2011-10-27 07:30:00 CEST
2011-10-27 07:30:52 CEST
REGULATED INFORMATION
Oriola-KD Oyj - Interim report (Q1 and Q3)
Oriola-KD Corporation's Interim Report for 1 January - 30 September 2011
Oriola-KD Corporation Stock Exchange Release 27 October 2011 at 8.30 a.m.
Key figures for continuing operations for 1 January - 30 September 2011
* Net sales increased by 13.2 per cent to EUR 1,587.2 million (1-9/2010: EUR
1,401.5 million).
* Operating loss came to EUR 26.0 million (1-9/2010: operating profit of EUR
2.4 million), which includes an impairment charge of EUR 33.4 million
related to the Russian Stary Lekar brand in the second quarter.
* Operating profit excluding one-off items and impairment charges was EUR 7.4
million (1-9/2010: EUR 14.2 million).
* Net result was EUR -28.2 million (1-9/2010: EUR -2.0 million) and earnings
per share were EUR -0.19 (1-9/2010: EUR -0.01) including the impairment
charge of Stary Lekar brand.
* Net cash flow from operations was EUR -2.4 million (1-9/2010: EUR 43.2
million).
* Return on equity was -11.8 per cent (1-9/2010: -0.9 per cent).
* Outlook unchanged: Oriola-KD's net sales are expected to increase over 10
per cent in 2011 compared to the previous year. Operating profit excluding
one-off items and impairment charges is expected to exceed EUR 20 million in
2011.
Key figures for continuing operations for 1 July - 30 September 2011
* Net sales increased by 4.6 per cent to EUR 521.6 million (7-9/2010: EUR
498.5 million).
* Operating profit was EUR 3.4 million (7-9/2010: operating loss of EUR 5.8
million).
* Operating profit excluding one-off items and impairment charges was EUR 3.4
million (7-9/2010: operating profit of EUR 5.9 million).
* Net result was EUR -0.6 million (7-9/2010: EUR -6.3 million) and earnings
per share were EUR 0.00 (7-9/2010: EUR -0.04).
Eero Hautaniemi, President and CEO, in conjunction with the interim report:"Oriola-KD's third-quarter net sales grew five per cent to EUR 522 million and
operating profit excluding one-off items and impairment charges declined to EUR
3.4 million. The new IT system in the Swedish retail business was taken into use
according to plan by the end of September. The Swedish retail business started
negotiations for reducing workforce. In the Russian retail business, the Stary
Lekar and the 03 Apteka pharmacy chains were integrated and 19 unprofitable
pharmacies closed. The sales of the Stary Lekar pharmacy chain began to grow as
a result of changes in pricing. In Russian wholesale, sales outside Moscow were
increased and projects for boosting the efficiency of logistics were continued
as planned."
Financial performance
Net sales generated by the continuing operations of the Oriola-KD Group
(hereinafter Oriola-KD) in January-September 2011 were EUR 1,587.2 million (EUR
1,401.5 million), and the operating loss was EUR 26.0 million (operating profit
of EUR 2.4 million). The operating loss includes an impairment charge of EUR
33.4 million in the second-quarter related to the value of the intangible assets
of the Stary Lekar brand in Russia. Operating profit excluding one-off items and
the impairment charge decreased to EUR 7.4 million (1-9/2010: EUR 14.2 million),
owing to the weakened profitability of the Swedish retail business and the
Russian retail and wholesale businesses.
Profit after financial items was EUR -33.1 million (EUR -1.1 million) and net
profit EUR -28.2 million (EUR -2.0 million). Oriola-KD's financial expenses
increased to EUR 7.1 million (EUR 3.6 million), mainly due to the exchange
differences of loans and increased interest expenses. Taxes were EUR 4.9 million
positive (EUR -0.8 million), mostly owing to the change in deferred tax related
to the brand write-off. Taxes corresponding to the result for the January-
September period 2011 are entered under this figure. Earnings per share were EUR
-0.19 (EUR -0.01).
Third-quarter net sales came to EUR 521.6 million (EUR 498.5 million), and the
operating profit was EUR 3.4 million (operating loss of EUR 5.8 million).
Operating profit excluding one-off items and impairment charges decreased to EUR
3.4 million (EUR 5.9 million), owing to the weakened profitability of the
Swedish retail business. Profit after financial items was EUR 0.3 million (EUR
-7.0 million) and net result EUR -0.6 million (EUR -6.3 million). The third-
quarter earnings per share came to EUR 0.00 (EUR -0.04).
Return on equity was -11.8 per cent (-0.9 per cent) in January-September 2011.
Balance sheet, financing and cash flow
Oriola-KD's balance sheet total on 30 September 2011 stood at EUR 1,136.6
million (EUR 1,144.3 million). Cash assets were EUR 114.8 million (EUR 89.5
million), equity was EUR 283.8 million (EUR 302.5 million) and the equity ratio
was 25.6 per cent (27.1 per cent). During the second quarter of 2011, Oriola-KD
recognised an impairment charge of EUR 33.4 million related to the value of the
intangible assets of the Stary Lekar brand in Russia. In the changed competitive
environment the pricing power of the Stary Lekar brand has essentially declined.
Of Oriola-KD's group goodwill of EUR 255.5 million, EUR 121.1 million has been
allocated in impairment testing to the cash-generating unit of the Russian
retail and wholesale companies, EUR 108.2 million to the cash-generating unit of
the Swedish pharmaceutical retail business and EUR 26.2 million to the cash-
generating unit of the Swedish pharmaceutical wholesale business. According to
the impairment tests conducted in October 2011, Oriola-KD has no need for
goodwill write-offs.
Interest-bearing debt at the end of September 2011 was EUR 149.9 million (EUR
187.9 million), interest-bearing net debt was EUR 35.1 million (EUR 98.4
million) and the gearing ratio was 12.4 per cent (32.5 per cent). Interest-
bearing debt consists of long-term debt financing, advance payments from
pharmacies in Finland and the estimated discounted value of the minority share
of the Swedish pharmacy company that Oriola-KD is obliged to acquire. Oriola-KD
has hedged the interest rate risk of long-term debt financing.
Oriola-KD's committed long-term credit facilities of EUR 102.4 million and EUR
41.6 million in short-term credit account facilities with banks stood unused at
the end of the review period. Oriola-KD's EUR 150 million commercial paper
programme was not in use at the end of the review period. The terms of the
financial covenants were met by a wide margin at the end of September 2011.
Net cash flow from operations in January-September 2011 was EUR -2.4 million
(EUR 43.2 million), of which changes in working capital accounted for EUR -6.2
million (EUR 32.1 million). In the Swedish pharmaceutical wholesale business,
the trade receivables sales programme was continued during 2011.
Net cash flow from investments was EUR -17.7 million (EUR -166.3 million).
During the January-September 2011 period, cash flow after investments was EUR
-20.1 million (EUR -123.1 million).
Investments
Gross investments for January-September 2011 came to EUR 20.3 million (EUR
186.1 million). They include operational investments mostly in establishing new
pharmacies in Sweden and Russia, improving the efficiency of wholesale
operations and information systems.
Personnel
On 30 September 2011, Oriola-KD's continuing operations had a payroll of 4,981
(4,877) employees, 10 per cent (11 per cent) of whom worked in Finland and the
Baltic countries, 25 per cent (28 per cent) in Sweden, and 65 per cent (61per
cent) in Russia. Personnel numbers include the members of staff in active
employment.
Changes to the Oriola-KD Group Management Team: Anne Kariniemi, Vice President,
Logistics and Sourcing, resigned on 23 June 2011 and Cecilia Marlow, Vice
President, Pharmaceutical Retail, Sweden, resigned on 15 August 2011. Anne
Kariniemi's duties have been distributed among the current organisation, and
Jonas Levin is now the acting head of Pharmaceutical Retail in Sweden.
Reporting segments
Oriola-KD's reporting segments are Pharmaceutical Trade Finland and Baltics,
Pharmaceutical Trade Sweden and Pharmaceutical Trade Russia.
Pharmaceutical Trade Finland and Baltics
The net sales of Pharmaceutical Trade Finland and Baltics in January-September
2011 were EUR 309.1 million (EUR 336.9 million), and its operating profit was
EUR 16.2 million (EUR 16.1 million). Pharmaceutical wholesale Finland's
invoicing in January-September was EUR 725.1 million (EUR 713.8 million) and net
sales were EUR 249.6 million (EUR 281.9 million). Net sales of pharmaceutical
wholesale in the Baltic countries were EUR 25.4 million (EUR 23.0 million) and
net sales of the Consumer Health business, i.e. consumer health products sold
under Oriola-KD's own brands or exclusive sales rights, was EUR 34.4 million
(EUR 32.2 million).
The net sales of Pharmaceutical Trade Finland and Baltics in the third quarter
of 2011 were EUR 101.8 million (EUR 111.1 million) and its operating profit was
EUR 5.9 million (EUR 6.2 million). Invoicing of Pharmaceutical wholesale Finland
in the third quarter came to EUR 239.6 million (EUR 240.0 million) and net sales
to EUR 82.7 million (EUR 93.2 million). Net sales of pharmaceutical wholesale in
the Baltic countries were EUR 8.2 million (EUR 7.4 million), while net sales of
the Consumer Health business were EUR 11.1 million (EUR 10.6 million).
The Finnish pharmaceutical market grew by 1.0 per cent (decrease of 0.9 per
cent) in January-September 2011. Oriola-KD's market share in the Finnish
pharmaceutical wholesale market was 45.6 per cent (46.5 per cent) in January-
September 2011 (source: IMS Health).
Pharmaceutical Trade Finland and Baltics had 496 (497) employees at the end of
September 2011.
Pharmaceutical Trade Sweden
Pharmaceutical Trade Sweden's net sales in January-September 2011 were EUR
783.5 million (EUR 661.9 million) and its operating profit excluding one-off
items was EUR 8.0 million (EUR 10.9 million). Operating profit in 2010 included
EUR 1.7 million in one-off costs in relation to the bankruptcy of a
pharmaceutical company in Sweden. Competition in the pharmaceutical retail
business in Sweden was stiff and the profitability of business operations was
weaker than in the previous year. Invoicing of the pharmaceutical wholesale
business in Sweden was EUR 1,083.6 million (EUR 908.5 million) and net sales
were EUR 465.9 million (EUR 414.1 million). Net sales of the pharmaceutical
retail business in Sweden were EUR 361.6 million (EUR 282.4 million). The
pharmaceutical retail business has been consolidated with the Oriola-KD figures
as of 19 February 2010.
Third-quarter net sales of Pharmaceutical Trade Sweden came to EUR 249.6 million
(EUR 239.5 million), of which retail accounted for EUR 115.3 million (EUR 116.1
million). Wholesale invoicing was EUR 337.8 million (EUR 308.1 million) and net
sales were EUR 148.4 million (EUR 137.6 million). The operating profit of
Pharmaceutical Trade Sweden excluding one-off items decreased to EUR 3.8 million
(EUR 6.6 million), owing to the weakened profitability of the retail business.
In the pharmaceutical retail business, the operating profit was weakened by
decreased year-on-year sales in Swedish krona as a result of stiff competition,
as well as by high fixed costs that were mostly due to the implementation of an
IT system. The third-quarter operating profit in 2010 included EUR 1.7 million
in one-off costs.
At the end of September, Kronans Droghandel Apotek AB completed the
implementation of a new IT system in all of its pharmacies, which will decrease
the fixed costs of the retail business starting from the fourth quarter and
enable the company to implement its efficiency programme. The company announced
in September that it will begin negotiations with labour unions to reduce a
maximum of 40 jobs in order to enhance operational efficiency and improve
profitability.
The Swedish pharmaceutical market grew by 2.8 per cent (0.8 per cent) in
January-September 2011. Oriola-KD's market share in the Swedish pharmaceutical
wholesale market was 38.7 per cent (40.5 per cent) and in the retail market
13.5 per cent (14 per cent) in January-September 2011 (source: IMS Health).
Oriola-KD had a total of 202 (176) pharmacies in Sweden at the end of September
2011.
Pharmaceutical Trade Sweden had 1,254 (1,381) employees at the end of September
2011, of whom 1,002 (1,082) were employed in retail and 252 (299) in wholesale.
Pharmaceutical Trade Russia
Pharmaceutical Trade Russia's net sales in January-September 2011 were EUR
494.9 million (EUR 402.8 million) and its operating loss excluding one-off items
was EUR 12.8 million (operating loss of EUR 8.2 million). One-off items were EUR
33.4 million caused by impairment charge of EUR 33.4 million related to the
value of the intangible assets of the Stary Lekar brand in Russia. (EUR 10.0
million in 2010 related to write-off of trade receivable and stock value write-
off). Stiff competition in Russia decreased the retail business's sales margin
and changes in the competitive environment substantially weakened the pricing
power of the Stary Lekar brand. The net sales of pharmaceutical wholesale in
Russia were EUR 426.0 million (EUR 369.5 million) and of retail EUR 96.6 million
(EUR 72.9 million). The figures for the 03 Apteka pharmacy chain have been
consolidated with Oriola-KD's figures as of 31 August 2010.
In Pharmaceutical Trade Russia, the third-quarter net sales came to EUR 170.3
million (EUR 147.8 million), of which retail accounted for EUR 31.5 million (EUR
25.4 million) and wholesale EUR 145.7 million (EUR 137.5 million). The operating
loss excluding one-off items was EUR 5.5 million (operating loss of EUR 5.7
million). The third-quarter operating loss for 2010 included EUR 10.0 million in
one-off costs.
The Stary Lekar and 03 Apteka pharmacy chains were integrated, 19 unprofitable
pharmacies were closed and the pharmacies' pricing changes were implemented by
the end of the third quarter. The sales of the Stary Lekar pharmacy chain began
to increase as a result of changes in pricing. In the wholesale business,
regional sales outside Moscow were increased, sales margins were raised, a
number of unprofitable operations were discontinued, the organisation was
strengthened and the project for enhancing the efficiency of logistics was
continued in the third quarter. During the fourth quarter, the IT systems of the
Stary Lekar and 03 Apteka pharmacy chains will be integrated, more unprofitable
pharmacies will be closed and measures to enhance the efficiency of the
wholesale business will continue to be carried out.
The Russian Ruble-denominated growth in the commercial pharmaceutical market in
Russia was 9.9 per cent (10.0 per cent) in January-September 2011 (source:
Pharmexpert). Oriola-KD's net sales increased by 25.9 per cent (about 9 per
cent) in Russian Rubles in January-September 2011.
At the end of September 2011, Oriola-KD had 264 (251) pharmacies in the Moscow
area, of which 189 (181) operated under the Stary Lekar brand and 75 (70) under
the 03 Apteka brand. In addition to the main logistics centre in Moscow, there
are twelve regional logistics centres.
At the end of September 2011, Pharmaceutical Trade Russia had 3,231 (2,999)
employees, of whom 1,585 (1,533) were employed in retail and 1,646 (1,466) in
wholesale.
Related parties
Related parties in the Oriola-KD Group are deemed to comprise the parent company
Oriola-KD Corporation, the subsidiaries and associated companies, the members of
the Board and the President and CEO of Oriola-KD Corporation, the other members
of the Group Management Team of the Oriola-KD Group, the immediate family of the
aforementioned persons, the companies controlled by the aforementioned persons,
and the Oriola Pension Foundation. The Group has no significant business
transactions with related parties, except for pension expenses arising from
defined benefit plans with the Oriola Pension Foundation. Oriola-KD Corporation
has given internal loans mainly to the holding companies of the Swedish and
Russian businesses. Oriola-KD Corporation has given no significant sureties on
behalf of Group companies, with the exception of a parent company guarantee for
a loan given to Kronans Droghandel Apotek AB.
Oriola-KD Corporation shares
Trading volume of the Oriola-KD Corporation's class A and B shares in January-
September 2011:
Trading volume Jan-Sept 2011 Jan-Sept 2010
class A class B class A class B
Trading volume, million 2.1 58.2 4.5 68.8
Trading volume, EUR million 6.5 163.2 20.5 287.3
Highest price, EUR 3.83 3.74 5.47 5.49
Lowest price, EUR 1.76 1.57 3.30 3.30
Closing quotation, end of period, EUR 1.79 1.69 4.26 4.27
In the review period, the traded volume of Oriola-KD Corporation shares,
excluding treasury shares, corresponded to 39.9 per cent (48.6 per cent) of the
total number of shares. The traded volume of class A shares amounted to 4.5 per
cent (9.5 per cent) of the average stock, and that of class B shares, excluding
treasury shares, 56.0 per cent (66.6 per cent) of the average stock.
Oriola-KD Corporation's market capitalisation on 30 September 2011 was EUR
260.3 million (EUR 645.4 million).
At the end of September 2011, the company had a total of 151,257,828 shares
(151,257,828), of which 47,163,160 were class A shares (47,217,359) and
104,094,668 were class B shares (104,040,469). Under Article 3 of the Articles
of Association, a shareholder may demand conversion of class A shares into class
B shares. During January-September 2011, no class A shares were converted into
class B shares (450,000).
The company has 96,822 treasury shares, all of which are class B shares. These
account for 0.06 per cent of the company's shares and 0.009 per cent of the
votes.
The Board of Directors of Oriola-KD has further specified the earnings criteria
for the share incentive scheme for the Group's key personnel for the years
2010-2012, stating that any payment for the 2011 earnings period will be based
on Oriola-KD's earnings per share (EPS) and return on equity (ROE). No payment
was made for the 2010 earnings period in the share incentive scheme for
2010-2012.
Decisions of the 2011 Annual General Meeting
The Annual General Meeting of Oriola-KD Corporation, held on 6 April 2011,
adopted the 2010 financial statements and discharged the members of the Board of
Directors and the President and CEO from liability for the financial year ending
31 December 2010. According to the decisions of the AGM, the company paid a
dividend of EUR 0.05 per share and distributed EUR 0.13 per share as repayment
of equity on 19 April 2011.
The AGM re-elected Harry Brade, Per Båtelson, Pauli Kulvik, Outi Raitasuo, Olli
Riikkala (Chairman) and Mika Vidgrén as Board members and elected Jukka Alho and
Ilkka Salonen as new members. PricewaterhouseCoopers Oy was re-elected as
auditor for the company, with APA Heikki Lassila as principal auditor.
The AGM authorised the Board to decide on the payment of an additional dividend
from undistributed profits and/or distribution of assets from the company's
invested unrestricted equity reserve, or both together, totalling a maximum of
EUR 0.10 per share. The authorisation is in force until the next annual general
meeting.
The AGM authorised the Board to decide on repurchasing up to fifteen million of
the company's own class B shares. Shares may be repurchased also in a proportion
other than in which shares are owned by the shareholders. The authorisation is
in force for a maximum of eighteen months following the decision of the AGM.
The AGM authorised the Board to decide on a share issue against payment in one
or more issues, including the right to issue new class B shares or to assign
class B shares held by the company. The authorisation covers a combined maximum
of fifteen million class B shares of the company and includes the right to
derogate from the shareholders' pre-emptive subscription right. The
authorisation is in force for eighteen months following the decision of the AGM.
At its constitutive meeting held immediately after the AGM, the Board of
Directors of Oriola-KD Corporation elected Outi Raitasuo as Vice Chairman of the
Board. The Board appointed from among its members Outi Raitasuo (Chairman),
Harry Brade, Ilkka Salonen and Mika Vidgrén to the Board's Audit Committee, and
Olli Riikkala (Chairman), Per Båtelson and Pauli Kulvik to the Board's
Remuneration Committee. The Board of Directors has assessed the independence of
its members and determined that all members are independent of both the company
and its major shareholders.
Risks
Oriola-KD's Board of Directors has approved the company's risk management policy
in which the risk management operating model, principles, responsibilities and
reporting are specified. The Group's risk management seeks to identify, measure
and manage risks that may threaten Oriola-KD's operations and the achievement of
goals set. The roles and responsibilities relating to risk management have been
determined in the Group.
Oriola-KD's risks are classified as strategic, operational and financial. Risk
management is a key element of the strategic process, operational planning and
daily decision-making at Oriola-KD.
Oriola-KD has identified the following principal strategic and operational risks
in its business:
* growth in the number of pharmacies outperforms growth in the market, leading
to intense competition
* competition for market share in pharmaceutical wholesale in a consolidating
market
* ensuring cost efficiency, flexibility and quality
* development of processes and infrastructure required by strategic expansion
* requirements and restrictions on pharmaceutical retail and wholesale imposed
by the authorities, especially price control
* commitment of key employees.
The major financial risks for Oriola-KD involve currency exchange rates,
liquidity, interest rates and credit. Expansion of operations into new business
areas and new markets has increased the financial risks. Currency risks are the
most significant financial risks in Russia and Sweden, as any changes in the
value of the Russian Ruble or the Swedish Krona will have an impact on Oriola-
KD's financial performance and equity.
Goodwill and intangible rights are subject to impairment testing at least once
every year. Changes in cash flow forecasts based on strategic plans, or in the
discount rate or perpetuity growth rate, can cause a goodwill write-off, which
would weaken Oriola-KD's result. The impairment test of the goodwill of the
Russian cash-generating unit, in particular, is more sensitive than before to
changes in the discount rate or cash-flow forecasts.
Near-term risks and uncertainty factors
Stiff competition and the number of new pharmacies to be established has an
impact on the profitability of Oriola-KD's pharmacy business. Changes in the
exchange rate of the Russian Ruble due to uncertainties in the global economy
and increasing customer credit risks may have an impact on the profitability of
the wholesale business in Russia.
Outlook
Oriola-KD's outlook for 2011 is based on external market forecasts, supplier and
customer agreements and management assessments. In the period 2011-2014, the
pharmaceutical market is expected to grow annually in average by some 3 per cent
in Finland, 2-3 per cent in Sweden, and 11-13 per cent in Russia, measured in
local currencies (source: IMS Health). Growth in the Russian pharmaceutical
market in 2011 is expected to be lower than the longer term trend and the tough
competition is expected to continue. The visibility in the Russian
pharmaceutical market development continues to be poor. Competition in the
Swedish retail market is expected to continue to be stiff as a result of the
deregulation.
Outlook unchanged:
Oriola-KD's net sales are expected to increase over 10 per cent in 2011 compared
to the previous year. Operating profit excluding one-off items and impairment
charges is expected to exceed EUR 20 million in 2011.
Tables
The interim report for 1 January-30 September 2011 has been prepared in
accordance with the recognition policies of the IAS 34 standard. Oriola-KD
adopted new IAS/IFRS standards in 2011: IAS 32 (amendment), IAS 24 (revised) and
IFRIC 14 (amendment). The figures are unaudited.
Consolidated
Statement of
Comprehensive 1 Jan - 30 1 Jan - 30 1 July - 1 July - 1 Jan - 31
Income (IFRS), Sep Sep 30 Sep 30 Sep Dec
EUR million 2011 2010 2011 2010 2010
--------------------------------------------------------------------------------
Continuing
operations
Net sales 1,587.2 1,401.5 521.6 498.5 1,929.4
Cost of goods sold -1,355.0 -1,219.5 -447.9 -439.6 -1,668.2
--------------------------------------------------------------------------------
Gross profit 232.2 182.1 73.7 58.9 261.2
Other operating
income 2.0 3.2 0.5 1.3 4.8
Selling and
distribution
expenses -185.0 -152.7 -58.6 -54.6 -214.7
Administrative
expenses -41.8 -30.1 -12.2 -11.4 -41.5
--------------------------------------------------------------------------------
Operating
Profit/Loss before
Impairment * 7.4 2.4 3.4 -5.8 9.8
Impairment ** -33.4 - - - -
--------------------------------------------------------------------------------
Operating
Profit/Loss -26.0 2.4 3.4 -5.8 9.8
Financial income 7.5 8.4 2.0 5.0 13.0
Financial expenses -14.7 -12.0 -5.1 -6.3 -18.3
--------------------------------------------------------------------------------
Profit/Loss before
taxes -33.1 -1.1 0.3 -7.0 4.5
Income taxes *** 4.9 -0.8 -0.9 0.8 -0.9
--------------------------------------------------------------------------------
Profit/Loss for the
period
from continuing
operations -28.2 -2.0 -0.6 -6.3 3.5
Discontinued
operations
Profit for the
period
from discontinued
operations - 60.7 - 1.3 98.6
--------------------------------------------------------------------------------
Profit/Loss for the
period
including
discontinued
operations -28.2 58.7 -0.6 -4.9 102.1
Other comprehensive
income
Net investment in
a foreign operation -4.3 3.7 -4.2 -4.5 5.1
Cash flow hedge -1.2 0.0 -1.7 0.4 1.2
Income tax relating
to
other comprehensive
income 0.9 -0.7 0.8 0.9 -1.0
Translation
difference -8.9 15.2 -11.8 -22.2 20.0
--------------------------------------------------------------------------------
Total comprehensive
income
for the period
including
discontinued
operations -41.7 76.8 -17.5 -30.4 127.4
Attribution of
Profit/Loss for
the period from
continuing
operations
--------------------------------------------------------------------------------
To parent company
shareholders -28.2 -2.0 -0.6 -6.3 3.5
--------------------------------------------------------------------------------
To non-controlling
interest - - - - -
--------------------------------------------------------------------------------
Attribution of
Profit/Loss for the
period
including
discontinued
operations
--------------------------------------------------------------------------------
To parent company
shareholders -28.2 58.7 -0.6 -4.9 102.1
--------------------------------------------------------------------------------
To non-controlling
interest - - - - -
--------------------------------------------------------------------------------
Attribution of
total comprehensive
income for the
period
(including
discontinued
operations)
--------------------------------------------------------------------------------
To parent company
shareholders -41.7 76.8 -17.5 -30.4 127.4
--------------------------------------------------------------------------------
To non-controlling
interest - - - - -
--------------------------------------------------------------------------------
Earnings per share
for the period
from continuing
operations
Basic earnings per
share, EUR -0.19 -0.01 -0.00 -0.04 0.02
Diluted earnings
per share, EUR -0.19 -0.01 -0.00 -0.04 0.02
Earnings per share
for the period
(including
discontinued
operations)
Basic earnings per
share, EUR -0.19 0.39 -0.00 -0.04 0.68
Diluted earnings
per share, EUR -0.19 0.39 -0.00 -0.04 0.68
*) Including
depreciation, EUR
million -11.1 -8.0 -3.9 -2.9 -11.1
**) Stary Lekar
-brand impairment,
EUR million -33.4 - - - -
***) The tax
expense for the
period
corresponds to the
taxes calculated
from the
profit/loss for the
financial year and
a change in
deferred tax caused
by impairment of
Stary Lekar -brand
Consolidated Balance Sheet (IFRS),
EUR million
ASSETS 30 Sep 2011 30 Sep 2010 31 Dec 2010--------------------------------------------------------------------------------
Non-current assets
Property, plant and equipment 69.2 62.8 68.0
Goodwill 255.5 260.3 266.1
Other intangible assets 51.1 74.6 79.3
Investments in associated companies 0.0 32.1 0.0
Other non-current assets 9.3 9.1 10.6
Deferred tax assets 5.2 8.6 3.3
--------------------------------------------------------------------------------
Non-current assets total 390.4 447.6 427.2
Current assets
Inventories 309.4 308.3 287.5
Trade and other receivables 322.1 298.9 290.1
Cash and cash equivalents 114.8 89.5 187.8
--------------------------------------------------------------------------------
Current assets total 746.2 696.7 765.4
ASSETS TOTAL 1,136.6 1,144.3 1,192.6
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES 30 Sep 2011 30 Sep 2010 31 Dec 2010
--------------------------------------------------------------------------------
Equity
Share capital 36.2 36.2 36.2
Other funds 31.2 50.9 52.1
Retained earnings 216.4 215.4 264.5
Equity of the parent
company shareholders 283.8 302.5 352.7
Non-controlling interests - - -
--------------------------------------------------------------------------------
Equity total 283.8 302.5 352.7
Non-current liabilities
Deferred tax liabilities 14.5 23.8 22.2
Pension obligations 5.9 5.3 5.7
Provisions - - -
Interest-bearing non-current liabilities 121.5 121.8 124.5
Other non-current liabilities 0.0 - -
--------------------------------------------------------------------------------
Non-current liabilities total 142.0 150.9 152.5
Current liabilities
Trade payables and other current liabilities 682.4 624.8 633.6
Interest-bearing current liabilities 28.4 66.1 53.7
--------------------------------------------------------------------------------
Current liabilities total 710.8 690.9 687.4
EQUITY AND LIABILITIES TOTAL 1,136.6 1,144.3 1,192.6
--------------------------------------------------------------------------------
Consolidated
Statement
of Changes in
Equity (IFRS)
Equity
of the Non-
Trans- parent cont-
lation Re- company rolling
Share Hedge Other diffe- tained share- inte-
EUR million capital fund funds rences earnings holders rest Total
--------------------------------------------------------------------------------
Equity
1 Jan 2010 36.2 - 50.9 -30.4 186.8 243.4 10.8 254.2
--------------------------------------------------------------------------------
Dividends paid - - - - -18.1 -18.1 - -18.1
Change in non-
controlling interest - - - - - - -10.8 -10.8
Share-based payments - - - - 0.3 0.3 - 0.3
Net profit/loss for
the period - - - - 58.7 58.7 - 58.7
Other comprehensive
income:
Net investment in
a foreign operation - - - 3.7 - 3.7 - 3.7
Cash flow hedge - 0.0 - - - 0.0 - 0.0
Income tax relating
to
other comprehensive
income - - - -0.7 - -0.7 - -0.7
Translation
difference - - - 15.2 - 15.2 - 15.2
--------------------------------------------------------------------------------
Equity
30 Sep 2010 36.2 0.0 50.9 -12.3 227.7 302.5 - 302.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity
1 Jan 2011 36.2 1.2 50.9 -6.3 270.8 352.7 - 352.7
--------------------------------------------------------------------------------
Dividends paid and
return of equity - - -19.7 - -7.6 -27.2 - -27.2
Net profit/loss for
the period - - - - -28.2 -28.2 - -28.2
Other comprehensive
income:
Net investment in
a foreign operation - - - -4.3 - -4.3 - -4.3
Cash flow hedge - -1.2 - - - -1.2 - -1.2
Income tax relating
to
other comprehensive
income - - - 0.9 - 0.9 - 0.9
Translation
difference - - - -8.9 - -8.9 - -8.9
--------------------------------------------------------------------------------
Equity
30 Sep 2011 36.2 0.0 31.2 -18.6 235.0 283.8 - 283.8
--------------------------------------------------------------------------------
Consolidated Cash Flow Statement * 1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 31 Dec
(IFRS), EUR million 2011 2010 2010
--------------------------------------------------------------------------------
Operating profit /loss -26.0 9.7 17.1
Depreciation 11.1 8.4 11.5
Impairment 33.4 - -
Change in working capital -6.2 32.1 73.4
Cash flow from financial
items and taxes -14.8 -12.7 -18.1
Other adjustments 0.1 5.8 4.8
Net cash flow from operating
activities -2.4 43.2 88.7
Net cash flow from investing
activities -17.7 -166.3 -104.7
Net cash flow from financing
activities -52.5 71.5 61.2
Net change in cash and cash
equivalents -72.5 -51.6 45.2
Cash and cash equivalents
at the beginning of the period 187.8 133.7 133.7
Foreign exchange rate differences -0.5 7.4 8.9
Net change in cash and cash
equivalents -72.5 -51.6 45.2
Cash and cash equivalents
at the end of the period 114.8 89.5 187.8
--------------------------------------------------------------------------------
*) Includes net cash flow of
Healthcare
Trade until 31 May 2010 and net
cash
flow of Dental Trade until 28
October 2010.
Change in Property, Plant and
Equipment, 1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 31 Dec
EUR million 2011 2010 2010
--------------------------------------------------------------------------------
Carrying amount at the beginning of
the period 68.0 53.3 53.3
Increases through acquisitions of
subsidiary shares - 9.3 9.7
Increases 9.9 7.0 14.3
Decreases -0.5 -4.1 -5.2
Depreciation -6.8 -5.6 -7.6
Foreign exchange rate differences -1.4 2.9 3.4
--------------------------------------------------------------------------------
Carrying amount at the end of the
period 69.2 62.8 68.0
--------------------------------------------------------------------------------
1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 31 Dec
Key Figures 2011 2010 2010
--------------------------------------------------------------------------------
Equity ratio, % 25.6 27.1 30.8
Equity per share, EUR 1.88 2.00 2.33
Return on capital employed (ROCE)
from continuing operations, % -7.2 0.7 2.1
Return on capital employed (ROCE)
incl. discontinued operations, % -7.2 19.0 23.3
Return on equity from
continuing operations, % -11.8 -0.9 1.2
Return on equity incl.
discontinued operations, % -11.8 28.1 33.7
Net interest-bearing debt, EUR
million 35.1 98.4 -9.5
Gearing, % 12.4 32.5 -2.7
Earnings per share from
continuing operations, EUR -0.19 -0.01 0.02
Earnings per share incl.
discontinued operations, EUR -0.19 0.39 0.68
Average number of shares, 1000 pcs 151,161 151,256 151,164
Derivatives, Commitments
and Contingent Liabilities
30 Sep 2011
Positive fair Negative fair Nominal values of
EUR million value value contracts
Derivatives recognised as
cash flow hedges
Interest rate swaps - -0.0 108.0
Derivatives measured at
fair value through profit or loss
Foreign currency forward and swap
contracts - -0.0 2.2
30 Sep 2010
Positive fair Negative fair Nominal values of
EUR million value value contracts
Derivatives recognised
as cash flow hedges
Interest rate swaps - -0.0 109.4
Derivatives measured at
fair value through profit or loss
Foreign currency forward and swap
contracts 0.5 - 56.0
Contingencies for Own Liabilities,
EUR million 30 Sep 2011 30 Sep 2010 31 Dec 2010
--------------------------------------------------------------------------------
Guarantees given 117.0 123.3 125.4
Mortgages on land and buildings 2.0 2.0 2.0
Mortgages on company assets 2.3 2.3 2.3
Other guarantees and liabilities 0.6 0.1 0.5
--------------------------------------------------------------------------------
Total 121.8 127.7 130.3
--------------------------------------------------------------------------------
Leasing-liabilities (operating
liabilities) 0.7 1.3 0.9
Rent contingencies 61.9 59.9 66.5
NUMBER OF PERSONNEL
1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 31 Dec
Average number of personnel 2011 2010 2010
--------------------------------------------------------------------------------
Continuing operations 4,992 4,362 4,512
Group 4,992 4,580 4,675
Number of personnel at the end of
the period 30 Sep 2011 30 Sep 2010 31 Dec 2010
--------------------------------------------------------------------------------
Continuing operations 4,981 4,877 4,954
Group 4,981 4,877 4,954
SEGMENT INFORMATION
1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 31 Dec
Net Sales, EUR million 2011 2010 2010
--------------------------------------------------------------------------------
Pharmaceutical Trade
Finland and Baltics 309.1 336.9 448.3
Pharmaceutical Trade Sweden 783.5 661.9 908.7
Pharmaceutical Trade Russia 494.9 402.8 572.4
Net sales to other segments -0.2 -0,0 -0,0
--------------------------------------------------------------------------------
Continuing operations total 1,587.2 1,401.5 1,929.4
1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 31 Dec
Operating Profit/Loss, EUR million 2011 2010 2010
--------------------------------------------------------------------------------
Pharmaceutical Trade
Finland and Baltics 16.2 16.1 21.4
Pharmaceutical Trade Sweden 8.0 9.1 12.5
Pharmaceutical Trade Russia -46.2 -18.1 -18.1
Group Administration and Others -4.0 -4.6 -6.0
--------------------------------------------------------------------------------
Continuing operations total -26.0 2.4 9.8
1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 31 Dec
One-off costs and Impairment, EUR
million 2011 2010 2010
--------------------------------------------------------------------------------
Pharmaceutical Trade
Finland and Baltics - - -
Pharmaceutical Trade Sweden * - -1.7 -2.8
Pharmaceutical Trade Russia ** -33.4 -10.0 -10.0
Group Administration and Others - - -
--------------------------------------------------------------------------------
One-off costs and Impairment total -33.4 -11.7 -12.7
*) Write-off of a receivable
relating to the bankruptcy of a
pharmaceutical company EUR -1.7
million and a provision related to
restructuring of the pharmaceutical
wholesale operations EUR -1.1
million
**) Stary Lekar -brand impairment
EUR -33.4 million and a write-off
of a trade receivable relating to
the bankruptcy of a pharmaceutical
chain EUR -2.1 million and
purchase-related discounts booked
in stock value EUR -7.9 million
Operating Profit/Loss excl. One-off
costs 1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 31 Dec
and Impairment, EUR million 2011 2010 2010
--------------------------------------------------------------------------------
Pharmaceutical Trade
Finland and Baltics 16.2 16.1 21.4
Pharmaceutical Trade Sweden 8.0 10.9 15.3
Pharmaceutical Trade Russia -12.8 -8.2 -8.2
Group Administration and Others -4.0 -4.6 -6.0
--------------------------------------------------------------------------------
Continuing operations total
excl. One-off costs and Impairment 7.4 14.2 22.5
One-off costs and impairment -33.4 -11.7 -12.7
--------------------------------------------------------------------------------
Continuing operations total -26.0 2.4 9.8
Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/
Quarterly Net Sales, EUR million 2011 2011 2011 2010 2010 2010 2010
--------------------------------------------------------------------------------
Pharmaceutical Trade
Finland and Baltics 101.8 104.8 102.5 111.5 111.1 113.1 112.6
Pharmaceutical Trade Sweden 249.6 268.6 265.3 246.8 239.5 241.4 181.0
Pharmaceutical Trade Russia 170.3 162.2 162.4 169.6 147.8 132.8 122.1
Net sales to other segments -0.0 -0.1 -0.1 -0.0 -0.0 -0.0 -0.0
--------------------------------------------------------------------------------
Continuing operations total 521.6 535.5 530.1 527.8 498.5 487.3 415.7
Quarterly Operating Profit/Loss, EUR Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/
million 2011 2011 2011 2010 2010 2010 2010
--------------------------------------------------------------------------------
Pharmaceutical Trade
Finland and Baltics 5.9 4.7 5.6 5.3 6.2 5.2 4.8
Pharmaceutical Trade Sweden 3.8 1.9 2.3 3.3 4.9 5.6 -1.4
Pharmaceutical Trade Russia -5.5 -39.1 -1.6 0.1 -15.7 -2.0 -0.4
Group Administration and Others -0.9 -1.9 -1.2 -1.4 -1.2 -1.9 -1.6
--------------------------------------------------------------------------------
Continuing operations total 3.4 -34.4 5.0 7.3 -5.8 6.9 1.3
One-off costs and Impairment, EUR Q3/ Q2/ Q4/ Q3/ Q2/ Q1/
million 2011 2011 Q1/2011 2010 2010 2010 2010
--------------------------------------------------------------------------------
Pharmaceutical Trade
Finland and Baltics - - - - - - -
Pharmaceutical Trade Sweden * - - - -1.1 -1.7 - -
Pharmaceutical Trade Russia ** - -33.4 - - -10.0 - -
Group Administration and Others - - - - - - -
--------------------------------------------------------------------------------
One-off costs and Impairment total - -33.4 - -1.1 -11.7 - -
*) Write-off of a receivable
relating to the bankruptcy of a
pharmaceutical company EUR
-1.7 million (Q3/2010) and a
provision related to restructuring
of the pharmaceutical wholesale
operations EUR -1.1 million
(Q4/2010)
**) Stary Lekar -brand impairment
EUR -33.4 million (Q2/2011) and a
write-off of a trade receivable
relating to the bankruptcy of a
pharmaceutical chain EUR -2.1
million (Q3/2010) and purchase-
related discounts booked in stock
value EUR -7.9 million (Q3/2010)
Quarterly Operating
Profit/Loss,
excl. One-off costs and Q3/ Q2/ Q1/ Q4/ Q3/ Q2/ Q1/
Impairment, EUR million 2011 2011 2011 2010 2010 2010 2010
--------------------------------------------------------------------------------
Pharmaceutical Trade
Finland and Baltics 5.9 4.7 5.6 5.3 6.2 5.2 4.8
Pharmaceutical Trade
Sweden 3.8 1.9 2.3 4.5 6.6 5.6 -1.4
Pharmaceutical Trade
Russia -5.5 -5.7 -1.6 0.1 -5.7 -2.0 -0.4
Group Administration and
Others -0.9 -1.9 -1.2 -1.4 -1.2 -1.9 -1.6
--------------------------------------------------------------------------------
Continuing operations
total excl.
One-off costs and
Impairment 3.4 -1.0 5.0 8.4 5.9 6.9 1.3
One-off costs and
impairment - -33.4 - -1.1 -11.7 - -
--------------------------------------------------------------------------------
Continuing operations
total 3.4 -34.4 5.0 7.3 -5.8 6.9 1.3
1 Jan - 30 Sep 1 Jan - 30 Sep 1 Jan - 31 Dec
Net Sales by Market, EUR million 2011 2010 2010
-----------------------------------------------------------------------------
Finland 283.3 314.1 417.6
Sweden 762.3 643.0 882.6
Russia 494.9 402.8 572.4
Baltic countries 24.4 22.6 30.5
Other countries 22.4 19.0 26.4
-----------------------------------------------------------------------------
Continuing operations total 1.587,2 1,401.5 1,929.4
Quarterly Net Sales by
Market, EUR million Q3/2011 Q2/2011 Q1/2011 Q4/2010 Q3/2010 Q2/2010 Q1/2010
--------------------------------------------------------------------------------
Finland 93.6 96.5 93.1 103.5 102.6 106.5 105.0
Sweden 241.8 262.1 258.4 239.6 233.5 235.3 174.2
Russia 170.3 162.2 162.4 169.6 147.8 132.8 122.1
Baltic countries 8.0 7.7 8.7 7.8 7.0 7.3 8.3
Other countries 8.0 6.9 7.5 7.4 7.4 5.4 6.2
--------------------------------------------------------------------------------
Continuing operations
total 521.6 535.5 530.1 527.8 498.5 487.3 415.7
Espoo, 26 October 2011
Oriola-KD Corporation's Board of Directors
Oriola-KD Corporation
Eero Hautaniemi
President and CEO
Kimmo Virtanen
Executive Vice President and CFO
Further information:
Eero Hautaniemi
President and CEO
tel. +358 (0)10 429 2109
e-mail: eero.hautaniemi@oriola-kd.com
Kimmo Virtanen
Executive Vice President and CFO
tel. +358 (0)10 429 2069
e-mail: kimmo.virtanen@oriola-kd.com
Pellervo Hämäläinen
Vice President, Communications and IR
tel. +358 (0)10 429 2497
e-mail: pellervo.hamalainen@oriola-kd.com
Distribution
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Published by:
Oriola-KD Corporation
Corporate Communications
Orionintie 5
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www.oriola-kd.com
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