Release Date: October 22, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- BioGaia AB (BGLAF, Financial) experienced a 24% sales increase in the Asia Pacific region, driven by strong performance in China, Indonesia, and Australia.
- The Americas saw a 5% sales growth, with significant contributions from the US, Canada, and Guatemala.
- The company's adult sales portfolio increased by 29%, primarily due to the success of Prodentis and Protectis tablets.
- BioGaia AB (BGLAF) has a strong cash flow of SEK 111 million, an improvement from SEK 88 million the previous year.
- The company has a promising start in Australia and New Zealand, with plans to expand its product portfolio in these markets.
Negative Points
- Overall sales declined by 4% in Q3, with a significant 27% decrease in the EMEA region, particularly in Turkey, Spain, and Poland.
- The EBIT declined by 65% due to an impairment loss related to the Metabogen acquisition, impacting the EBIT margin.
- Pediatric sales decreased by 12%, mainly due to lower sales of Protectis drops in EMEA and the Americas.
- Operating expenses increased by 56%, largely due to the impairment loss, with an adjusted increase of 11%.
- The clinical study for a potential product targeting metabolic syndrome did not meet its primary endpoint, leading to an impairment loss of SEK 51.2 million.
Q & A Highlights
Q: Italy seems challenging. Is it worthwhile to enter with your own brand to build a strong market long-term?
A: We have a strong partner, Ricardo, a top pharmaceutical company in Italy. We are confident in working with them to drive growth in the Italian market. We are not exploring our own brand currently, as we have an exclusive distribution agreement with Ricardo under the Rale brand. - Theresa Agnew, CEO
Q: What is the visibility in turning the EMEA market back into growth mode, and which countries have untapped growth potential?
A: We see growth potential in smaller markets like Germany and the UK. In the UK, we have expanded distribution with Boots, and our Amazon business is growing strong. We also see opportunities in France, where we recently launched Protectis plus vitamin D. - Theresa Agnew, CEO
Q: Can you provide some figures on how much you're growing in the US right now?
A: The US is growing ahead of the market, with high single-digit growth. Our Amazon business is doing extremely well, and we have expanded distribution at Target, which has positively impacted our sales. - Theresa Agnew, CEO
Q: How should we think about the phasing of the SEK 75-85 million intended for deployment in the second half?
A: We have spent in Q3 and are spending in Q4. Some investments are longer-term, so we won't see an immediate positive impact in Q4. We are focusing on sustainable growth and competitive advantage through our sales activities. - Theresa Agnew, CEO
Q: Can you expand on the competitive pressure in Italy? Is it from your previous distributor or new entrants?
A: The competition is linked to current competitors and our former distributor, who has their own brand of probiotics with different strains. We now have direct communication with Ricardo, our exclusive distributor, enhancing our competitive advantage. - Theresa Agnew, CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
