Oriola Corporation’s Financial Statements Release 1 January–31 December 2018

Oriola Corporation stock exchange release 22 February 2019 at 3.00 p.m.

Oriola Corporation’s Financial Statements Release 1 January–31 December 2018

Financial performance October–December 2018, continuing operations

  • Invoicing increased by 6.6% (increased 1.5%) to EUR 929.1 (871.6) million. On a constant currency basis invoicing increased by 10.5% and was EUR 963.4 million.                                                                                                        
  • Net sales decreased by 0.1% (decreased 3.9%) to EUR 394.7 (395.2) million. On a constant currency basis net sales increased by 3.8% and were EUR 410.4 million.
  • Adjusted EBITDA was EUR 12.0 (13.1) million. On a constant currency basis the adjusted EBITDA was EUR 12.5 million.
  • Adjusted EBIT was EUR 5.2 (6.2) million. On a constant currency basis the adjusted EBIT was EUR 5.5 million.
  • Profit for the period totalled EUR -8.5 (2.1) million and earnings per share was EUR -0.05 (0.01)

Financial performance January–December 2018, continuing operations

  • Invoicing increased by 5.5% (decreased 0.8%) to EUR 3,518.4 (3,336.3) million. On a constant currency basis invoicing increased by 10.1% and was EUR 3,674.4 million                                                                                                        
  • Net sales increased by 1.6% (decreased 3.8%) to EUR 1,552.2 (1,527.7) million. On a constant currency basis net sales increased by 6.5% and were EUR 1,626.2 million.
  • Adjusted EBITDA was EUR 65.5 (67.6) million. On a constant currency basis the adjusted EBITDA was EUR 68.9 million.
  • Adjusted EBIT was EUR 36.9 (39.9) million. On a constant currency basis the adjusted EBIT was EUR 39.1 million.
  • Profit for the period totalled EUR 12.7 (25.9) million and earnings per share was EUR 0.07 (0.14).
  • The Board of Directors proposes a dividend of EUR 0.09 per share for the year 2018.

Business outlook for 2019

The adjusted EBIT on a constant currency basis is estimated to increase from the 2018 level.

Oriola’s business outlook for 2019 is based on external market forecasts, agreements with pharmaceutical companies and pharmacies, and management assessments.

President and CEO Robert Andersson:

“Oriola’s invoicing on a constant currency basis (EUR 3,674.4 million, +10.1% from previous year) and net sales performance on a constant currency basis (EUR 1,626.2 million, +6.5% from previous year) were strong in 2018. Weaknesses in efficiency, high operational costs, Hehku investment as well as a weak Swedish Krona burdened our EBIT the whole year. However, our net cash flow from operating activities was positive throughout the year, totalling EUR 102.8 million in 2018.

Services Business Area invoicing increased 11.7% and net sales increased 4.2% on a constant currency basis in the fourth quarter compared to the corresponding period last year, but the profitability was affected by inefficiencies in logistics, which mainly were driven by delayed Enköping distribution centre ramp-up. For the Consumer Business Area the final quarter of 2018 was difficult because of strong competition but our online sales continued to grow faster (+73%) than the market (+35%). Healthcare Business Area progressed as planned. Net sales grew on a constant currency basis by 10.9% compared to corresponding period last year.

Our challenging year led us to take decisive steps forward. We renewed leadership, changed ERP-implementation partner, decided to discontinue the Hehku business and established a new customer focused organisation which is able to serve our customers in a holistic way in the growing health and wellbeing market. Our new Business Area organisation is based on customer segments. We also created a new function, “Operations”, which is focusing on efficient and lean operations, scaling sourcing capabilities and developing logistics for fast-growing e-commerce needs.

Year 2019 is full of initiatives to strengthen our business. We are starting the Enköping distribution centre ramp-up during the first quarter to secure capacity and efficiency of our business in the growing Swedish market, with modern and automated processes. By developing our digital service-approach in Kronans Apotek, we want to ensure our capability to serve the growing online demand, but also to build a strong omni-channel experience. This experience includes elements supplied by partly-owned Doktor.se and our own health support experts in Sweden.

This year will be an important milestone to implement and execute the next steps in our transformation. We have recognised and understand our operational challenges in efficiency, in costs and in processes. Key to solve these is to improve customer focus and execution. We have decided to start the 20by20 Excellence programme to systematically review operations and resources to ensure efficient and high-quality operations as well as reduce costs. I’m confident we are on the right track to offer a stronger performance in coming years.”  

Key figures, continuing operations 2018 2017 Change 2018 2017 Change
EUR million 10-12 10-12 % 1-12 1-12 %
Invoicing 929.1 871.6 6.6 3,518.4 3,336.3 5.5
Net sales 394.7 395.2 -0.1 1,552.2 1,527.7 1.6
Adjusted EBITDA 12.0 13.1 -8.2 65.5 67.6 -3.0
Adjusted EBITDA % 3.1 3.3 4.2 4.4
Adjusted EBIT1 5.2 6.2 -16.4 36.9 39.9 -7.7
EBIT -8.0 3.9 -304.4 22.0 37.8 -41.9
Adjusted EBIT % 1.3 1.6 2.4 2.6
EBIT % -2.0 1.0 1.4 2.5
Profit for the period -8.5 2.1 -495.8 12.7 25.9 -51.1
Earnings per share, EUR, continuing   operations -0.05 0.01 -495.8 0.07 0.14 -51.2
Earnings per share, EUR, discontinued   operations - -0.00 - 0.00
Net cash flow from operating activities2 48.4 11.0 102.8 23.7
Gross capital expenditure 39.6 46.1
Total assets 927.7 922.4
Net interest-bearing debt 63.6 110.2
Gearing, % 35.1 55.7
Net debt / 12-month EBITDA2 1.1 1.7
Equity per share, EUR 1.00 1.09
Equity ratio, %2 19.8 21.8
Return on equity (ROE), %2 6.7 13.0
Return on capital employed (ROCE), %2 6.9 11.7
Average number of shares, 1000 pcs3 181,361 181,328
Average number of personnel 2,699 2,686
Number of personnel at the end of the period 2,706 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 Financial Statements Release January­­–December 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 Friday, 22 February 2019 at 4.00 p.m. at Hotel Scandic Simonkenttä, meeting room Mansku, Simonkatu 9, 00100 Helsinki, Finland.

Publication of the Financial Statements

Oriola Corporation will publish its 2018 Financial Statements by 25 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