Oriola Corporation’s Interim report 1 January–30 September 2020

Oriola Corporation stock exchange release 23 October 2020 at 8.30 a.m.

Oriola Corporation’s Interim report 1 January–30 September 2020

 

January–September 2020 highlights

  • The COVID-19 pandemic had a significant impact on Oriola’s operating environment and operations.

  • Invoicing increased by 0.9% (increased 6.4%) to EUR 2,778.3 (2,754.2) million. On a constant currency basis invoicing increased by 0.8% and was EUR 2,776.5 million.                                           
  • Net sales increased by 4.7% (increased 10.1%) to EUR 1,334.5 (1,274.6) million. On a constant currency basis net sales increased by 4.6% and were EUR 1,333.6 million.
  • Adjusted EBIT was EUR 13.0 (18.4) million. On a constant currency basis the adjusted EBIT was EUR 13.0 million.
  • Profit for the period totalled EUR 7.2 (8.2) million and earnings per share were EUR 0.04 (0.05).

July–September 2020 highlights

  • The recommendations given by the authorities and their impacts on consumer behaviour were reflected in pharmaceutical volumes. Ongoing pandemic and its acceleration at the end of the reporting period had a negative impact on Oriola’s business environment.
  • The dose dispensing business developed well during the reporting period.
  • Covid-related adjacent services developed positively.
  • Invoicing decreased by 0.2% (increased 8.7%) to EUR 915.3 (917.3) million. On a constant currency basis invoicing decreased by 2.4% and was EUR 895.6 million.                                           
  • Net sales increased by 2.3% (increased 16.0%) to EUR 438.9 (429.0) million. On a constant currency basis net sales decreased by 0.1% and were EUR 428.6 million.
  • Adjusted EBIT was EUR 6.3 (9.1) million. On a constant currency basis the adjusted EBIT was EUR 6.2 million.
  • Profit for the period totalled EUR 3.7 (2.0) million and earnings per share were EUR 0.02 (0.01).

Business outlook for 2020

The adjusted EBIT on a constant currency basis stays on the same level or increases from the 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 third quarter of 2020:

“During the review period, Oriola’s business continued to be significantly impacted by COVID-19 pandemic. The number of infections increased rapidly towards the end of the reporting period. The usage of pharmaceuticals was lower than usual as healthcare resources were allocated to testing and other pandemic preparedness measures. Especially the volumes of elective care fell below the customary level. Moreover, the changes in buying behaviour - based on the restricted consumer mobility - negatively affected the demand for health and wellbeing products. These phenomena impacted the operating environment globally and increased uncertainty also in both Oriola’s markets, Finland and Sweden.

Important milestones were reached in the distribution centre in Sweden. Despite delays caused by the pandemic, the ramp-up phase of the automatisation will be completed during the last quarter of 2020 and the focus will shift to process optimisation and efficiency improvements. The positive impacts of the automatisation and the efficiency improvements will contribute to our financial result gradually.
 

Oriola’s invoicing remained at the level of the comparison period and net sales increased slightly. On a constant currency basis, invoicing decreased and net sales remained stable. Adjusted EBIT decreased by 30.1% to EUR 6.3 million.

In Consumer, net sales1 grew by 1.2% compared to the same period last year. In the strategically important online channel, growth continued at a rate faster than market. In addition, we saw healthy demand for COVID-19-related services, such as antibody tests, offered by our pharmacies. However, sales of our brick-and mortar pharmacies decreased due to the lower consumer mobility, particularly in shopping centres.

In Pharma, invoicing1 decreased by 3.1% and net sales1 decreased by 0.5% compared to the same period last year. Pandemic slowed down pharmaceutical sales, which was further reflected in the lower demand for pharmaceuticals distribution. The business of Expert services developed favourably during the review period. The decline in pharmaceutical volumes, changes in distribution agreements and the increased cost to serve burdened Pharma’s financial result.

In Retail, net sales1 grew by 1.9% compared to the same period last year. Dose dispensing business developed favourably. Moreover, the demand for products related to pandemic, such as face masks, was active. Retail’s financial result developed positively, mainly due to the growth in dose dispensing and the improved efficiencies in dose dispensing operations. In Sweden, increased cost to serve burdened the business area’s result.

While the market environment has remained tough, we have been capable of safeguarding the health and safety of our employees and executing our societally crucial purpose – Health for life. A warm thank you to our personnel for making this happen.“

1 On a constant currency basis

Key figures 2020 2019 Change 2020 2019 Change 2019
EUR million 7-9 7-9 % 1-9 1-9 % 1-12
Invoicing 915.3 917.3 -0.2 2,778.3 2,754.2 0.9 3,733.1
Net sales 438.9 429.0 2.3 1,334.5 1,274.6 4.7 1,721.3
Adjusted EBIT1 6.3 9.1 -30.1 13.0 18.4 -29.5 20.5
EBIT 6.3 3.8 68.1 13.6 14.5 -6.8 15.3
Adjusted EBIT % 1.4 2.1 1.0 1.4 1.2
EBIT % 1.4 0.9 1.0 1.1 0.9
Profit for the period 3.7 2.0 87.1 7.2 8.2 -12.6 8.0
Earnings per share, EUR 0.02 0.01 87.1 0.04 0.05 -12.6 0.04
Net cash flow from operating activities 4.3 12.9 12.6 57.0 84.4
Gearing, % 102.3 86.8 76.1
Equity ratio, % 14.0 15.1 15.5
Return on capital employed (ROCE), % 4.5 5.2 4.1
1 Adjusting items are specified in note 12. Adjusting items.

The figures for Q1-Q3 2019 in this Interim 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 Interim report.

Disclosure procedure

This stock exchange release is a summary of Oriola Corporation’s Interim Report January­­–September 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, 23 October 2020 at 10.00 a.m. The event can be followed as a live-webcast accessible through this link: https://oriola.videosync.fi/2020-q3-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/