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Sales growth and improved profitability

CEO Katarina Gabrielson comments on Oriola’s Q1 2024 results.


We had a good start of the year with net sales growing and profitability improving from the previous year. The pharmaceutical distribution market continued a steady growth and we saw the overall operating environment somewhat stabilising from last year, although consumer confidence remained weak. 

In the first quarter, Oriola’s net sales grew by 4% to EUR 375 million, driven by both Distribution and Wholesale segments. Profitability improved from the previous year and was EUR 4.0 (3.5) million. When excluding the impact of the Swedish dose dispensing business, the adjusted EBIT improved by 14% to EUR 4.5 (3.9) million. 

Profitability improvement was supported by lower operating expenses compared with the previous year, and lower freight costs. The decrease in freight costs was related to operational improvement and lower fuel prices. Oriola’s financial position has remained strong with net interest-bearing debt decreasing.

From the start of this year, we have two reporting segments – Distribution and Wholesale. This change in reporting reflects our strategy and also provides better visibility into the financial development of our business. 

In the Distribution segment, which includes pharmaceutical logistics and dose dispensing services, net sales grew by 4% to EUR 294 million and were largely driven by the steady market growth. Profitability improved by 29% to EUR 4.1 (3.2) million, supported mainly by a lower cost base compared with the previous year. In the distribution business, we focus on our core and continue to build on the steady development we saw last year. Our market shares were stable year-on-year both in Finland and Sweden. We have gained new customers and renewed important distribution contracts to support our growth going forward. 

The Wholesale segment includes the wholesale of traded goods and OTC products, parallel import, special-licensed medicines as well as advisory services. Net sales in the Wholesale segment grew by 5% to EUR 81 million, with solid growth in the Swedish wholesale business and good development of advisory services. Profitability declined slightly to EUR 2.8 (3.0) million. The profitability decline was related to lower volumes in the Finnish wholesale business. Our long-term strategic goal is to grow the wholesale business by developing our brand portfolio and product categories. Early this year, our focus has been on building our range and technical capabilities to better meet the needs of our growing customer segments. We have also made appointments in key leadership positions.

The implementation of our refined strategy, launched at the end of last year, has progressed well. A key milestone in January was the announcement of the investment to renew Oriola’s ERP (enterprise resource planning) and warehouse management in 2025-2027. This important investment aims to enhance efficiency and operational excellence, and enables us to better respond to future customer and business needs. The project was started in the first quarter and is proceeding according to plan. An essential part of rolling out the strategy is actively engaging with our senior management to ensure alignment, strengthen our common understanding and develop our leadership. This will remain a focus throughout the year. 

In the joint venture company, Kronans Apotek, e-commerce continued to grow steadily, while the weaker customer flow in the brick-and-mortar compared with Q1 2023 reduced volumes, market share and adjusted EBIT. Kronans Apotek continues to develop its customer experience and product range, both in physical and digital stores. The focus remains on long-term profitability improvement, integration activities and business development. In 2024, Kronans Apotek’s profitability is expected to be positively impacted by new legislation on pharmaceutical compensations. On 17 April, Kronans Apotek announced the appointment of Tomas Rupšys as the new CEO. Kronans Apotek is an important strategic partner for us, and we will actively support its value creation as a major shareholder. Kronans Apotek expects its full profit potential to materialise by the end of 2025.

I am very pleased with the positive beginning to the year at Oriola. With the refined strategy we have a clear direction forward and a good understanding of our long-term goals. I want to take this opportunity and thank everyone at Oriola for all their efforts at the start of the year and their commitment to our shared priorities.

Katarina Gabrielson is the CEO of Oriola Corporation. This text was published in the Q1 2024 interim report on 25 April 2024. The complete report can be downloaded from the link below.