses -135,022 -116,571 -509,281 -527,732 -475,990 Other operating expenses/income 12,376 2,057 2,194 12,513 27,919 Operating profit 143,183 147,998 443,103 438,287 414,162 Net financial items 10,416 2,563 25,731 33,584 86,645 Profit before tax 153,599 150,561 468,834 471,871 500,807 Sales by geographical market APAC Pediatrics 57,695 51,132 176,797 183,360 152,473 Adult Health 25,521 27,338 121,999 120,183 98,550 Other 2,542 2,299 5,289 5,532 5,865 Total APAC 85,759 80,769 304,085 309,075 256,888 EMEA Pediatrics 137,763 132,752 424,930 429,941 447,521 Adult Health 23,616 10,143 65,275 78,748 55,357 Other 158 434 1,575 1,299 1,525 Total EMEA 161,536 143,329 491,781 509,988 504,403 Americas Pediatrics 96,821 122,072 411,795 386,543 351,798 Adult Health 25,681 19,133 87,955 94,505 72,154 Other 0 518 889 371 680 Total Americas 122,502 141,723 500,640 481,419 424,632 Total 369,797 365,821 1,296,506 1,300,482 1,185,923 ===== SIDA 14 ===== Q1 2024 14 BioGaia AB (publ.) Interim management statement, January – March 2024 Note 2. Largest shareholders at 31 March 2024 (source: Vantage by Euroclear) Date of recognition (Amounts in SEK 000s) Jan – Mar Jan – Mar Jan – Dec Performance obligations met on specific date (Product sales) 2024 2023 2023 Pediatrics 292,278 305,957 1,013,522 Adult Health 72,516 54,762 266,030 Other 2,761 2,887 6,392 Total 367,556 363,606 1,285,944 Performance obligations met over time (Royalty) Pediatrics - - - Adult Health 2,303 1,851 9,201 Other -62 364 1,361 Total 2,241 2,215 10,561 Total 369,797 365,821 1,296,506 A shares B shares Share capital No. of votes Capital Votes 1 Annwall & Rothschild Investments AB 3,703,340 500,000 840,668 37,533,400 4.16% 27.94% 2 EQT 11,164,630 2,232,926 11,164,630 11.06% 8.31% 3 Fjärde AP -fonden 7,750,182 1,550,036 7,750,182 7.67% 5.77% 4 Premier Miton Investors 4,050,295 810,059 4,050,295 4.01% 3.02% 5 Cargill Inc 3,000,000 600,000 3,000,000 2.97% 2.23% 6 TIN Fonder 3,000,000 600,000 3,000,000 2.97% 2.23% 7 Juno Selection Fund 2,187,295 437,459 2,187,295 2.17% 1.63% 8 Tredje AP -fonden 2,180,915 436,183 2,180,915 2.16% 1.62% 9 Handelsbanken Fonder AB 1,946,674 389,335 1,946,674 1.93% 1.45% 10 Allianz Global Investors 1,830,953 366,191 1,830,953 1.81% 1.36% Other shareholders 59,668,026 11,933,605 59,668,026 59.09% 44.42% Total 3,703,340 97,278,970 20,196,462 134,312,370 100% 100% ===== SIDA 15 ===== Q1 2024 15 BioGaia AB (publ.) Interim management statement, January – March 2024 Note 3. Fair value (Amounts in SEK 000s) Jan – Mar Jan – Dec 2024 2023 Opening balance 46,529 33,627 Value adjustment 1,245 14,992 Exchange difference 2,899 -2,090 Closing balance 50,673 46,529 Financial liabilities BioGaia has a financial liability relating to the additional purchase price in business acquisitions that is measured at fair value through profit or loss. The additional purchase price is due to the acquisition of Nutraceutics and is based on sales in Nut raceutics in 2026 or 2027. The amount, which will be settled in April 2027 or 2028, may also be adjusted if the agreed budget for marketing costs is exceeded. Revaluation took place during the first quarter of 202 4 and BioGaia’s best assessment of fair value of the financial liability related to the additional purchase price at 31 March 2024 was therefore adjusted to SEK 50.7 million. Estimates of fair value are based on Level 3 of the hierarchy for fair value, which means fair value is determined using valuation models where significant inputs are based on unobservable data. The measurement was based on anticipated future cash flows di scounted with a market -based interest rate. The value adjustment is recognized as a financial expense of SEK 1. 2 million ( 1.5) during the three-month period. The weighted average cost of capital (WACC) amounted to 10. 39% (10.84% at 31 March 2023). Financial assets BioGaia owns shares in the companies Boneprox AB and Skinome AB through BioGaia Invest. These financial assets are measured at fair value through profit or loss. Estimates of fair value are based on Level 3 of the hierarchy for fair value, which means fair value is determined using valuation models where significant inputs are based on unobservable data. The fair values of other receivables, cash and cash equivalents, trade payables and other liabilities are estimated to be equal to their carrying amounts (amortized cost) due to the short maturities. (Amounts in SEK 000s) Jan – Mar Jan – Dec 2024 2023 Opening balance 28,013 25,793 Value adjustment - - Acquisitions - 2,220 Closing balance 28,013 28,013 ===== SIDA 16 ===== Q1 2024 16 BioGaia AB (publ.) Interim management statement, January – March 2024 A list of definitions of key ratios reported in the consolidated financial statements is provided on page 138 of BioGaia’s annual report for 202 3. In this report, BioGaia reports information used by Executive Management to assess the Group’s development. Some of the key ratios presented are not defined according to IFRS. The company is of the opinion that these metrics provide valuable complementar y information to stakeholders and the company’s management since they contribute to evaluation of relevant tren ds and the company’s performance. Since not all companies calculate key ratios in the same manner, these are not always comparable to metrics used by other companies. These key ratios should therefore not be seen as a replacement for metrics defined according to IFRS. ESMA’s guidelines on alternative performance measures are applied, which means extended disclosure requirements regarding key ratios not define d according to IFRS. A reconciliation of key ratios that BioGaia considers relevant according to these guidelines is provided below. Consolidated key ratios (Amounts in SEK 000s) Jan – Mar Jan – Mar Jan – Dec 2024 2023 2023 Net sales 369,796 365,821 1,296,506 Growth of net sales 1% 29% 17% Operating profit, SEK 000s 143,18 3 147,998 443,103 Adjusted operating profit, SEK 000s 148,18 3 150,400 444,247 Profit after tax, SEK 000s 121,847 115,945 365,352 Return on equity 6% 6% 18% Return on capital employed 7% 7% 24% Capital employed, SEK 000s 2,183,308 2,099,400 2,045,523 Number of shares, thousands 100,982 100,982 100,982 Average number of shares before dilution, thousands 1) 100,982 100,982 100,982 Average number of shares after dilution, thousands 1) 100,992 100,982 100,982 Earnings per share before dilution, SEK 1) 1.21 1.15 3.62 Earnings per share after dilution, SEK 1) 1.21 1.15 3.62 Equity per share , SEK 21.47 20.67 20.11 Equity per share after dilution , SEK 21.47 20.67 20.11 Equity/assets ratio 87% 90% 87% Operating margin 39% 40% 34% Adjusted operating margin 40% 41% 34% Profit before tax margin 42% 41% 36% Average number of employees 208 215 213 1) Key ratio defined according to IFRS. ===== SIDA 17 ===== Q1 2024 17 BioGaia AB (publ.) Interim management statement, January – March 2024 Key ratio Definition/calculation Purpose Return on equity Profit attributable to the owners of the Parent Company divided by average equity attributable to the owners of the Parent Company. Return on equity is used to measure profit generation, over time, given the resources attributable to the owners of the Parent Company. Return on capital employed Profit before net financial items plus financial income as a percentage of average capital employed. Return on capital employed is used to analyze profitability, based on the amount of capital used. Gross margin Gross profit as a percentage of net sales. The gross margin is used to measure profitability. Equity per share Equity attributable to the owners of the Parent Company divided by the average number of shares. Equity per share measures the company’s net value per share and indicates whether a company will increase the shareholders’ wealth over time. Average number of shares Time-weighted number of outstanding shares during the year taking bonus issue elements into account. Used to calculate equity and earnings per share. Adjusted operating margin Adjusted operating margin excluding items affecting comparability. The adjusted measure provides enhanced understanding of the performance of operations. Adjusted operating profit Operating profit (earnings before financial items and tax) excluding items affecting comparability. The adjusted measure provides enhanced understanding of the performance of operations. Items affecting comparability Expenses in conjunction with restructuring, impairment, changes in provisions for share - based long -term incentive programs and other items of a nature that affect comparability. The separate recognition of items that affect comparability between different periods provides enhanced understanding of the company’s financial performance. Earnings per share Profit for the period attributable to owners of the Parent Company divided by the average number of shares (definition according to IFRS). EPS measures how much of net profit is available for payment to the shareholders as dividends per share. Operating margin (EBIT margin) Operating profit expressed as a percentage of net sales. The operating margin is used to measure operational profitability. Equity/assets ratio Shareholders’ equity at the end of the period as a percentage of total assets. A traditional metric to show financial risk expressed as the share of total assets financed by the shareholders. Shows the company’s stability and ability to withstand losses. Capital employed Total assets less interest -free liabilities. Capital employed measures the company’s ability, in addition to cash and liquid assets, to meet the requirements of business operations. Growth Sales for the period less sales for the year - earlier period divided by sales for the year - earlier period. Breakdown by foreign exchange, organic growth and acquisitions. Shows the company’s realized sales growth over time. Profit before tax margin Profit before tax as a percentage of net sales. This key ratio makes it possible to compare profitability regardless of the corporate income tax. ===== SIDA 18 ===== Q1 2024 18 BioGaia AB (publ.) Interim management statement, January – March 2024 Key ratio (Amounts in SEK 000s) Jan – Mar Jan – Mar Jan – Dec 2024 2023 2023 Return on equity Profit attributable to owners of the Parent Company (A) 121,847 115,945 365,352 Equity attributable to owners of the Parent Company 2,168,058 2,086,866 2,030,342 Average equity attributable to owners of the Parent Company (B) 2,099,200 2,029,641 2,001,379 Return on equity (A/B) 6% 6% 18% Return on capital employed Operating profit 143,183 147,998 443,103 Financial income 11,961 2,758 41,532 Profit before net financial items + financial income (A) 155,144 150,756 484,635 Total assets 2,479,984 2,324,003 2,333,190 Interest -free liabilities -296,676 -224,603 -287,666 Capital employed 2,183,308 2,099,400 2,045,523 Average capital employed (B) 2,114,416 2,042,090 2,015,151 Return on capital employed (A/B) 7% 7% 24% (Amounts in SEK 000s) 31 Mar 31 Mar 31 Dec 2024 2023 2023 Equity/assets ratio Equity (A) 2,168,060 2,086,868 2,030,344 Total assets (B) 2,479,984 2,324,003 2,333,189 Equity/assets ratio (A/B) 87% 90% 87% Operating margin Operating profit (A) 143,183 147,998 443,103 Net sales (B) 369,796 365,821 1,296,506 Operating margin (A/B) 39% 40% 34% Profit before tax margin Profit before tax (A) 153,599 150,561 468,834 Net sales (B) 369,796 365,821 1,296,506 Profit before tax margin (A/B) 42% 41% 36% Equity per share Equity attributable to owners of the Parent Company (A) 2,168,058 2,086,866 2,030,342 Average number of shares (B) 100,98 2 100,982 100,982 Equity per share (A/B) 21,47 20.67 20.11 Key ratio ===== SIDA 19 ===== Q1 2024 19 BioGaia AB (publ.) Interim management statement, January – March 2024 Change in sales by segment ( including and excluding foreign exchange effects) Pediatrics Adult Health Other Total (Amounts in SEK 000s) Jan – Mar Jan – Mar Jan – Mar Jan – Mar 2024 2024 2024 2024 Description A Previous year’s net sales according to the average rate 305,957 56,613 3,251 365,821 B Net sales for the year according to the average rate 292,278 74,819 2,700 369,797 C Recognized change (B -A) -13,679 18,206 -551 3,976 Percentage change (C/A) -4% 32% -17% 1% D Net sales for the year according to the previous year’s average rate 295,160 75,550 2,700 373,410 E Foreign exchange effects (B –D) -2,882 -731 0 -3,613 Percentage change (E/A) -1% -1% 0% -1% F Organic change (C –E) -10,797 18,937 -551 7,589 Organic change, % (F/A) -4% 33% -17% 2% Closing date key exchange rates 31 Mar 31 Mar 31 Dec 2024 2023 2023 EUR 11.53 11.28 11.10 USD 10.66 10.35 10.04 JPY 0.0705 0.0780 0.0710 Pledged assets and contingent liabilities – Group 31 Mar 31 Mar 31 Dec (Amounts in SEK 000s) 2024 2023 2023 Floating charges 0 0 0 Contingent liabilities None None None Adjusted operating profit – Group Jan – Mar Jan – Mar Jan – Dec (Amounts in SEK 000s) 2024 2023 2023 Operating profit 143,183 147,998 443,103 Adjustments 5,000 2,402 1,144 Adjusted operating profit 148,183 150,400 444,247 Average key exchange rates Jan – Mar Jan – Mar Jan – Dec 2024 2023 2023 EUR 11.18 11.14 11.48 USD 10.29 10.42 10.61 JPY 0.0698 0.0788 0.0760 ===== SIDA 20 ===== Q1 2024 20 BioGaia AB (publ.) Interim management statement, January – March 2024 Stockholm, 7 May 2024 Theresa Agnew CEO This interim management statement has not been audited. Financial calendar 12 FEB 2025 8:00 a.m. CET Year-end report 1 January – 31 December 2024 23 JUL 2024 8:00 a.m. CET Interim report 1 January – 30 June 2024 22 OCT 2024 8:00 a.m. CET Interim management statement 1 January – 30 September 2024 ===== SIDA 21 ===== Q1 2024 21 BioGaia AB (publ.) Interim management statement, January – March 2024 The company BioGaia is a Swedish world -leading probiotic company that has been at the forefront of microbiome research for more than 30 years with a vision to be the most trusted probiotic brand in the world. We develop, manufacture, market , and sell probiotic products for gut , oral, and immune health . The products are primarily based on different strains of the lactic acid bacterium Limosilactobacillus reuteri , L. reuteri (formerly Lactobacillus). The class B shares of the Parent Company BioGaia AB are quoted on the Mid Cap List of Nasdaq Stockholm. Business model BioGaia has two types of distribution – sales through distribution partners and direct sales (subsidiaries). Most of BioGaia’s revenue comes from the sale of gut health products, such as colic drops, immune - and oral health products. Revenues also include the sale of bacterial cultures to be used in licensee products, such as infant formula and dairy products, as well as royalties for the use of L. reuteri in licensee products. BioGaia’s products are available in more than 100 countries throu gh partnerships with nutrition and pharmaceutical companies, as well as through our own subsidiaries. BioGaia’s direct distribution , through subsidiaries, extends across six countries (Sweden, Finland, the UK, USA, Canada, and Japan). BioGaia holds patents for the use of certain strains of L. reuteri and certain packaging solutions in all major markets. At the end of 2023, BioGaia held more than 600 approved patents for various bacteria strains and territories. The BioGaia brand BioGaia launched its own consumer brand in 2006. Today, a number of BioGaia’s distribution partners sell finished products under the BioGaia brand in a number of markets. One important element of BioGaia’s brand strategy is to increase the percentage of sales under the BioGaia brand. Of products (drops, tablets for gut an d oral health, oral rehydration, etc.) sold in 2023, 90% (86%) were sold under the BioGaia brand including co -branding. Some of BioGaia’s distributors sell finished consumer products under their own brand names. On these products, the BioGaia brand is shown on the consumer package since BioGaia is both the manufacturer and licensor. BioGaia’s licensees add L. 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. Research and clinical studies BioGaia’s strains of L. reuteri are among the most studied in the world, in particular studies in young children, with strong pre -clinical and clinical evidence. As of December 2023, over 250 clinical studies with BioGaia’s various strains of L. reuteri have been performed. These studies involved more than 22,000 individuals of all ages. Over the years, BioGaia has performed studies in the following areas: • Colic and constipation in infants • Immune modulation and infection prevention • Acute diarrhea • Antibiotic -associated side effects, such as diarrhea • Treatment of H. pylori infections • Irritable bowel syndrome (IBS) • Oral health, such as gingivitis (inflammation of the gums) and periodontitis (loosening of the teeth) • Osteopenia • Autism spectrum condition • Urinary tract infections BioGaia AB BioGaia AB Box 3242 SE -103 64 STOCKHOLM Street address: Kungsbroplan 3, Stockholm Telephone: +46 8 555 293 00, Corporate identity no. 556380 -8723, www.biogaia.com