Ladies and gentlemen, welcome to the BioGaia Audiocast Teleconference Q1 2022. For the first part of this call, all participants will be in listen-only mode, and afterwards there will be a question and answer session. Today, I am pleased to present CEO Isabelle Ducellier and CFO Alexander Kotsinas. Dear speakers, please go ahead.
Thank you for the introduction, and good morning, everyone. I have to admit that I'm particularly pleased with our first quarter. We are over-performing on all important parameters. Starting with one of the most important, the sales. We have a record revenue with SEK 284 million, which is a pretty strong increase, +41% versus last year, first quarter. For the one following it, you would probably remember that the first quarter last year was strong as well, but not that strong, but strong as well. This is mainly driven by strong demand worldwide and especially the comeback of Europe. On the operating profit, here as well, pretty impressive increase with +48%.
We are able to have our EBIT margin at 34%, as we are promising to do, and we have a strong operating cash flow. Next page, please. In terms of key events, I just would like to have your attention on a couple of launches. One in Brazil with our distributor, Aché, where we are launching MiniPak in a very big indication in Brazil, namely diarrhea in children. In Sweden, we launched our adult portfolio last year directly, and we managed to negotiate with our current distributor of pediatric, Semper, a semi-exclusivity. Semper will continue to sell their product based on our strain with their brands, while we have been able to launch as well our strain, the drop in pediatrics with our brand name BioGaia for the first time.
We are very happy with the way we work with Semper on that. We do believe that one plus one is going to make three. In China, we are mainly driven by our sales in pediatrics. Now we're starting to look into the adult segment, and we are launching BioGaia Prodentis Capsules. Next page, please. Looking at the sales per segment. Well, basically pediatrics +38%, adult +57% for the quarter and a strong MAT. I just would like to have your attention here as well on the adult portfolio, because if you follow us quarter after quarter, you will as well notice that the adult portfolio is over-performing every quarter, and this Q1 is particularly strong. It's mainly thanks to the Prodentis Tablets in all regions. Next page, please.
Looking at the sales per geographical market. Here we are really happy to see a +60% in EMEA. As you know, we've been suffering quite a lot during the COVID period in Europe. The good thing is that we learn from it. We learn that we have to be wherever the consumer is. Meaning in pharmacy, but as well on marketplaces or on e-commerce platform. Now you can find our product both in pharmacy and online. During this quarter we have a kind of double effect. We can leverage on our key strength, the medical marketing, and we are as well online. I'm very happy to see Italy back on track, very, very strong, but as well Spain and we name as well Eastern Europe, but I could name France, Turkey.
I mean, basically the whole EMEA region is really back on track. Hopefully, we have a limited exposure to Russia and Ukraine. Looking at the Asian and Australian market. I mean, basically a strong quarter, 11%. Here you're used to this good quarter. It seems like eleven is almost a small increase, but it's still a very strong increase. We have a MAT by 21%. I mean, for the quarter, I think it's worth to mention that South Korea performed extremely well. We're happy because we changed our distributor. We had a very traditional distributor before. Now we switched to a much more digital distributor, and it's paying back.
For Hong Kong, I mean, to be transparent, we had a pretty bad year last year, so we are recovering from a pretty bad year in Hong Kong that has suffered from both political events and the COVID restriction. Vietnam is strong quarter after quarter. Here we have a very young population with a stronger and stronger middle class buying our drops for their kids. So, Vietnam is doing well. Indonesia is doing well. If I have just to flag on one country, that might be China. It's not that we are doing a bad quarter, but it's not as strong as usual. That's basically because of the zero-tolerance policy from the Chinese government. That meant that at the beginning of the quarter, they were closing down big cities as soon as one case of COVID was noticed.
Now they are doing that not per big city, they do that per district, so it's a bit softer to handle. Our main problem is really the logistics, because if you close the district, then you cannot get in and get out. What we've been doing with our distributor is to open plenty of small new warehouses, so that in case one is in the middle of a closed district, we can continue to operate from other warehouses. That's creating hurdle to the business. If we go to Americas, strong quarter, +32%. Here, we are very happy with the full integration of Everidis, our distributor. Now the company is called BioGaia USA, and is doing as planned. Very happy with the US market.
For Latin America, we have a very strong quarter as well, with the comeback of Chile. We are happy because Chile is a very interesting major probiotic market. Brazil is kind of uncertain. I mean, they have high inflation, but still the third-world country in terms of COVID, but actually is very strong. They always have the possibility, and they are very agile despite their huge size. For our direct markets, we are very happy with the development of the sales in our new subsidiary in the U.K. We have good sales on our e-com, and we have much better sales than we thought for a very young subsidiary with a limited number of SKUs, but we have strong sales to the wholesaler that sells to pharmacy.
On the more marketing side, we are focusing on social media and on what we call the momfluencer. Influencers that are mom and targeting the young mother community. Here we have a full program in place, which means that our drops are really flying. In Finland, we have, well, a very young operation. We started to ship in Finland in September last year. As we speak, and I know that Mina, our CEO, is sitting in a bigger pharmacy conference today, we are listed in 543 pharmacies out of 800. A pretty good result for young operation.
The only direct market that has been slightly suffering is Japan, where here as well the government has a kind of very strict regulations against COVID and which make our life a bit complicated to visit the doctor clinic. Next page, please. Gross margin, I will be very brief. I mean, we are still at very high level, pretty stable, with some differences quarter per quarter, depending on pediatrics, adult, but that's mainly due to product mix effect. Nothing very specific to comment. Next page, please. We just wanted to have some comment on our two affiliates, BioGaia Pharma and MetaboGen, where regarding BioGaia, we have two clinical study ongoing and doing as planned, one in the treatment of ulcerative colitis and constipation in patient receiving opioid therapy.
As far as MetaboGen is concerned, we have one clinical efficacy study on metabolic disease that is done, and we are continuing to work on our anaerobic strain. Next page, please, Alex. Could you take us through the financials, please?
Yes. Thank you, Isabelle. If we look at the slide called Q1 Financials. To summarize our revenues, as we heard, we're at SEK 284 million, which is a growth of 41%. Our EBIT was SEK 95 million, a growth of 48%, and the margin 34% versus 32% last year. Earnings per share, 3.78% versus 2.50%. An operating cash flow of SEK 93 million versus SEK 42 million last year. Basically all figures are record high in this quarter. Move on to the next slide, the Q1 sales bridge. The sales of SEK 284 million, the 41% growth, is underlying. We have an organic growth of 24%, and we have a growth of acquisitions.
That is the acquisition of Nutraceutics in the US, Everidis, of 8% and a currency effect of 9%. Just to summarize then organically, we are growing 24%. We move on to a slide called Group OPEX. Our total costs, OPEX, grew with 32%. However, if you exclude the acquisition we made of Nutraceutics or Everidis, OPEX grew 7%. If we look at the sales costs, the main increase in the sales cost is then as mentioned in the Everidis acquisition. Apart from that, we have higher personnel costs due to restructuring cost of SEK 1.9 million in the quarter.
For admin, you will see that admin costs decreased mainly due to that we have a lower cost for evaluation of acquisition candidates of SEK 0.8 million versus SEK 2.5 million last year. We had a lower cost for impairment of right to use assets. Extraordinary items were lower so to speak this quarter. R&D costs for the company excluding MetaboGen and BioGaia Pharma decreased. This is mainly due to some phasing of clinical studies. That's the main explanation. Other costs were SEK +1.1 million due to positive currency effect. All in all, down a total OPEX of SEK 107 million versus SEK 81 million last year. Move on to the slide group profit and loss.
As mentioned then, total sales increased 41%, OpEx 32%, and EBIT increased with 48% at a margin of 34%. If we exclude the one-off items, we had an adjusted EBIT margin of 35%, which was a growth for the adjusted EBIT of also 35% versus last year. Moving on to the cash flow, we have a very high cash flow from operating activities due to the high results of SEK 81 million. Also we have a positive effect of changes in working capital of SEK 12 million, leading to record high cash flow from operating activities of SEK 93 million. As for cash flow from investing activities, it was low at SEK -5 million versus SEK 23 million last year.
Last year included the acquisitions, the investments we made in BioGaia Invest in bone health and skin health, which we did at that time, and we have not done any investments in this quarter. This all in all leads to a cash flow for the period of SEK 86 million versus SEK 17 million last year. Cash at the end of the period of SEK 1.57 billion versus SEK 1.49 billion in the same quarter last year. I've added just a balance sheet slide. It's more for reference. I will not go through this in detail, but it is just worth noting that the equity has increased from SEK 1.80 to 1.96 billion. With that, I'll hand over to Isabelle for concluding remarks.
Thank you, Alex, for all these good figures. As a conclusion, I just would like to repeat that after a good 2021, we are proud to present a very strong first quarter with 41% growth, which is mainly driven by the lifting of COVID restriction and the wider implementation in Europe and the wider implementation of our omni-channel retailing strategy of a global premium brand, BioGaia. After two years of, I would say, suffering, EMEA is recovering, and we have a super strong increase by 60%, driven by Italy, Spain, and Eastern Europe. As I said before, America has been performing well, and that's mainly thanks to the integration of our friends from Everidis and Latin America overperforming the probiotic market. In fact, you're used to this quarter after quarter increase, and indeed, we continue to do so for Q1 2022.
I would conclude by saying that this strong quarter definitively reinforce our confidence for the future of BioGaia. We know that the market is there, probiotic market is growing, and so everybody is aligned to say that it continue to grow. Despite some risk linked to high inflation and maintain strict anti-COVID policy in some countries such as Japan or China, our strategy to build a global trusted brand of probiotics anchored in science, widely available to healthcare professional and consumer, keeps paying back. I will be happy to take any question.
Thank you. Ladies and gentlemen, if you wish to ask a question, please press zero one on your telephone keypad. Our first question comes from Kristofer Liljeberg, Carnegie, please go ahead.
Yeah, hi, good morning. First question I had, were there any more significant stocking effects in the quarter we should be aware of? Of course, you always have some sort of stocking effects, but if there was something bigger that helped sales. I also wonder you had some positive commentary about U.K. and Finland. Is it maybe possible to quantify that with a little bit of figures? For example, Finland, I guess it's still way below previous sales level, but if you could give an indication of how much lower. Thank you.
Okay. Thank you, Kristofer . To address your first question about the possible stocking effect, to be honest, we've really been looking at that. When we have a sellout data, we really compare with our sell-in. We have asked distributor who has been increasing their sales a bit, I mean, so hard that we were wondering, and we have not noticed anything. Having said that, the consumer demand is high, so the stock of our distributor were low. They are planning for continued consumer growth. We have really big order, but no really stock building that we are aware of. First question. The second one regarding UK and Finland. I mean, I don't think I'm open to disclose any figures per country.
What I can do is that, UK basically, we are the one man show kind of distributor. It's pretty easy for us to overperform. Now we are on e-com. We started on Amazon, and now we have some administrative problem with Amazon that we have to solve, but we are selling there as well. We have the sales to the pharmacy. We have the wholesaler. We have recruited a person coming from the pharma and vitamins industry, so he knows all the key account manager. He has a very clear plan how to get into Boots and how to get in everything. Here it's really looking promising.
We start with one man, and the plan is to be able to increase our coverage of the UK market better. For Finland, yes, I mean, Verman was a fantastic distributor, and we were doing about SEK 18 million in Finland only. We are not back to that level or figure. When we look at the sellout, Q1, we have almost sold as much as Rela sold during the same quarter. Rela being the brand of Verman before they were buying the strain from us. Now they are buying other strains. You know, Finland is an ethical market, as we call them. Pharmacists are extremely well educated, and they are really promoting the product, but they know a lot about it.
They discover that, "Oh my goodness, but that's not the same strain in the brand anymore. What do you have for clinical data?" Then we arrive and say, "Okay, here we are. That's, you know, the familiar territory. That's us." Suddenly we got mega facings in every pharmacy because for them, we have the real stuff. Then, consumer-wise, it's a bit more complicated. I mean, the consumer might not look into, okay, which strain is it in that product or another. The pharmacists are there to tell them, "Well, you should look at that, and that's the real product." We are not back to the same level, but we are going very, very fast.
We have only two people in Finland, so it's a very lean operation, I mean organization.
Okay, thank you. Just a final quick one. China, you saw some negative effects. Have the situation worsened in the second quarter than what you saw in the first quarter?
The Q2 will be better in China than Q1. If you look at the six-month perspective, that will be okay. We had higher ambition. I mean, China, we just scratched the surface. There are so many newborns there that we know we can do much better. Now if we have to undo the logistics and wait until it's over to be able to accelerate again. That will be an okay six months, not a super six months that we could have hoped for, but nothing to be worried as we speak. I mean, now if a new variant of COVID is coming, I don't know. As we speak, I think we will be able to land on our feet at end of June.
Great. Thank you very much.
You're welcome, Kristofer.
Thank you. Our next question comes from Mattias Häggblom, Handelsbanken. Please go ahead.
Yeah, good morning. With raw material price increases and inflationary pressure in the world, any updates on planned or announced price increases that we should think about? That's my first question, please.
Yeah. You're right. That's kind of. It's happening. Raw materials are increasing. Especially, we have a kind of a difficulty to have a clear view about the price increase on our oil that we use for the drops. But we have done a cost analysis on the dry goods, on the oil, on the ingredients, on everything. We have passed on an increase to all our distributors that will be implemented by 90 days. That's the way we have our contract built, so we will be able to pass on the price increase. Obviously, nobody wants to have price increase, nor the distributor nor the consumer, but we have been obliged to do so.
Is it possible to quantify the average price increase you're taking?
I think I would like to prefer to keep that for ourselves.
Okay.
To maintain our margin, I would say.
Clear. Around the gross margin and, perhaps a question for Alexander. We had rather a high gross margin in the quarter, but I know that Q1 last year was also sort of a low point and then things improved. Is there anything we should think about in terms of seasonality, that is not clear to at least me? Or is it just mix effects that will continue to be volatile in between quarters?
Yeah. It's partly due to, like we wrote in the report, it's partly due to some mix effects that affected the margin. We have not really felt yet, so to speak, the increased costs in raw materials. That has not affected, so that is not really the explanation so far. That will come later, so to speak. The cost increases are coming gradually, but it has not affected in the quarter. It's more rather just mix effect. Plus there are some inventory effects also, so smaller inventory effects in the acquisition in the US, with the fact that they already had inventory of ours, so to speak.
There is inventory effect of that will, I think, will also exist in the next quarter and then it will move away. Those are some of the explanations for the a bit lower margin.
Maybe final question for me related to the acquisition in the U.S. I'm you know, maybe first a point of clarification. I'm still hearing investors thinking the U.S. acquisition is gonna be margin dilutive. Doesn't seem to be the case here in the first quarter. Secondly, maybe can you talk a bit more about, you know, you've now owned the company for a quarter. You know, what is going better than planned? What is perhaps taking a bit longer than you planned for?
Okay. We know the company for more than a quarter. We've been working with them since 2007. We know them very well, and that's why we decided to acquire them. They are very bullish in the U.S. When we look at the five-year plan we have in front of us that we designed together, it's very bullish, but we are leveraging on that. They are very good at the U.S. is to both handle the medical marketing and the consumer marketing. They see the medical marketing as the base. They have a major sampling campaign all the time to healthcare professionals.
You go to your pediatrician, and there is a great chance that you see samples of BioGaia on the desk of the physician. That's one way to do. I think they told me they will participate to 32 congresses, so they keep talking to healthcare professionals as a reliable ambassador for the brand. At the same time, they are super good at finding the right influencer to talk to the moms who are not, I mean, physicians how great the BioGaia Drops are. Then now they try to go into women's health, and they find new ambassadors for the Prodentis Kids. They have a very strong campaign on oral health, which is new to them.
I mean, the Prodentis Kids has been one of the best seller at Amazon for the probiotics category. We are entering a new area with the oral portfolio. The good thing with the U.S. is that it's a green market in terms of regulatory restriction. We use them as pilot for product that you have not heard about as we speak, but we test them there. If we see that there is a good response from the healthcare professional and the consumer, then we are starting to roll out in the rest of the world. I mean, it's going to be a very interesting year for us to follow in the U.S.
Thank you so much.
Thank you. Ladies and gentlemen, as a final reminder, if you wish to ask a question, please press zero one on your telephone keypad. We have no further questions. Dear speakers, back to you.
Thank you so much, and just wishing everybody a very nice day. We hear each other in a quarter. Bye-bye.
Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you all for attending. You may now disconnect.