Probi Annual and Sustainability Report 2021

First in Probiotics

CEO's statement

Our global partnerships are the key to growth

2021 was a year with many bright spots but also certain challenges. Despite a challenging external environment, we had our second best-year-ever in terms of sales. During the year, we entered into a number of global partnerships that will be important for us to achieve our growth goals in the future.

Our manufacturing facilities have received a major upgrade, which is the key to both improved profit­ability and a more efficient use of resources. During the year, we formulated a clear sustainability strategy that is ­integrated with our three strategic focus areas.

  Tom Rönnlund

 

”It’s an honor to have some of the world’s largest healthcare companies choose us, Probi, as their partner for scientifically proven probiotics.” 

The year in brief

Net Sales SEK m

658

Operating profit SEK m

109

EBITDA margin

28

%

Employees

175


Net sales

SEK m

Net sales

Operating profit

SEK m

Operating profit

EBITDA margin

%

EBITDA margin

Increasing health awareness drives demand

Globally, retail sales of probiotic supplements amounted to nearly USD 7 bn in 2021. Between 2021 and 2026, the expected annual average global growth rate will be around 3.7%.

An increasing awareness of the link between health and the body’s gastric system has affected demand for probiotics in the form of fortified foods, not least during the pandemic. Demand is expected to remain high.

 

Market and products

Globally, retail sales of probiotic supplements amounted to nearly USD 7 bn in 2021.

The largest market was the United States, where the value of probiotic supplements amounted to approximately USD 2.3 bn in 2021. The US market accounted for just under 35% of the global market. The second largest market was China, which has grown in recent years and amounted to approximately USD 900 m in 2021. Italy is the third largest market with a value of USD 673 m.

2285

USD m

1:st: USA

901

USD m

2:nd: China

673

USD m

3:rd: Italy





Global sales of probiotic supplements

Region Americas, 34%

Region APAC, 34%

Region EMEA, 27%

Rest of the world, 5%


Probi net sales per market

Region Americas, 74%

Region EMEA, 19%

Region APAC, 7%


Probi sales per category

Product sales, 98%

Royalty, 2%


Markets

Market trends

Product portfolio

Health positions

Strategy

Growth

Probi’s growth goal is to double sales within five to seven years. Probi continues to invest significant resources to increase its presence in important emerging markets. Growth is generated through both new customers and in-depth collaboration with existing ones. In 2021, a number of new collaborations were started with customers who are expected to contribute to Probi’s growth in Asia and Europe.

Organic growth will be complemented by long-term strategic partnerships and acquisitions in relevant areas. The partnership with Blis, which began in 2021, gives Probi the chance to offer its customers products in new health areas.

Growth EMEA

17

%

Growth in net sales region EMEA

New customers

4

Number of new global key customers in 2021

Growth

-3

%

Net sales growth YoY

Strategy

Innovation and development

Probi’s scientific foundation and investment in clinical research has resulted in Probi currently having four clinically well-documented main areas in gastric health, immune health, bone health and iron absorption, and over 400 approved patents. Research and development is a time-consuming process, which is why Probi sees many advantages in collaborating with external partners.

Given the solid knowledge and scientific foundation that exists at Probi, we often receive offers for collaboration that lead to research projects with both industry partners and independent university groups. Probi is research-driven and continuously evaluates new functional areas within probiotics.

Number of patents

416

43 new patents were approved in 2021

Published studies in 2021

3

Studies within iron health, bone health and tolerance study on newborn babies

Investments in R&D

40

SEK m

Investments in research and development 2021, corresponding to 6% of net sales

Strategy

Manufacturing

Through consistent work and a structured process for continuous improvement, Probi has a manufacturing process today that can deliver probiotics with the quality Probi’s customers demand. With its two production facilities in the USA, Probi has a fully integrated production process.

Probi offers a wide range of probiotic products through its in-house manufacturing or in collaboration with strategic partners. All manufacturing takes place in accordance with good manufacturing practice and Probi is regularly inspected by customers, partners, authorities and independent third-party auditors.

Water consumption

-60

%

Investments in increased efficiency have contributed to reduced water consumption in production.

Manufacturing facilities

2

Probi has two production facilities in the USA.

Sustainability at Probi

A natural progression of Probi’s focus on health and well-being is to work towards sustainable business operations. Therefore, further steps have been taken in 2021 to move towards a sustainable future and meet the needs and aspirations of our stakeholders.

This has resulted in a new sustainability strategy linked to the UN’s 17 Sustainable Development Goals, with Probi focusing on three main goals.

Probiotics for better health & a healthier planet

Contributing to healthier lives

Our products contribute to better health for everyone, which is scientifically proven.

Acting responsibly

We ­minimize the use of ­natural resources and strive for safe working conditions throughout our value chain.

Stopping climate change

Probi is committed to contributing to the 1.5˚C aim of the Paris Agreement.

Our vision is to improve the health and well-being of people around the world

The starting point of Probi’s new sustainability strategy is the company’s vision to improve the health and well-being of people throughout the world. In Probi’s day-to-day work – from probiotics research to manufacturing and new collaborations – a significant part of the sustainability work already takes place.

The aim of the strategy is to ensure that sustainability efforts take place in all parts of the business and as strategically as Probi’s business development in other spheres.

The work on sustainability in three key areas, in which Probi has set ambitions, targets and an action plan.

>

40

Number of countries in which Probi's products are sold

With establishment in more markets, Probi contributes to increased prosperity in the world through sales of clinically documented probiotics.

43

%

of suppliers to whom the Code of Conduct was sent signed it

By 2025, all our suppliers will adhere to the established principles of safety, security, diverse and inclusive environments for employees.

-

10

%

Reduced CO2 emissions

We reduced our CO2 emissions by 10% in 2021 compared to 2020. Our ambition is to halve CO2 emissions throughout our value chain by 2030.





Gender distribution, all employees

Men, 50%

Women, 50%


Gender distribution, managers

Men, 61%

Women, 39%


Gender distribution, executive mgmt

Men, 75%

Women, 25%