We continue to increase our market shares

2018 was yet another year of strong growth for BioGaia, with annual sales reaching a record-high SEK 742 million. As the new CEO, I am taking charge of a business with a positive trend – and with major potential.

During the year sales increased by SEK 127 million, which represents growth of 16 percent after foreign exchange effects. Our growth continues to outpace the market which is expected to grow by approximately 10 percent per year. The key to our success year after year is our business model where BioGaia is the hub of an international network within research, production and distribution.

In the Pediatrics segment sales of our key products, BioGaia Protectis drops and tablets, continue to grow. At the same time we see strong development for the Adult Health portfolio where sales of Gastrus and Prodentis in particular saw strong growth during the year, although from low levels. This performance strengthens our vision.

 

Interview with the CEO

She took up her new position in November. Her mission is to continue to build and establish BioGaia as a global probiotics brand. Read more

 

Build our brand

We also continue to build our brand and during the year we could see that sales of products under our own brand are rising. In EMEA, France and several countries in Eastern Europe are examples of markets that sell under the BioGaia brand and where development was very positive during the year. In the Americas as well we see that partners who sell under the BioGaia brand or with co­branding showed strong growth during the year. In the USA, growth is especially high for online sales of our drops. Online sales in China, which mainly comprise drops sold under the BioGaia brand, also increased during the year. In addition, our subsidiary in Japan reported good sales development primarily for the oral health product Prodentis.

 

New strategy

In 2016 we launched a strategy which guides our activities based on five cornerstones: Growth, Customer Focus, Operational Efficiency, Innovation and Sustainability. This gives BioGaia total strategic control of everything along the entire value chain – from bacterial strains to finished consumer products.

Growth

For Growth, the focus in 2018 was on expansion of the existing portfolio in both already established and new markets.

Customer focus

In order to get closer to our partners in Asia, we opened an office in Singapore in the past year, in the same way as we opened an office in Miami in 2017. We also launched BioGaia Academy, a totally new educational platform where we train doctors from around the world and thereby increase the number of well­informed opinion leaders.

Operational Efficiency

Implementation of the new ERP system – which will strengthen Operational Efficiency – started towards the end of the year.

Innovation

In Innovation, 2018 was an intensive year with some 55 ongoing studies, the acquisition of the research company MetaboGen (read more on page 22), the startup of our new laboratory in Eslöv and new research collaboration at our Center of Excellence in Mexico and with doctoral students.

Sustainability

Within Sustainability the Foundation to prevent antibiotic resistance, set up by BioGaia at the end of 2017, awarded its first grants to researchers at the Karolinska Institute and Uppsala University. During the year it was also decided to employ someone to be responsible for our sustainability initiatives. Recruitment to this position is underway.

Operating expenses increased by 25 percent

Our operating expenses increased by 25 percent in 2018. We invest heavily in research and development, including investments in our subsidiaries BioGaia Pharma and MetaboGen as well as in research projects, clinical studies and product development. We have also increased our investment in marketing activities in countries including Italy, Brazil and Sweden. This higher level of activity also requires additional staff and during the year the number of employees increased by 23, including ten at BioGaia Japan and three through the acquisition of MetaboGen.

An exciting year

During 2019 I expect continued investments to drive market growth, maintain a strong research program and further strengthen our brand. I look forward to an exciting year!