Lunds Klimatallians 18th of November 2015 Cecilia Wallentin Lindberg, Manager QA Niklas Brandt, CFO
Agenda Probi today The Probiotics Market Our products Financial development Probi Growth strategy 2
Probiotics. Live micro-organisms which, when administered in adequate amounts, confer a health benefit on the host (WHO) Lactobacillus plantarum 299v
It started with a vision to save lives Lactobacillus plantarum 299v (LP299V ) was identified LP299V saved patients lives by avoiding serious infections and sepsis First commercial product ProViva was launched in 1994 Probis Immune products was launched in 2010 Clinical studies were performed Probi was founded 1991 in Lund Probis supplement was launched in 2005 Probi Iron uptake concept launched in 2015 4
Bild 4 Office [2]1 Historisk linje istället Microsoft Office-användare; 2015-09-23
Probi 2015 Well documented and patent procted product platforms available in more than 35 markets Gastro/ IBS (ProViva & Probi Digestis ) Immune (Probi Defendum ) Iron uptake (Probi ferrosorb ) launching Grew revenues with 32% to 135 MSEK in 2014, growth for 1 st half 2015 is 120% Accelererating international expansion Largest research portfolio ever Consumers all over world improving their health with Probiotics from Probi 5
Agenda Probi today The Probiotics Market Our products Financial development Probi Growth strategy 6
Microbiome and Probiotics in focus Scientific publications on Gut microbiota 10 times more bacterial cells than human 100-150 more bacterial genes than People are not just people. They are an awful lot of microbes, too The Economist Intense efforts in mapping disease with microbiome cause relationships 7
Scientific research supports health benefits of probiotics Weight management Improved digestion and wellbeing Intestinal regularity Increased nutrient absorption Reduction of carcinogens Cardio-vascular health Diarrhoea Antiinflammatory Relief of IBS symptoms Infant eczema reduction Immune support, URTI Help develop postnatal immunity Food intolerance Oral health Urigenital health Mouth and throat care Prevention/trea tment of ulcers Asthma/arthritis Source: Market updates and newly released numbers for 2014, IPA World Congress 2014, Euromonitor 8
General market conditions and drivers The probiotic world market is worth around $35 billion USD, of which 90% is food and 10% dietary supplements/consumer healthcare products. The food portion of the market is dominated by large multinationals such as Danone and Yakult. The consumer healthcare portion is highly fragmented with primarily VMS 1) and pharmaceutical companies participating. The market consists almost entirely of gut health and immune health products, with gut health being the most significant portion. The market is growing at > 6 % per annum, however the tendency to launch new products or make major investments in probiotics will be highly influenced by the regulatory process. > 6 % 1) Vitamins, Minerals & Supplements. Source: Euromonitor 2015 9
From USD 24 billion in 2009 to USD 48 billion in 2019 Source: Euromonitor 2015 10
Probi partners with consumer health companies creating local probiotic market leadership
Agenda Probi today The Probiotics Market Our products Financial development Probi Growth strategy 12
13 Probi product platforms
14 Probi Consumer Healthcare products
Probi Functional Food products
Agenda Probi today The Probiotics Market Our products Financial development Probi Growth strategy 16
17 Net Sales & EBITDA development last 5 years
18 Net Sales per Business Area last 5 years
Q3 2015 P&L MSEK 2015 Q3 2014 Q3 % change 2015 Q1-Q3 2014 Q1-Q3 % change 2014 FY Consumer Healthcare 43,4 28,5 152,2 67,6 99,1 Functional Food 8,5 8,6 27,6 27,7 36,1 Net sales 51,9 37,1 +40% 179,8 95,3 +120% 135,2 Adjusted for Fx impact 44,4 +20% 154,7 +89% Consumer Healthcare 15,8 7,3 55,4 14,0 23,3 Functional Food 2,2 3,1 8,6 10,5 12,9 EBITDA 18,0 10,4 +73% 64,0 24,5 +225% 36,2 Adjusted for Fx impact 12,4 +19% 45,8 +130% EBITDA % 35% 28% 36% 26% 27% 19
Q3 2015, Probi has a strong balance sheet Balance sheet as per 2015 09 30 MSEK 2015 Q3 2014 Q3 2014 Q4 Intangible assets 40,7 32,7 30,0 Tangible assets 4,8 2,1 4,9 Current assets 31,6 34,8 32,9 Cash 143,0 97,6 108,2 Total Assets 220,1 167,2 176,0 Shareholders Equity 184,5 140,6 146,0 Current liabilities 35,6 26,6 30,0 Shareholders equity and liabilities 220,1 167,2 176,0 20
Q3 2015 - Cash flow MSEK 2015 Q3 2014 Q3 2014 Q4 Cash flow from operating activities 57,8 21,4 37,2 Cash flow from investing activities -15,3-8,3-13,5 Cash flow from financing activities -7,7-6,8-6,8 Total cash flow 34,8 6,3 16,9 Cash at the end of the period 143,0 97,6 108,2 21
Agenda Probi today The Probiotics Market Our products Financial development Probi Growth strategy 22
Probis growth strategy - markets
Probis growth strategy R&D 2014 2015 2016 Application Development Existing product in a new format Clinical development Confirm health benefits Discovery Identify new candidates with new health benefits 24
Goals for 2015 growth above market rate combined with a profit margin (EBITDA) above 20% Expand Probis sales and marketing organization Launch in new markets in Americas and Asia Pacific Develop the functional food business Launch Probi Iron and Probi Defendum R&D accelerate product development
Veckans affärer 7 oktober 2010 26
Probis miljöledningssystem Utmaningar Extern efterfrågan Internt fokus Lokaler Flygresor Få nyckelleverantörer 27
Fastläggande av miljömål Flera miljöutredningar, första 2009 Seminarier 2012 ISO 14001 certifierade Ambitiös och miljöintresserad personal vilket resultaterade i många miljömål Probis direkta miljöpåverkan inte så stor Outsourcad verksamhet 28
Under första åren 2012 15 miljömål inom 3 områden/verksamheter + övrigt Energiförbrukningen inom den egna verksamheten Val av leverantörer Val av förpackningsmaterial Övrigt Klimatkompensering för resor Pappersförbrukningen Avfallsförbrukningen Svårt att följa upp Överblick 29
Senare år 2013-2014 7 miljömål inom samma 3 områden/verksamheter Konstaterade att några kommer inte att införas 1 indirekt positivt miljöpåverkan Inte så lätt att arbeta med 30
2015 Två miljömål Prioriterad betydande miljöaspekt Val av leverantörer för produkter och tjänster Övergripande miljömål Minska negativ miljöpåverkan genom val av leverantör/ underleverantör Miljömål Långsiktigt mål på 10 års sikt: Probis största varuleverantör ska ha ett väl dokumenterat hållbarhetsarbete. Val av förpackningsmaterial för produkter Minska negativ miljöpåverkan av förpackningsmaterial Långsiktigt mål att på 5-10 år sikt verka för att ta bort sekundärförpackning en och 3-5 år verka för mindre miljöpåverkande primärförpackning. 31