PROBI ANNUAL AND SUSTAINABILITY REPORT 2023

FIRST IN PROBIOTICS

CEO's statement

A challenging, yet eventful year

This year has been both challenging and rewarding for Probi. At large, we have seen a generally weak underlying market in North America, which is our largest market, having considerable impact on our overall results. Moreover, our commercial efforts in EMEA saw a negative impact from a reduction of safety stock levels with some of our B2B customers as well as one-time effects associated with our transition to take over the Probi® brand in Sweden, establishing our own B2C operations.

Since my appointment as CEO in the first quarter, we have also executed various operational changes and launched new strategic initiatives, including a dedicated optimization program in manufacturing – investing heavily into the future, as we are confident that these actions will gradually contribute to increased profitability. In APAC the growth was consistently strong throughout the year, totaling an impressive 26% increase, and we believe this positive trend will continue. Probi’s overall net sales for 2023 were on par with the previous year, while the EBITDA margin declined from 22% to 17%.

Anita Johansen

“A clear purpose, strategy and direction, along with new products and strengthened operational capacity, will put us back on track with stable growth and better profitability.”

CEO's STATEMENT

THE YEAR IN BRIEF

Net Sales

0

SEK m

EBITDA

0

%

Investments in R&D

0

SEK m

Net sales

SEK m

Net sales

Megaliters in relation to produced biotics culture in KG in Probi USA

Megaliters

Megaliters in relation to produced biotics culture in KG in Probi USA

Total emissions in CO2 equivalents

tCo2e

Total emissions in CO2 equivalents

THE YEAR IN BRIEF

Launching new concepts to meet increased interest

Globally, retail sales of probiotic dietary supplements were worth around USD 9 bn in 2023. Between 2023 and 2028, the annual average global growth rate is expected to be around 7.8% according to Euromonitor.

Demand for probiotics in the form of fortified foods is expected to remain high due to increased interest and awareness of the link between health and the body’s digestive system. The global pandemic has been a major driving force behind the greater interest, which has been seen among leading e-commerce platforms.

THE MARKET

North America remains the single largest market for probiotic supplements, accounting for around 29% of the total market. According to Euromonitor, growth in the US will be slightly lower than growth globally, at around 3% per year between 2023 and 2028. However, interest in probiotics remains in the consumer market and surveys conducted by the New Hope Network show that the health areas that consumers will prioritize most in the coming years are digestive health, immune health and mental health.

1

USD m

USA

2

USD m

CHINA

3

USD m

ITALY

Distribution of sales of probiotic supplements in the world 2023

Region Americas, 29%

Region APAC, 42%

Region EMEA, 23%

Rest of world, 6%

Supplements in the world 2028 (Based on Euromonitor projections for each region. Growth calculated in constant prices.)

Region Americas, 24%

Region EMEA, 21%

Region APAC, 49%

Rest of the world, 7%

Probi® Sensia mental health concept

Synbiotics by Probi® and Clasado

MARKETS

Health positions

THE MARKET

OUR STRATEGY FOR SUSTAINABLE AND PROFITABLE GROWTH

 

Pioneering biotic solutions from science to sales

Our vision is to improve lives through the science of biotics. Probi’s strategy for sustainable and profitable
growth focuses on four key areas: excellence in commercial execution with a customer emphasis, 
advancements in science and innovation, delivering high-quality, differentiated products, and fostering a strong, healthy organization with employees united by a shared vision to improve health through biotics science.

STRONG BUSINESS ACUMEN WITH A CUSTOMER FOCUS

Sales Americas

0

%

Growth 2023

Sales EMEA

0

%

Growth 2023

Sales APAC

0

%

Growth 2023

LEADING THROUGH SCIENCE

 

SCIENTIFIC RESEARCH AS OUR CORE, PRESENT AND FUTURE

Probi’s biotic solutions are scientifically proven to support the body’s natural functions with the potential to enhance human health worldwide. Our commitment to science keeps us at the forefront of developments 
in biotics, pushing the boundaries of innovation in both existing and new areas. The efficacy of our 
signature products is validated by rigorous clinical trials that exceed our industry’s standard practices, and no product is ever brought to market without a solid scientific foundation. 
That’s a promise.

ADVANCEMENTS IN SCIENCE AND INNOVATION

Approved patents

0

covering Probi’s most important markets in the world

Number of clinical studies

0

initiated by Probi, published during 2019-2023

INVESTMENTS IN R&D

0

SEK m

BRINGING VALUE TO LIFE

 

ONE OF FEW TO HAVE IN-HOUSE PRODUCTION 

Probi is one of the select integrated players with advanced in-house probiotic production. That makes 
us well positioned to offer unique products according to specific customer needs, formats and market 
preferences, while allowing us to adapt operations and optimize processes to meet evolving demands.

DIFFERENTIATED HIGH-QUALITY PRODUCTS

MANUFACTURING FACILITIES

0

Probi has two production facilities in the USA, in Redmond, Washington and in Lafayette, Colorado

Clickable Image

STRATEGY – DIFFERENTIATED HIGH-QUALITY PRODUCTS

 

IN-HOUSE PRODUCTION WITH UNIQUE FLEXIBILITY AND QUALITY

Probi is among the few fully integrated players on the market to have its own advanced production of probiotics. We are therefore well-positioned to offer unique and high-quality products according to specific customer needs, formats and market preferences, while allowing us to adapt operations and optimize processes according to prevailing needs.

DIFFERENTIATED HIGH-QUALITY PRODUCTS

MANUFACTURING FACILITIES

0

Probi has two production facilities in the USA, in Redmond, Washington and in Lafayette, Colorado

Clickable Image

Sustainability at Probi

Probi continues to prioritize health and well-being by focusing on sustainable activities. In 2023, the company doubled its efforts to create a profitable and sustainable future. This influences decisions, guides strategies and shapes the corporate culture. The goal extends beyond meeting the needs of stakeholders today; it is about ensuring a thriving future for all people. Placing the sustainability strategy at the core of our business ensures that it permeates every aspect of Probi.

Our main goal is to strengthen human health

 

At Probi, our mission is to promote healthy lives with probiotics. We believe that a company’s role in society is connected to its social responsibility. Companies must take responsibility for both social and environmental values; this is crucial in today’s world.

In 2023, Probi continued its mission to promote health and demonstrated a strong commitment to health, sustainability, well-being and innovation. Launching Probi® Sensia, a breakthrough psychobiotic, reinforces our focus on sustainable health solutions. This product improves mood, memory, sleep and learning ability while supporting holistic well-being and the UN Sustainable Development Goal for good health and well-being.

0

%

increased sales of ClinBac™ products in the Chinese market compared to 2022.

>

0

countries where Probi's products are sold.

0

Recall of products in 2023

SUSTAINABILITY

Gender distribution - Total employees

Men, 48%

Women, 52%

Gender distribution - Managers

Men, 49%

Women, 51%

Gender distribution - Executives

Men, 50%

Women, 50%