Oriola Corporation’s Half Year Financial Report 1 January–30 June 2020

Oriola Corporation stock exchange release 17 July 2020 at 8.30 a.m.
 

Oriola Corporation’s Half Year Financial Report 1 January–30 June 2020

January–June 2020 highlights

  • Invoicing increased by 1.4% (increased 5.3%) to EUR 1,863.0 (1,836.9) million. On a constant currency basis invoicing increased by 2.4% and was EUR 1,880.9 million.                                           
  • Net sales increased by 5.9% (increased 7.4%) to EUR 895.6 (845.6) million. On a constant currency basis net sales increased by 7.0% and were EUR 905.0 million.
  • Adjusted EBIT was EUR 6.6 (9.3) million. On a constant currency basis the adjusted EBIT was EUR 6.8 million.
  • Profit for the period totalled EUR 3.5 (6.3) million and earnings per share were EUR 0.02 (0.03).
  • The COVID-19 pandemic had a significant impact on Oriola’s operations in the first half of the year.   

April–June 2020 highlights

  • Invoicing decreased by 4.7% (increased 5.1%) to EUR 897.7 (942.5) million. On a constant currency basis invoicing decreased by 4.6% and was EUR 899.1 million.                                           
  • Net sales decreased by 2.8% (increased 12.3%) to EUR 435.8 (448.5) million. On a constant currency basis net sales decreased by 2.6% and were EUR 436.6 million.
  • Adjusted EBIT was EUR -0.3 (5.6) million. On a constant currency basis the adjusted EBIT was EUR -0.3 million.
  • Profit for the period totalled EUR -1.6 (4.5) million and earnings per share were EUR -0.01 (0.02).
  • Due to the COVID-19 pandemic, the restrictions on citizens’ mobility and slow-down of healthcare services, the market demand declined and Oriola’s result turned negative in the second quarter of 2020.

Business outlook for 2020

The adjusted EBIT on a constant currency basis is estimated to increase from 2019 level.

Oriola’s business outlook for 2020 is based on external market forecasts, agreements with pharmaceutical companies and pharmacies, and management assessments.

President and CEO Robert Andersson on the second quarter of 2020:

Oriola’s invoicing (EUR 897.7 million, -4.7%) and net sales (EUR 435.8 million, -2.8%) decreased in the second quarter of the year compared to last year. On a constant currency basis invoicing decreased by 4.6% and net sales decreased by 2.6%. Adjusted EBIT decreased to EUR -0.3 million.

The second quarter result was lost due to the COVID-19 pandemic, which significantly impacted Oriola’s market environment and operations in both countries. The restricted consumer mobility, especially in April–May, impacted buying behavior and the use of healthcare services negatively. Public healthcare focused on the preparations for, and treatment of COVID-19 patients, which resulted in partial standstill of elective care. In addition, securing pharmaceutical deliveries in all circumstances raised operational costs.

In Consumer, net sales decreased by 1.9% on a constant currency basis compared to the same period last year. In the second quarter, sales were affected by the change in consumer buying behaviour, which was reflected in the significant slowdown in commerce in shopping centres and also in the growth of online sales. At our pharmacies, new services were quickly developed to support the new market situation, such as ”Call and Collect Outside” service, as well as COVID-19 antibody testing. In accordance with our omnichannel strategy, we launched a “Click & Collect” service, where products can be ordered online and picked up from a pharmacy, with an accelerated schedule. 

Pharma´s invoicing decreased by 5.9% on a constant currency basis compared to the same period last year, and net sales decreased by 4.8% compared to the same period last year. The slowdown in pharmaceutical sales following the pandemic was particularly evident in April–May. The result was also weakened by the increased costs due to the securing the pharmaceutical distribution to customers. Together with four Swedish regions and another wholesaler, we built a national stock in Sweden for certain pharmaceuticals to support pharmaceutical availability.

In Retail, net sales grew by 4.2% on a constant currency basis compared to the same period last year. Retail´s sales were positively impacted by the demand for pandemic-related products. On the other hand, the decline in pharmacy visits had a negative impact on overall product sales and on pharmacy staffing business in Finland. The Business Area´s result was also weakened by the increased distribution and operational costs at our distribution centre in Sweden.

In our operating countries the COVID-19 pandemic situation is currently relatively stable, but the risk of a second wave may increase volatility of the business environment.”

 

Key figures

2020 2019 Change 2020 2019 Change 2019
EUR million 4-6 4-6 % 1-6 1-6 % 1-12
Invoicing 897.7 942.5 -4.7 1,863.0 1,836.9 1.4 3,733.1
Net sales 435.8 448.5 -2.8 895.6 845.6 5.9 1,721.3
Adjusted EBIT1 -0.3 5.6 -105.0 6.6 9.3 -28.9 20.5
EBIT -0.2 7.1 -103.1 7.2 10.8 -32.8 15.3
Adjusted EBIT % -0.1 1.3 0.7 1.1 1.2
EBIT % -0.1 1.6 0.8 1.3 0.9
Profit for the period -1.6 4.5 -135.2 3.5 6.3 -43.7 8.0
Earnings per share, EUR -0.01 0.02 -135.2 0.02 0.03 -43.7 0.04
Net cash flow from operating activities 8.8 69.6 8.3 44.2 84.4
Gearing, % 99.8 97.1 76.1
Equity ratio, % 13.3 14.9 15.5
Return on capital employed (ROCE), % 3.6 5.7 4.1
1 Adjusting items are specified in note 12. Adjusting items.

The figures for Q1-Q3 2019 in this Half year financial report have been restated due to an error related to previous periods. For more information on the correction of the error please refer to the 31 December 2019 annual financial statements.

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 “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 11. Alternative performance measures in the notes to this Half year financial report.

 

Disclosure procedure

This stock exchange release is a summary of Oriola Corporation’s Half Year Financial Report January­­–June 2020. The complete report is attached to this release in pdf format and is also available on Oriola’s website at  https://www.oriola.com/

Analyst and investor meeting

Oriola Corporation will organise a live-webcast meeting for investors, analysts and the press on Friday, 17 July 2020 at 10.00 a.m. The event can be followed as a live-webcast accessible through this link: https://oriola.videosync.fi/2020-q2-results. The event will be arranged only as a webcast.

 

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/