2008-08-21 07:30:00 CEST
2008-08-21 07:30:44 CEST
REGULATED INFORMATION
Oriola-KD Oyj - Interim report (Q1 and Q3)
Oriola-KD Corporation's interim report for 1 January - 30 June 2008
Oriola-KD Corporation Stock Exchange Release 21 August 2008 at 8.30am
This review presents the financial information for the Oriola-KD
Group (hereinafter Oriola-KD) for the period January-June 2008. The
retail and wholesale businesses Vitim and Moron acquired in Russia
have been consolidated into Oriola-KD's accounts since 1 April 2008.
The interim report has been prepared in accordance with IAS 34 and in
keeping with the same accounting principles as the annual financial
statements for 2007. The figures are unaudited.
Key figures 1 January - 30 June 2008
* Invoicing was EUR 1399.9 million (1-6/2007: EUR 1279.4m) and net
sales were EUR 733.3 million (1-6/2007: EUR 711.9m).
* Operating profit was EUR 12.7 million (1-6/2007: EUR 14.1m).
* Net earnings were EUR 9.7 million (1-6/2007: EUR 11.4m).
* Earnings per share were EUR 0.07 (1-6/2007: EUR 0.08).
* Return on capital employed was 12.3 percent (1-6/2007: 14.7
percent).
President and CEO Eero Hautaniemi: "The early part of the year has
seen Oriola-KD invest heavily in long-term strategic ventures, the
execution and takeover of the Russian pharmaceutical retail and
wholesale acquisition, and the business opportunities offered by the
potential deregulation of the pharmaceutical retail market in Sweden.
Progress as planned has been made on the strategic undertakings and
the costs arising from these eroded the company's Q2 earnings.
Strategic undertakings will remain a focus of investment in the
latter half of the year as well. The operating loss attributable to
the seasonal nature of the Russian business along with additional
expenditure relating to strategic ventures eroded operating profit
for the first half of the year by approximately two million Euro.
Oriola-KD's operating profit for 2008 inclusive of the additional
expenditure arising from strategic ventures and the effects of the
acquisition in Russia is anticipated to exceed that for the previous
year."
Financial performance
Oriola-KD's invoicing in January-June 2008 was EUR 1399.9 million
(EUR 1279.4 million) and net sales were EUR 733.3 million (EUR 711.9
million). Second-quarter invoicing came to EUR 756.2 million (EUR
644.4 million) and net sales to EUR 415.4 million (EUR 356.1
million).
Operating profit in January-June 2008 came to EUR 12.7 million (EUR
14.1 million) and earnings after financial items to EUR 12.9 million
(EUR 15.1 million). During the review period, Oriola invested heavily
in strategic growth ventures, the execution and takeover of the
Russian acquisition and the business opportunities offered by the
potential deregulation of the Swedish pharmacy market, which gave
rise to additional expenditure of EUR 1.2 million in the first half
of the year. Second-quarter operating profit came to EUR 4.2 million
(EUR 6.3 million) and earnings after financial items to EUR 3.8
million (EUR 7.0 million).
Oriola-KD had net financing income of EUR 0.2 million (EUR 1.0
million) in January-June 2008.
Taxes in the review period amounted to EUR 3.2 million (EUR 3.7
million). Taxes corresponding to the result for the period under
review are accounted as taxes.
Net earnings in the first half of 2008 were EUR 9.7 million (EUR 11.4
million).
Earnings per share in the review period were EUR 0.07 (EUR 0.08).
Return on capital employed was 12.3 percent (14.7 percent) and return
on equity 9.7 percent (11.9 percent).
Balance sheet, financing and cash flow
Oriola-KD's total assets at 30 June 2008 stood at EUR 817.0 million
(EUR 640.4 million). Cash and cash equivalents at 30 June 2008 stood
at EUR 42.2 million (EUR 99.8 million) and equity at EUR 194.2
million (EUR 193.0 million). Oriola-KD's equity ratio was 24.4
percent (30.9 percent).
At the end of the review period, interest-bearing net debt amounted
to EUR 18.9 million (EUR -82.3 million) and the gearing ratio was 9.7
percent (-42.6 percent). Interest-bearing debt, which stood at EUR
61.0 million at 30 June 2009 (EUR 17.5 million), was made up of
drawings on the commercial paper programme, the amounts owed by the
companies acquired in Russia, and pharmacies' advance payments in
Finland. At the end of June, Oriola-KD had a EUR 100 million
commercial paper programme which had been drawn upon in the amount of
EUR 27 million at month-end. The credit facilities of EUR 80 million
with banks to secure the programme remained untapped at the end of
the period under review.
Cash flow from operations in January-June 2008 was EUR -5.2 million
(EUR 13.9 million), of which changes in working capital accounted for
EUR -17.8 million (EUR -1.1 million). The rise in working capital is
mainly attributable to changes in the terms of payment applicable to
trade payables and receivables in the Russian companies and to growth
in Russia. The changes in the terms of payment applicable to trade
payables and receivables will improve the competitiveness and
performance of the businesses in Russia starting in Q3. Cash flow
from investments was EUR -74.7 million (EUR -2.6 million). Cash flow
after investments in the period was EUR -79.9 million (EUR 11.3
million). Cash flow from financing includes the dividend of EUR 11.3
million paid in April.
Investments
Investments in the period under review amounted to EUR 113.2 million
(EUR 3.8 million) and mainly concerned the business acquisition in
Russia, the acquisition of the12.51-percent minority holding in
Kronans Droghandel AB from Merck Sharp & Dohme (Sverige) AB, and
operative maintenance and PPE investments.
Personnel
At the end of the period under review, Oriola-KD had a payroll of
4626 employees (1486), 72 percent of whom worked in Russia (0%), 15
percent in Finland (56%), 8 percent in Sweden (27%) and a combined 5
percent in the Baltic countries and Denmark (17%).
Business segments
Oriola-KD has two business segments: the Pharmaceutical Trade
business segment and the Healthcare Trade business segment, which
includes the share of profits from the associated dental trade
company.
Pharmaceutical Trade business segment
The Pharmaceutical Trade business segment's invoicing in January-June
2008 was EUR 1298.6 million (EUR 1139.0 million) and net sales were
EUR 654.6 million (EUR 586.7 million). Second-quarter invoicing came
to EUR 706.5 million (EUR 575.9 million) and net sales to EUR 377.2
million (EUR 295.5 million).
Operating profit for the first six months of 2008 was EUR 10.2
million (EUR 9.7 million). Second-quarter operating profit came to
EUR 4.3 million (EUR 4.6 million), which figure includes the Russian
companies' operating loss of EUR 1.0 million in Q2.
The number of employees within the Pharmaceutical Trade business
segment at 30 June 2008 was 4222 (919).
Finland
The Pharmaceutical Trade business segment's invoicing in Finland in
January-June 2008 was EUR 518.9 million (EUR 488.9 million) and net
sales were EUR 260.6 million (EUR 237.5 million).
The Finnish pharmaceutical market grew by 6.4 percent (4.4%) in the
review period. Oriola-KD held a 47.9 percent (46.8%) share of the
pharmaceutical distribution market in Finland in January-June 2008
(source: IMS Health).
Oriola-KD took over the distribution of Wyeth products at the
beginning of 2008. Wyeth's share of the Finnish pharmaceutical market
is roughly two percent (source: IMS Health). Oriola-KD retained all
its major pharmaceutical principals in Finland during the period
under review.
According to the situation at the end of the review period,
Oriola-KD's share of the pharmaceutical wholesale market in Finland
is estimated at some 47 percent in 2008.
Sweden
The Pharmaceutical Trade business segment's invoicing in Sweden in
January-June 2008 was EUR 663.1 million (EUR 630.9 million) and net
sales were EUR 280.9 million (EUR 332.4 million).
The Swedish pharmaceutical market grew by 5.6 percent (6.3%) in the
review period. Oriola-KD held a 43.9 percent (42.4%) share of the
pharmaceutical distribution market in Sweden in January-June 2008
(source: IMS Health).
Oriola-KD took over the distribution of McNeil products in Sweden at
the beginning of 2008. McNeil's share of the Swedish pharmaceutical
market is roughly two percent (source: IMS Health). Oriola-KD
retained all its major pharmaceutical principals in Sweden during the
period under review.
According to the situation at the end of the review period,
Oriola-KD's share of the pharmaceutical wholesale market in Sweden is
estimated at some 43 percent in 2008.
The Swedish Government has proposed deregulation of the pharmacy
monopoly in mid-2009. In the second quarter, Oriola-KD continued to
prepare for eventual changes in the pharmacy market.
Oriola-KD increased its shareholding in the Swedish Kronans
Droghandel AB in June from 85.62 percent to 98.13 percent by
acquiring the 12.51-percent minority holding of Merck Sharp & Dohme
(Sverige) AB in KD. Minority holdings in KD subsequent to the
transaction consist of the 1.87-percent holding of Organon AB.
Russia
The retail and wholesale businesses Vitim and Moron acquired in
Russia have been consolidated into Oriola-KD's accounts since 1 April
2008. The second-quarter net sales of the acquired companies grew by
28 percent to EUR 93.8 million. Oriola-KD maintained 148 pharmacies
in Russia at the end of June. The Russian retail and wholesale
businesses showed an operating loss of EUR 1.0 million in the second
quarter. The operating loss includes EUR 0.2 million in depreciation
relating to the fair value allocation of the acquisition. The strong
expansion of the retail business partly caused declined profitability
in the second quarter.
The business in Russia is seasonal by nature, meaning that
performance in the first and fourth quarters of the year is typically
strong. Historically speaking, performance in the fourth quarter of
the year has clearly been the strongest whereas the second and third
quarters have been weaker. Oriola-KD has commenced streamlining
measures in both the retail and wholesale operations as part of the
takeover of the businesses.
Oriola-KD confirmed the acquisition of the pharmacy and
pharmaceutical wholesale businesses Vitim & Co and Moron Ltd on 21
April 2008.The acquisition involved the establishment of the Finnish
company Foreti Oy which owns the Moscow-based pharmacy retail company
Vitim and pharmaceutical wholesaler Moron. Oriola-KD's holding in
Foreti Oy subsequent to the acquisition is 75 percent while the
Russian company founders Igor Yankov and Oleg Yankov hold 25 percent.
In addition, Oriola-KD has agreed to buy out the remaining 25-percent
holding in 2010 for a consideration based on the companies'
performance in 2009. The Boards of Directors of Foreti Oy, Vitim and
Moron are made up of Eero Hautaniemi (Chairman), Kimmo Virtanen,
Christian Ramm-Schmidt, Igor Yankov and Oleg Yankov.
Other countries
The Pharmaceutical Trade business segment's invoicing in the Baltics
in January-June 2008 was EUR 21.5 million (EUR 19.2 million) and net
sales were EUR 19.3 million (EUR 16.9 million).
Healthcare Trade business segment
The Healthcare Trade business segment's invoicing in January-June
2008 was EUR 101.3 million (EUR 140.3 million) and net sales were EUR
78.8 million (EUR 125.2 million). Invoicing and net sales in the
Healthcare Trade business segment were reduced by the merger of the
Dental Trade business with and into Lifco Dental, by the sale of the
home distribution business in Sweden in 2007, and by changes in
principals in Finland. Second-quarter invoicing came to EUR 49.7
million (EUR 68.5 million) and net sales to EUR 38.1 million (EUR
60.7 million).
Operating profit for the first six months of 2008 was EUR 5.4 million
(EUR 6.6 million). Second-quarter operating profit was EUR 1.9
million (EUR 3.0 million).
The Healthcare Trade business segment had a payroll of 404 (567)
employees at the end of the period under review.
Finland
The Healthcare Trade business segment's invoicing in Finland in
January-June 2008 was EUR 43.2 million (EUR 41.8 million) and net
sales were EUR 39.9 million (EUR 39.0 million). Both invoicing and
net sales in Finland were reduced by changes in principals. Sysmex
haematology products transferred from Oriola-KD at the beginning of
2008 and Zimmer orthopaedic products at the end of March. The product
range was augmented with Carl Zeiss Meditec's ophthalmic surgery
products in early 2008.
Sweden
The Healthcare Trade business segment's invoicing in Sweden in
January-June 2008 was EUR 51.8 million (EUR 67.7 million) and net
sales were EUR 32.6 million (EUR 56.7 million). The sale of the home
distribution business in Sweden in 2007 reduced both invoicing and
net sales.
Other countries
The Healthcare Trade business segment's invoicing in the Baltics and
Denmark in January-June 2008 was EUR 6.3 million (EUR 5.8 million)
and net sales were EUR 6.3 million (EUR 5.1 million).
Dental trade
Dental trade contributed EUR 0.0 million (EUR 25.0 million) to the
segment's invoicing, EUR 0.0 million (EUR 24.3 million) to its net
sales and EUR 1.0 million (EUR 1.2 million) to the segment's
operating profit in January-June 2008. At 30 June 2007, personnel
numbered 117. The merger of the dental trade business with and into
Lifco Dental was finalised on 2 January 2008 with the merger of the
businesses in Estonia, Latvia and Lithuania. Oriola-KD holds a
30-percent share of the merged dental business while Lifco has a
70-percent holding.
Changes in company management
CFO Kimmo Virtanen was appointed Executive Vice President and deputy
to the CEO of Oriola-KD Corporation effective 1 May 2008. His sphere
of responsibility comprises Group functions as well as finance. CIO
Claes von Bonsdorff, Pellervo Hämäläinen, Vice President,
Communications and IR and Teija Silver, Vice President, Human
Resources report to Kimmo Virtanen effective 1 May 2008. Attorney at
Law Thomas Heinonen was appointed Senior Legal Counsel at Oriola-KD
effective 1 June 2008. He reports to Kimmo Virtanen. General Counsel
Henry Haarla retired on 1 June 2008 but stays on as legal advisor and
Secretary to the Board of Oriola-KD Corporation until the end of
2008.
Jukka Niemi was appointed Vice President of the Pharmaceutical Trade
Finland business effective 1 July 2008. Current Vice President Matti
Lievonen will take retirement at the end of 2008, until which time he
will retain his seat on the Group Management Team and will also serve
as an advisor in the business of pharmaceutical distribution in
Finland.
The Group Management Team at Oriola-KD as of 1 May 2008 comprises the
following heads of businesses and Group functions: Eero Hautaniemi
(Chairman), Claes von Bonsdorff, Birgitta Gunneflo, Henry Haarla
(until 31 May 2008), Thomas Heinonen (as of 1 June 2008), Pellervo
Hämäläinen, Anne Kariniemi, Jukka Niemi, Teija Silver, Ilari
Vaalavirta and Kimmo Virtanen (deputy chairman), and Matti Lievonen
until the end of 2008.
Related parties
Related parties in the Oriola-KD Group are deemed to comprise parent
company Oriola-KD Corporation, subsidiaries and associated companies,
the members of the Board and the President and CEO of Oriola-KD
Corporation, 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. The
notes to the financial statements of Oriola-KD Corporation provide
additional information on intra-Group liabilities and sureties given
on behalf of Group companies. Oriola-KD Corporation has given no
significant sureties on behalf of Group companies.
Oriola-KD Corporation share
Trading volume of Oriola-KD Corporation's Class A and B shares in
January-June 2008:
Trading January-June 2008 January-June 2007
Class A Class B Class A Class B
Trading volume, million 1.9 22.0 8.0 86.8
Trading volume, EUR million 5.3 63.3 26.8 135.1
High, EUR 3.10 3.10 3.57 3.60
Low, EUR 2.50 2.60 2.84 2.87
Close at 30 June, EUR 2.66 2.69 3.40 3.42
The traded volume of Oriola-KD Corporation shares in the review
period excluding treasury shares equalled 16.9 percent (35.0 percent)
of total outstanding shares. The traded volume of Class A shares in
the period under review amounted to 3.7 percent (14.8 percent) of
average outstanding stock and that of Class B shares excluding
treasury shares to 24.2 percent (47.6 percent).
Oriola-KD Corporation's market capitalisation at 30 June 2008
excluding treasury shares was EUR 380 million (EUR 482 million).
Under Article 3 of the Articles of Association, a shareholder may
demand conversion of Class A shares into Class B shares. During the
first half of the 2008, a total of 2,422,543 Class A shares have been
converted into Class B shares (4,563,300). At the end of the review
period, the company had 48,822,862 Class A shares (51,731,340) and
93,084,966 Class B shares (89,526,488).
The resolutions of Oriola-KD Corporation's Board of Directors taken
on 20 February 2008 pursuant to the authorisation granted by the
Annual General Meeting on 13 March 2007, concerning a bonus issue to
the company and a targeted bonus issue within the share incentive
scheme, were executed during the period under review. Oriola-KD
Corporation issued to itself 650,000 new Class B shares in the bonus
issue. In addition, the Board resolved on a targeted bonus issue in
which 156,048 Class B shares held as treasury shares were assigned to
the company's President and CEO and other members of Oriola-KD
Corporation's Group Management Team. The share issues were executed
and registered in the period under review. In the context of the
targeted bonus issue, the company on 27 March 2008 transferred
156,048 Class B shares into the book-entry accounts of persons
covered under the incentive scheme for management.
Subsequent to the bonus issues, the company holds 493,952 treasury
shares, all of which are Class B shares. These account for 0.35
percent of the company's outstanding stock and 0.05 percent of the
votes in the company.
Risks
The Board of Directors of Oriola-KD has approved the company's risk
management policy in which the operational model, principles,
responsibilities and reporting in risk management have been
determined. The Group's risk management seeks to identify, measure
and manage risks that may threaten the operations of the company and
the achievement of goals set for them. Roles and responsibilities
relating to risk management have been determined in the Group.
Oriola-KD's risks are classified as strategic, operative and
financial. Risk management is a key element of the strategic process,
operative planning and daily decision-making at Oriola-KD.
Oriola-KD has identified the following most significant strategic and
operative risks in its business:
* changes in bargaining position vis-à-vis suppliers and customers
* impacts on business concepts of potential changes in the
structure of the Swedish market
* maintenance of cost-effectiveness and flexibility in costs
* provision of competitive products and services in expanding and
consolidating markets
* expansion-related risks in new markets and businesses
* commitment of key employees
The major financial risks for Oriola-KD involve currency exchange
rates, interest rates, liquidity and credit. The estimated
USD-denominated additional purchase price on the Russian business
acquisition and the USD-denominated purchase price of the remaining
25-percent holding were hedged in July 2008 in accordance with the
Group's treasury policy.
Oriola-KD's exposure to risks relating to new markets and businesses
as well as financial risks increased in the second quarter as the
Company expanded to the Russian pharmaceutical retail and wholesale
market. Goodwill and intangible rights are subject to annual
impairment testing which may affect Oriola-KD's financial result.
Near-term risks and uncertainty factors
Factors with a material impact on Oriola-KD's near-term outlook are
the success of the takeover of the Russian acquisition, the
realization of the growth potential of the Russia-based businesses,
and general market trends in Russia.
Events after the period under review
A total of 130,659 Class A shares were converted into 130,659 Class B
shares and the conversion was entered in the Trade Register on 17
July 2008.Subsequent to the conversion, the company has 48,692,203
Class A shares and 93,215,625 Class B shares. The total number of
outstanding shares is 141,907,828 and these produce a total of
1,067,059,685 votes.
The portion of the votes produced by Oriola KD Corporation's shares
held by Maa- ja Vesitekniikan Tuki ry and its subsidiary exceeded the
one twentieth threshold (1/20) referred to in Section 9 Chapter 2 of
the Securities Markets Act subsequent to a transaction executed on 29
July 2008. Their ownership was 5.07 percent of the total votes in
Oriola-KD on 29 July 2008.
Cecilia Tufvesson Marlow, MSc (Econ & Bus Admin) (b. 1960), was
appointed Vice President of Oriola-KD's Swedish retail business
effective 4 August 2008. Her main duty is to prepare Oriola-KD's
business in Sweden for the post-deregulation Swedish pharmacy market
and to set up a chain of pharmacies in Sweden during 2009. Cecilia
Tufvesson Marlow reports to Oriola-KD President and CEO Eero
Hautaniemi. Finance Director Thomas Gawell of Kronans Droghandel AB
assumes responsibility for developing pharmaceutical wholesale in
Sweden. He reports to Kronans Droghandel AB Managing Director
Birgitta Gunneflo.
Future outlook
Oriola-KD's outlook for 2008 is based on external market forecasts,
agreements with principals, cumulative orders and management's
estimates. Long term fundamentals and growth prospects are deemed to
remain favourable in the healthcare market.
Oriola-KD estimates that the pharmaceutical market in Finland and
Sweden will grow by about 3-5 percent annually over the next few
years, which is in line with the longer-term average growth rate of
these markets. The Russian pharmaceutical market is estimated to see
growth of nearly 20 percent annually in the next few years. Growth in
the market for healthcare equipment and supplies in Finland and
Sweden is estimated to outpace that of the pharmaceutical market.
Invoicing in the Pharmaceutical Trade business segment in 2008 is
estimated to rise due to market growth and expansion to Russia.
Invoicing in the Healthcare and Dental Trade business segment is
projected as lower than in the previous year due to the merger with
and into Lifco Dental, the sale of the home distribution business in
Sweden in 2007 and changes in principals in Finland. Oriola-KD's
invoicing in 2008 is projected as clearly higher than in the previous
year.
Operating profit in the Pharmaceutical Trade business segment is
anticipated to see positive development in 2008. Oriola-KD is
investing in strategic growth ventures, the takeover of the Russian
acquisition and the business opportunities offered by the potential
deregulation of the Swedish pharmacy market, which are projected to
give rise to additional expenditure not exceeding three million euro
in 2008. Operating profit in the Pharmaceutical Trade business
segment in 2008 is estimated to improve owing to the Russian business
acquisition. Operating profit for 2008 in the Healthcare Trade
business is expected to fall from the previous year due to the
reported changes in principals in Finland. The merger in the Dental
Trade business is estimated to improve comparable operating profit
for 2008. Oriola-KD's operating profit for 2008 inclusive of the
additional expenditure arising from strategic ventures and the
acquisition in Russia is anticipated to exceed that for the previous
year.
TABLES
Income
Statement, 1.1.- 1.1.- 1.4.- 1.4.- 1.1.-
EUR million 30.06.2008 30.06.2007 30.06.2008 30.06.2007 31.12.2007
Net sales 733.3 711.9 415.4 356.1 1377.3
Cost of goods
sold -643.2 -637.5 -361.2 -319.5 -1232.0
Gross profit 90.1 74.5 54.1 36.6 145.2
Other
operating
income 2.0 0.9 0.9 0.5 2.3
Selling and
distribution
expenses -66.7 -53.7 -40.9 -27.3 -104.5
Administrative
expenses -13.7 -7.6 -10.3 -3.5 -14.9
Profit from
associated
company 1.0 0.0 0.4 0.0 1.0
Operating
profit 12.7 14.1 4.2 6.3 29.1
Financial
income
and expenses 0.2 1.0 -0.4 0.7 1.9
Profit before
taxes 12.9 15.1 3.8 7.0 31.0
Tax expense*) -3.2 -3.7 -1.1 -1.7 -7.3
Profit for the
period 9.7 11.4 2.7 5.3 23.7
of which
available for:
Parent company
shareholders 9.6 11.2 2.7 5.3 23.3
Minority
interest 0.0 0.2 0.0 0.1 0.4
Earnings per
share:
Basic earnings
per share
(EUR) 0.07 0.08 0.02 0.04 0.16
Diluted
earnings
per share
(EUR) 0.07 0.08 0.02 0.04 0.16
*) The tax expense for the period has
been calculated as the proportional share
of the total estimated taxes for the financial
year.
Balance sheet,
EUR million 30.06.2008 30.6.2007 31.12.2007
Non-current assets
Property, plant
and equipment 60.9 60.9 56.3
Goodwill 106.1 34.5 33.9
Other intangible
assets 46.4 5.8 4.5
Investments in
associates and
available-for-sale
investments 27.6 0.0 27.1
Other non-current
receivables 9.8 11.6 10.6
Deferred tax assets 1.6 0.1 0.2
Non-current
assets total 252.3 112.9 132.5
Current assets
Inventories 246.1 196.6 180.9
Trade and
other receivables 276.3 231.2 201.0
Cash and
cash equivalents 42.2 99.8 131.0
Current assets
total 564.7 527.5 512.9
ASSETS TOTAL 817.0 640.4 645.4
Balance sheet,
EUR million 30.06.2008 30.6.2007 31.12.2007
Non-current
liabilities
Share capital 36.2 36.2 36.2
Other funds 30.1 30.1 30.1
Retained earnings 126.8 118.6 129.2
Net assets of the
parent company
shareholders 193.1 184.9 195.5
Minority interest 1.1 8.0 8.1
Net assets total 194.2 193.0 203.6
Non-current
liabilities
Deferred tax
liabilities 18.8 9.8 8.7
Pension liability 4.4 4.1 4.4
Provisions 0.0 0.0 0.0
Interest-bearing
non-current liabilities 10.3 0.4 0.3
Other non-current
liabilities 27.2 0.4 0.4
Current liabilities
total 60.7 14.7 13.8
Current liabilities
Trade payables and
other current liabilities 511.2 414.6 387.4
Provisions 0.0 1.0 0.0
Interest-bearing
current liabilities 50.7 17.1 40.7
Current liabilities
total 562.0 432.8 428.1
EQUITY AND
LIABILITIES TOTAL 817.0 640.4 645.4
Changes in
shareholder's
equity: Equity of
the parent
EUR Share Other Translation Retained company Minority
million capital funds differences earnings shareholders interest Total
Shareholder's
equity
1.1.2007 36.2 30.1 0.0 116.9 183.3 8.5 191.8
Translation
differences -1.1 -1.1 -0.2 -1.3
Dividend Paid -8.5 -8.5 -0.5 -8.9
Hedge on net
investment in
foreign
subsidiary -0.2 -0.2 -0.2
Change in
minority
interest
Other changes
Share based
payments 0.2 0.2 0.2
Taxes related
to items
booked
into equity
Items booked
into equity
Profit for
the period 11.2 11.2 0.2 11.4
Shareholder's
equity
30.6.2007 36.2 30.1 -1.0 119.6 185.0 8.0 193.0
Shareholder's
equity
1.1.2008 36.2 30.1 -2.5 131.7 195.5 8.1 203.6
Translation
differences -0.9 -0.9 0.0 -0.9
Dividend
distribution -11.3 -11.3 -11.3
Hedge on net
investment in
foreign
subsidiary
Change in
minority
interest -7.0 -7.0
Other changes
Share based
payments 0.2 0.2 0.2
Taxes related
to
items booked
into equity
Items booked
into equity
Profit for
the period 9.6 9.6 0.0 9.6
Shareholder's
equity
30.06.2008 36.2 30.1 -3.4 130.2 193.1 1.1 194.2
1.1.- 1.1.- 1.1.-
Cash flow statement, 30.06. 30.06. 31.12.
EUR million 2008 2007 2007
Operating profit 12.7 14.1 29.1
Depreciation 5.0 5.4 10.4
Change in working capital -17.8 -1.1 6.8
Cash flow from financial
items and taxes -3.6 -3.0 -5.5
Other adjustments -1.5 -1.7 -1.9
Cash flow from
operating activities -5.2 13.9 39.0
Cash flow from
investing activities -74.7 -2.6 -19.1
Cash flow from
financing activities -9.0 -23.7 -0.7
Net change in
cash and cash
equivalents -88.9 -12.4 19.1
Cash and cash
equivalents at
beginning of period 131.0 112.9 112.9
Foreign exchange
difference 0.1 -0.7 -1.0
Net change in
cash and cash
equivalents -88.9 -12.4 19.1
Cash and cash
equivalents at
end of period 42.2 99.8 131.0
Change in property,
plant and equipment
1.1.- 1.1.- 1.1.-
milj.EUR 30.06.2008 30.06.2007 31.12.2007
Carrying amount at
the beginning of
the period 56.3 63.3 63.3
Increase through
acquisition of
subsidiary share 7.2 0.0 0.0
Additions 2.2 3.3 5.1
Disposals -1.4 -1.1 -3.5
Depreciation -3.2 -3.8 -7.3
Translation differencies -0.1 -0.8 -1.4
Carrying amount
at the end of
the period 60.9 60.9 56.3
Key figures 1.1.- 1.1.- 1.1.-
and rations 30.06.2008 30.06.2007 31.12.2007
Equity ratio, % 24.4% 30.9% 33.7%
Equity per share, EUR 1.37 1.31 1.38
Return on
capital employed (ROCE), % 12.3% 14.7% 14.2%
Return on equity, % 9.7% 11.9% 12.0%
Net interest
bearing debt, Me 18.9 Me -82.3 Me -90.0 Me
Gearing, % 9.7% -42.6% -44.2%
Earnings per
share, EUR 0.07 0.08 0.16
Average number
of share, tpcs 141 370 141 258 141 258
Forward contracts and
contingent liabilities
30.6.2008
Positive Negative Nominal
fair fair values
EUR million value value of contracts
Hedging of a net
investment in an
independent foreign unit
Other forward and
currency swap contracts -0.1 27.5
FX options
purchased
30.6.2007
Positive Negative Nominal
fair fair values
EUR million value value of contracts
Hedging of a net
investment in an
independent
foreign unit 0.0
Other forward
and currency
swap contracts 0.0 5.6
EUR million 30.6.2008 30.6.2007 31.12.2007
Contingent for
own liabilities
Guarantees given 26.8 2.8 3.1
Real-estate
mortgages given 2.0 1.0 2.0
Mortgages on
company assets 21.9 22.4 21.9
Other guarantees
and liabilities 26.2 2.1 1.9
Total 76.9 28.3 28.9
Contingent for
liabilities of
other parties
Guarantees given
on behalf of
external parties 0.0 0.0 0.0
Leasing-liabilities
(operating
liabilities) 0.5 0.7 0.3
Rent contingent 28.9 6.5 5.0
Invoicing by
business segment,
EUR million 1.1.-30.06.2008 1.1.-30.06.2007 1.1.-31.12.2007
Pharmaceutical
Trade business
segment 1298.5 1139.0 2253.4
Healthcare Trade 101.3 115.3 234.7
Dental Trade 0.0 25.0 36.5
Group Total 1399.9 1279.4 2524.5
Oriola-KD has two business segments: the Pharmaceutical Trade
business segment and the Healthcare Trade business segment,
which includes the share of profits from the associated company
.
Net sales by business 1.1.- 1.1.- 1.1.-
segment, EUR million 30.06.2008 30.06.2007 31.12.2007
Pharmaceutical Trade
business segment 654.6 586.7 1135.8
Healthcare Trade 78.8 100.8 205.9
Dental Trade 0.0 24.3 35.6
Group Total 733.3 711.9 1377.3
Operating profit
by business segment, 1.1.- 1.1.- 1.1.-
EUR million 30.06.2008 30.06.2007 31.12.2007
Pharmaceutical Trade
business segment 10.2 9.7 17.4
Healthcare Trade 4.4 5.4 12.6
Dental Trade 1.0 1.2 2.2
Group items -2.8 -2.2 -3.2
Group total 12.7 14.1 29.1
Average number of
personnel 2 947 1 486 1 432
Number of personnel
at the end of the
period 4 626 1 487 1 302
Invoicing by
business segment, 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
EUR million 2008 2008 2007 2007 2007 2007
Pharmaceutical Trade
business segment 706.5 592.1 571.4 543.0 575.9 563.2
Healthcare Trade 49.7 51.6 67.3 52.1 56.7 58.6
Dental Trade 0.0 0.0 1.3 10.2 11.8 13.2
Group Total 756.2 643.6 640.0 605.2 644.4 634.9
Net sales by
business segment, 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
EUR million 2008 2008 2007 2007 2007 2007
Pharmaceutical Trade
business segment 377.2 277.3 270.7 278.3 295.5 291.3
Healthcare Trade 38.1 40.6 59.5 45.6 49.2 51.7
Dental Trade 0.0 0.0 1.3 9.9 11.5 12.9
Group Total 415.4 318.0 331.6 333.8 356.1 355.8
Operating profit by
business segment, 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
EUR million 2008 2008 2007 2007 2007 2007
Pharmaceutical Trade
business segment 4.3 5.9 2.7 5.0 4.6 5.1
Healthcare Trade 1.5 2.9 3.9 3.4 2.8 2.6
Dental Trade 0.4 0.6 1.0 0.1 0.2 1.1
Group items -2.0 -0.8 -0.5 -0.5 -1.2 -1.0
Group total 4.2 8.5 7.0 8.0 6.3 7.8
Net sales by market, 1.1.- 1.1.- 1.1.-
EUR million 30.06.2008 30.06.2007 31.12.2007
Finland 299.2 291.4 570.1
Other Nordic countries 315.0 394.5 756.5
Other Europe 25.3 25.0 49.1
Russia 93.8 0.1 0.1
Other countries 0.1 0.8 1.4
Total 733.3 711.9 1377.3
Net sales by market, 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
EUR million 2008 2008 2007 2007 2007 2007
Finland 150.5 148.7 143.4 135.3 143.4 148.1
Other Nordic countries 158.5 156.5 174.9 187.1 199.6 195.0
Other Europe 12.5 12.7 12.8 11.3 12.5 12.5
Russia 93.8 0.0 0.0 0.0 0.0 0.0
Other countries 0.1 0.0 0.5 0.1 0.7 0.2
Total 415.4 318.0 331.6 333.8 356.1 355.8
CORPORATE ACQUISITIONS
Acquisition of Vitim & Co
and Moron Ltd
Oriola-KD announced in March that it would acquire 75 percent of a
Moscow-based
pharmacy company (Vitim & Co) and of a pharmaceutical wholesaler
(Moron Ltd.)
The transaction was executed in April. In addition, Oriola-KD has
agreed to buy
out the remaining 25-percent holding in 2010 for a consideration
based on the companies'
performance in 2009. The additional purchase price relating to the
acquired 75-percent
holding and the purchase of the remaining 25-percent holding are
recognized as a liability,
the magnitude of which is based on the best estimate of management.
The acquisition cost is calculated on the basis of the companies'
provisional balance
sheets as per 31 March 2008 prepared in accordance with IFRS and the
Oriola-KD Group's
accounting principles in respect of all material elements. The
provisional balance sheets
and acquisition cost calculation are unaudited.
The acquisition is accounted for using provisional values as
permitted under IFRS 3.
Over the 12 months following the acquisition, Oriola-KD will make the
necessary
adjustments to these provisional values.
The balance sheets of the acquired companies have been consolidated
into the
Oriola-KD Group as of 1 April 2008 and the calculation below includes
the acquisition
of both companies.
Provisional details on the net assets
and goodwill acquires are as follows:
Carrying Fair
amount Fair value value
EUR allocations EUR
million EUR million million
Tangible assets 5.0 1.8 6.8
Other intangible
assets 3.5 41.5 45.0
Deferred tax assets 1.2 0.0 1.2
Inventories, advances
paid 68.5 0.0 68.5
Trade receivables 37.8 0.0 37.8
Other receivables 4.8 0.0 4.8
Cash and cash
equivalents 2.7 0.0 2.7
Deferred tax
liabilities 0.0 -10.4 -10.4
Interest-bearing
non-current
liabilities -8.8 0.0 -8.8
Trade payables
and other current
liabilities -103.7 0.0 -103.7
Interest-bearing
current liabilities -8.9 0.0 -8.9
Net indentifiable
assets 1.9 32.9 34.8
Acquisition price
Purchase price -64.0
Additional purchase
price
and purchase of theremaining 25% -35.8
Costs related to
acquisition -4.4
Goodwill 69.4
Purchase price
settled in cash -64.0
Costs related
to acquisition -4.4
Cash and cash
equivalents acquired 2.7
Cash outflow on
acquisition for 2008 -65.8
Estimated purchase
price payable -35.8
Total cash outflow
on acquisition -101.6
The remaining goodwill arising from the acquisition, is based on
synergy benefits and widened new market area possibilities and
benefits.
Espoo, 20 August 2008
Board of Directors of Oriola-KD Corporation
Oriola-KD Corporation
Eero Hautaniemi
President and CEO
Kimmo Virtanen
Executive Vice President and CFO
Further information:
Eero Hautaniemi
President and CEO
Tel. +358 10 429 2109
Email: eero.hautaniemi@oriola-kd.com
Kimmo Virtanen
Executive Vice President and CFO
Tel. +358 10 429 2069
Email: kimmo.virtanen@oriola-kd.com
Pellervo Hämäläinen
Vice President, Communications and IR
Tel. +358 10 429 2497
Email: pellervo.hamalainen@oriola-kd.com
Distribution:
OMX Nordic Exchange Helsinki
Key media
Released by:
Oriola-KD Corporation
Corporate Communications
Orionintie 5
FI-02200 Espoo, Finland
www.oriola-kd.com
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