Press Release 14 February 2007 (10 pages) BioGaia AB Year-end report 2006 (Figures in brackets refer to the previous year) Net sales amounted to SEK 86.8 (59.6) million, an increase of SEK 27.2 million (46%) compared to the previous year. The operating result was SEK 1.7 (-20.7) million, an increase of SEK 22.4 million compared to the previous year. Excluding one-time expenses related to BioGaia's allergy project in 2005, the operating result improved by SEK 16.5 million. The operating result was charged with bonuses of SEK 0.4 million for all employees. The result after tax was SEK 2.7 (-19.8) million, an increase of SEK 22.5 million compared to the previous year. Excluding one-time expenses related to BioGaia's allergy project in 2005, the result strengthened by SEK 16.6 million. Earnings per share were SEK 0.16 (-1.15). The year's cash flow from operating activities before changes in working capital was SEK 7.8 (-8.8) million. Total cash flow for the year was SEK -8.4 (-14) million. Cash and cash equivalents at 31 December 2006 were SEK 39.7 (48.3) million. Key events in the fourth quarter of 2006 Agreement with Ewopharma for the sale of BioGaia's probiotic drops and tablets in Central Eastern Europe. Agreement with HSO Pharma for the sale of BioGaia's probiotic tablets and drops in Germany. Agreement with PT Kalbe Farma for distribution of BioGaia's probiotic tablets and oral health products in Indonesia. Agreement with Sunstar Suisse SA, one of the ten largest oral health company in the world, for distribution of BioGaia's probiotic oral health products in four key markets in Europe. Key events after year-end Agreement with Semper for the sale of BioGaia's probiotic drops in Sweden and Norway. The study showing Reuteri's powerful effect on colic was published and featured in the media. Latest press releases from BioGaia: 2007-01-16 BioGaia signs agreement with Semper 2007-01-09 Lactobacillus reuteri against colic 2006-11-17 BioGaia signs agreement with major oral health company For additional information contact: Peter Rothschild, Managing Director, telephone: +46 8 - 555 293 00, Jan Annwall, Deputy Managing Director telephone: +46 8 - 555 293 00 -------------------------------------------------------------------------------- ----------------------------------------------------------------- BioGaia is a biotechnology company that develops, markets and sells probiotic products with documented health benefits. The products are primarily based on the lactic acid bacterium Lactobacillus reuteri (Reuteri), which has probiotic, health-enhancing effects. The class B share of the Parent Company BioGaia AB is quoted on the Small Cap list of the Stockholm Stock Exchange. www.biogaia.com BioGaia AB (publ) Year-end report 2006 Figures in brackets refer to the same period of last year. The Managing Director of BioGaia AB (publ) hereby presents the year-end report for 2006. BIOGAIA AB BioGaia is a biotechnology company that develops, markets and sells probiotic products with documented health benefits. The products are primarily based on the lactic acid bacterium Lactobacillus reuteri (Reuteri) which has health-enhancing effects. BioGaia has also developed unique delivery systems, such as probiotic-containing straw and cap, that make it possible to create probiotic products with a long shelf life. BioGaia's research is focused on selection of different probiotics for gut health, the immune system and oral health. Extensive clinical studies have shown that BioGaia's probiotic products are effective in stimulating the human immune system, protecting against gastrointestinal and respiratory infections, alleviating the side effects of antibiotics, reducing the level of H. pylori infection, dramatically relieving infantile colic and reducing gum inflammation and the risk for dental caries. BioGaia primarily sells finished probiotic products such as tablets, drops, oral health products (chewing gum and lozenges) and probiotic-containing straws and caps, but also sells license rights for the use of Reuteri cultures in customer's own products, such as yoghurt and infant formula. BioGaia's products are sold through nutrition, food, natural health, pharmaceutical and animal feed companies in close to 30 countries worldwide. BioGaia holds patents for the use of Reuteri in all major markets. BioGaia has 36 employees, of whom 16 are based in Stockholm, 15 in Lund, 2 in Raleigh, USA, and 3 in Hiroshima, Japan. The class B share of the Parent Company BioGaia AB is quoted on the Nordic Stock Exchange in Stockholm. KEY EVENTS IN THE FOURTH QUARTER OF 2006 Agreement with Sunstar In mid-November BioGaia signed an agreement with Sunstar Suisse SA, one of the ten largest oral health companies in the world. The agreement gives the company exclusive rights to distribute BioGaia's probiotic oral health products under the customer's own brand in four key markets in Europe. The launch is expected to take place in 2007. Agreement for Indonesia In November BioGaia signed an agreement with PT Kalbe Farma Tbk in Indonesia granting exclusive rights to distribute BioGaia's probiotic tablets and oral health products in Indonesia. The product launch is expected in 2007. Agreement with Ewopharma In October BioGaia signed an agreement with Ewopharma AG of Switzerland giving Ewopharma exclusive rights to distribute BioGaia's probiotic drops and tablets in a number of countries in Central Eastern Europe. Both products will be sold through pharmacies, under the BioGaia brand, in Poland, the Slovak Republic, Romania, Bulgaria and Slovenia. In addition, the tablets will be sold in the Czech Republic and Hungary. The launch is planned for 2007. Agreement with HSO Pharma for Germany At the end of October BioGaia signed an agreement with HSO Pharma of Austria, giving the company exclusive rights to market BioGaia's probiotic tablets and drops in Germany. HSO has been selling BioGaia's products through pharmacies in Austria since July. The products will also be sold via pharmacies in Germany. The tablets are sold under the BioGaia brand and the drops under the HSO Pharma brand. The launch is expected to take place in 2007. Education for healthcare personnel In October BioGaia arranged a course on probiotics for doctors, nutritionists and nurses in Sweden. The lectures covered topics such as the use of probiotics to treat various conditions in children and adults, including diarrhoea, allergies and inflammatory bowel disease (IBS). The course content was reviewed and approved by IPULS - Institute for the Professional Development of Physicians in Sweden. The course was a success and BioGaia plans to hold additional courses. Product launches in the fourth quarter Ferring launched BioGaia's probiotic drops in Canada and Portugal. HSO launched BioGaia's probiotic oral health products in Austria. KEY EVENTS AFTER THE END OF THE REPORTING PERIOD Agreement with Semper In mid-January 2007 BioGaia signed an agreement with Semper AB giving Semper the right to sell BioGaia's probiotic drops in Sweden and Norway under the name Semper Magdroppar. The launch is planned for 2007. Colic study published At the beginning of 2007, the clinical study on colic was published in the scientific journal Pediatrics. This attracted considerable attention from the media, including coverage by the American TV broadcasting company Gail Hallberg2007-06-26T00:00:00ABC är inte en TV kanal, utan ett bolag som sänder på ett flertal olika kanaler och även på radio.ABC and Swedish Science Radio P1. The results of the study demonstrate Reuteri's powerful efficacy in treating colic. EARLIER EVENTS IN 2006 Agreement with Novartis In January 2006 BioGaia signed an agreement with Novartis Consumer Health SA of Switzerland. The agreement gives Novartis the right to use Reuteri and BioGaia's delivery technologies in the medical nutrition market. The Novartis Medical Nutrition business unit offers a complete range of enteral nutrition products. Agreements in the Far East In early January 2006 BioGaia signed a new long term agreement with Chichiyasu, a BioGaia licensee for the past 10 years, for the sale of dairy products with Reuteri in Japan. Furthermore, the signing of additional agreements was reported, one with Biolife in Malaysia for distribution of BioGaia probiotic drops via pharmacies, and one with Age D'or Health Care in Singapore for distribution of Reuteri drops and Reuteri tablets. Agreement with Forest Laboratories An agreement was signed in March with the British pharmaceutical company Forest Laboratories UK Limited. The agreement gives Forest exclusive rights to sell BioGaia's probiotic drops on the UK and Irish markets, where Forest Laboratories is the leading provider of products for the treatment of colic. The drops were launched in the third quarter. Agreement with Ferring Pharmaceuticals An agreement was signed in March with Swiss-based Ferring Pharmaceuticals. The agreement gives Ferring exclusive rights to sell BioGaia's probiotic drops in Spain, Portugal, the Czech Republic and Hungary, as well as optional rights for several other countries. During the summer, the agreement was extended to include Canada and a number of countries in the Middle East. The drops will be sold under BioGaia's own brand. The registration process will begin immediately and the launch will take place as soon as approval has been obtained in each country. New patent in the USA At the end of March BioGaia was granted a patent in the USA for anti-inflammatory use of certain strains of probiotic lactobacilli. Anti-inflammatory lactobacilli are effective in reducing inflammation, which opens up a wide area of use. One specific application of interest is the treatment of inflammation associated with Helicobacter pylori infection. Helicobacter pylori can cause gastritis and ulcers and can even lead to stomach cancer. Expanded agreement with Thebe For several years, Thebe Medicare has sold BioGaia's probiotic tablets, drops and straws in South Africa. A new long-term exclusive agreement was signed with Thebe in March 2006 when the existing agreement expired. Extended agreement with Laboratorios Casen BioGaia previously sold Reuteri tablets in Spain and Portugal through Cantabria. During the first quarter, an agreement for the sale of BioGaia's probiotic tablets in Spain and Portugal was signed with Laboratorios Casen. BioGaia has an existing agreement with Casen covering BioGaia's probiotic straw, which Casen sells together with a rehydration beverage through pharmacies. Furthermore, the agreement with Casen has been extended to include the sale of portion-packed bags containing an oral rehydration powder and Reuteri. The product is intended for children and is also sold in pharmacies. LIVA sales discontinued Procordia has decided to discontinue sales of its LIVA products in Sweden. Since BioGaia's sales to Procordia were limited, the decision has had only a marginal effect on BioGaia's earnings. Agreement with Laboratoire Physcience In early April BioGaia signed an agreement with Laboratoire Physcience in France giving that company exclusive rights to sell Reuteri tablets in France and Belgium. In the third quarter the agreement was expanded to include sales of BioGaia's probiotic straw, containing Reuteri, in France. Both products were launched in France during September and are sold through pharmacies. The straws are sold together with an immunostimulatory effervescent tablet, Stimubiotic, for children. Move in Lund In early May BioGaia's operations in Lund were moved from two separate locations in the St. Lars area to a joint facility on Stora Södergatan. Activities in Lund include production planning, logistics, product development, quality control and laboratory work. The move gave rise to machinery and equipment investments of SEK 0.6 million. Oral health study published At the end of June, a study on the effects of Reuteri on bleeding gums was published in Swedish Dental Journal. The study showed that the occurrence of moderate to severe gingivitis (bleeding gums) was reduced by 60% after four weeks of use. The study was carried out by Dentist Per Krasse in Malmö, Sweden, during 2004. Study shows that BioGaia's probiotic drops halve hospital stay for premature infants A study presented in the third quarter showed that BioGaia's probiotic drops protect prematurely born infants from infections caused by bacteria and yeast. Hospital stay for the infants was reduced by almost half compared to the control group, from six weeks to three. Extended agreement with Erina In the third quarter BioGaia extended the agreement with its largest customer, Erina, for the sale of Reuteri tablets in Japan. Subsidiary in Japan In the third quarter of 2006, BioGaia established a wholly owned subsidiary in Hiroshima. The staff consists of one BioGaia employee from Sweden and two Japanese employees. The company will launch new products on the Japanese market under the BioGaia brand. The launch is scheduled for 2007. The start-up in Japan has led to an increase in selling expenses. LifeTop Cap LifeTop Cap is ready for delivery to the French company with which BioGaia has an agreement. However, the customer has not announced any date for launch and it is therefore uncertain whether the launch will take place. Even if no product is launched, BioGaia expects to receive financial compensation for lost sales. BioGaia is working actively to find new customers for this product. FINANCIAL PERFORMANCE IN 2006 The Group's net sales amounted to SEK 86.8 (59.6) million, up by 46% compared to the previous year. Increased sales were noted for all products, with the strongest growth for drops and tablets. Sales improved in all geographical markets, particularly in Europe. Gross profit was SEK 59.2 million, a year-on-year increase of SEK 20.5 million. Selling expenses rose by SEK 3.8 million over the year-earlier level as a result of the start-up in Japan. Administrative expenses declined by SEK 0.9 million compared to last year, mainly due to costs of SEK 0.5 million in the first quarter of 2005 arising from the dispute with Milko. Research and development expenses amounted to SEK 18.8 million, down by SEK 5.7 million from the year before. The figure for 2005 included one-time expenses attributable to the write-down of BioGaia's allergy project. Excluding this item, research and development expenses increased by SEK 0.2 million. No development expenses were capitalised during the year, compared with SEK 1.3 million in 2005. Amortisation of capitalized development expenses totalled SEK 3.5 (3.4) million. The operating result was SEK 1.7 (-20.7) million, up by SEK 22.4 million over the previous year. Excluding the write-down of the allergy project in 2005, the operating result improved by SEK 16.5 million. The figure for 2006 includes total bonuses of SEK 0.4 million (including social security expenses) to all employees, which will be paid in February 2007. The result after tax was SEK 2.7 (-19.8) million, an increase of SEK 22.5 million compared to last year. Excluding the write-down of the allergy project in 2005, earnings improved by SEK 16.6 million. The tax exense for the year refers to the American subsidiary. The Parent Company BioGaia pays no tax due to the existence of a cumulative loss carry forward. After the year's profit, the total loss carry forward amounts to SEK 131.3 million in the Parent Company and SEK 135.1 million in the Group. No deferred tax assets have been recorded. The Group's cash and cash equivalents at 31 December 2006 totalled SEK 39.7 (48.3) million. Cash flow strengthened by SEK 5.6 million over 2005 and amounted to SEK -8.4 million. In 2006 BioGaia paid a conditional shareholder contribution of SEK 2.9 million to the associated company TwoPac AB. In addition, BioGaia amortised loans from Industrifonden in an amount of SEK 3.0 million in December 2006. Cash flow from operating activities before change in working capital was SEK 7.8 million, an improvement of SEK 16.6 million compared to 2005. Consolidated equity amounted to SEK 74.5 million. The Group's equity/assets ratio was 82% (82%). Capital expenditure Gail Hallberg2007-06-26T00:00:00I detta sammanhang är “capital expenditure” more korrekt än “investments”on tangible assets totalled SEK 1.1 (0.4) million. Capital expenditure on intangible assets amounted to SEK 0 (1.3) million. The Parent Company reported net sales of SEK 86.9 (59.2) million and a result after net financial items of SEK 2.0 (-18.9) million. Financial performance in the fourth quarter of 2006 Net sales for the fourth quarter of 2006 amounted to SEK 24.7 million, an increase of SEK 9.8 million over the same period of 2005. Compared to the third quarter, sales rose by SEK 3.8 million. Since BioGaia still has a limited number of customers, the timing of deliveries can lead to variations in income between periods. The Company's recurring order intake is rising steadily, which is helping to reduce quarterly variations. The operating result for the fourth quarter was SEK 0.5 million, an increase of SEK 9.9 million over year-earlier period. Compared to the third quarter, this represents a decrease of SEK 0.6 million that is partly explained by lower operating expenses for the third quarter in connection with the summer holiday. In addition, the start-up of the Japanese subsidiary led to higher fourth quarter selling expenses and research and development expenses were up in the quarter mainly due to patent and regulatory costs. Furthermore, fourth quarter earnings include total bonus payments of SEK 0.4 million to all employees. The fourth quarter result after tax was SEK 0.9 million, an improvement of SEK 10 million over the same period of last year. Compared to the third quarter, the result declined by SEK 0.4 million. Cash flow for the fourth quarter totalled SEK -6.1 million. This is explained by increased working capital and amortisation of a loan from Industrifonden. In addition BioGaia paid a conditional shareholder contribution of SEK 1 million to the associated company TwoPac AB. Cash flow from operating activities before change in working capital was SEK 2.2 million. EMPLOYEES The number of employees increased by two people in the fourth quarter and amounted to 36 (33) at 31 December 2006. APPROPRIATION OF ACCUMULATED DEFICIT The Board of Directors and Managing Director propose that the accumulated deficit be carried forward to new account. No dividend is therefore proposed. FUTURE OUTLOOK By maintaining a largely stable cost level, increasing sales to existing customers and developing business with new customers, BioGaia's objective is to attain solid and sustainable profitability. In view of the Company's strong portfolio of innovative products, successful clinical trials and growing distribution network covering a large share of the key markets, BioGaia's future outlook is bright. -------------------------------------------------------------------------------- | INCOME STATEMENTS | | | | | | | | -------------------------------------------------------------------------------- | (Amounts in SEK 000s) | | | | | Oct-Dec | | Oct-Dec | -------------------------------------------------------------------------------- | | 2006 | | 2005 | | 2006 | | 2005 | -------------------------------------------------------------------------------- | Net sales | 86,792 | | 59,606 | | 24,675 | | 14,949 | -------------------------------------------------------------------------------- | Cost of goods sold | -27,63 | | -20,90 | | -7,985 | | -5,001 | | | 6 | | 2 | | | | | -------------------------------------------------------------------------------- | Gross profit | 59,156 | | 38,704 | | 16,690 | | 9,948 | -------------------------------------------------------------------------------- | Other operating income | 166 | | 812 | | -2 | | 398 | -------------------------------------------------------------------------------- | Selling expenses | -30,88 | | -27,04 | | -8,656 | | -7,353 | | | 6 | | 6 | | | | | -------------------------------------------------------------------------------- | Administrative expenses | -6,847 | | -7,726 | | -1,665 | | -1,647 | -------------------------------------------------------------------------------- | Research and development | -18,75 | | -24,48 | | -5,849 | | -10,461 | | expenses | 5 | | 4 | | | | | -------------------------------------------------------------------------------- | Other operating expenses | -433 | | - | | -9 | | - | -------------------------------------------------------------------------------- | Share in result of | -685 | | -957 | | -35 | | -257 | | associated company | | | | | | | | -------------------------------------------------------------------------------- | Operating result | 1,716 | | -20,69 | | 474 | | -9,372 | | | | | 7 | | | | | -------------------------------------------------------------------------------- | Financial income and | 1,039 | | 878 | | 507 | | 227 | | expenses | | | | | | | | -------------------------------------------------------------------------------- | Tax expense for the | -35 | | -6 | | -35 | | -6 | | period | | | | | | | | -------------------------------------------------------------------------------- | NET RESULT FOR THE PERIOD | 2,720 | | -19,82 | | 946 | | -9,151 | | | | | 5 | | | | | -------------------------------------------------------------------------------- | Earnings per share | | | | | | | | -------------------------------------------------------------------------------- | Earnings per share | 0.16 | | -1.15 | | 0.05 | | -0.53 | | (average number of | | | | | | | | | shares), SEK | | | | | | | | -------------------------------------------------------------------------------- | Earnings per share after | 0.16 | | -1.15 | | 0.05 | | -0.53 | | dilution, SEK | | | | | | | | -------------------------------------------------------------------------------- | Number of shares, | 17,208 | | 17,208 | | 17,208 | | 17,208 | | thousands | | | | | | | | -------------------------------------------------------------------------------- | Average number of shares, | 17,208 | | 17,208 | | 17,208 | | 17,208 | | thousands | | | | | | | | -------------------------------------------------------------------------------- | Average number of shares | 17,208 | | 17,208 | | 17,208 | | 17,208 | | after dilution, thousands | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | BALANCE SHEETS | 31 Dec | | 31 Dec | -------------------------------------------------------------------------------- | (Amounts in SEK 000s) | 2006 | | 2005 | -------------------------------------------------------------------------------- | ASSETS | | | | -------------------------------------------------------------------------------- | Intangible assets | 11,416 | | 15,076 | -------------------------------------------------------------------------------- | Tangible assets | 1,389 | | 1,091 | -------------------------------------------------------------------------------- | Participations in associated company | 5,188 | | 2,973 | -------------------------------------------------------------------------------- | Long-term receivables | 5,418 | | 5,421 | -------------------------------------------------------------------------------- | Current assets excl. cash and cash | 27,633 | | 14,243 | | equivalents | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | 39,719 | | 48,349 | -------------------------------------------------------------------------------- | TOTAL ASSETS | 90,763 | | 87,153 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | EQUITY AND LIABILITIES | | | | -------------------------------------------------------------------------------- | Shareholders' equity | 74,530 | | 71,779 | -------------------------------------------------------------------------------- | Interest-bearing current liabilities | - | | 2,984 | -------------------------------------------------------------------------------- | Non interest-bearing current liabilities | 16,233 | | 12,390 | -------------------------------------------------------------------------------- | TOTAL EQUITY AND LIABILITIES | 90,763 | | 87,153 | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | CASH FLOW STATEMENTS | | | | | Oct-Dec | | Oct-Dec | -------------------------------------------------------------------------------- | (Amounts in SEK 000s) | 2006 | | 2005 | | 2006 | | 2005 | -------------------------------------------------------------------------------- | Operating activities | | | | | | | | -------------------------------------------------------------------------------- | Operating result | 1,716 | | -20,69 | | 474 | | -9,372 | | | | | 7 | | | | | -------------------------------------------------------------------------------- | Depreciation/amortisation | 4,314 | | 4,204 | | 1,132 | | 1,060 | -------------------------------------------------------------------------------- | Write-down of capitalised | - | | 10,816 | | - | | 10,816 | | development expenditure | | | | | | | | -------------------------------------------------------------------------------- | Reversal of provision | - | | -4,866 | | - | | -4,866 | -------------------------------------------------------------------------------- | Capital gains/losses on | -147 | | -39 | | -2 | | -39 | | the | | | | | | | | | sale of fixed assets | | | | | | | | -------------------------------------------------------------------------------- | Share in result of | 685 | | 957 | | 35 | | 257 | | associated company | | | | | | | | -------------------------------------------------------------------------------- | Other non-cash items | 143 | | -97 | | 50 | | 33 | -------------------------------------------------------------------------------- | Interest received and | 1,039 | | 878 | | 507 | | 227 | | paid | | | | | | | | -------------------------------------------------------------------------------- | Cash flow from operating | 7,750 | | -8,844 | | 2,196 | | -1,884 | | activities before change | | | | | | | | | in working capital | | | | | | | | -------------------------------------------------------------------------------- | Change in working capital | -8,581 | | -1,125 | | -4,096 | | 3,568 | -------------------------------------------------------------------------------- | Cash flow from operating | -831 | | -9,969 | | -1,900 | | 1,684 | | activities | | | | | | | | -------------------------------------------------------------------------------- | Cash flow from investing | -4,566 | | -4,034 | | -1,263 | | -1,710 | | activities | | | | | | | | -------------------------------------------------------------------------------- | Cash flow from financing | -2,984 | | - | | -2,984 | | - | | activities | | | | | | | | -------------------------------------------------------------------------------- | Cash flow for the period | -8,381 | | -14,00 | | -6,147 | | -26 | | | | | 3 | | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | 48,349 | | 62,173 | | 45,964 | | 48,415 | | at beginning of period | | | | | | | | -------------------------------------------------------------------------------- | Exchange differences in | -249 | | 179 | | -98 | | -40 | | cash | | | | | | | | | and cash | | | | | | | | | equivalents | | | | | | | | -------------------------------------------------------------------------------- | Cash and cash equivalents | 39,719 | | 48,349 | | 39,719 | | 48,349 | | at | | | | | | | | | end of period | | | | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | STATEMENT OF CHANGES IN | | | | | | | | | EQUITY | | | | | | | | -------------------------------------------------------------------------------- | (Amounts in SEK 000s) | | | | | | | | -------------------------------------------------------------------------------- | | 2006 | | 2005 | | | | | -------------------------------------------------------------------------------- | At beginning of year | 71,779 | | 91,502 | | | | | -------------------------------------------------------------------------------- | The year's translation | 31 | | 102 | | | | | | difference | | | | | | | | -------------------------------------------------------------------------------- | Net result for the year | 2,720 | | -19,82 | | | | | | | | | 5 | | | | | -------------------------------------------------------------------------------- | At end of year | 74,530 | | 71,779 | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | SEGMENT REPORTING | | | | | | | | -------------------------------------------------------------------------------- | Sales, SEK 000s | 2006 | | 2005 | | | | | -------------------------------------------------------------------------------- | Europe | 37,290 | | 23,249 | | | | | -------------------------------------------------------------------------------- | USA | 6,888 | | 6,796 | | | | | -------------------------------------------------------------------------------- | Asia | 32,027 | | 23,877 | | | | | -------------------------------------------------------------------------------- | Rest of world | 10,587 | | 5,684 | | | | | -------------------------------------------------------------------------------- | | 86,792 | | 59,606 | | | | | -------------------------------------------------------------------------------- -------------------------------------------------------------------------------- | KEY RATIOS 1) | 2006 | | 2005 | -------------------------------------------------------------------------------- | Return on | | | | -------------------------------------------------------------------------------- | - average shareholders' equity | 4% | | -24% | -------------------------------------------------------------------------------- | - average capital employed | 4% | | -23% | -------------------------------------------------------------------------------- | Capital employed, SEK 000s | 74,530 | | 74,763 | -------------------------------------------------------------------------------- | Number of shares, thousands | 17,208 | | 17,208 | -------------------------------------------------------------------------------- | Average number of shares, thousands | 17,208 | | 17,208 | -------------------------------------------------------------------------------- | Number of outstanding warrants, thousands | - | | - | -------------------------------------------------------------------------------- | Number of outstanding warrants with a | - | | - | | dilutive effect, thousands | | | | -------------------------------------------------------------------------------- | Average number of shares after dilution, | 17,208 | | 17,208 | | thousands | | | | -------------------------------------------------------------------------------- | Earnings per share, SEK | 0.16 | | -1.15 | -------------------------------------------------------------------------------- | Earnings per share after dilution, SEK | 0.16 | | -1.15 | -------------------------------------------------------------------------------- | Equity per share, SEK | 4.33 | | 4.17 | -------------------------------------------------------------------------------- | Equity per share after | 4.33 | | 4.17 | | dilution, SEK | | | | -------------------------------------------------------------------------------- | Equity/assets ratio | 82% | | 82% | -------------------------------------------------------------------------------- | Average number of employees | 34 | | 33 | -------------------------------------------------------------------------------- 1) The definitions of key ratios correspond to those used in the annual report. ACCOUNTING POLICIES The consolidated financial statements have been prepared in compliance with the International Financial Reporting Standards (IFRS) established by the International Accounting Standards Board (IASB) and the interpretations published by the International Financial Reporting Interpretations Committee (IFRIC) as endorsed by the European Commission for application in the EU. This consolidated interim report has been prepared in accordance with IAS 34, Interim Financial Reporting, which is consistent with the requirements stated in the Swedish Financial Accounting Standards Council's recommendation RR 31, Interim Financial Reporting for Groups. The Group applies the same accounting and valuation principles as in the 2005 annual report. Financial calendar: 24 April 2007 Annual General Meeting 24 April 2007 Interim report 1 January - 31 March 2007 23 August 2007 Interim report 1 January - 30 June 2007 25 October 2007 Interim report 1 January - 30 September 2007 The Annual General Meeting will be held on 24 April, 4:00 p.m. at Hotel Birger JarlGail Hallberg2007-06-26T00:00:00Enligt hotellets webbsida heter det “Hotel Birger Jarl” och inte “Birger Jarls Hotel”., Tulegatan 8 in Stockholm. The 2006 Annual Report will be distributed to all shareholders in March 2007 and can also be ordered by telephone +46 8-555 293 00 or via e-mail to info@biogaia.se. Stockholm, 14 February 2007 Peter Rothschild Managing Director REVIEW REPORT Introduction I have reviewed the interim report for BioGaia AB (publ), corporate registration number 556380-8723, for the period 1 January to 31 December 2006. The Board of Directors and CEO are responsible for the preparation and presentation of this interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. My responsibility is to express a conclusion on this interim financial information based on my review. Scope of review I conducted my review in accordance with the Standard on Review Engagements SÖG 2410, Review of Interim Financial Information Performed by the Independent Auditor of the Entity, issued by FAR. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Standards on Auditing in Sweden (RS) and other generally accepted auditing practices. The procedures performed in a review do not enable me to obtain a level of assurance that would make me aware of all significant matters that might be identified in an audit. Therefore, the conclusion expressed based on a review does not give the same level of assurance as a conclusion based on an audit. Conclusion Based on my review, nothing has come to my attention that causes me to believe that the accompanying interim financial information is not, in all material aspects, prepared in accordance with IAS 34 and the Swedish Annual Accounts Act. Stockholm, 14 February 2007 Lena de Rosche Authorised Public Accountant Lindebergs Grant Thornton AB BioGaia AB Box 3242 SE-103 64 STOCKHOLM Telephone: +46 8 555 293 00 www.biogaia.se Corp. reg. no. 556380-8723 For additional information contact: Peter Rothschild, Managing Director, BioGaia AB, telephone +46 8-555 293 00 Jan Annwall, Deputy Managing Director, BioGaia AB, telephone +46 8-555 293 00