BioGaia marks 24% organic growth in Q1 boosted by pediatrics and adult health segments
06 May 2022 --- BioGaia’s net sales reached SEK 289.9 million (US$ 29 million) in the first quarter of 2022, marking a 41% increase compared to the same period of the previous year. Revenue increased across all regions.
The Sweden-based biotech company was predominantly supported by its pediatrics division – which accounts for approximately 80% of its overall sales – and the adult health segment, representing the remaining 20%.
“We had a very robust start to the year. I am pleased to see that the Pediatrics segment increased 38% and the adult health segment increased by 57%. Both have grown globally, entirely according to our target,” says Isabelle Ducellier, CEO of BioGaia.
Overall profit after tax resulted in SEK106.9 million (US$10.7 million), an increase of 51% compared to the previous year. The company’s net sales were partly supported by its acquisition of Nutraceutics, which accounted for 8%, SEK 15.8 million (US$1.59 million).
BioGaia sells probiotic products in the shape of capsules, and tablets with health benefits, based primarily on various strains of Limosilactobacillus reuteri, the lactic acid bacterium. The products aim to improve gut, teeth and bone health. Previous studies have shown the bacteria to have respiratory and immune beneficial effects.
Sales increased due to the rising demand for immunity boosters.Immunity demand drives profits
A number of factors explain company growth, including lifted COVID-19 restrictions across Europe, BioGaia says.
“This has meant that consumers were more exposed to infections, such as the common cold, which has increased demand for BioGaia’s products and led to outstanding sales growth of 60% in EMEA, mainly in Italy, Spain and Eastern Europe. In Italy, which was a problem child during the pandemic, sales have returned to almost pre-pandemic levels,” Ducellier states.
BioGaia also saw a 158% profit increase during Q3 2021, explained by demand for immunity products.
Another factor for the growth is the initiative to work with direct markets. Ducellier describes this as working “better than expected.”
Meanwhile, the company’s integration of Everidis as a distributor together with BioGaia USA is said to have brought an omnichannel strategy – creating a smooth customer experience through all available purchasing places – where some products have reached “record quarters” on Walmart and Amazon.
Eyeing regional differences
Globally, there were increases in revenues across all regions compared to the first quarter of 2021.
The EMEA region marked an “outstanding sales growth” of a 60% increase, resulting in SEK 150.4 million (US$15.1 million). The majority of the growth came from increased sales in Italy, Spain and Eastern Europe.
Global differences in sales and demand showed in the Q1 report.
Meanwhile, the Asia-Pacific region was the lowest representative of sales, although with an increase of 11%, also from the adult health segment predominantly from Hongkong and South Korea. There was a decrease in sales of pediatrics in the region, mainly in China and Taiwan.
“Our operation targeting dentists in Japan has been negatively impacted by pandemic restrictions, but we have partly offset this through our online store. In Sweden, our sales are increasing at pharmacies both online and in retail outlets,” according to Ducellier.
“Latin America has continued to perform well, and we are satisfied that our latest market, Argentina, met its entire budget for 2022 in a single quarter,” she adds.
Acquisition of Nutraceutics
BioGarma acquired Nutraceutics in the fourth quarter of 2021, now referred to as BioGaia USA. So far, 80% of the shares have been bought, and the remaining 20% are planned to be purchased in 2027 or 2028.
The main incentive for the acquisition was distribution opportunities, as it allows BioGaia for direct-to-consumer sales, as Nutraceutics holds all shares of Everidis.
The acquisition has brought BioGaia an 8% sales increase of SEK 15.8 million (US$1.59 million), as well as increased operating expenses of 25%, SEK 20.5 million (US$2,06 million).
Edited by Beatrice Wihlander
