BioGaia (BIOG) Q3 2024 earnings summary

Executive summary

• Q3 sales were SEK 304 million, a 4% decline, mainly due to weaker EMEA sales and order variability.

• EBIT dropped 65% to SEK 41 million, impacted by a SEK 51.2 million impairment loss related to the MetaboGen acquisition.

• Adjusted EBIT (excluding impairment) was SEK 93 million, a 22% decline, with a 31% margin.

• Gross margin was stable at 73%; EPS fell to SEK 0.36.

• Several new product launches occurred in Q3 across Switzerland, Brazil, Mexico, Latin America, Peru, Australia, and New Zealand.

Financial highlights

• Revenue for Q3 was SEK 304 million, down 4% year-over-year; 3% of the decline was currency-related.

• EBIT margin was 14% (reported) and 31% (adjusted); EPS was SEK 0.36.

• Cash flow from operating activities increased to SEK 111 million.

• Gross margin for Q3 was 73% (vs. 74% last year); pediatric margin stable at 75%, adult margin at 66%.

• Year-to-date sales up 6% (7% organic growth, -1% currency effect); cash at period end was SEK 1,115 million.

Outlook and guidance

• Continued investment in sales and marketing, especially in direct markets, is planned for Q4.

• No specific quarterly guidance provided; focus remains on turning around EMEA and growing direct markets.

• Direct markets, especially in Australia and New Zealand, are performing strongly and expected to grow.

• Investments' impact on margins and growth will be monitored and adjusted based on ROI.

• Long-term target remains an operating margin of at least 34%.