Oriola Corporation’s Interim Report 1 January–30 September 2018

Oriola Corporation stock exchange release 1 November 2018 at 8.30 a.m.

Oriola Corporation’s Interim Report 1 January–30 September 2018

Financial performance July–September 2018, continuing operations

  • Invoicing increased by 2.6% (increased 1.3%) to EUR 844.2 (823.1) million, on a constant currency basis invoicing increased by 8.9% and was EUR 896.0 million                                                                                                       
  • Net sales decreased by 2.0% (decreased 1.4%) to EUR 369.9 (377.6) million, on a constant currency basis net sales increased by 4.5% and were EUR 394.5 million
  • Adjusted EBITDA was EUR 24.7 (16.7) million, at constant currencies the adjusted EBITDA was EUR 26.0 million
  • Adjusted EBIT was EUR 17.5 (9.7) million, at constant currencies the adjusted EBIT was EUR 18.4 million
  • Profit for the period totalled EUR 12.2 (8.0) million and earnings per share was EUR 0.07 (0.04)

Financial performance January–September 2018, continuing operations

  • Invoicing increased by 5.0% (decreased 1.6%) to EUR 2,589.2 (2,464.8) million, on a constant currency basis invoicing increased by 10.0% and was EUR 2,711.0 million                                                                                                      
  • Net sales increased by 2.2% (decreased 3.8%) to EUR 1,157.5 (1,132.5) million, on a constant currency basis net sales increased by 7.4% and were EUR 1,215.9 million
  • Adjusted EBITDA was EUR 53.5 (54.5) million, at constant currencies the adjusted EBITDA was EUR 56.3 million
  • Adjusted EBIT was EUR 31.7 (33.7) million, at constant currencies the adjusted EBIT was EUR 33.6 million
  • Profit for the period totalled EUR 21.1 (23.8) million and earnings per share was EUR 0.12 (0.13)

Business outlook for 2018

Oriola’s guidance is unchanged: Adjusted EBIT of continuing operations on constant currency basis is estimated to increase from the 2017 level.

President and CEO Robert Andersson:

“In the third quarter, Oriola’s net sales continued to grow, but profitability was impacted by performance challenges. Invoicing increased by 2.6% (8.9% on a constant currency basis) but net sales decreased by 2.0% (increased 4.5% on a constant currency basis). Adjusted EBIT was EUR 17.5 million. The amount includes a positive EUR 9 million settlement with the provider of the new logistics and warehouse IT system, announced in August.

Service Business Area invoicing increased by 4.1% in the third quarter, 10.1% on a constant currency basis, driven by pharmaceutical price and volume increase mainly in Sweden. Due to new logistics and warehouse IT system implementation in Finland and DC-project in Enköping, we experienced inefficiencies, and operations costs were high in both countries. We will continue to focus on improving logistics efficiency in both countries. The Enköping distribution center will open during the first quarter of 2019.

On a constant currency basis Consumer Business Area net sales grew 4.2% in the third quarter compared to corresponding period last year, despite of the strong competition in traded goods and OTC, and margin pressure in prescription medicines. Our online sales continued to grow (58%) stronger than the market. Comprehensive wellbeing chain Hehku opened one new store and now consists of 19 stores and an online shop in Finland.

In the third quarter Business Area Healthcare continued its good development. Net sales grew on a constant currency basis by 39.4% compared to corresponding period last year. Oriola dose dispensing services won a major new contract in Sweden in September. The contract covers Stockholm and Gotland area dose dispensing and will bring approximately 35,000 new patients from the beginning of February 2019. This will increase Oriola’s total number of dose dispensing patients to more than 100,000, out of which more than 80,000 patients are in Sweden.

Oriola is in the middle of a transformation process. In September we announced our new organisation, which will be more customer focused and efficient. From 1 January 2019 our Business Areas will be Consumer, Pharma and Retail. As part of this change we are creating a new Group function called Operations, which covers logistics, dose manufacturing and indirect sourcing, and supports all Business Areas. I’m confident that with this change we can develop our business and become more customer oriented. This transformation supports a more holistic way to drive and develop our unique offering in the growing health and wellbeing market. By building a strong Oriola culture we ensure synergies, improve our operational excellence and cost efficiency throughout the whole organisation.”

Key figures, continuing operations 2018 2017 Change 2018 2017 Change 2017
EUR million 7-9 7-9 % 1-9 1-9 % 1-12
Invoicing 844.2 823.1 2.6 2,589.2 2,464.8 5.0 3,336.3
Net sales 369.9 377.6 -2.0 1,157.5 1,132.5 2.2 1,527.7
Adjusted EBITDA 24.7 16.7 48.2 53.5 54.5 -1.8 67.6
Adjusted EBITDA % 6.7 4.4 4.6 4.8 4.4
Adjusted EBIT 1) 17.5 9.7 81.2 31.7 33.7 -6.1 39.9
EBIT 16.5 10.7 54.5 30.0 33.9 -11.5 37.8
Adjusted EBIT % 4.7 2.6 2.7 3.0 2.6
EBIT % 4.5 2.8 2.6 3.0 2.5
Profit for the period 12.2 8.0 52.3 21.1 23.8 -11.2 25.9
Earnings per share, EUR, continuing   operations 0.07 0.04 52.3 0.12 0.13 -11.2 0.14
Earnings per share, EUR, discontinued   operations - -0.00 - 0.00 0.00
Net cash flow from operating activities 2) 3.3 -24.0 54.4 12.7 23.7
Gross capital expenditure 32.4 37.0 46.1
Total assets 2) 929.1 950.8 922.4
Net interest-bearing debt 2) 105.0 120.5 110.2
Gearing, % 2) 55.3 59.8 55.7
Net debt / 12-month EBITDA 2) 1.7 1.6 1.7
Equity per share, EUR 2) 1.05 1.11 1.09
Equity ratio, % 2) 20.8 22.0 21.8
Return on equity (ROE), % 2) 14.8 16.3 13.0
Return on capital employed (ROCE), % 2) 12.5 13.9 11.7
Average number of shares, 1000 pcs 3) 181,353 181,357 181,328
Average number of personnel 2,697 2,727 2,686
Number of personnel at the end of the period 2,688 2,896 2,619
1) Adjustment items are specified in table "Adjusting items included in EBIT"
2) Includes discontinued operations
3) Treasury shares held by the company not included

Disclosure procedure

This stock exchange release is a summary of Oriola Corporation’s Interim Report January­­–September 2018. The complete report is attached to this release in pdf format and is also available on Oriola’s website at www.oriola.com.

Analyst and investor meeting

Oriola Corporation will organise a meeting for investors, analysts and the press on Thursday, 1 November 2018 at 10.00 a.m. at Hotel Scandic Simonkenttä, meeting room Ateljee 3, Simonkatu 9, 00100 Helsinki, Finland.

Next financial report

Oriola Corporation will publish its financial statements release for January-December 2018 on 22 February 2019.

Further information:

Robert Andersson, President and CEO
tel. +358 10 429 2109, email: robert.andersson@oriola.com

Helena Kukkonen, CFO
tel. +358 10 429 2112, email: helena.kukkonen@oriola.com

Distribution:

Nasdaq Helsinki Ltd
Key media

Released by:

Oriola Corporation
Orionintie 5, 02200 Espoo
www.oriola.com