Oriola Corporation published its financial statements release 1 January-31 December 2018 on Friday, 22 February 2019 at 3.00 p.m.
President and CEO Robert Andersson:
“Oriola’s invoicing on a constant currency basis (EUR 3,674.4 million, +10.1% from previous year) and net sales performance on a constant currency basis (EUR 1,626.2 million, +6.5% from previous year) were strong in 2018. Weaknesses in efficiency, high operational costs, Hehku investment as well as a weak Swedish Krona burdened our EBIT the whole year. However, our net cash flow from operating activities was positive throughout the year, totalling EUR 102.8 million in 2018.
Services Business Area invoicing increased 11.7% and net sales increased 4.2% on a constant currency basis in the fourth quarter compared to the corresponding period last year, but the profitability was affected by inefficiencies in logistics, which mainly were driven by delayed Enköping distribution centre ramp-up. For the Consumer Business Area the final quarter of 2018 was difficult because of strong competition but our online sales continued to grow faster (+73%) than the market (+35%). Healthcare Business Area progressed as planned. Net sales grew on a constant currency basis by 10.9% compared to corresponding period last year.
Our challenging year led us to take decisive steps forward. We renewed leadership, changed ERP-implementation partner, decided to discontinue the Hehku business and established a new customer focused organisation which is able to serve our customers in a holistic way in the growing health and wellbeing market. Our new Business Area organisation is based on customer segments. We also created a new function, “Operations”, which is focusing on efficient and lean operations, scaling sourcing capabilities and developing logistics for fast-growing e-commerce needs.
Year 2019 is full of initiatives to strengthen our business. We are starting the Enköping distribution centre ramp-up during the first quarter to secure capacity and efficiency of our business in the growing Swedish market, with modern and automated processes. By developing our digital service-approach in Kronans Apotek, we want to ensure our capability to serve the growing online demand, but also to build a strong omni-channel experience. This experience includes elements supplied by partly-owned Doktor.se and our own health support experts in Sweden.
This year will be an important milestone to implement and execute the next steps in our transformation. We have recognised and understand our operational challenges in efficiency, in costs and in processes. Key to solve these is to improve customer focus and execution. We have decided to start the 20by20 Excellence programme to systematically review operations and resources to ensure efficient and high-quality operations as well as reduce costs. I’m confident we are on the right track to offer a stronger performance in coming years.”