Oriola Corporation published its Interim report 1 January–30 September 2019 on Friday, 25 October 2019 at 8.30 a.m.
President and CEO Robert Andersson on the third quarter of 2019:
“Oriola’s invoicing (EUR 917.3 million, +8.7%) and net sales (EUR 429.0 million, +16.0%) continued to grow strongly in the third quarter compared to the previous year. On a constant currency basis invoicing grew by 10.4% and net sales by 18.1%. Adjusted EBIT was EUR 9.8 million, 43.8% lower than in the previous year. Adjusted EBIT for the comparison period includes a settlement totalling EUR 9 million received from the provider of the new logistics and warehouse IT system as a contribution to costs incurred. The slower than planned ramp-up of the new distribution centre in Sweden was still impacting the quarterly profitability negatively.
Consumer net sales increased 4.6% year-on-year on a constant currency basis. Online sales grew by 33% and especially sales of prescription medicines was increasing. Consumers shift to online shopping has affected profitability. Brick and mortar pharmacy development and location optimization are increasingly important to attract consumers. As part of the pharmacy service development, we continue to open more Drop-in clinics to ensure people’s easy access to healthcare services. We plan to open eight clinics by the end of the year 2019. In September, as part of finalising the cooperation negotiations, we decided to close nine pharmacies.
Pharma continued strong growth in both operating countries. Invoicing increased 11.6% year-on-year and net sales increased 30.2% on a constant currency basis driven by the pharmaceutical market growth and changes in the current distribution agreements for pharmaceuticals. During the period we also signed new significant distribution agreements with pharmaceutical companies. In Finland, we renewed our distribution agreement with Orion and in Sweden, we signed a new distribution agreement with MSD. The Pharma result was still burdened by inefficiency of the Swedish distribution centre.
Retail continued good growth during the third quarter. Net sales increased 16.8% year-on-year on a constant currency basis. Net sales was driven by the growing number of the dose patients. Year-on-year growth was 66%, and at the end of the period we served a total of more than 116.000 patients. Retail result was still burdened by inefficiency of the Swedish distribution centre.
Oriola’s strategic programmes, 20by20 Excellence and Customer Experience, are progressing according to plan. In September, we finalised cooperation negotiations which were part of the 20by20 Excellence programme. Target of the programme is to deliver EUR 20 million annualised savings compared to the 2018 cost level. Savings are expected to materialise with full effect by the end of 2020. Customer experience has been systematically developed during the year and customer satisfaction has developed positively.”