Oriola-KD's updated strategy, new operating model and long-term financial targets
Oriola-KD Corporation Stock Exchange Release 18 August at 8.30 a.m.
Oriola-KD's updated strategy, new operating model and long-term financial
On 17 August 2015, as part of the company's annual strategy work, Oriola-KD's
Board of Directors approved the company's updated strategy, new operating model
and new long-term financial targets.
Changing business environment
People are more interested in their own health and live longer. Awareness and
spending on health and wellbeing is increasing. Consumers are more demanding and
technically advanced, thus expecting services 24/7. The retail business is
becoming increasingly digital and hence digital services are becoming a
Also the pharmaceutical markets are undergoing a change. The roles of various
operators are changing, new actors are entering the markets and at the same time
markets are consolidating. Pharmaceutical companies are becoming specialised and
are focusing on their core businesses. Digitalization has an impact on all
operators and the need for digital services is growing. These changes are
increasing demand for new services.
The share of ageing population is growing leading into increasing need for
healthcare related services. These changes create new business opportunities in
public and private healthcare.
Strategy - The Channel for Health
Oriola-KD helps consumers to improve their wellbeing. In its own pharmacies,
Oriola-KD offers expert advice on health and wellbeing and an extensive and
high-quality selection of products. To healthcare operators in Sweden, Finland
and the Baltic countries, Oriola-KD offers a wide selection of services. Oriola-
KD unites consumers and pharmaceutical companies in a unique way. Oriola-KD
provides pharmaceutical companies an effective access to markets and improves
consumers' wellbeing by ensuring that pharmaceuticals, health products and
services are delivered in a safe and customer-friendly manner.
New business areas
Oriola-KD is changing its operating model in order to meet the challenges of the
changing business environment and to serve customers even better. Oriola-KD's
operations will be divided into three business areas and operating segments:
Consumer, Services and Healthcare.
The Consumer business area focuses on the needs of consumers' in health and
wellbeing related products and services. The business area will be headed by
Lars Birkeland, Vice President, Consumer business.
The Services business area offers tailored services to pharmaceutical companies,
pharmacies and other customer groups. The business area will be headed by Kimmo
Virtanen, Executive Vice President, Services business.
The Healthcare business area offers services to hospitals, healthcare centres
and other healthcare sector operators. The business area will be headed by
Thomas Gawell, Vice President, Healthcare business.
The new operating model and responsibilities will be in force starting 1 January
Oriola-KD's Group Management Team's responsibilities as of 1 January 2016:
* Eero Hautaniemi, President and CEO
* Sari Aitokallio, CFO
* Lars Birkeland, Vice President, Consumer Business
* Thomas Gawell, Vice President, Healthcare Business
* Jukka Mäkelä, Vice President, Development
* Teija Silver, Vice President, HR
* Kimmo Virtanen, Executive Vice President, Services Business
Oriola-KD has a nationwide pharmacy chain Kronans Apotek in Sweden, skilled
personnel and an in-depth knowledge of consumer needs.
Oriola-KD has a strong position in health and wellbeing and prescription
medicine markets. Oriola-KD continues to develop its pharmacy chain and customer
loyalty programme and will have a strong focus on the development of digital
In Sweden, Oriola-KD will launch digital business for consumers and
professionals during the autumn 2015. In Finland and the Baltic countries the
company will continue to develop its existing oriolashop.fi and
internetaptieka.lv digital channels and to broaden the consumer offerings.
Oriola-KD is a reliable and well-known partner for healthcare actors in Sweden,
Finland and the Baltic countries. Oriola-KD focuses on long-term customer
relationships and wide service offering covering pharmaceutical distribution,
branded products and other tailored services.
There are many growing business opportunities in the healthcare market, such as
hospital pharmaceutical care, dose dispensing and home distribution of
pharmaceuticals. Oriola-KD is investigating opportunities for expansion into
these new business areas.
Investments supporting the strategy
To support its strategy Oriola-KD will invest in improving its operational
efficiency and strengthening company's market position. To support this Oriola-
KD's Board of Directors has decided on additional investments, of about EUR 20
million, into Group's IT systems and the logistics centre in Finland. These
investments will be realized over the following three years.
New long-term financial targets
Long-term financial targets:
* Business growth at the rate of the market
* Annual EPS growth over 5 per cent without non-recurring items
* Return on capital employed of over 20 per cent
* Adjusted gearing ratio of 30-60 per cent*
*Non-recourse trade receivables are added to the net debt
Oriola-KD's aim is to pay out an increasing annual dividend of at least 50 per
cent of its earnings per share.
Oriola-KD's President and CEO, Eero Hautaniemi:
"Oriola-KD has a solid position in consumer and services business in the
pharmaceutical markets in Sweden, Finland and Baltic countries. We see new
opportunities in the growing healthcare markets. With our new strategy and
operating model, we can even better respond to our customers' needs. By
streamlining our operations and unifying our processes we provide better
services to our customers and improve our efficiency."
Capital Markets Day on 9 September 2015
Oriola-KD will host a Capital Markets Day for investors, analysts and media
representatives on 9 September 2015 in Stockholm. The aim of the event is to
provide information about Oriola-KD's updated strategy, new operating model and
long-term financial targets. To register for the event and to find out more,
please visit www.oriola-kd.com/CMD.
President and CEO
President and CEO
tel. +358 (0)10 429 2109
tel. +358 (0)10 429 2112
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FI-02200 Espoo, Finland