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2014-06-05 10:15:00 CEST 2014-06-05 10:15:25 CEST REGULATED INFORMATION Oriola-KD Oyj - Company AnnouncementOriola-KD Corporation recognizes EUR 74 million impairment charge for Russian pharmaceutical wholesale operating segmentOriola-KD Corporation Stock Exchange Release 5 June 2014 at 11.15 a.m. Oriola-KD Corporation recognizes EUR 74 million impairment charge for Russian pharmaceutical wholesale operating segment Oriola-KD Corporation recognizes an estimated EUR 74 million impairment charge for Russian pharmaceutical wholesale impacting the 2014 second quarter results. The impairment charge consists of goodwill EUR 67 million, intangible assets EUR 1 million and deferred tax assets EUR 6 million. After impairment no goodwill is allocated to the Russian wholesale business. The impairment results from the revised business plan developed by the new Russian pharmaceutical wholesale operational management and subsequently the updated parameters applied in the value-in-use calculation. Based on the business plan, the growth in future net sales and profitability are expected to be below those of the earlier plans. The impairment charge is reported in the Oriola-KD Corporation's second quarter interim results as a non-recurring, non- cash item of expense. The key parameters applied in the value-in-use calculation of the Russian pharmaceutical wholesale are on 30 May 2014 (31 December 2013) as follows: Post- tax discount rate 11.8 (10.1) per cent, operating profit 0.2 (0.8) per cent, terminal growth 2.0 (1.0) per cent and net sales growth 5.0 (8.4) per cent. Operating profit percentage in the value-in-use calculation is the average operating profit percentage over a ten year period and net sales growth rate is the average growth rate over a ten-year period. Terminal growth rate is applied from the beginning of year 2025. The Group's revised outlook on the growth of Russian pharmaceutical wholesale operations is consistent with the weakening view of external information sources regarding the future development of the Russian markets. Based on the assessments by IMF, the growth in the Russian GDP is expected to slow down during 2014 to 0.2 per cent instead of the earlier estimated one percent and above (source: BOFIT). The IMS expects the Russian pharmaceutical market to grow on average 8.1% between 2013 - 2018 instead of the earlier estimated 10.0 per cent (source: IMS Health). Oriola-KD Corporation's January - June interim results are released 24 July 2014. Oriola-KD Corporation Tuomas Itkonen CFO For further information, please contact: Tuomas Itkonen CFO tel. +358 40 596 4004 email: tuomas.itkonen@oriola-kd.com Sami Laine Group Treasurer tel. +358 40 638 0251 email: sami.laine@oriola-kd.com Distribution: NASDAQ OMX Helsinki Ltd. Key media Released by: Oriola-KD Corporation Corporate Communications Orionintie 5 FI-02200 Espoo www.oriola-kd.com [HUG#1790944] |
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