Oriola Corporation Interim report January 1– March 31, 2021

Oriola Corporation stock exchange release 27 April 2021 at 8.30 a.m.

Q1 2021: Profit weakened due to the increased demand volatility of the amplified pandemic

January–March 2021 highlights

  • Invoicing decreased by 2.4% to EUR 942.5 (965.3) million. On a constant currency basis invoicing decreased by 6.0% and was EUR 907.4 million.
  • Net sales decreased by 2.1% to EUR 450.2 (459.8) million. On a constant currency basis net sales decreased by 6.0% and were EUR 432.0 million.
  • Adjusted EBIT was EUR 0.3 (6.9) million. On a constant currency basis the adjusted EBIT was EUR 0.1 million.
  • Profit for the period totalled EUR -1.7 (5.1) million and earnings per share were EUR -0.01 (0.03).
Key figures 2021 2020 Change 2020
EUR million 1-3 1-3 % 1-12
Invoicing 942.5 965.3 -2.4 3,764.9
Net sales 450.2 459.8 -2.1 1,800.8
Adjusted EBIT1 0.3 6.9 -95.8 21.0
EBIT -0.5 7.5 -106.9 20.4
Adjusted EBIT % 0.1 1.5 1.2
EBIT % -0.1 1.6 1.1
Profit for the period -1.7 5.1 -132.6 11.3
Earnings per share, EUR -0.01 0.03 -132.6 0.06
Net cash flow from operating activities -14.2 -0.5 58.3
 
Gearing, % 94.7 91.8 75.0
Equity ratio, % 14.1 12.4 14.8
Return on capital employed (ROCE), % -0.5 8.6 5.0
1 Adjusting items are specified in note 12. Adjusting items.

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.

Business outlook for 2021

The adjusted EBIT on a constant currency basis stays on the same level or increases from the 2020 level.

The COVID-19 pandemic is expected to continue during 2021. Severity and duration of the pandemic remain unclear in Oriola’s operating environment. Oriola’s business outlook for 2021 is based on external market forecasts, agreements with pharmaceutical companies and pharmacies, and management assessments.

President and CEO Juko Hakala on the first quarter of 2021:

“The third wave of the COVID-19 pandemic affected societies in Finland and Sweden significantly in the first quarter of 2021. These effects caused adverse market developments and impacted strongly the entire industry. Low people mobility, lack of seasonal influenza epidemic and tightened restrictions impacted consumer buying behaviour in an exceptional way, especially in Sweden. On top of that, the reallocation of healthcare resources kept the pharmaceutical volumes low.

In the first quarter, Oriola’s invoicing and net sales declined by 6.0% in constant currency. Adjusted EBIT decreased to EUR 0.3 (6.9) million. A major driver was pharmaceutical market volume decline, especially in the important prescription (RX) and over-the-counter (OTC) categories in both markets. Channel shift to online in Swedish pharmacy business accelerated. We estimate these impacts to be temporary, with the exception of the channel shift to online.

For Consumer, the first quarter was challenging due to the strong COVID-19-related impacts in consumer behaviour, particularly in January and February. The first quarter net sales decreased by 6.4% in constant currency. The online sales increased by 80%. Adjusted EBIT decreased to EUR -0.6 (5.4) million. Key drivers for this adverse profit impact were lower volumes in RX and OTC pharmaceuticals. The channel shift to online accelerated.
 

Pharma business area was also impacted by the temporary pandemic effects. The first quarter net sales declined by 6.3% in constant currency. Adjusted EBIT decreased to EUR 2.0 (3.6) million. Key drivers were lower volumes in many RX and OTC categories, like cough and cold, changes in customer agreements as well as volume volatility driven operations inefficiency.

The net sales of Retail decreased by 3.7% in constant currency. Adjusted EBIT increased to EUR 1.1 (0.2) million, mainly due to the positive development of dose-dispensing business. Also, improved customer agreements in health and wellbeing product category in Sweden impacted the result positively.

Due to the significant temporary pandemic effects in the market environment, we started a short-term initiative named Focus21. The initiative simplifies the focus of Oriola’s 2021 activities to reach its strategic and business performance goals for the year. Oriola’s current strategic programmes 20by20 and Customer Experience will be merged into Focus21.

While the beginning of the 2021 was a challenging one for Oriola’s profitability, our operational service level was solid. We performed well in our role of delivering pharmaceuticals and operated our services reliably to our customers and the society amid the pandemic. Going forward in 2021, we continue working in line with our purpose “Health for Life”, continuing to prioritise Oriola’s reliable service, profitability and competitiveness.“

Disclosure procedure

This stock exchange release is a summary of Oriola Corporation’s Interim Report January­­–March 2021. 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 Tuesday, 27 April 2021 at 10.00 a.m. The event can be followed as a live-webcast accessible through this link: https://oriola.videosync.fi/q1-2021. Due to the current situation, the event will be arranged only as a webcast.

Further information:

Juko Hakala, President and CEO
tel: 
+358 10 429 2109 email: juko.hakala@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

https://www.oriola.com/