Welcome to BioGaia Q1 Report for 2023. For the first part of the conference call, the participants will be in listen-only mode. During the question- and- answer session, participants are able to ask questions by dialing star five on their telephone keypad. I will hand the conference over to CEO Isabelle Ducellier. Please go ahead. Thank you, welcome to BioGaia Interim Management Statement Q1 2023. As we have already sent a revised profit warning, I think the good surprise effect is over. I have some information that I think you will find interesting to add to that press release. In this Q1 2023, once again a very stronger quarter. Now it's the seventh quarter in a row with the high double digits increase. About record, that's the first time in one quarter that we sold more than SEK 300 million. We sold SEK 366 million, which is our record for one quarter. A lot of record after the record 2022 year at SEK 1 billion turnover. We are very happy about that. As we've been very cautious in term of spending, you can see as well our EBIT margin that increased to 40%. Next page, please. In term of key event, quite a lot of things have happened during Q1. I will not comment on the fact that, okay, I will start another position. We can discuss that later. More important, we launched two new products. One in the U.S., which is a totally new category. It's in the cosmetic category, and that's one of the first pediatric probiotic cosmetic products. It's a ointment for baby skin. We launched it in the U.S. because here we have a very strong route to market. That's a kind of pilot launch for us. It's a new type of product, but we are very hopeful with that one. The second one, we just launched, it's called Prenatal Care for Women, and it's a probiotic with our main strain, DSM 17938, together with everything what a pregnant mother would need. Instead of buying from the shelf vitamins or zinc or folic acid and probiotics, she will get everything she needs during a pregnancy. We even recommend to start to take it while thinking to be pregnant because it's as well good for the mother. This Prenatal Care product will be available for order in Q3, and we do expect rolling out launches in 2024 in about 20 markets. Very exciting time. It's always for us a pleasure to launch new products. Innovation is important for BioGaia. It takes always a bit of time, but now we have two products out, very key and in the target group. Next page, please. As I mentioned in my introduction, + 29% increase for the quarter with 90% purely organic. If we look per type of product, the pediatrics have been doing extremely strong, plus 37%, which is exactly what we said last time. Okay, recession happening, it has an impact on our sales, and I'm pretty convinced that the sales of our drops for colicky baby are very resilient because you really need to solve a problem and there is no other alternative. The +3 7%, I think, demonstrates that perfectly. As we as well said, the adult is a bit more challenged because, I mean, one is recession. You might wait for buying something for yourself. You don't wait for your baby, but for yourself you might, I mean, pre-privilege another type of spending. A slightly decrease of -7%, which is mainly on our Protectis tabs. I don't think we should be worried too much. We had a very strong year even for adults in 2022 with an increase of 30% of the Adult portfolio. Next page, please. Sales per region. If you remember, by 2022 we had a fantastic increase in EMEA of a +52%. That was really the pure effect of recovery after COVID. The whole industry opened, pharmacy were ordering, consumer were out in the pharmacy and buying. We have very tough comparable for Europe for Q1, and that explain the -5%. On top of that, we, you know, we had a price increase that has been announced in 2022 with full implementation in 2023. We knew that some market, mainly in the Eastern Europe, had bought a bit more in 2022, so that has a slight effect as well on Q1. The very good news is that what we said would happen in Asia Pacific is happening. With China opening up, Japan opening up after COVID restriction, we see a fantastic demand on APAC, a really strong quarter, +72% increase. The main country is China, but we see it as well in Korea. I mean, the recession has not really impacted Asia. It's the contrary. Everything is opening up and you see the impact on sales. Last region, Americas. For the first time, Americas is 39% of our total sales, which is exactly the same thing as the whole Europe. That has never happened. Now Europe and Americas are, as big for us, at least during this quarter. Why is it doing well in Americas? Well, it's one, U.S. still going extremely strong. The team had one fun fact. For the first time in March 2023, they sold more than $1 million to Amazon, via Amazon, so which has never happened before, so very strong in the U.S. We opened BioGaia Canada. We worked with Ferring before. We opened Canada in, as BioGaia in January. We have the chance to be able to attract two super strong talent from Ferring that work for us now, and a lot of synergy from the U.S. We didn't have to recruit any specific marketing team in Canada. We just used the team from the U.S. They developed content for both U.S. and Canada. Worked very well, same language, same culture, and almost the same type of clients. Here as well, Amazon is very, very big for us in Canada. For the clients, as that was the same guy from Ferring, it's almost transparent from them, and especially Costco, which is very big in Canada. We see a increase in demand, and it works very well. The last impact to explain the good figures of Americas is as well Brazil, where we had some in, I mean, some order that end up in Q1 could have end up in Q4 last year. Brazil is doing very strongly here as well. A very, very happy development of sales in Americas. Next page, please. In term of gross margin, we've been very, very, very careful because we have, as everybody else, increase in term of cost of goods on our glass bottle, on the raw material. We've been very, very cautious. We had this price increase to compensate partly. We've been looking at our, I mean, our spending, and we've been able to maintain a gross margin at 72%. Of course, if you want to find a problem in that report, you might say, "You, but in 2022, the gross margin was 73%, which is 1% under." I think we've been pretty good to monitor the inflation. We have already announced last week a new price increase for 2023, which is going to start in the Q3 2023. Next page, please. Now, I will pass over to Alex, who's going to comment the financial figure. Thank you. Thank you, Isabelle. To summarize, the revenues were SEK 366 million, which was a growth of 29%. The profits, operating profits were SEK 148 million, and the margin was 40%. We move on and look at sales then. Our sales growth of 29% consisted of organic growth of 19% and a currency effect of 10%. About 1/3 of the growth was due to currency, and the rest is organic. We look then at our expenses. Our OpEx increased with 7%, and excluding some adjustments, a growth of 10%. Sales costs grew with 22% from SEK 72 million- SEK 88 million, and that growth is mainly related to the increased sales. Certain items in our sales costs are correlated with the sales. As for the R&D costs, they declined with 25% from SEK 25 million- SEK 19 million, the main explanation is basically timing effects of different studies that we're doing. This is not the sustainable level. It will increase. It is due to timing of clinical studies, basically. All in all, that meant an increase of 7% of the OpEx. We now look at the P&L. That summarizes the situation. We see, as we mentioned, the sales growth of 29%, an operating margin of 72% versus 71% in Q1 last year, an OpEx that increased with 7%. That led to an increase in operating profit of 55%. Excluding some adjustments, the adjusted EBIT was SEK 150 million versus SEK 100 million one year ago, so a growth of exactly 50%. The adjusted operating margin was 41%. Earnings per share at SEK 1.15 versus SEK 0.76 last year. As for the cash flow, cash flow from operating activities before changes in working capital was SEK 122 million versus SEK 81 million, so that is an effect of the increased profits we are making. Changes in working capital were negative in the quarter, of SEK 24 million. This is nothing strange. It's more of a timing effect of when the sales happened in the quarter and things like that. It will normalize in the next quarter. The cash flow from operating activities was SEK 98 million versus SEK 93 million one year ago. The cash flow, total cash flow for the period down, SEK 94 million, which was an increase of 9%. Cash at the end of the period is still strong at SEK 1.58 billion versus SEK 1.57 billion one year ago. The balance sheet is more for reference. I will not go through it. With that, I'll hand over to Isabelle for some concluding remarks. Yeah. Thank you, Alex. My conclusion is just to say with 29% sales growth, we are continuing a success story. As I said, seven quarter s in a row with double digits increase. This quarter is really, really thanks to Americas and APAC that I presented before. Which means that despite the sluggish and with this seven quarter in our back of good figures, we remain very confident that we will be able to reach our set and financial goals, so we maintain them with a 34% EBITDA margin. Now I'm happy to take questions. If you wish to ask a question, please dial star five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial star five again on your telephone keypad. The next question comes from Mattias Vadsten from SEB. Please go ahead. Hi. Good to see a strong quarter. Firstly, I wanted to ask if you're willing to disclose if there were any orders that were supposed to come in Q2 that instead hit Q1, and if you're willing to quantify those in that case. If you agree with me that it's more sensible to look at, let's say, flat development in Q2 or marginal increase, let's say, given a very strong Q1 where inventories are probably a tad high at some distributors and maybe in some pharmacies in, for instance, Canada, where you were strong here initially. If you agree to this understanding or if you could help us in any direction? Yes, thank you, Mattias. To answer your first question, do we have Q2 order that moved to Q1? The answer is no, clearly no. The question two, do we expect a flat development for Q2? My answer will be more yes. I think we should look at Q1 plus Q2 together where we will grow. Between Q1 and Q2, I think that's the most important to have a global view on it. We foresee increase, Q2 will not be at the same level as Q1, which is exceptionally good. Agree that you should try to look at, more last [12 months] or half year. I agree with that. Thanks for that. The next question relates to price increases, if you could quantify the impact of prices here in Q1. Do you expect further price increases from here, or if the price increase you pressed through at the turn of the year, what we should expect here? That's my next question. We announced a price increase in March last year, 2022, to our partner. Depending on the contract, we've been rolling out different months. Full impact of the 2022 price increase started in January 2023. Now we've announced last week a new price increase to our distributor. Here as well, we cannot change the price more than once per year, mainly depending on the contract. It will start to roll out as from Q3 2023, with full effect probably in January next year. We have already anticipated. We have looked at the input cost, the COGS increase on the glasses, on the raw material, and we passed already the information to distributor. We are very happy about it. Thank you. My last question, you know, R&D came in fairly low. You, you described that this should come up in coming quarters. You know, where do you see this level more medium term? Previously, that has been, let's say, yeah, 30% of sales or something. On the research part, we've seen some launches here that you discussed in March, April, but I wonder if you could share some insights to which you know, are the most important areas in terms of focus now, and if you're willing to share any insights on the next generation probiotics that you have been mentioning, more recently, I would say. Yeah. I will answer all these question at once. Because why we didn't spend that much on R&D Q1, it's basically because our main R&D program is to have very good data for next generation probiotics to replace the drops where we will be out of patent in 2026. Our full focus is on the next generation of drops and meaning that we have to recruit babies. For some reason, the world is stopping doing babies. It's difficult to recruit babies for the clinical study. We had a plan to run the recruitment and the clinical study in one or two centers, but now we realize that we have to open new center to recruit more babies so that our clinical study are of high impact. We're delayed in the spending because we are delayed in recruitment of these babies. The main focus area is really to come up with the next generation of drops, which we do believe will be even better than the current one. Very good. Thank you very much. You're welcome. The next question comes from Kristofer Liljeberg from Carnegie Investment Bank. Please go ahead. Yeah. Thank you and good morning. Maybe start with the follow-up on the R&D question. I don't know if you answered really what type of level for R&D we should expect going forward. Does this study you will conduct, does it mean R&D costs will increase dramatically from not this quarter level, but what we have seen in previous quarters? No, I think we will maintain the same level as before, around 13% of turnover, which has been normally what we've been spending on R&D. Our effort for this, what we call NGC, Next Generation Colic product, will be, I mean, will happen during three years. We start with safety study, we do, I mean, prevention study, we do treatment study, we start that not at the same time, obviously, because we need sometimes to have the answer from the first safety study before being able to proceed. At the end of the day, it's a massive investment in R&D because it's very important for the company. Together, that will be a 13% of turnover, as usual. Okay. On the new price increase, is it possible to quantify how large it will be? It is quantified. I'm looking at Alex now. Shall I disclose the figures or not? Yeah, you can say. Oh, I'm allowed to disclose. We've announced an increase of 6%. Last year we had an increase by 9%, so together there will be an increase by 15%. Again, this is not going to impact all markets. It is going to impact all markets, but not at the same time, depending on when we sign the contract and when we are able to change the price. There are older contracts with different terms. All the new contracts are exactly the same, but we have old contracts with Nestlé, where we have different rules. That really depends. I mean, it's ongoing the same way it has been ongoing for 2022 price increase. How are you thinking about pricing when it comes to markets where you sell directly, like, you, North America now, for example? Yeah. I mean, on one end, we don't have to negotiate with the partner, I just have to negotiate with our own people. It's not easier sometimes, but by definition, we can be a bit more harder to say, "Well, it's happening now." Having said that, what is very important is to look at the competitive set. U.S. is a super competitive market. It's a major probiotic market, so we are following on our main competitor price evolution prior to any adjustment. The good thing is that now we've, I mean, there are a lot of ways to do price elasticity analysis via digital tools very quickly. We can even test to say, "Okay, can we pass on that level of prices and see the impact on sales?" If we reach a too high level and you see, whoop, you lose more sales than you can increase in value, then you can moderate and change. Amazon is fantastic. The price, I mean, you can change the price every five minutes if you wish so, and that's what we're doing. So, so- We work very closely. Have you increased prices in the U.S.? We just sell, you know, it's almost 70% on Amazon, we just change the price on Amazon, that's happening very quickly in one second. You know, you have this buy box that you have to own, it's changing all the time. In order to be able to maintain it, you can play on the prices, have a small decrease, you get back the buy box, you increase it again. The elasticity on price on Amazon is a job as it is. We have 1 guy only working on it all day. Okay. On the topic of Amazon, do you see any risk here of being too dependent on them? I mean, I don't think so, because we've seen the contrary happening. Thanks to our strong position on Amazon, Target contacted us and say, "Well, we want to have you in our shops." I mean, before, it was like 2017, we tried to enter Target and they say, "No, sorry, not interested." Basically, our strong brand awareness online are leveraging on the retail, so it has helped us, and it has not been a hurdle. On the contrary. Okay. Have you launched with Target now? Yes. We are both online at Target and in about 600 shops. Okay. my final question, coming back to, you know, trying to get a sense for the underlying growth here. I of course understand there's a lot of phasing effects back and forwards, opening up effects, et cetera, et cetera, both positive and negative. How would you describe, or would you be able to quantify what you think is a reasonable underlying growth for BioGaia now? Now I'm looking again at Alex. Yeah. I mean, we don't really give, you know, any guidance going forward, but basically what we're saying, we still stick to that we believe it's possible to continue to grow as we have done before COVID, for the product sales. Mm-hmm. In line with that, those percentage numbers, we believe that to be useful. That means, I think you have talked before about double digits without being more precise. Perhaps not 29. Perhaps more starting with one and starting with two or three as we've been doing recently. Yeah, that seems more realistic. Okay, great. Thank you. Thank you, Kristofer. The next question comes from Mattias Häggblom from Handelsbanken. Please go ahead. Good morning. Thanks so much for taking my questions. I'll try again with the understanding better the dynamics on the first quarter as some of the previous questions here on the call. I'll try in a different way maybe. I think you spelled out a few large anticipated orders in China that was expected to happen in Q4 that I assume was then sold and shipped in the first quarter. Adjusting for those orders to China that were delayed, combined with the stocking in Canada ahead of the launch, would organic growth for the quarter still have been double digit? Yes. That's clear. I'm curious to hear, although, you know, you spoke about the safety trial first, of course, for the next generation probiotic, is it reasonable to think about the design for a future efficacy trial that it's gonna be intended to again in particular show prevention of colic as the primary endpoint? Will you also include the original strain as a control arm? Or how should we think about what capacity you will think you can show in terms of future trials for this next generation strain? Yeah, I really like your question because I think you understand exactly what we are going through. This is really the most highly confidential information that we are not ready to disclose. Because obviously we want to prepare ourselves to close the door for competition, if that type of information about our aim and objective and our hope will go public, we will not have the possibility to prepare ourselves with the best answer towards our competitor. I'm sorry, that I cannot disclose. That's fair. A follow-up, still. Is it fair to anticipate that you hope to bring this new product with claims that you can generate prior to the expiration for the original strain that starts, I guess, sometime in 2026? Yes. That's exactly our aim. We want to be in good time ahead before the patent is over. To give the time for our distributor and our direct market to present the new product and why is it superior to the old one. In case competitor wants to start to produce and manufacture the DSM 17938 that will be out of patent, we will be ready one year, I mean, before. That's, that's clear. My final question is more perhaps strategic or almost philosophical. It relates to the cosmetic product for infants and children, as well as for pregnant women. Can you talk about the clinical evidence for these two indications in contrast, for example, to colic? Reason I'm asking is curious how you balance the importance of peer review publications that historically has been important in clinical trials vis-à-vis maximizing the commercial potential for the brand. This is again, a very good question. For cosmetic, we have run some clinical study for atopic dermatitis with a good result. I mean, it's easier to run clinical trial. The regulatory landscape is slightly easier on cosmetic, to be honest. I mean, we are doing better than in the cosmetic. Yes, we are doing clinical trial prior to launch. This doesn't change. For the prenatal product, though, it's a mix with our main strain, where we know that it has an impact on the immune system. We add vitamins, minerals, where we know that there are extra claims. We know that folic acid is very necessary for the development of the fetus. We have not run any specific clinical new study on that product. We've been using all the literature on already existing and the EFSA claim that already exists out there. It's a bit more, I agree, a bit more new commercial approach to do so, but based on very solid, old study we've done on our own strain, plus on the EFSA claim that exists out there for vitamins and minerals. That's clear. That's all for me. Thanks so much for taking my questions. Thank you, Matthias. Bye. As a reminder, if you wish to ask a question, please dial star five on your telephone keypad. The next question comes from Mattias Vadsten from SEB. Please go ahead. Sorry, I was on mute. Just a short follow-up on the price increases. You said there is 6% and 9%. That is true for the group, let's say. Should we think of some markets with no price increases? Just to be, you know, clear on that. Yeah, I can answer that. I mean, that is the price increase where we increase the price. Then of course, there are some contracts where you have a bit different setup, where the timing is different, like we discussed some direct markets where you may not increase to the same extent and so on. The blended average is lower than 9% or 6%. That's very clear. Another question, I mean, lots of discussions around some key markets, but one market we're almost never discussing in this case is India, where I think you have only the baby and child products today, if I'm not mistaken. You know, just talk a little bit about that market and, you know, how you approach it and, yeah, what you think about it. Yeah, we opened India, that was like three, 4 years ago. I think we picked up the best distributor for probiotics in India, which is Dr. Reddy's. Having said that, they are very big, so it's sometimes difficult to get their attention on a totally new product, totally unknown in India and kind of very expensive. I would say that the start is lower than what we expected. I mean, here as well, you speak about newborn, and there are millions of newborn. We want to be in India, but it's quite expensive product for the average Indian families. We are talking to the top end of the population. I'm confident with India. I think this country is going to be big but not now, not in the medium term. It's going to take time to build, but it's going to be at the rendezvous at the end. Thanks so much for that. There are no more questions at this time, so I hand the conference back to the speakers for any closing comments. No. Thank you for your attention and, we hear each other in July for the Q2 report. Have a nice day. Bye-bye.