Press Release, 12 February, 2009 (13 pages) BioGaia AB Year-end Report 2008 (Figures in brackets refer to the same period of last year) * Net sales amounted to SEK 145.2 million (106.6), an increase of SEK 38.6 million (36%) compared to the previous year. * Operating profit was SEK 25.8 million (8.9), up by SEK 16.9 million compared to the previous year. * Profit before tax was SEK 24.0 million (10.7), an improvement of SEK 13.3 million compared to the previous year. This figure includes an unrealised foreign exchange loss of SEK 4.5 million on forward exchange contracts. * Profit after tax was SEK 36.1 million (19.7), an increase of SEK 16.4 million compared to the previous year. Profit for the period includes a deferred tax benefit of SEK 12.1 million (9.0). * Earnings per share were SEK 2.10 (1.14). * The year's cash flow from operating activities before change in working capital was SEK 32.4 million (15.8). Total cash flow for the year was SEK 14.3 (3.3). Cash and cash equivalents at 31 December 2008 amounted to SEK 58.1 million (43.0). * The Board proposes to the upcoming AGM that a dividend be paid to the shareholders. Key events in the fourth quarter of 2008 * BioGaia invests in LifeTop Cap through new subsidiary - CapAble AB. * New study confirms that BioGaia's oral health products counteract gingivitis. * Agreement with Delta Medical for the sale of BioGaia's Probiotic drops and tablets in Kazakhstan and tablets in Ukraine. * Agreement with Ferring for the sale of BioGaia's Probiotic drops in Ireland and drops and tablets in the Middle East. * Delivery of LifeTop Straw to China started. * BioGaia's subsidiary CapAble signs agreement with Mass Probiotics for the sale of LifeTop Cap in North America. Key events after the end of the financial year * BioGaia's subsidiary CapAble signs agreement with Aqua Scandik for the sale of LifeTop Cap with Reuteri in Mexico."I am very pleased with BioGaia's continued sales growth and dramatic increase in earnings during the past year, which has motivated the Board to propose payment of a shareholder dividend. Because of our strong financial position, this limited capital outflow will not affect our opportunities for expansion. We are seeing sustained strong demand for our products and expect to launch our products in many new countries during 2009," says President Peter Rothschild. Latest press releases from BioGaia: 2009-01-12 CapAble signs agreement in Mexico 2008-12-19 BioGaia's subsidiary CapAble signs agreement for LifeTop(TM) Cap in North America 2008-12-15 BioGaia signs distribution agreement for Ireland and Middle East For additional information contact Peter Rothschild, President, telephone: +46 8 -555 293 00 Jan Annwall, Executive Vice President, 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 Nasdaq OMX Nordic Exchange Stockholm. www.biogaia.se