Positive trend ends the year
2019 ended with a clear recovery following a weak third quarter. While the Americas region returned to growth and EMEA stabilised, APAC had a tough fourth quarter. During the quarter, we took a major step into Italy together with a local pharmaceutical company with a strong market position. We also signed important exclusive supply agreements with our two largest customers in the US market. Together with one of our customers in India, we secured a major contract, which provides good conditions for further growth in the APAC region.
For full-year 2019, net sales rose 4% to MSEK 626. Adjusted for currency effects, growth remained largely unchanged compared with 2018. As previously communicated, this is not in line with our long-term target to grow faster than the market and is mainly due to a challenging market in the US. At the same time, we have secured a number of important agreements with existing and new customers which gives us confidence of an increased growth next year. Our profitability was further strengthened during the year, and our EBITDA margin was 29%.
During the second half of the year we initiated an upgrade program of the manufacturing unit in Redmond in the US. The upgrade program aims to further improve the efficiency and quality of production which is central for strengthening our competitiveness. By modernising and upgrading the unit, we are expecting to see positive effects on the gross margin and a stronger capacity to grow both in the US and internationally. The investment programme will continue throughout 2020, but the full impact will not be seen until 2021.
Products with a scientific basis
Our new product concepts - Probi[®] Osteo for reduced osteoporosis, and Probi FerroSorb[®] for pregnant women - received a positive response in our markets during the year, backed up by solid scientific evidence. In the case with Probi[®] Osteo, we are particularly proud that the clinical trial behind the product was published in one of the most prestigious scientific journals, The Lancet Rheumatology. That proves the strength of how Probi works with research and development.
Despite a challenging year with organic sales in line with the year-on-year period, I still feel confident that we will show increased growth in 2020. We have a clear focus on broadening our premium segment sales to new customers and markets, a highly respected product portfolio, strengthened production capacity and a fantastic team with unique expertise in probiotics. That gives us a strong foundation to drive growth and profitability. I am looking forward to an exciting 2020 in which we, as a team, will continue to work towards our vision: Probi - First in Probiotics.
Tom Rönnlund, CEO
Invitation to teleconference
Date: February 11, 2020
Time: 10:00 a.m.
Phone: +46 (0)8 50 55 83 65
Participants from Probi:
Tom Rönnlund, CEO
Henrik Lundkvist, CFO
The presentation is available at www.probi.com and www.financialhearings.com
This information is information that Probi AB is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact person set out above, on 11 February 2020 at 8:00 a.m. CET. This a translation of the Swedish version of the interim report. When in doubt, the Swedish wording prevails.
This information was distributed by Cision http://www.cisionwire.se/