To Newsroom
Oriola-KD Corporation's Interim Report for 1 January-31 March 2016
22.4.2016
Oriola-KD Corporation Stock Exchange Release 22 April 2016 at 8.30 a.m.
Oriola-KD Corporation's Interim Report for 1 January-31 March 2016
Financial performance January-March 2016
* Invoicing, indicating volume of the business, increased by 5.2 (7.9) per
cent to EUR 834.4 (793.3) million
* Net sales decreased by 2.4 (increased by 3.0) per cent to EUR 401.3 (411.3)
million
* Net sales at comparable exchange rate was EUR 399.6 million
* Adjusted EBITDA increased by 7.6 (decreased by 0.7) per cent to EUR 20.1
(18.7) million
* Adjusted operating profit was EUR 13.9 (13.1) million
* Adjusted operating profit at comparable exchange rate was EUR 13.9 million
* Profit for the period totalled EUR 10.1 (7.4) million and earnings per share
were EUR 0.06 (0.05)
Key figures 2016 2015 Change 2015
EUR million 1-3 1-3 (1)) % 1-12
-------------------------------------------------------------------------------
Continued operations
Invoicing 834.4 793.3 5.2 3,262.2
Net sales 401.3 411.3 -2.4 1,626.3
Adjusted EBITDA (2)) 20.1 18.7 7.6 83.4
EBITDA 20.1 17.3 16.2 85.1
-------------------------------------------------------------------------------
Adjusted operating profit
(2)) 13.9 13.1 6.2 60.8
Operating profit 13.9 11.7 18.8 62.6
Adjusted operating profit % 3.5 3.2 3.7
Operating profit % 3.5 2.9 3.8
Profit for the period 10.1 7.4 35.4 44.5
-------------------------------------------------------------------------------
Earnings per share, EUR 0.06 0.05 22.3 0.25
Net cash flow from operating
activities -26.8 13.3 85.6
Return on equity (ROE), % 23.2 24.2 29.1
Gearing, % 28.2 41.7 3.4
-------------------------------------------------------------------------------
(1) )Equity-related key figures restated as a result of correction of an error
relating to previous financial periods. Correction was made in 2015 Financial
Statements.
(2)) Adjustments to EBITDA and operating profit exclude gains or losses from
the sale or discontinuation of business operations or assets, gains or losses
from restructuring business operations, and impairment losses of goodwill and
other non-current assets, or other income or expenses arising from rare events
and, changes in estimates regarding the realisation of contingent
consideration arising from business acquisitions.
Outlook for 2016
Oriola-KD estimates its full-year net sales to remain at the 2015 level on
constant currency basis. Adjusted operating profit is estimated to remain at
2015 level or to increase, on a constant currency basis. Full-year net sales in
2015 were EUR 1,626.3 million and adjusted operating profit was EUR 60.8
million.
President and CEO Eero Hautaniemi's comments regarding the financial statements
release:
The markets both in Finland and Sweden grew at healthy pace. In Consumer
business our growth continued to be slightly below market, but the sales mix
developed favorably supporting the profitability despite the costs related to
new pharmacy openings in Sweden and start-up costs in Finland. Services
performed well helped by volume growth and efficiency improvement. In Healthcare
the Svensk Dos acquisition was successfully closed and integration started
according to the plan. In general, the year started with a solid performance
across the board.
Oriola-KD Corporation's interim report 1 January-31 March 2016
The commentary of this interim report focuses on the January-March 2016 result.
A comparison in accordance with the International Financial Reporting Standards
(IFRS) has been carried out on the figures for the corresponding period in
2015, unless otherwise stated. The figures in this interim report are unaudited.
The figures in the tables have been rounded independently.
2016 2015 2015
Key Figures 1-3 1-3 (1)) 1-12
-------------------------------------------------------------------------------
Goodwill, EUR million 269.9 253.7 256.5
Equity, EUR million 180.9 150.6 194.6
Interest-bearing debt, EUR
million 146.6 199.9 128.6
Net interest-bearing debt, EUR
million 50.9 62.7 6.6
Total assets, EUR million 950.5 961.6 946.9
Equity ratio, % 19.6 16.0 21.1
Return on equity (ROE), % 23.2 24.7 29.1
Return on capital employed
(ROCE), % 18.3 15.1 19.9
Gearing, % 28.2 41.7 3.4
Net debt / 12-month EBITDA 0.6 0.7 0.1
Equity per share, EUR 1.00 0.83 1.07
Earnings per share, continuing
operations, EUR 0.06 0.05 0.25
Earnings per share, incl.
discontinued operations, EUR 0.06 0.04 0.25
Average number of shares, 1000
pcs (2) ) 181,362 158,504 177,502
Average number of personnel 2,404 2,301 2,327
Number of personnel at the end of
the period 2,425 2,256 2,353
Gross investments, EUR million 25.6 3.4 20.4
(1)) Equity-related key figures restated as a result of correction of an error
relating to previous financial periods. Correction was made in 2015 Financial
Statements.
(2)) Treasury shares held by the company
not included
Changes in the Group Structure in January-March 2016
Oriola-KD completed the acquisition of the Swedish dose dispensing company
Svensk Dos AB on 8 February 2016. Svensk Dos is reported as part of Oriola-KD
Healthcare Business.
The Group's net sales and result for January-March 2016
Oriola-KD's net sales decreased by 2.4 (increased by 3.0) per cent to EUR 401.3
(411.3) million and adjusted operating profit increased by 6.2 (decreased 2.5)
per cent to EUR 13.9 (13.1) million. Operating profit was EUR 13.9 (11.7)
million. January-March net sales at comparable exchange rate EUR/SEK was EUR
399.6 million.
The decrease in net sales was due to changes in volumes between ownership and
consignment stock, the volume of the business (measured by invoicing) as whole
increased by 5.2 per cent. Profitability was supported by positive margin
development, whereas the operative and amortization costs increased due to new
businesses and pharmacies.
The appreciation of the Swedish krona from the corresponding period positively
affected the euro denominated operating profit by approximately EUR 0.1 million.
In the comparative period the depreciation of the Swedish krona negatively
affected the euro denominated operating profit by approximately EUR 0.6 million.
Profit after financial items was EUR 12.9 (9.8) million and profit for the
period was EUR 10.1 (7.4) million. Oriola-KD's net financial expenses were EUR
1.0 (2.0) million. Income taxes were 2.8 (2.3) which corresponds to effective
tax rate of 22.0 (23.8) per cent. Earnings per share were EUR 0.06 (0.05).
Reportable segments
Oriola-KD's reportable segments as of 1 January 2016 are Consumer, Services and
Healthcare.
Consumer
The Consumer segment focuses on the needs of the consumers' for health and
wellbeing related products and services. The business consists of retail
business in Sweden, Finland and Latvia, whereof over 90 per cent of the net
sales originates from the Swedish retail business.
Key Figures 2016 2015 Change 2015
EUR million 1-3 1-3 % 1-12
------------------------------------------------------------------
Invoicing 203.9 196.9 3.6 794.4
Net Sales 199.2 192.8 3.3 777.1
Adjusted operating profit 7.7 7.6 0.9 33.7
Operating profit 7.7 7.6 0.9 33.7
Adjusted operating profit % 3.9 3.9 4.3
Operating profit % 3.9 3.9 4.3
Number of personnel at the end of period 1,616 1,515 1,574
------------------------------------------------------------------
January-March 2016
The pharmaceutical retail market in Sweden grew by 5.2 (9.6) per cent in Swedish
krona (source: Apoteksförening) in January-March 2016. Parallel imports' share
of the Swedish pharmaceutical market was approximately 10.5 (10.9) per cent
(source: IMS Health). Based on Oriola-KD's estimate the number of pharmacies in
Sweden increased by 14 pharmacies in the first quarter, at the end of March
there were 1,372 pharmacies in Sweden.
Oriola-KD's market share of the pharmaceutical retail market in Sweden in
January-March 2016 was 18 (19) per cent (source: Apoteksförening). At the end of
the reporting period, Oriola-KD had a total of 314 (306) pharmacies of which
312 (304) were in Sweden and 2 (2) were in Latvia. Oriola-KD established three
new pharmacies, and agreed to take over two pharmacies from Apotek Hjärtat in
January-March 2016. The take-over is estimated to be completed during the second
quarter of 2016. In Sweden and Latvia, Oriola-KD has internet pharmacies and in
Finland the webshop Oriolashop.fi selling traded goods to healthcare
professionals.
The relative share of OTC and traded goods from the net sales was 27.0 (25.7)
per cent in the Swedish consumer business. The net sales increased by 3.3 (0.7)
per cent to EUR 199.2 (192.8) million, and on a constant currency basis, net
sales increased by 2.8 (6.4) per cent. Adjusted EBITDA was EUR 12.0 (11.7)
million and EBITDA was EUR 12.0 (11.7) million. Adjusted operating profit
increased by 0.9 (3.8) per cent to EUR 7.7 (7.6) million. On a constant currency
basis adjusted operating profit increased by 0.4 (10.0) per cent. Operating
profit increased by 0.9 (13.3) per cent to EUR 7.7 (7.6) million.
Majority of the growth in Oriola-KD's Consumer business in Sweden came from OTC
medicines and traded goods, which also supported the profitability. The costs
increased from comparison period due to establishment of new pharmacies.
Services
The Services segment offers tailored services to pharmaceutical companies and
pharmacies in Sweden, Finland and in the Baltic countries. In addition Oriola-KD
Services offers sales and marketing services of large assortment of traded goods
in Finland and in the Baltic countries.
Key Figures 2016 2015 Change 2015
EUR million 1-3 1-3 % 1-12
--------------------------------------------------------------------
Invoicing 717.5 679.7 5.6 2,802.0
Net Sales 289.1 301.7 -4.2 1,183.4
Adjusted operating profit 8.5 7.1 19.6 33.2
Operating profit 8.5 6.2 36.6 32.2
Adjusted operating profit % 2.9 2.3 2.8
Operating profit % 2.9 2.1 2.7
Number of personnel at the end of period 715 705 745
--------------------------------------------------------------------
January-March 2016
The pharmaceutical market at wholesale prices in Sweden grew by 3.8 (10.3) per
cent in Swedish krona (source: IMS Health) in January-March 2016. Oriola-KD's
share of the Swedish pharmaceutical wholesale market was approximately 40 (39)
per cent (Oriola-KD estimate).
The Finnish pharmaceutical market at wholesale prices grew by 2.4 (1.6) per cent
in January - March 2016 (source: IMS Express). Oriola-KD's share of the Finnish
pharmaceutical wholesale market was 46 (46) per cent (source: ATY).
Oriola-KD's invoicing increased from the previous year by 5.6 (8.9) per cent to
EUR 717.5 (679.7) million. On a constant currency basis invoicing increased by
5.2 (12.8) per cent. The net sales decreased by 4.2 (increased by 3.5) per cent
to EUR 289.1 (301.7) million, and on a constant currency basis, net sales
decreased by 4.6 (increased 7.6) per cent. Adjusted EBITDA was EUR 9.9 (8.5)
million and EBITDA was EUR 9.9 (7.6) million. Adjusted operating profit
increased by 19.6 (decreased 7.2) per cent to EUR 8.5 (7.1) million. On a
constant currency basis adjusted operating profit increased by 19.3 (decreased
by 5.3) per cent. Operating profit increased by 36.6 (decreased 18.7) per cent
to EUR 8.5 (6.2) million.
The profitability of Oriola-KD Services improved through increased margin in
services as well as lower operating costs. In Finland cooperative negotiations
were started regarding plan to close company's Oulu distribution center. The
negotiations concern 18 employees. In Sweden a new long-term cooperation
agreement with pharmaceutical company Shire Sweden AB was signed.
Healthcare
The Healthcare segment offers services to hospitals, healthcare centres and
other healthcare sector operators. The business participates in large tenders
covering e.g. pharmaceutical delivery and dispensing services in Sweden.
Key Figures 2016 2015 Change 2015
EUR million 1-3 1-3 % 1-12
----------------------------------------------------------------
Invoicing 5.0 - - -
Net Sales 5.0 - - -
Adjusted operating profit -0.6 - - -
Operating profit -0.6 - - -
Adjusted operating profit % -11.7 - -
Operating profit % -11.7 - -
Number of personnel at the end of period 55 - -
----------------------------------------------------------------
The net sales of Healthcare business were EUR 5.0 (-) million in the first
quarter. Adjusted EBITDA was EUR -0.1 (-) million and EBITDA was EUR -0.1 (-)
million. Adjusted operating profit was EUR -0.6 (-) million and operating profit
was EUR -0.6 (-) million. Amortization related to acquisition of Svensk Dos
affected Healthcare operating profit by EUR -0.3 million in the first quarter of
2016; the whole year amortization is estimated to be EUR 1.5 million.
Oriola-KD's Healthcare business started operation as of Jan 1, 2016. Svensk Dos
AB acquisition was completed on Feb 8, 2016. Svensk Dos managed to successfully
renew the contract for dose dispensing in the region Skåne. The Sjuklövern
tender process was ruled as non-compliant with legal requirements. The decision
has been appealed to the Supreme Administrative Court by the Sjuklövern county
councils. Oriola-KD has been awarded a contract for hospital services for
Dalarna county council. Contract is currently under appeal. Healthcare digital
platform for veterinarians was successfully launched in Sweden and first
deliveries were made.
Adjusting items to EBITDA and Operating Profit
Adjusting items include gains or losses from the sale or discontinuation of
business operations or assets, gains or losses from restructuring business
operations, and impairment losses of goodwill and other non-current assets, or
other income or expenses arising from rare events and, changes in estimates
regarding the realisation of contingent consideration arising from business
acquisitions.
Adjusting items included in Operating Profit 2016 2015 2015
EUR million 1-3 1-3 1-12
--------------------------------------------------------------
Services
Restructuring costs - -0.9 -0.9
Group items
Restructuring costs - -0.5 -0.5
Revaluation of contingent consideration - - 3.4
Service award arrangement - - -0.3
Pensions - - -0.3
Other - - -0.1
--------------------------------------------------------------
Total - -1.4 1.8
--------------------------------------------------------------
Adjusting items reported in the first quarter of 2015 relate to restructuring
charges in the Services segment and in the Group.
Balance sheet, financing and cash flow
Oriola-KD's total assets at 31 March 2016 were EUR 950.5 (961.6) million. Cash
and cash equivalents totalled EUR 95.6 (137.1) million and equity was EUR 180.9
(150.6) million. The equity ratio was 19.6 (16.0) per cent and gearing was 28.2
(41.7) per cent. The comparative information includes an expense of EUR 0.1
million from discontinued operations.
Oriola-KD has EUR 176 million long-term revolving credit facility and term loan
agreement. The financing agreement consists of EUR 100 million revolving credit
facility and Swedish Krona denominated approximately EUR 76 million amortized
term loan agreement. Revolving credit facility and term loan agreements will
mature in May 2018.
Oriola-KD's goodwill of EUR 269.9 (253.7) million has been allocated in
impairment testing to the cash-generating units. In Oriola-KD goodwill is tested
annually, in accordance with the timetable of its strategy and planning process.
At the end of March 2016, EUR 229.6 (228.0) million of the goodwill was
allocated to the Consumer segment, EUR 26.0 (25.7) million to the Services
segment and EUR 14.3 (-) million to the Healthcare segment.
At the end of March 2016, interest-bearing debt was EUR 146.6 (199.9) million of
which syndicated bank loans totalled EUR 75.9 (83.1) million, commercial papers
EUR 40.0 (32.8) million, advance payments from pharmacies EUR 26.0 (23.0)
million, and finance lease liabilities EUR 4.1 (4.2) million. Long-term interest
bearing-liabilities were EUR 67.2 (79.3) million and short-term interest-bearing
liabilities were EUR 79.4 (120.6) million. Interest-bearing net debt was EUR
50.9 (62.7) million. The non-recourse trade receivables sales programmes were
continued in Sweden in the first quarter. At the end of March 2016, a total of
EUR 115.5 (106.4) million in trade receivables had been sold. Including the sold
trade receivables, the adjusted gearing was 92 (112) per cent. Oriola-KD's long
term revolving credit facility and term loan agreement include financial
covenants that are based on the Net Debt to EBITDA -ratio and on Gearing.
Oriola-KD's has committed long-term revolving credit facility of EUR 100.0
million and EUR 35.4 million of short-term credit limit with the banks. Of such
limits EUR 0.7 million was used at the end of the reporting period.
Net cash flow from operations in the first quarter was EUR -26.8 (13.3) million,
of which changes in net working capital accounted for EUR -46.0 (-0.5) million.
Net cash flow from investing activities was EUR -16.2 (-3.9) million. Net cash
flow from financing activities was EUR 16.6 (36.2) million.
Investments
Gross investments in the first quarter of 2016 totalled EUR 25.6 (3.4) million
and consisted of the acquisition of Svensk Dos and investments related to the
opening of new pharmacies, information systems and improvements in logistics
efficiency.
Personnel
At the end of March 2016, Oriola-KD had a payroll of 2,425 (2,256) employees,
67 (67) per cent of whom worked in the Consumer segment, 29 (31) per cent in
Services segment, and 2 (-) in Healthcare segment. The group administration
employed 2 (2) percent of the total number of employees. Personnel numbers
consist of members of staff in active employment.
Administration
Oriola-KD's Group Management Team:
· Eero Hautaniemi, President and CEO
· Sari Aitokallio, CFO
· Thomas Gawell, Vice President, Healthcare Business
· Jukka Mäkelä, Vice President, Development
· Teija Silver, Vice President, HR
· Stig Tornell, Vice President, Consumer Business (from
12.4.2016)
· Kimmo Virtanen, Executive Vice President, Services Business
· Lars Birkeland, Vice President, Consumer Business (until
12.4.2016)
Oriola-KD applies the Finnish Corporate Governance Code which was issued by the
Securities Market Association on 1 October 2015 and which entered into force on
1 January 2016, with the exception that the Company deviates from recommendation
15 of the Corporate Governance Code as the company's Nomination Committee may
also have members who are not members of the company's Board of Directors. The
purpose of this deviation from the Corporate Governance Code is to allow the
election of major shareholders in the company to the Nomination Committee and
thus to ensure that their opinions are heard well before the Annual General
Meeting. The Nomination Committee is a body established by the Board for the
purpose of preparing and presenting to the Board a recommendation for the
proposal to be put to the Annual General Meeting concerning the composition and
remuneration of the Board.
The Corporate Governance Statement and the Remuneration Statement for 2015 can
be viewed on the company's website at: http://www.oriola-
kd.com/CorporateGovernance. The Corporate Governance Statement and the
Remuneration Statement for 2015 have been prepared in accordance with the
Corporate Governance Code 2010.
Resolutions of the Annual General Meeting
The Annual General Meeting (AGM), held on 14 March 2016 adopted the financial
statements and discharged the members of the Board of Directors and the
President and CEO from liability for the financial year ending 31 December 2015.
The AGM resolved that a dividend of EUR 0.13 per share shall be paid on the
basis of the balance sheet adopted for the financial year ending 31 December
2015. The dividend was paid to shareholders registered in the company's
shareholders register held by Euroclear Finland Ltd on the dividend record date
16 March 2016. The payment date of the dividend was 5 April 2016.
The AGM confirmed that the Board of Directors is composed of eight members.
Current members of the Board of Directors Anja Korhonen, Kuisma Niemelä, Eva
Nilsson Bågenholm, Matti Rihko, Staffan Simberg and Anssi Vanjoki were re-
elected to the Board of Directors, and Mariette Kristenson and Lena Ridström
were elected new members of the Board of Directors. Anssi Vanjoki was re-elected
Chairman of the Board of Directors.
The AGM confirmed that the fee for the term of office of the Chairman of the
Board of Directors is EUR 48,400, the fee for the term of office of the Vice
Chairman of the Board of Directors and for the Chairman of the Board's Audit
Committee is EUR 30,250 and the fee for the term of office of other members of
the Board of Directors is EUR 24,200. Of the annual fee, 60 per cent shall be
paid in cash and 40 per cent shall be used to acquire Oriola-KD Corporation's
class B shares for the Board members on the NASDAQ Helsinki Stock Exchange
within two weeks from the release of the Interim Report 1 January - 31 March
2016 of the company. The Chairman of the Board of Directors receives an
attendance fee of EUR 1000 per meeting and the other members EUR 500 per
meeting. Attendance fees are correspondingly also paid to the chairmen and
members of Board and company committees. Travel expenses are compensated in
accordance with the travel policy of the company.
In its constitutive meeting convening after the AGM, the Board of Directors of
Oriola-KD Corporation elected Eva Nilsson Bågenholm as Vice Chairman of the
Board of Directors.
The Board also appointed Ms Anja Korhonen (Chairman), Mr Kuisma Niemelä and Mr
Staffan Simberg to the Board's Audit Committee, and Ms Eva Nilsson Bågenholm
(Chairman), Ms Mariette Kristenson, Ms Lena Ridström and Mr Matti Rihko to the
Board's Remuneration Committee.
The Board of Directors has assessed the independence of the members of the
Board, and determined that all members of the Board are independent of the
company and its major shareholders.
PricewaterhouseCoopers Oy, who has nominated authorized public accountant Ms
Ylva Eriksson as principal auditor, was re-elected as the auditor of the
company.
The AGM authorised the Board of Directors to decide on a share issue against
payment in one or more issues. The authorisation comprises the right to issue
new shares or assign treasury shares held by the company. The authorisation
covers a maximum of 5,650,000 Class A shares and 12,500,000 Class B shares
representing approximately 10.00 per cent of all shares in the company and
includes the right to derogate from the shareholders' pre-emptive subscription
right. Pursuant to the authorisation, shares held by the company as treasury
shares may also be sold through trading on a regulated market organised by
NASDAQ Helsinki Ltd. The authorisation is in effect for a period of eighteen
months from the decision of the AGM.
The AGM authorised the Board of Directors to decide on a share issue against
payment in one or more issues. The authorisation comprises the right to issue
new class B shares or assign class B treasury shares held by the company. The
authorisation covers a combined maximum of 18,000,000 class B shares of the
company, representing approximately 9.92 per cent of all shares in the company
and includes the right to derogate from the shareholders' pre-emptive
subscription right. Pursuant to the authorisation, class B shares held by the
Company as treasury shares may also be sold on regulated market organised by
NASDAQ Helsinki Ltd. The authorisation is in effect for a period of eighteen
months from the decision of the AGM.
The authorisation revokes all previous share issue authorisations given to the
Board of Directors apart from the authorisation given to the Board of Directors
by the Annual General Meeting held on 20 March 2013, pursuant to which the Board
of Directors may decide upon directed share issues against or without a payment
concerning no more than 1,715,000 class B shares in order to execute the share-
based incentive plan for the Oriola-KD Group's executives and the share savings
plan for the Oriola-KD Group's key personnel.
The AGM also authorised the Board of Directors to decide on repurchasing of the
company's own class B shares. The authorisation entitles the Board of Directors
to decide on the repurchase of no more than 18,000,000 of the company's own
class B shares, representing approximately 9.92 per cent of all shares in the
company. The authorisation may only be used in such a way that in total no more
than one tenth of all shares in the company may from time to time be in the
possession of the company and its subsidiaries. Shares may be repurchased also
in a proportion other than in which shares are owned by the Shareholders. Shares
may be repurchased to develop the company's capital structure, to execute
corporate transactions or other business arrangements, to finance investments,
to be used as a part of the company's incentive schemes or to be otherwise
relinquished, held by the company or cancelled. The authorisation to repurchase
own shares is in force for a period of not more than eighteen months from the
decision of the AGM. This authorisation revokes the authorisation given to the
Board of Directors by the AGM on 30 March 2015 in respect of repurchase of the
company's own class B shares.
The AGM resolved to amend the following Articles of the company's Articles of
Association in accordance with the proposal of the Board of Directors:
* The age limit of Board member elects was removed from § 5.
* A possibility to deliver the notice to the Annual General Meeting by
publishing the notice on the company's website was added to § 12.
Oriola-KD Corporation shares
Trading volume of the Oriola-KD Corporation's class A and B shares in the first
quarter of 2016:
Jan-Mar 2016 Jan-Mar 2015
Trading volume class A class B class A class B
------------------------------------------------------------------------
Trading volume, million 0.4 5.3 1.2 15.5
Trading volume, EUR million 1.6 21.9 4.6 56.5
Highest price, EUR 4.35 4.40 4.15 4.10
Lowest price, EUR 3.70 3.65 3.11 3.05
Closing quotation, end of period, EUR 4.32 4.33 3.82 3.79
------------------------------------------------------------------------
Oriola-KD Corporation's market capitalisation on 31 March 2016 was EUR 785.3
(689.5) million.
In the review period, the traded volume of Oriola-KD Corporation shares,
excluding treasury shares, corresponded to 3.2 (10.6) per cent of the total
number of shares. The traded volume of class A shares amounted to 0.7 (2.5) per
cent of the average stock, and that of class B shares, excluding treasury
shares, to 4.2 (14.3) per cent of the average stock.
At the end of March 2016, the company had a total of 181,486,213 (181,486,213)
shares, of which 55,484,648 (56,578,452) were class A shares and 126,001,565
(124,907,761) were class B shares. The company has 124,024 (148,338) treasury
shares (including shares held by third-party service provider), all of which are
class B shares. They account for 0.07 (0.08) per cent of the company's shares
and 0.01 (0.01) per cent of the votes.
Under Article 3 of the Articles of Association, a shareholder may demand
conversion of class A shares into class B shares. During the period 1 January -
31 March 2016, no class A shares were converted into class B shares (0 shares).
On 19 December 2012, Oriola-KD Corporation's Board of Directors decided on a
share incentive scheme for the Group's senior management for the years
2013-2015. The scheme covered six persons. The reward for the 2015 earning
period was based on the Oriola-KD Group's earnings per share (EPS) calculated
from the adjusted earnings excluding taxes. The rewards to be paid in 2018 on
the basis of the performance period 2015 corresponded to the value of 292,098
Oriola-KD Corporation class B shares (including the proportion to be paid in
cash).
On 4 December 2015 the Board of Directors of Oriola-KD Corporation resolved to
establish a share-based incentive plan directed to the Group key personnel (the
Plan).14 key persons, including the members of the Group Management Team,
participate in the Plan. The Plan includes three performance periods, calendar
years 2016, 2017 and 2018, and three vesting periods, calendar years 2017, 2018
and 2019, respectively. The Board of Directors of the Company will resolve on
the Plan's performance criteria and on the required performance level for each
criterion at the beginning of each performance period.
The prerequisite for participation in the Plan and for receipt of reward on the
basis of the Plan is that a key person has enrolled in the share saving plan,
OKShares, and makes the monthly saving from his or her fixed gross monthly
salary, in accordance with the Rules of the OKShares in force. The aim is also
to harmonise the Company's incentive plans into a One-Platform Plan where the
Company's Key Personnel Share Savings Plan (the OKShares) and Long-Term
Incentive Plan are combined.
The potential reward from the performance period 2016 will be based on the
Group's Earnings per Share (EPS). The rewards to be paid on the basis of the
performance period 2016 correspond to the value of an approximate maximum total
of 800,000 Oriola-KD Corporation Class B shares (including also the proportion
to be paid in cash). The potential reward will be paid partly in Oriola-KD
Corporation Class B shares and partly in cash in 2018. The cash proportion is
intended to cover taxes and tax-related costs arising from the reward to a key
person.
The member of the Group Management Team must hold 50 per cent of the net shares
given on the basis of the entire Plan, until his or her shareholding in the
Company in total equals the value of his or her gross annual salary. Such number
of shares must be held as long as the key person holds a position as a Group
Management Team member.
A total of 39 key employees participated in the Oriola-KD Corporation key
personnel share savings plan during a savings period 1 October 2014 - 30
September 2015 that was approved 27 August 2014. The maximum and minimum monthly
savings amounted to 10 and 2 per cent, respectively, of each participant's fixed
gross monthly salary. Approximately 50 key employees participate in the savings
period 1 October 2015 - 31 December 2016 that was approved on 18 June 2015. The
maximum monthly saving is 8.3 percent and the minimum is 2 percent of each
participant's fixed monthly gross salary.
The accumulated savings will be used for purchasing Oriola-KD's class B shares
for the participants at market prices. In return, each participant will receive
two free class B matching shares for every three acquired savings shares.
Matching shares will be delivered to a participant if the participant holds the
acquired shares from the savings period until the end of the designated holding
period and the employment has not terminated by the last day of the holding
period. Matching shares will be paid partly in Oriola-KD's class B shares and
partly in cash. The cash proportion is intended for covering taxes and tax-
related payments arising from the reward to a key person.
The savings of plan 2014-2015 correspond to approximately 46,835 savings shares
and 31,206 matching shares estimated at the share price level of the year end.
Oriola-KD Corporation has an agreement with a third-party service provider
concerning administration of the share-based incentive program. At the end of
the reporting period, the amount of shares held by the third-party service
provider was 27,202 (27,202).
Liquidity guarantee
There is no liquidity guarantee in effect for the shares of Oriola-KD
Corporation.
Flagging announcements
No flagging announcements were received during the period.
Risks
Oriola-KD's Board of Directors has approved the company's risk management policy
in which the risk management operating model, principles, responsibilities and
reporting are specified. The Group's risk management seeks to identify, measure
and manage risks that may threaten Oriola-KD's operations and the achievement of
goals set. The roles and responsibilities relating to risk management have been
determined in the Group.
Oriola-KD's risks are classified as strategic, operational and financial. Risk
management is a key element of the strategic process, operational planning and
daily decision-making at Oriola-KD.
Oriola-KD has identified the following principal strategic and operational risks
in its business:
* Amendments to pharmaceutical market regulations, pricing of pharmaceuticals
and reimbursements may weaken Oriola-KD's net sales and profitability.
* In the Swedish pharmaceutical retail business, the free establishment of
pharmacies has led to an increase in the number of pharmacies. The number of
pharmacies may continue to grow, which could further increase the fierce
competition.
* Extra capacity ensuing from a change in the Swedish wholesale market will
intensify competition, which may weaken the profitability of operations. The
share of single channel distribution in the pharmaceutical wholesale market
may decline rapidly, which may weaken the profitability of operations and
lead to the restructuring of wholesale operations.
* Changes in share of parallel imports in Swedish pharmaceutical market may
affect profitability of the Swedish wholesale and retail businesses.
* Loss of several key pharmaceutical company agreements would have an adverse
effect on net sales and profitability.
* Strategic development projects involve operational risks.
The main financial risks for Oriola-KD involve currency rate, liquidity,
interest rate and credit risks. Currency risk is the most significant financial
risks in Sweden, as any changes in the value of the Swedish krona will have an
impact on Oriola-KD's net sales, earnings and consolidated statement of
financial position.
Oriola-KD prepares goodwill impairment testing annually, in accordance with the
timetable of its strategy and planning process. Changes in cash flow forecasts
based on strategic plans, or in the discount rate or perpetuity growth rate, can
cause a goodwill write-off, which would weaken Oriola-KD's result.
Near-term risks and uncertainty factors
Oriola-KD's strategic development projects involve operational risks which may
have an effect on Oriola-KD's profitability.
Outlook
Oriola-KD's outlook for 2016 is based on external market forecasts, agreements
with pharmaceutical companies and pharmacies, and management assessments. The
Finnish pharmaceutical market is expected to grow during 2015-2020, at an annual
rate of 0-3 per cent. Swedish pharmaceutical market is expected to grow an
annual rate of 4-7 per cent per year in the local currencies (source: IMS
Health).
Outlook for 2016
Oriola-KD estimates its full-year net sales to remain at the 2015 level on
constant currency basis. Adjusted operating profit is estimated to remain at
2015 level or to increase, on a constant currency basis. Full-year net sales in
2015 were EUR 1,626.3 million and adjusted operating profit was EUR 60.8
million.
Events after the review period
Stig Tornell was appointed Vice President, Consumer Business Area and member of
the Oriola-KD's Group Management Team as of April 12, 2016, as Lars Birkeland,
Vice President of Consumer Business Area, left the company.
The co-operation negotiations affecting the logistics personnel in the
distribution centre in Oulu were completed. Oriola-KD transfers the operations
that are carried out at the distribution centre in Oulu to Espoo and terminates
operations at the Oulu distribution centre. The restructuring may lead to a
maximum of 18 redundancies. The restructuring costs are expensed during the
second quarter.
Next interim report
Oriola-KD Corporation will publish its results for the second quarter of 2016 on
19 July 2016 approximately at 8.30 am.
Oriola-KD's Interim Report January - March 2016
Consolidated Statement of
Comprehensive Income (IFRS), 2016 2015 2015
EUR million 1-3 1-3 1- 12
--------------------------------------------------------------------------
Continuing operations
Net sales 401.3 411.3 1,626.3
Other operating income 5.0 3.1 14.9
Cost of goods sold -317.2 -331.9 -1,298.4
Employee benefit expenses -37.7 -37.8 -143.8
Other operating expenses -31.2 -27.4 -113.9
--------------------------------------------------------------------------
Gross profit 20.1 17.3 85.1
Depreciation and amortization -6.2 -5.6 -22.6
--------------------------------------------------------------------------
Operating profit 13.9 11.7 62.6
Financial income and expenses -1.0 -2.0 -6.5
--------------------------------------------------------------------------
Profit before taxes 12.9 9.8 56.1
Income taxes -2.8 -2.3 -11.5
--------------------------------------------------------------------------
Profit for the period from continuing operations 10.1 7.4 44.5
Profit for the period from discontinued operations - -0.1 0.1
--------------------------------------------------------------------------
Profit for the period 10.1 7.3 44.6
Other comprehensive income
Items which may be reclassified subsequently to profit or loss:
Translation differences recognised in comprehensive income
during the reporting period -0.4 1.5 3.6
Cash flow hedge -0.1 -0.4 0.1
Income tax relating to
other comprehensive income 0.0 0.1 0.0
-------------------------------------------------------------------------------
-0.5 1.2 3.7
Items which will not be reclassified to profit or loss:
Actuarial gains/losses on
defined benefit plan - - 5.6
Income tax relating to
other comprehensive income - - -1.1
-------------------------------------------------------------------------------
- - 4.4
Total comprehensive income for the period 9.6 8.5 52.8
Profit attributable to
-------------------------------------------------------------------------------
Parent company shareholders 10.1 7.3 44.6
-------------------------------------------------------------------------------
Total comprehensive income attributable to
-------------------------------------------------------------------------------
Parent company shareholders 9.6 8.5 52.8
-------------------------------------------------------------------------------
Earnings per share attributable to parent company
shareholders:
Basic earnings per share, EUR
-------------------------------------------------------------------------------
Continued operations 0.06 0.05 0.25
Discontinued operations - -0.00 0.00
From profit of the year 0.06 0.04 0.25
-------------------------------------------------------------------------------
Diluted earnings per share, EUR
-------------------------------------------------------------------------------
Continued operations 0.06 0.05 0.25
Discontinued operations - -0.00 0.00
From profit of the year 0.06 0.04 0.25
-------------------------------------------------------------------------------
Consolidated Statement of Financial
Position (IFRS),
EUR million
ASSETS 31 Mar 2016 31 Mar 2015 (1)) 31 Dec 2015
-------------------------------------------------------------------------------
Non-current assets
Property, plant and
equipment 73.0 73.8 72.7
Goodwill 269.9 253.7 256.5
Other intangible assets 70.6 61.6 63.2
Other non-current assets 0.4 0.0 0.3
Deferred tax assets 4.6 5.8 3.7
-------------------------------------------------------------------------------
Non-current assets total 418.4 395.0 396.4
Current assets
Inventories 204.3 194.3 201.1
Trade receivables 205.7 194.3 194.0
Other receivables 26.6 40.9 33.4
Cash and cash equivalents 95.6 137.1 121.9
-------------------------------------------------------------------------------
Current assets total 532.1 566.7 550.5
ASSETS TOTAL 950.5 961.6 946.9
-------------------------------------------------------------------------------
EQUITY AND LIABILITIES
-------------------------------------------------------------------------------
Equity
Share capital 36.2 36.2 36.2
Hedging reserve -1.3 -1.7 -1.2
Contingency fund 19.4 19.4 19.4
Invested unrestricted equity
reserve 74.8 75.0 74.8
Other reserves 0.2 0.1 0.2
Translation differences 0.1 -1.5 0.5
Retained earnings 51.5 22.9 64.7
-------------------------------------------------------------------------------
Equity attributable to the
parent company shareholders 180.9 150.6 194.6
Non-current liabilities
Deferred tax liabilities 16.6 15.9 15.8
Pension obligations 10.0 15.2 10.0
Borrowings 67.2 79.3 66.9
Other non-current
liabilities 2.1 2.6 2.1
-------------------------------------------------------------------------------
Non-current liabilities
total 95.9 113.0 94.7
Current liabilities
Trade payables 515.6 525.1 547.7
Provisions - 1.9 -
Borrowings 79.4 120.6 61.7
Other current liabilities 78.8 50.5 48.1
-------------------------------------------------------------------------------
Current liabilities total 673.7 698.0 657.5
EQUITY AND LIABILITIES TOTAL 950.5 961.6 946.9
-------------------------------------------------------------------------------
(1)) Comparative figures restated as a result of correction of an error
relating to previous financial periods Correction was made in 2015 Financial
Statements.
Consolidated
Statement of Changes
in Equity (IFRS)
Equity attributable to the parent
company shareholders
Trans- Re-
lation tained
Share diffe- earn- Hybrid Equity
EUR million capital Funds rences ings bond total
-------------------------------------------------------------------------------
Equity
1 Jan 2015 36.2 19.3 -3.1 19.5 39.6 111.5
-------------------------------------------------------------------------------
Comprehensive income
for the period
Net profit for the
period - - - 7.3 - 7.3
Other
comprehensive
income:
Cash flow hedge - -0.4 - - - -0.4
Actuarial gains
and losses - - - -0.0 - -0.0
Income tax
relating to
other
comprehensive income - 0.1 - 0.0 - 0.1
Translation
difference - 0.0 1.5 - - 1.5
-------------------------------------------------------------------------------
Comprehensive income
for the period total - -0.3 1.5 7.3 - 8.5
-------------------------------------------------------------------------------
Transactions with
owners
Share issue - 74.0 - - - 74.0
Hybrid bond paid
interest - - - -2.2 - -2.2
Hybrid bond
redemption - - - -1.6 -39.6 -41.2
Share-based
incentive - - - 0.0 - 0.0
Purchase of own
shares - - - -0.0 - -0.0
-------------------------------------------------------------------------------
Transactions with
owners total - 74.0 - -3.8 -39.6 30.5
-------------------------------------------------------------------------------
Equity
31 Mar 2015 (1)) 36.2 92.9 -1.5 22.9 - 150.6
-------------------------------------------------------------------------------
Equity
1 Jan 2016 36.2 93.1 0.5 64.7 - 194.6
-------------------------------------------------------------------------------
Comprehensive income
for the period
Net profit for the
period - - - 10.1 - 10.1
Other
comprehensive
income:
Cash flow hedge - -0.1 - - - -0.1
Income tax relating
to
other comprehensive
income - 0.0 - - - 0.0
Translation
difference - - -0.4 - - -0.4
-------------------------------------------------------------------------------
Comprehensive income
for the period total - -0.1 -0.4 10.1 - 9.6
-------------------------------------------------------------------------------
Transactions with
owners
Dividend
distribution - - - -23.6 - -23.6
Share-based
incentive - - - 0.3 - 0.3
-------------------------------------------------------------------------------
Transactions with
owners total - - - -23.3 - -23.3
-------------------------------------------------------------------------------
Equity
31 Mar 2016 36.2 93.1 0.1 51.5 - 180.9
-------------------------------------------------------------------------------
(1)) Comparative figures restated as a result of correction of an error
relating to previous financial periods Correction was made in 2015
Financial Statements.
Condensed Consolidated Statement of Cash Flows (IFRS),
2016 2015 2015
EUR million 1-3 1-3 1- 12
-------------------------------------------------------------------
Operating profit 13.9 11.6 62.7
Depreciation and amortization 6.2 5.6 22.6
Change in working capital -46.0 -0.5 11.2
Cash flow from financial
items and taxes -3.6 -1.3 -16.9
Other adjustments 2.7 -2.2 6.2
-------------------------------------------------------------------
Net cash flow from operating activities -26.8 13.3 85.6
Net cash flow from investing activities -16.2 -3.9 -19.9
Net cash flow from financing activities 16.6 36.2 -35.2
Net change in cash and cash equivalents -26.3 45.6 30.6
Cash and cash equivalents
at the beginning of the period 121.9 91.5 91.5
Foreign exchange rate differences 0.0 0.0 -0.1
Net change in cash and cash equivalents -26.3 45.6 30.6
-------------------------------------------------------------------
Cash and cash equivalents
at the end of the period 95.6 137.1 121.9
-------------------------------------------------------------------
Notes to financial statements
Principal accounting policies as of 1 January 2016 (IFRS)
These financial statements release has been prepared in accordance with IFRS
standards (IAS 34). The accounting policies and calculation methods applied in
the interim report are the same as those in the 31 December 2015 annual
financial statements, excluding the standards and interpretations applied as of
1 January 2016 as presented below. However, the interim report does not include
all of the information and notes presented in the annual financial statements.
Consequently, the interim report should be read together with the company's
financial statements for 2015.
In connections with the new operating model, the chief operating decision maker
of Oriola-KD is the President and CEO of Oriola-KD Corporation, who makes
strategic decisions, allocates resources to the operating segments and assesses
their performance.
The figures in the interim report have been rounded independently.
New standards or amendments to the existing ones that have been applied as of 1
January 2016:
* Amendments to IAS 16 Property, plant and equipment and IAS 38 Intangible
assets
* Annual improvements in IFRS standards 2012-2014
The new standards have not had a material impact on the Group's financial
position.
The figures in this interim review are unaudited.
Earnings per share
2016 2015 2015
EUR million 1-3 1-3 1- 12
-------------------------------------------------------------------------------
Profit attributable to equity owners of the parent
from continuing operations 10.1 7.4 44.5
Accumulated interest on hybrid bond net of tax - -0.2 -
-------------------------------------------------------------------------------
Adjusted profit for the period from continuing
operations 10.1 7.2 44.5
2016 2015 2015
EUR million 1-3 1-3 1- 12
-------------------------------------------------------------------------------
Profit incl. discontinued operations attributable to
equity owners of the parent 10.1 7.3 44.6
Accumulated interest on hybrid bond net of tax - -0.2 -
-------------------------------------------------------------------------------
Adjusted profit for the period including discontinued
operations 10.1 7.1 44.6
Average number of outstanding shares (1000 shares)
Basic 181,362 158,504 177,502
Diluted 181,362 158,504 177,502
Earnings per share (EUR)
Basic
Continuing operations 0.06 0.05 0.25
Discontinuing operations - -0.00 0.00
-------------------------------------------------------------------------------
Total 0.06 0.04 0.25
Diluted
Continuing operations 0.06 0.05 0.25
Discontinuing operations - -0.00 0.00
-------------------------------------------------------------------------------
Total 0.06 0.04 0.25
Business combinations
Oriola-KD has on 8 February 2016 acquired the entire capital stock of the
Swedish pharmacy company Svensk Dos. The acquisition is related to Healthcare
business area. Svensk Dos is specialized in dose dispensing of pharmaceuticals.
Today Svensk Dos provides dose dispensed medicines to 25,000 people via
extradition locations and nursing homes in the region of Skåne and direct to the
Swedish Prison and Probation Service all over Sweden. In 2014, the net sales of
Svensk Dos were approximately EUR 25.0 million and estimated market share was
13 per cent. Svensk Dos has approximately 60 employees and is based in Uppsala.
The acquisition cost calculation is based on the company's preliminary statement
of financial position as at 31 January 2016, the essential parts of which have
been prepared in accordance with IFRS's accounting principles. The acquisition
has been recognised on a preliminary basis, as permitted under IFRS 3. Oriola-KD
will make the necessary adjustments to these preliminary assessments during the
12 months following the acquisition date.
The preliminary recognised goodwill of EUR 14.0 million is the value of Svensk
Dos AB's experienced personnel, dose dispensing system and process, and synergy
benefits that can be achieved in purchasing operations, storage and growth
expectations.
The statement of profit and loss and the statement of financial position have
been consolidated in Oriola-KD as of 1 February 2016.
From the time of its acquisition, Svensk Dos AB has contributed from the
ordinary business net sales for the reporting period of EUR 5.0 million and
profit for the period of EUR 0.0 million to the Oriola-KD Group.
If the acquisition had taken place on January 1, 2016, net sales for the
reporting period would have amounted to EUR 7.2 million and profit for the
period to EUR -0.1 million.
Tangible and intangible assets
Changes in Property, Plant and Equipment, 2016 2015 2015
EUR million 1-3 1-3 1- 12
---------------------------------------------------------------
Carrying amount at the beginning of the period 72.7 75.2 75.2
Business combinations 1.4 - -
Increases 3.0 1.8 11.9
Decreases -0.2 -0.1 -0.6
Reclassifications - - 0.0
Depreciation -3.8 -3.7 -14.8
Foreign exchange rate differences -0.2 0.6 1.0
---------------------------------------------------------------
Carrying amount at the end of the period 73.0 73.8 72.7
---------------------------------------------------------------
Changes in Intangible assets, 2016 2015 2015
EUR million 1-3 1-3 1- 12
-----------------------------------------------------------------
Carrying amount at the beginning of the period 319.7 312.3 312.3
Business combinations 1.1 - -
Increases 22.6 1.5 8.5
Reclassifications - - 0.0
Impairments and Amortization -2.4 -1.9 -7.8
Foreign exchange rate differences -0.6 3.4 6.7
-----------------------------------------------------------------
Carrying amount at the end of the period 340.4 315.3 319.7
-----------------------------------------------------------------
Derivatives
31 Mar 2016
Positive fair Negative fair Nominal values on
EUR million value value contracts
-------------------------------------------------------------------------------
Derivatives
recognised as cash
flow hedges
Interest rate swaps - 1.7 56.4
Derivatives measured
at fair value through
profit and loss
Foreign currency
forward and swap
contracts 0.4 - 38.6
-------------------------------------------------------------------------------
Derivatives
31 Mar 2015
Positive fair Negative fair Nominal values on
EUR million value value contracts
-------------------------------------------------------------------------------
Derivatives
recognised as cash
flow hedges
Interest rate swaps - 2.1 56.6
Derivatives measured
at fair value through
profit and loss
Foreign currency
forward and swap
contracts - 1.3 108.5
-------------------------------------------------------------------------------
Derivatives measured at fair value through profit and loss are mainly related to
hedging of group's internal transactions. Fair values of the derivatives have
been booked to balance sheet in gross amount as the derivatives contracts are
related to credit events and cannot be netted in financial statements. The group
has not given nor received collateral to/from derivatives counterparties
Fair value hierarchy
EUR million
31 Mar 2016 Level 1 Level 2 Level 3 Total
-------------------------------------------------------------------------------
Assets
Derivatives measured at fair value through
profit and loss - 0.4 - 0.4
Liabilities
Derivatives designated as hedges - 1.7 - 1.7
Derivatives measured at fair value through
profit and loss - 0.0 - 0.0
Contingent consideration - - 9.8 9.8
-------------------------------------------------------------------------------
EUR million
31 Mar 2015 Level 1 Level 2 Level 3 Total
-------------------------------------------------------------------------------
Assets
Derivatives measured at fair value through
profit and loss - 0.3 - 0.3
Liabilities
Derivatives designated as hedges - 2.1 - 2.1
Derivatives measured at fair value through
profit and loss - 1.6 - 1.6
Contingent consideration - - 15.1 15.1
-------------------------------------------------------------------------------
Level 1: Quoted prices (unadjusted) in active markets for identical assets or
liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (i.e. as prices) or
indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that is not based on observable
market data (i.e. unobservable inputs).
Reconciliation of financial liabilities recognised at fair value through
profit and loss according to the level 3
EUR million
-------------------------------------------------------------------------------
Book value 31 Dec 2015 12.4
-------------------------------------------------------------------------------
Recognised in financial expenses 0.2
Decrease in the fair value of financial
liabilities -12.4
Increase in the fair value of financial
liabilities 9.5
Translation differences 0.1
-------------------------------------------------------------------------------
Book value 31 Mar 2016 9.8
-------------------------------------------------------------------------------
Financial liabilities recognised at fair value through profit and loss (level
3) include estimated value of a contingent consideration related to the Svensk
Dos acquisition. The contingent considerations recognised relates to successful
execution of certain distribution agreements. The contingent consideration is
expected to be realised in 2016. The decrease in fair value of financial
liabilities relates to the payment of Medstop acquisition on 17 Mar 2016.
Commitments and Contingent Liabilities
EUR million 31 Mar 2016 31 Mar 2015
--------------------------------------------------------------------
Commitments for own liabilities
Guarantees on behalf of own companies 8.4 8.2
Guarantees on behalf of other companies 0.8 21.2
Mortgages on company assets 2.3 2.3
Other guarantees and liabilities 1.0 1.0
--------------------------------------------------------------------
Total 12.5 32.7
--------------------------------------------------------------------
Leasing liabilities (operating liabilities) 0.8 0.8
Rent liabilities 43.7 44.4
Guarantees on behalf of other companies include parent company guarantees given
to third parties on behalf of sold Russian entities commercial agreements and
rent contracts. In accordance of framework agreement the buyer undertakes to
compensate Oriola-KD for any claim against the guarantees. In addition the
buyer's bank has given Oriola-KD in aggregate EUR 0.8 (18.8) million counter
guarantee mainly subject to parent company guarantees of the commercial
agreements. The guarantees on behalf of other companies will expire in 2016.
The most significant guarantees are bank guarantees against trade payables in
Sweden. In addition, Oriola-KD Corporation has granted parent company guarantees
of EUR 2.8 (2.8) million against subsidiaries' trade payables.
Provisions
On 31 March 2016 Oriola-KD had no recognised provisions. On 31 March 2015
Oriola-KD had recognised a restructuring provisions totalling EUR 1.4 million.
The restructuring provision in the comparative period relates to the co-
operation negotiations concerning Oriola-KD's personnel in Finland and
integration of Medstop acquisition. In addition, at 31 March 2015 group items
included a provision of EUR 0.5 million related to the sale of Russian
businesses.
Related parties
Related parties in the Oriola-KD Group are deemed to comprise the members of the
Board of Directors and the President and CEO of Oriola-KD Corporation, the other
members of the Group Management Team of the Oriola-KD Group, the immediate
family of the aforementioned persons and the companies controlled by the
aforementioned persons. The Group has no significant business transactions with
related parties.
Segment information
Reportable segments
1-3/2016
EUR million Consumer Services Healthcare Group items Total
-------------------------------------------------------------------------------
External Invoicing 203.9 625.6 5.0 - 834.4
Internal Invoicing - 91.9 - -91.9 -
-------------------------------------------------------------------------------
Invoicing 203.9 717.5 5.0 -91.9 834.4
External Net Sales 199.2 197.1 5.0 - 401.3
Internal Net Sales - 91.9 - -91.9 -
-------------------------------------------------------------------------------
Net Sales 199.2 289.1 5.0 -91.9 401.3
Operating profit 7.7 8.5 -0.6 -1.6 13.9
Adjusted operating
profit 7.7 8.5 -0.6 -1.6 13.9
Assets 458.0 350.0 27.0 115.5 950.5
Liabilities 74.2 507.8 6.2 181.3 769.6
Investments 3.3 0.8 19.0 2.5 25.6
Depreciation 4.3 1.4 0.4 0.1 6.2
Average number of
personnel 1,607 722 36 38 2,404
1-3/2015
EUR million Consumer( 1)) Services Healthcare Group items Total
-------------------------------------------------------------------------------
External Invoicing 196.9 596.5 - - 793.3
Internal Invoicing - 83.2 - -83.2 -
-------------------------------------------------------------------------------
Invoicing 196.9 679.7 - -83.2 793.3
External Net Sales 192.8 218.5 - - 411.3
Internal Net Sales - 83.2 - -83.2 -
-------------------------------------------------------------------------------
Net Sales 192.8 301.7 - -83.2 411.3
Operating profit 7.6 6.2 - -2.1 11.7
Adjusted operating
profit 7.6 7.1 - -1.6 13.1
Assets 459.0 356.5 - 146.1 961.6
Liabilities 74.2 530.0 - 206.8 811.1
Investments 2.4 0.9 - 0.1 3.4
Depreciation 4.1 1.4 - 0.1 5.6
Average number of
personnel 1,523 734 - 44 2,301
(1)) Comparative figures restated as a result of correction of an error
relating to previous financial periods
Geographical information
1-3/2016
Baltic Other
EUR million Sweden Finland countries countries Total
------------------------------------------------------------------
Net Sales 288.0 82.9 12.8 17.6 401.3
Assets 685.7 246.1 18.7 - 950.5
Investments 22.2 3.3 0.1 - 25.6
1-3/2015
Baltic Other
EUR million Sweden Finland countries countries Total
------------------------------------------------------------------
Net Sales 291.0 91.1 11.7 17.5 411.3
Assets 655.4 290.7 15.5 - 961.6
Investments 2.6 0.7 0.1 - 3.4
Espoo, 21 April 2016
Board of Directors of Oriola-KD Corporation
Further information:
Eero Hautaniemi
President and CEO
tel. +358 (0)10 429 2109
e-mail: eero.hautaniemi@oriola-kd.com
Sari Aitokallio
CFO
tel. +358(0)10 429 2112
e-mail: sari.aitokallio@oriola-kd.com
Distribution:
NASDAQ OMX Helsinki Ltd
Key media
Released by:
Oriola-KD Corporation
Corporate Communications
Orionintie 5
02200 Espoo
www.oriola-kd.com
[HUG#2005731]