Lunds Klimatallians18th of November 2015

Cecilia Wallentin Lindberg, Manager QANiklas Brandt, CFO

• Probi today

• The Probiotics Market

• Our products

• Financial development

• Probi Growth strategy

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Agenda

Probiotics. Live micro-organisms which, when administered in adequate amounts, confer a health benefit on the host (WHO)

Lactobacillus plantarum 299v

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It started with a vision to save lives ,

Lactobacillus plantarum 299v (LP299V®) was identified

Clinical studies were performed

LP299V® saved patients lives by avoiding serious infections and sepsis

Probi was founded 1991 in Lund

First commercial product ProViva was launched in 1994

Probis supplement was launched in 2005

Probis Immune products was launched in 2010

Probi Iron uptake concept launched in 2015

Bild 4

Office [2]1 Historisk linje iställetMicrosoft Office-användare; 2015-09-23

• Well documented and patent procted product platforms available in more than 35 markets− Gastro/ IBS (ProViva® & Probi Digestis®) − Immune (Probi Defendum®)− Iron uptake (Probi ferroSorb®) – launching

• Grew revenues with 32% to 135 MSEK in 2014, growth for 1st half 2015 is 120%

• Accelererating international expansion

• Largest research portfolio ever

• Consumers all over world improving their health with Probiotics from Probi

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Probi 2015

• Probi today

• The Probiotics Market

• Our products

• Financial development

• Probi Growth strategy

6

Agenda

“People are not just people. They are an awful lot of microbes, too”

The Economist

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• 10 times more bacterial cells than human

• 100-150 more bacterial genes than

• Intense efforts in mapping disease with microbiome cause relationships

Scientific publications on Gut microbiota

Microbiome and Probiotics in focus

Scientific research supports health benefits of probiotics

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Source: Market updates and newly released numbers for 2014, IPA World Congress 2014, Euromonitor

Improved digestion and

wellbeing Intestinal regularity

Reduction of carcinogens

Diarrhoea

Relief of IBS symptoms

Immune support, URTI

Food intolerance

Urigenitalhealth

Asthma/arthritisPrevention/treatment of ulcers

Mouth and throat care

Oral health

Help develop postnatal immunity

Infant eczema reduction

Anti-inflammatory

Cardio-vascular health

Increased nutrient

absorption

Weight management

General market conditions and drivers

• The probiotic world market is worth around $35 billion USD, of which 90% is food and 10% dietary supplements/consumer healthcare products.

• The food portion of the market is dominated by large multinationals such as Danone and Yakult. The consumer healthcare portion is highly fragmented with primarily VMS1) and pharmaceutical companies participating.

• The market consists almost entirely of gut health and immune health products, with gut health being the most significant portion.

• The market is growing at > 6 % per annum, however the “tendency” to launch new products or make major investments in probiotics will be highly influenced by the regulatory process.

1) Vitamins, Minerals & Supplements. Source: Euromonitor 2015

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> 6 %

From USD 24 billion in 2009 to USD 48 billion in 2019

Source: Euromonitor 2015

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Probi partners with consumer health companies creating local probiotic market leadership

• Probi today

• The Probiotics Market

• Our products

• Financial development

• Probi Growth strategy

12

Agenda

Probi product platforms

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Probi Consumer Healthcare products

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Probi Functional Food products

• Probi today

• The Probiotics Market

• Our products

• Financial development

• Probi Growth strategy

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Agenda

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Net Sales & EBITDA development last 5 years

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Net Sales per Business Area last 5 years

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MSEK 2015 Q3 2014 Q3 % change 2015 Q1-Q3 2014 Q1-Q3 % change2014

FY

Consumer Healthcare 43,4 28,5 152,2 67,6 99,1

Functional Food 8,5 8,6 27,6 27,7 36,1

Net sales 51,9 37,1 +40% 179,8 95,3 +120% 135,2

Adjusted for Fx

impact44,4 +20% 154,7 +89%

Consumer Healthcare 15,8 7,3 55,4 14,0 23,3

Functional Food 2,2 3,1 8,6 10,5 12,9

EBITDA 18,0 10,4 +73% 64,0 24,5 +225% 36,2

Adjusted for Fx

impact12,4 +19% 45,8 +130%

EBITDA % 35% 28% 36% 26% 27%

Q3 2015 – P&L

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Q3 2015, Probi has a strong balance sheet

MSEK 2015 Q3 2014 Q3 2014 Q4

Intangible assets 40,7 32,7 30,0

Tangible assets 4,8 2,1 4,9

Current assets 31,6 34,8 32,9

Cash 143,0 97,6 108,2

Total Assets 220,1 167,2 176,0

Shareholders Equity 184,5 140,6 146,0

Current liabilities 35,6 26,6 30,0

Shareholders equity and liabilities 220,1 167,2 176,0

Balance sheet as per 2015 09 30

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Q3 2015 - Cash flow

MSEK 2015 Q3 2014 Q3 2014 Q4

Cash flow from operating activities 57,8 21,4 37,2

Cash flow from investing activities -15,3 -8,3 -13,5

Cash flow from financing activities -7,7 -6,8 -6,8

Total cash flow 34,8 6,3 16,9

Cash at the end of the period 143,0 97,6 108,2

• Probi today

• The Probiotics Market

• Our products

• Financial development

• Probi Growth strategy

22

Agenda

Probis growth strategy - markets

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Probis growth strategy – R&D

• Confirm health benefits

• Existing product in a new format

• Identify new candidates with new health benefits

Application Development

Clinical development

Discovery

2014 2015 2016

Goals for 2015 – growth above market rate combined with a profit margin (EBITDA) above 20%

Expand Probis sales and marketing organization

Launch in new markets in Americas and Asia Pacific

Develop the functional food business

Launch Probi Iron and Probi Defendum

R&D – accelerate product development

Veckans affärer 7 oktober 2010

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Probis miljöledningssystem

• Utmaningar– Extern efterfrågan

– Internt fokus

– Lokaler

– Flygresor

– Få nyckelleverantörer

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Fastläggande av miljömål

• Flera miljöutredningar, första 2009

• Seminarier

• 2012 ISO 14001 certifierade

• Ambitiös och miljöintresserad personal vilket resultaterade i många miljömål

• Probis direkta miljöpåverkan inte så stor– Outsourcad verksamhet

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Under första åren

• 2012– 15 miljömål inom 3 områden/verksamheter + övrigt

– Energiförbrukningen inom den egna verksamheten

– Val av leverantörer

– Val av förpackningsmaterial

– Övrigt

– Klimatkompensering för resor

– Pappersförbrukningen

– Avfallsförbrukningen

– Svårt att följa upp

– Överblick

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Senare år

• 2013-2014– 7 miljömål inom samma 3 områden/verksamheter

– Konstaterade att några kommer inte att införas

– 1 indirekt positivt miljöpåverkan

– Inte så lätt att arbeta med

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2015

• Två miljömål

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Prioriterad betydande miljöaspekt

Övergripande miljömål

Miljömål

Val av leverantörer för produkter och tjänster

Minska negativ miljöpåverkan genom

val av leverantör/ underleverantör

Långsiktigt mål på 10 års sikt: Probis

största varuleverantör ska

ha ett väl dokumenterat

hållbarhetsarbete.

Val av förpackningsmaterial för produkter

Minska negativ miljöpåverkan av

förpackningsmaterial

Långsiktigt mål att på 5-10 år sikt verka

för att ta bort sekundärförpackningen och 3-5 år verka

för mindre miljöpåverkande

primärförpackning.