Welcome to the BioGaia Audiocast with the Teleconference Q3 2021. Today, I am pleased to present CEO Isabelle Ducellier and CFO Alexander Kotsinas. For the first part of this call, all participants will be in listen-only mode, and afterwards, there will be a Q&A session. Speakers, please begin. Yes, thank you so much. Thank you for attending BioGaia's third quarter interim management statement. We are actually pretty pleased with the third quarter. With a sales of SEK 174 million, that represents an increase of 32%, and if we would exclude the foreign exchange, an increase of 35%, and an operating profit of SEK 67 million. We are pleased with the third quarter. We can see three external reasons for the good results. Firstly, an increased demand from consumer ahead of the winter season. People know that it's going to be cold, time for back to school, back to work. All the viruses are outside waiting for us. People are working on prevention and buying probiotics in advance. Secondly, thanks to the lifting of pandemic restriction, that has led to a rise in visit to doctor and pharmacies. Both the consumer are back to pharmacies, they are back to visit their GPs. The mother are back to the pediatrician, but as well, our distributor in the world and their sales force has been able to visit again the healthcare professional and speak about BioGaia probiotics. Thirdly, the same way that the quarter two has been impacted by orders that have been shipped under Q1 instead of Q2, we have actually exactly the same phenomenon, but the other way around this time. We had a big customer got to be out of stock that asked us to ship Q4 orders under Q3, and that has helped to generate this very nice increase of 32%. In per region, we have a sales increase in EMEA, so it's a bit like light at the end of the tunnel. Still growing in APAC, and growing strongly in North America, and LATAM, we look at that a bit later, a bit down, but it's more a phasing issue. If you put that together, we can show an increase of the EBIT by 148%. Next page, please. We've been communicating four times to the market during the quarter. We had a press release in July to announce the fact that now we have the full ownership of MetaboGen. MetaboGen is our subsidiary based in Gothenburg, specializing in anaerobic strain. For us, it's extremely strategic, so we are very happy to welcome the full team of MetaboGen at BioGaia. In September, BioGaia Pharma announced as well that they're proceeding with the clinical study in two areas, one for ulcerative colitis, and one to treat constipation in patients receiving opioid therapy for pain treatment. In September, that is probably the greatest news of this quarter, we announced the fact that we have opened BioGaia U.K. In the U.K. market, we are the one managed distributor, we do believe that U.K. probiotics market is extremely interesting, that with our own setup, we can really gain market share and grow pretty quickly in the U.K. market, both via our own e-com, our web shop, that we are going to open on November 1st. While being on the marketplaces on Amazon, we intend to be on Amazon U.K., mid of November. Of course, as well, starting to look at the specialized drugstore in the U.K. More to come here. Very happy to have U.K. at least on the map of BioGaia. The last communication there was basically to announce that we are doing today a bit better than the market for Q3, as you've noticed. Next page, please. Regarding launches, you see a long list of 12 launches, I just would like to attract your attention on Finland, that's where we've launched the whole portfolio under our own brand. A lot of activities there, a lot of visit to pharmacy. Now we've already the main listing in the main pharmacy chain. Very happy with the launch of BioGaia brand in Finland. In the U.S., we launched the Immune Boost portfolio, here as well, very good timing with the back-to-school campaign. The third launch I would like to underline on is the Prodentis Pediatric Kids and Baby. That's a line extension. We had Prodentis for adults and for pregnant women. Now we are focusing on pediatrics, and that's where our distribution network is the best at. We see direct contact with moms to be able to speak about oral health for their baby and for their kids. We start with launch in the U.S. and in China, but you will see more of it coming as well in the coming months. Next page, please. Looking at segment. I think the good news is that we keep saying that we want to focus on adult. Obviously, we want to maintain our leading position within pediatric, that's obvious, but we want as well to increase our penetration within the adult segment. We've been struggling year after year, but this year, if you look at the quarter three, if you look at the year-to-date or at the EBIT, you see actually a bigger increase of the adult than the pediatrics. Obviously from a smaller base, I'm pretty happy, I think it's encouraging to see that switch. Next page, please. Geography, I was mentioning it during my introduction. We see the light at the end of the tunnel at EMEA level. A very big increase during the quarter. It's not enough to compensate the year-to-date or the MAT figures, at least a very strong Q3. That's mainly thanks to our program countries that we've been mentioning, Italy and Spain. In France and in Turkey, in Russia, we see nice growth. That was the case before, but we see Italy and Spain back on track, that generates an increase of 51%. APAC, here as well, a very strong quarter, plus 53%, mainly driven by China and Hong Kong. China, we keep being out of stock, which is a very good signal that the demand is very strong from the consumer side. Hong Kong, it's more basically because they had problem with the COVID-19 strict restriction and lockdown in Hong Kong, plus all the demonstration and political problems, they had a very tough year. They are just back on track. In Japan, increase of our sales year-to-date, not for the quarter, despite here as well, a pretty strict lockdown. The interesting thing is that in Japan, our sales are increasing thanks to our own web shop mainly, and the dental clinic that we visit by ourselves. That was interesting to notice. For the Americas, we had a very strong quarter last time for LATAM, therefore now it's more periodization issue of order, mainly in Brazil. It was not increasing during the quarter. The North America and especially our distributor, Everidis, is really doing very strongly. You could see at MAT level, we are +19%, year-to-date +22%. That's really the hero of the year 2021. That has an impact here as well. I mentioned our strategy to minimize the risk per region, we were extremely dependent on Europe, at least when I joined three years ago. Now, as you can see on the year-to-date, Europe is 43% of our turnover, when APAC is 24% and Americas is 33%. Very nice split per region now. If we look at the next page and the gross margin, not that much to mention. We are able to maintain gross margin at a pretty high level of 74%. It's pretty stable per segment. Adults are always a bit under the level of profitability than the pediatrics products, because we are new into that business, the volume are smaller, and there has been some product mix and campaign effects. Nothing more to add on gross margin. If we move to the financial, Alex. Yeah. Thank you, Isabelle. We move to the slide called Opex. Our total operating expenses were 3% lower than last year. Our sales costs increased, mainly due to increased marketing activities and personnel costs as we are moving out of the pandemic. R&D costs, including MetaboGen and BioGaia Pharma, increased also slightly, mainly due to higher cost for clinical studies. Again, this is also partly an effect of the return to a normal after the pandemic. We had those cost increases, this was then, however, compensated by positive currency effects of SEK 4.6 million. We had positive currency effects this quarter, in the same quarter last year, we had negative currency effects. That explains mainly why we have slightly lower operating expenses in the quarter. We move on to next slide, the P&L, which is basically a summary of what we have gone through here. As Isabelle said, we had an increase in sales of 32%, even 35% excluding the currency effects. A gross profit of SEK 128 million, which is then an increase of 43%. Operating expenses, SEK 61 million, -3%, and earnings before interest and taxes of SEK 67 million versus SEK 27 million in the same quarter last year, which is then 148% higher. We had an extraordinarily high margin of 39% in the quarter, which then gives us a year-to-date margin, EBIT margin of 35% versus 33% last year. We then also mention adjusted EBIT. This is our EBIT excluding restructuring costs and M&A costs. As you can see, the EBIT is the same in the quarter. Year-to-date, we have about SEK 10 million higher adjusted EBIT, and a margin of 36% then. Good. If we move on to next slide called cash flow. We see that our cash flow from operating activities was SEK 52 million versus SEK 15 million the same quarter last year. Which is a nice increase. It's mainly due to the increased profits and cash flow for the period at SEK 55.6 million versus SEK 50 million in the same period last year. If you look at the cash flow from investing activities, you will see that it's higher in this quarter, and that is due to the acquisition of the remaining Nutraceutics shares. Also, cash flow from investing activities in the year-to-date figures also includes the investments in Boneprox and Skinome of approximately SEK 20 million in total. Cash at the end of this period then is SEK 1.53 billion versus SEK 292 million in the same quarter last year. With that, I hand over to Isabelle for concluding remarks. Yes. The main conclusion is that we are very happy with the strong Q3. It's always nicer to present such a good quarter than last time, Q2. The good thing is that it's mainly due to increased consumer demand, which is the most important, and the impact of this order that we shifted from Q4 to Q3. EMEA starting to recover. We are happy about that. APAC has a very good growth and America is on fire. We are so happy to see the reactivity of the U.S. market. We've launched a lot of new products that the consumer and the healthcare professional are very happy about. Based on the job we've been doing on the drops, we've managed to establish BioGaia brand in the U.S. very strongly. Now we can leverage on the power of the mother brand being able to penetrate new target group and new type of healthcare professional. We are accelerating our B2C journey with the establishment of BioGaia UK. That would not have been possible if we would not have created our B2C marketing department that is in full operational mode since August this year. The creation of BioGaia Digital, because as we are operating on our own, we need that competency, especially on the digital side, to be able to penetrate the promising U.K. probiotic market. In a nutshell and as a conclusion, I would just say that the global market for probiotic is growing in term of sales and consumer recognition. The lifestyle after the pandemic will lead to an increased focus on preventive healthcare. Based on this trend and based on the work we've been doing on our organization, we are very confident for the future of BioGaia. I thank you for your attention. Thank you for your confidence and I will be happy to take any question. Ladies and gentlemen, if you have a question for the speakers, please press zero and one on your telephone keypad. We have received the first question. It is from Kristofer Liljeberg, Carnegie. Your line's now open. Good morning. Hi. Good morning. Hi. I have a few questions here. First, is it possible to quantify this large order or the phasing effect and whether that was from one customer or several? Okay. It was mainly from APAC and mainly from China, but as well in Indonesia where Indonesia is an interesting market because the demographic is definitely into our favor. I think we count about 4.6 million newborn every year, getting more and more digital. We have a good partner there, and an acceleration that we didn't foresee, so they ran out of stock. That was one of the country. China, they just accelerate the sales every time, so here as well. That's the main two parts. From APAC mainly. Of course, I can quantify, but I'm not doing that. I think in the report, it also mentioned that there were one large order in Spain that was supposed to happen. Yeah. No, in Spain, here we have discussed with our distributors, Recordati, and they had our strain under their own brand forever. Here we had a lot of discussion because we would like to have BioGaia present in Spain a bit more visible. We agreed on a new trade dress, a new communication campaign. We use both their brand because it's very well recognized by the healthcare professional and the consumer, but with the signature of BioGaia. Therefore, it took a bit of time to put that in place to agree with our distributor. Now we have a strong campaign back to school that Recordati is doing for us with the new BioGaia tagline. It took a bit of time. Now we're there with the new product. Okay. There were no order in Spain that were supposed to happen in Q4 that now happen in the third quarter. Is that what you're saying? Yeah. No, it was supposed to be shipped in Q4 and has been shipped last week of Q3. It's a matter of a couple of days. Yeah. I'm just trying to understand because I think you might not have said that in the report now, but in the press release the previous week- Yeah You also said that despite the high sales in the third quarter, you were, I don't know exactly how you phrased it, but you expected or for full year sales would be lining with expectations. Yeah. I guess then that you might refer to consensus, and if I do the math- Yes, exactly. Correctly, that would imply virtually no growth in the fourth quarter. Is that correct, or I might be missing something here? Hello? Yeah. Hello. Yeah, sorry. You're back. Yeah. Did you hear my question? Yes, I think I did, and I think the answer is that our expectation for the year is in line with the general expectation from the market. Okay. My last question relates to R&D costs that were down or quite a bit lower in the fourth quarter than in the first and second quarter. I think it was the same in 2020. Before that, it was pretty evenly spread between the quarters. Is this a new type of seasonality explaining this or something else? No, there is no seasonality. In here, we are very pragmatic. Depending on the possibility to recruit patients that you cannot foresee. With healthy patients, you can recruit any time, but when you are really targeting a specific type of patient, then they have to show up at the hospital. We don't have any seasonality in that sense. We had some difficulties to start new or even to pursue some ongoing clinical study because the hospital were closed. There was only COVID-19 patients allowed. Now we're back on track. We had to postpone some clinical study, and now they are all up and running. Do you think it's fair to assume R&D costs will be up to the same level maybe as in the first and second quarter? Yes Now in the fourth quarter? Okay, great. Yes. Okay. Thank you very much. Thank you, Kristofer. Have a nice day. I remind you that if you want to ask a question, you will have to press zero and one on your telephone keypad. We have another question. It is from Mattias Larsson, Swedbank. Yes, your line is now open. Hi there. I will try to not phrase this question in the same way as Christopher did. Obviously difficult for you to know the sales level in Q4 right now, but how should we assess the potential in your view to reach the sort of H1 level on a quarterly basis of around SEK 200 million? Then I'm thinking headwind obviously from some prioritization of orders, but we have lifted restrictions compared to H1 overall, and as you said, demand of immune health products ahead of winter could help a bit. Just some general thought at least around the potential for Q4 would be very helpful. We normally don't disclose the coming quarter. To be honest, we have a very clear view because we deliver at 90 days, so we start to have a pretty clear view about how the year is going to look like, but that's not something we normally disclose. To be able to answer to your question, I think Q4 last year was not very strong. We were totally paralyzed due to the pandemic. This year will be easier. That will be a better quarter for us than last year. If you put together Q1 and Q2, and that's basically what we said when we started in January. We said, "Q1, Q2 going to be tough. Q3, Q4 going to be easier if you compare with last year." That's what is going to happen. Thanks very much for that color. You're welcome. Another question we have received, it is from Mattias Häggblom, Handelsbanken. Your line is now open. Mattias Häggblom, Handelsbanken. Good morning. I was curious here if you could spell out. I missed the number for the growth in the U.S. I think you did that in Q2. Americas obviously was weak, but that was due to LATAM, and you seem very pleased with the U.S. performance. Can you spell out U.S. or U.S., Canada together for the quarter? We normally do not do that, Mattias. That's something we are asking ourselves if we should do it for next year. For the moment, we aggregate the whole Americas in one. For the U.S. is going to be our number one market in 2021. We want to have SEK 100 million market plus, and I think U.S. will be the first one. Going strong. That's just the beginning. Yeah. In the Q2 report, you spelled out U.S., Canada growing 43%. Should we think about that ballpark figure or is it at least double-digit growth? Any color you can help us with the performance in the U.S. That would be helpful. Yeah, no, on the year basis, U.S. is going to be a very strong double-digit growth. That I can easily disclose, and we will have sales more than SEK 100 million for the U.S. market. Per quarter is not really relevant to go into detail, because what I look at every day is basically their sellout, to make sure that we don't have any problem with stocks or with out of stocks. We see really a snowball effect, starting from the drops going into other indication, and now we are able to go out from the pediatric to go to the adult. That's really encouraging. We had a major sampling campaign for the immune boost launch. We see how the healthcare professional has been reacting when they receive the samples. We've never seen that. Even their website just collapsed because there were so many people looking at it and wanting to order the samples and so on. How is it going to be in terms of sales in the future? It's a bit premature to say, but at least the reaction from the healthcare professional, regarding the launch of the BioGaia Immune Active is extremely encouraging, and the same has happened on BioGaia Prodentis Kids and babies. Here, they don't have that many products for oral health for kids. The need is huge, both in terms of teething, then caries. They got a lot of calls from dentists that normally never call us because we have never been targeting the dentist before. Something is happening there, but it's not turning into selling figures as we speak, but we are very optimistic. A follow-up question to that. Obviously, U.S. is a large market in terms of populations. You have historically had the biggest penetration in, I think you have the Finnish markets, but anything you could help us with thinking about the opportunity for the longer term in the U.S.? You said it's SEK 100 million is a start. Yeah. We just did the math prior to our strategy meetings that we are doing today with the board, and even if we are selling in great quantity in the U.S., the drops, if you look at the penetration, it remains very limited. Sometimes when I want to be extremely positive, I take the penetration of three, four bottles per newborn that we had in Finland, multiplied by the low penetration we have in the U.S., and then the figures are just fantastic. It's a bit too naive to believe that we are going to reach three bottles per newborn in the U.S. tomorrow, but we are working on it. Here in terms of potential, there is a lot of things that we can still grab, even on the drops. That's basically what we do with all our market now. We look at the number of newborn, we look at the penetration of the drops we have, to identify where we should invest for the future. We allocate in the right market the resources we have, because we remain pretty small, and we are very global. It's important for us to focus on the right stuff. Good. On the strength in Italy and Spain, do you have any information from your distributors there to what extent in market sales growth was vis-à-vis stocking effects with the distributor? I am trying to understand if patient demand is returning in those markets or is it still only stocking? No. They stocked in Q2 prior to the pandemic. If you remember our Q2 2020, we had SEK 245 million in sales, and that was really this massive order from all our distributors, mainly in Europe to say, "Okay, everything is going to close down. We have to get the stuff now." Now they have had almost four quarters to deplete what they had in stock. They are repurchasing because they don't have anything in stock. We thought that they would start to rebuild their stock in Q2, and they basically did it now. Mainly in Italy, both Recordati and Noos are two distributors, and in Spain. Good. Last question from me. Any update you can give us on the M&A process? You have SEK 1.5 billion in that cash on the balance sheet and it's a very low interest environment we're in, it's not generating a very strong return. I guess you're working on that and finding options to deploy that capital. Anything you can update us on? No. Just that we are working on it. Yeah, that keep us awake night and days. Hope to be able to come up with good news in a close future, but nothing more I can say unfortunately today. Good. Thank you so much. Thank you so much, Mattias. There are no further questions at this time. Please go ahead, speakers. Thank you so much. Thank you for your attention and have a very nice end of the day. Bye-bye.