Oriola Corporation’s Interim Report January-September 2023
31.10.2023
Oriola Corporation Stock Exchange Release 31 October 2023 at 8.30 a.m. EET
Oriola Corporation’s Interim Report January-September 2023
Solid sales growth in Distribution business, strong financial position
July–September 2023 highlights
- Invoicing was EUR 861.7 (870.6) million and slightly below the previous year’s level. On a constant currency basis, invoicing increased by 5.7% and was EUR 920.6 million.
- Net sales decreased by 5.7% to EUR 352.6 (373.9) million. On a constant currency basis, net sales increased by 0.7% and were EUR 376.5 million.
- Adjusted EBIT was EUR 4.4 (6.6) million. On a constant currency basis, the adjusted EBIT was EUR 4.7 million.
- EBIT was EUR -17.1 (6.3) million and included adjusting items of EUR -21.6 (-0.3) million mainly related to an impairment loss on goodwill in Dose dispensing cash generating unit. On a constant currency basis, EBIT was EUR -16.9 million.
- Profit for the period totalled EUR -20.2 (5.3) million and earnings per share were EUR -0.11 (0.03).
Excluding Swedish dose business:
- After the reporting period, Oriola announced the sale of Svensk dos AB to Apotekstjänst Sverige AB and issued a new outlook.
- Net sales were EUR 350.6 (354.0) million.
- Adjusted EBIT was EUR 5.2 (4.8) million.
January–September 2023 highlights
- Invoicing decreased by 1.4% to EUR 2,624.4 (2,661.2) million. On a constant currency basis, invoicing increased by 4.3% and was EUR 2,775.6 million.
- Net sales decreased by 4.4% to EUR 1,090.9 (1,141.3) million. On a constant currency basis, net sales increased by 1.1% and were EUR 1,153.4 million.
- Adjusted EBIT was EUR 11.3 (16.8) million. On a constant currency basis, the adjusted EBIT was EUR 11.9 million.
- EBIT was EUR -10.5 (16.6) million and included adjusting items of EUR -21.8 (-0.2) million mainly related to an impairment loss on goodwill in Dose dispensing cash generating unit. On a constant currency basis, EBIT was EUR -9.9 million.
- Profit for the period totalled EUR -17.9 (12.9) million and earnings per share were EUR -0.10 (0.07).
Excluding Swedish dose business:
- Net sales were EUR 1,075.3 (1,081.1) million.
- Adjusted EBIT was EUR 13.3 (10.2) million.
| Key figures | 2023 | 2022 | Change | 2023 | 2022 | Change | 2022 |
| EUR million | 7-9 | 7-9 | % | 1-9 | 1-9 | % | 1-12 |
| Continuing operations | |||||||
| Invoicing | 861.7 | 870.6 | -1.0 | 2,624.4 | 2,661.2 | -1.4 | 3,568.0 |
| Net sales | 352.6 | 373.9 | -5.7 | 1,090.9 | 1,141.3 | -4.4 | 1,515.5 |
| Adjusted EBIT1, 2 | 4.4 | 6.6 | -33.2 | 11.3 | 16.8 | -32.7 | 19.7 |
| EBIT | -17.1 | 6.3 | -371.0 | -10.5 | 16.6 | -163.0 | 9.5 |
| Adjusted EBIT % | 1.3 | 1.8 | 1.0 | 1.5 | 1.3 | ||
| EBIT % | -4.9 | 1.7 | -1.0 | 1.5 | 0.6 | ||
| Profit for the period | -20.2 | 5.3 | -482.2 | -17.9 | 12.9 | -239.4 | 4.8 |
| Earnings per share, EUR, continuing operations | -0.11 | 0.03 | -0.10 | 0.07 | 0.03 | ||
| Earnings per share, EUR, discontinued operations | 0.05 | 0.12 | -0.04 | ||||
| Net cash flow from operating activities3 | 10.1 | -25.8 | -13.3 | 41.8 | 77.9 | ||
| Gearing, % 3 | -0.9 | 15.5 | -10.5 | ||||
| Equity ratio, % 3 | 19.3 | 21.8 | 23.8 | ||||
| Return on capital employed (ROCE), % 3 | -4.2 | 4.9 | 2.4 |
1 Year 2022 Adjusted EBIT and EBIT have been restated and exclude the share of result in joint venture.
2 Adjusting items are specified in note Adjusting items.
3 Comparative figures include continuing and discontinued operations.
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 the “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 Alternative performance measures in the notes to this Interim Report.
Outlook for 2023
Oriola issued a new outlook on 13 October 2023:
Oriola expects the adjusted EBIT, excluding the dose dispensing business in Sweden, for the year 2023 to be on the same level as adjusted EBIT for 2022 (EUR 19.7 million).
Oriola’s adjusted EBIT, excluding the dose dispensing business in Sweden, for the year 2022 was EUR 11.9 million. The adjusted EBIT for the dose dispensing business in Sweden was EUR 7.8 million in 2022 and EUR -1.2 million in Q1-Q2 2023.
The recent overall inflationary environment and related cost pressures may have an impact on Oriola’s profitability.
Oriola’s adjusted EBIT in 2022 was EUR 19.7 million, excluding the contribution from the joint venture company Swedish Pharmacy Holding AB.
CEO Katarina Gabrielson:
The stable sales development continued in the third quarter. Oriola’s net sales on a constant currency basis were EUR 376.5 million, which is at last year’s level. We saw good development in our core business, the Distribution of pharmaceuticals, especially in Sweden. This has offset the negative impact of lower volumes in the Swedish dose dispensing business. Our share of the pharmaceutical distribution market remained stable both in Sweden and Finland. During the third quarter the overall development in the pharmaceutical distribution market was a bit softer than during the first half of the year, although we believe that the solid underlying long-term market drivers remain unchanged.
Adjusted EBIT declined from the previous year to EUR 4.4 (6.6) million. Profitability in the third quarter was mainly burdened by lower volumes in the Swedish dose dispensing business and as the Swedish krona has further weakened it has had some impact on the EBIT-line as well. Adjusted EBIT on a constant currency basis was EUR 4.7 million. Adjusted EBIT excluding Swedish dose business was EUR 5.2 (4.8) million. Operating expenses were below last year’s level mainly following the restructuring of the Swedish dose dispensing business. Oriola’s financial position has remained strong with a positive cash flow from operating activities in the third quarter and net working capital at a normalised level. At the end of the reporting period, net debt was close to zero.
In the third quarter, we have continued to focus on developing our commercial and supply chain excellence while ensuring profitability, efficiency and a collaborative culture. We have continued to strengthen our commercial capabilities with training and our focus is strongly on enhancing our understanding of how we can increasingly create relevance and value to our customers. The tighter collaboration between the sales teams and supply-demand planning improves our efficiency in deliveries.
The decline of adjusted EBIT in the joint venture company Kronans Apotek related to lower revenues compared to Q2 mainly affected by customer flows. A focus within Kronans Apotek remains on operations and integration activities, and synergies are proceeding according to plan.
In October, after the reporting period, we announced the sale of Svensk dos AB to Apotekstjänst Sverige AB. Consequently, we will exit the dose dispensing business in Sweden. Svensk dos has lost market share during the past 12 months and in our ongoing strategy review we have not identified a recovery in the foreseeable future of the business due to the prevailing Swedish tender market conditions. While this transaction gives continuity to Svensk dos, it also supports our decision to strengthen focus on our core distribution business. The transaction is subject to approval by the Swedish Competition Authority, and we expect it to be completed no later than in the first quarter of 2024. Going forward, we aim to deepen our pharmacy health products supply cooperation with Apotekstjänst.
In connection with the announcement about Svensk dos AB, we gave a new outlook for 2023. We expect the adjusted EBIT, excluding the dose dispensing business in Sweden, for the year 2023 to be on the same level as adjusted EBIT for 2022 (EUR 19.7 million). The recent overall inflationary environment and related cost pressures may have an impact on Oriola’s profitability.
We continue to focus on the long-term transformation of Oriola. Our people have shown great dedication and motivation during the whole year, and this is something I am very proud of.
Disclosure procedure
This stock exchange release is a summary of Oriola Corporation’s Interim Report January-September 2023. The complete report is attached to this release in pdf format and is also available on Oriola’s website at www.oriola.com/investors.
Analyst and investor meeting at 10.00 a.m. EET
Oriola’s CEO Katarina Gabrielson and CFO Timo Leinonen will present the Q3 Interim Report at a live webcast meeting today at 10.00 a.m. EET. Please join meeting here: https://oriola.videosync.fi/q3-2023
Next financial report
Oriola will publish its Financial Statements Release for January-December 2023 on 16 February 2024.
Further information:
Timo Leinonen
CFO
email: timo.leinonen@oriola.com
Mikael Wegmüller
VP, Communications and Sustainability
email: mikael.wegmuller@oriola.com
Distribution:
Nasdaq Helsinki Ltd
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