Oriola Corporation’s Interim report 1 January–31 March 2022

Oriola Corporation Stock Exchange Release 28 April 2022 at 8.30 a.m.

Oriola Corporation’s Interim report 1 January–31 March 2022

Q1 2022: Turnaround actions and market demand improved profit – market environment uncertain

Reporting information for 2021 has been restated to reflect Oriola’s operating model change announced October 2021 and February 2022 announced framework merger agreement with Euroapotheca for combining the respective pharmacy businesses in Sweden. Restated information, which was published on 26 April 2022, contained the new segment structure. Continuing operations is combining the old business areas Pharma and Retail into new Oriola Services segment, and discontinued operations consist of Consumer segment including pharmacy operations in Sweden, which are planned to be merged with Euroapotheca’s Apoteksgruppen.

January–March 2022 highlights

Continuing operations

• Invoicing increased by 6.3% to EUR 886.7 (834.1) million. On a constant currency basis invoicing increased by 8.9% and was EUR 908.0 million.
• Net sales increased by 7.6% to EUR 372.7 (346.4) million. On a constant currency basis net sales increased by 10.2% and were EUR 381.9 million.
• Comparable adjusted EBIT was EUR 4.7 (0.9) million. On a constant currency basis, the comparable adjusted EBIT was EUR 4.8 million.
• Adjusted EBIT was EUR 4.7 (0.9) million. On a constant currency basis, the adjusted EBIT was EUR 4.8 million.
• Profit for the period totalled EUR 2.1 (-0.2) million and earnings per share were EUR 0.01 (-0.00).

Discontinued operations

• Invoicing increased by 2.6% to EUR 209.6 (204.3) million. On a constant currency basis invoicing increased by 6.3% and was EUR 217.1 million.
• Net sales increased by 2.7% to EUR 205.1 (199.7) million. On a constant currency basis net sales increased by 6.4% and were EUR 212.4 million.
• Comparable adjusted EBIT was EUR 6.8 (-0.6) million. On a constant currency basis, the comparable adjusted EBIT was EUR 7.0 million.
• Adjusted EBIT was EUR 10.3 (-0.6) million. On a constant currency basis, the adjusted EBIT was EUR 10.6 million.
• Adjusted EBIT includes a positive impact EUR of 3.5 million from lower depreciations, as discontinued operations’ non-current assets are classified as held for sale and not depreciated. Comparable adjusted EBIT excludes the positive impact from depreciations.

Continuing and discontinued operations

• Invoicing increased by 6.2% to EUR 1 000.7 (942.5) million. On a constant currency basis invoicing increased by 8.9% and was EUR 1 026.1 million.
• Net sales increased by 7.1% to EUR 482.3 (450.2) million. On a constant currency basis net sales increased by 10.0% and were EUR 495.3 million.
• Comparable adjusted EBIT was EUR 11.5 (0.3) million. On a constant currency basis, the comparable adjusted EBIT was EUR 11.8 million.
• Adjusted EBIT was EUR 15.0 (0.3) million. On a constant currency basis, the adjusted EBIT was EUR 15.4 million.
• Adjusted EBIT includes a positive impact of EUR 3.5 million from lower depreciations, as discontinued operations’ non-current assets are classified as held for sale and not depreciated. Comparable adjusted EBIT excludes the positive impact from depreciations.

 

Key figures	2022	2021	Change	2021
EUR million	1-3	1-3	%	1-12
Continuing operations
Invoicing	886.7	834.1	6.3	3,506.9
Net sales	372.7	346.4	7.6	1,452.2
Comparable adjusted EBIT1	4.7	0.9		14.9
Adjusted EBIT1	4.7	0.9		14.9
EBIT	3.3	-0.0		10.7
Adjusted EBIT %	1.3	0.3		1.0
EBIT %	0.9	-0.0		0.7
Profit for the period	2.1	-0.2		8.6
Earnings per share, EUR, continuing operations	0.01	-0.00		0.05
Earnings per share, EUR, discontinued operations	0.04	-0.01		0.01
Continuing and discontinued operations
Invoicing	1,000.7	942.5	6.2	3,959.1
Net sales	482.3	450.2	7.1	1,882.4
Comparable adjusted EBIT1, 4	11.5	0.3		26.3
Adjusted EBIT1, 2	15.0	0.3		26.3
EBIT2	13.2	-0.5		20.5
Comparable adjusted EBIT %4	2.4	0.1		1.4
Adjusted EBIT %2	3.1	0.1		1.4
EBIT %2	2.7	-0.1		1.1
Net cash flow from operating activities3	28.7	-14.2		40.0
Gearing, % 3	34.3	94.7		46.5
Equity ratio, % 3	19.1	14.1		20.1
Return on capital employed (ROCE), % 3	12.6	-0.5		4.6

 

 

1 Adjusting items are specified in note 13. Adjusting items.

2 The periods presented in the table are not fully comparable because when a non-current asset is classified as held for sale, it is not depreciated.

3 Includes discontinued operations.

4 Includes depreciations for the period in which the non-current assets are classified as held for sale.

In order to reflect the underlying business performance and to enhance comparability between financial periods Oriola discloses certain performance measures of historical performance, financial position and cash flows, as permitted in “Alternative performance measures” guidance issued by the European Securities and Markets Authority (ESMA). These measures should not be considered as a substitute for measures of performance in accordance with the IFRS. The calculation methods of these measures are provided in note 12. Alternative performance measures in the notes to this Financial Statements Release.

Outlook for 2022

The comparable adjusted EBIT is estimated to increase from the 2021 level.

The COVID-19 pandemic continues and severity as well as duration of the pandemic remain unclear in Oriola’s operating environment. Furthermore, the recent overall inflationary increases and related cost pressures may have a significant impact on Oriola’s profitability.

The outlook remains based on current group structure, including both continuing operations and discontinued operations. The comparable adjusted EBIT in 2021 was EUR 26.3 million.

CEO Katarina Gabrielson:

“In the first quarter, both Oriola's continuing operations and discontinued operations generated good results. This was driven by high market demand and increased sales as well as progressing turnaround actions, especially in operational efficiency. Also, the strong performance in dose dispensing business continued. In February, we announced the planned merger with Euroapotheca for pharmacy operations in Sweden. Due to this we are reporting our Consumer business as discontinued operations.

During the first quarter we continued our short-term action plan to secure Oriola’s turnaround. We proceeded with strict cost control, improved efficiency and commercial excellence in many areas. To streamline our business further, we implemented the new operating model in the beginning of the year. In March, we announced the decision to sell our pharmacy staffing business in Finland.

We are committed to continue to work with the turnaround actions consisting of four key elements: cost savings, efficient net working capital management, excellent customer relationship management and commercial excellence. The impact of these actions will gradually become visible during 2022.

Year 2022 has started under extraordinary circumstances in Europe. After two pandemic years we are witnessing Russia's military offensive against Ukraine. This together with the prolonging COVID-19 restrictions especially in China have caused uncertainty and further increased inflation in the global market.

During the turnaround our focus is to reach our goals as well as to secure the wellbeing of our employees. I want to thank all our employees for doing their best during the pandemic and contributing to the turnaround activities, I am extremely pleased with the work done by the whole organisation. With our committed employees we as a company are every day doing our utmost to secure pharmaceuticals availability on the market according to our purpose “Health for life”.

Disclosure procedure

This stock exchange release is a summary of Oriola Corporation’s Interim Report January–March 2022. The complete report is attached to this release in pdf format and is also available on Oriola’s website at https://www.oriola.com

Analyst and investor meeting

Oriola Corporation will organise a live-webcast meeting for investors, analysts and the press on Thursday, 28 April 2022 at 10.00 a.m. The event can be followed as a live-webcast accessible through this link: https://oriola.videosync.fi/2022-q1.

Further information:

Tuula Lehto
VP, Communications and Sustainability
tel. +358 40 5885 343
email: tuula.lehto@oriola.com

Sari Pohjonen, CFO
email: investor.relations@oriola.com

Distribution:
Nasdaq Helsinki Ltd.
Key media

Released by:
Oriola Corporation
Corporate Communications
Orionintie 5
FI-02200 Espoo, Finland
www.oriola.com