Oriola Oyj - Interim report (Q1 and Q3)

Oriola Corporation's Interim Report January-March 2024

Oriola Corporation Stock Exchange Release 25 April 2024 at 8.30 a.m. EEST

Oriola Corporation's Interim Report January-March 2024

Sales growth and improved profitability

January-March 2024 highlights

  · Invoicing increased by 5.8 % to EUR 908.4 (858.3). On a constant currency
basis, invoicing increased by 6.3% and was EUR 912.4 million.
  · Net sales increased by 4.1% to EUR 375.1 (360.4) million. On a constant
currency basis, net sales increased by 4.5% and were EUR 376.8 million.
  · Adjusted EBIT was EUR 4.0 (3.5) million. On a constant currency basis, the
adjusted EBIT was EUR 4.0 million.
  · EBIT was EUR 3.7 (3.5) million and included adjusting items of EUR -0.3 (
-0.0) million mainly related to the sale of dose dispensing business in Sweden.
On a constant currency basis, EBIT was EUR 3.7 million.
  · Profit for the period totalled EUR -2.3 (1.1) million and earnings per share
were EUR -0.01 (0.01).

Excluding Swedish dose business:

  · In October 2023, Oriola announced the sale of Svensk dos AB to Apotekstjänst
Sverige AB. The transaction is subject to the approval of the Swedish
Competition Authority and a decision is expected in the second quarter of 2024.
  · Net sales were EUR 372.2 (351.0) million.
  · Adjusted EBIT was EUR 4.5 (3.9) million.

Key events:

  · Oriola's reporting segments from 1 January 2024 are Distribution and
Wholesale
  · On 10 January, Oriola announced the investment in ERP and warehouse
management as part of the refined strategy to enhance efficiency and operational
excellence
[][]
Key figures                                      2024   2023  Change     2023
EUR million                                       1-3    1-3       %     1-12
Invoicing                                       908.4  858.3     5.8  3,587.7
Net sales                                       375.1  360.4     4.1  1,493.8
Adjusted EBIT[1]                                  4.0    3.5    13.0     16.7
EBIT                                              3.7    3.5     6.2     -5.3
Adjusted EBIT %                                   1.1    1.0              1.1
EBIT %                                            1.0    1.0             -0.4
Profit for the period                            -2.3    1.1  -311.3    -20.7
Earnings per share, EUR, continuing operations  -0.01   0.01            -0.11
Net cash flow from operating activities         -11.3  -42.6              9.6
Gearing, %                                       -6.2    8.7            -12.1
Equity ratio, %[ ]                               17.3   22.8             18.5
Return on capital employed (ROCE), %              5.5    4.0             -1.6

[1] Adjusting items are specified in note 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 the “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 under Key financial
indicators in this interim report.

Outlook for 2024

In 2024, the pharmaceutical distribution market is expected to continue to grow.
A continuation of a weak consumer confidence might impact the wholesale market
development. The recent overall inflationary environment and related cost
pressures may have an impact on Oriola's profitability.

Oriola expects the adjusted EBIT, excluding the dose dispensing business in
Sweden, for the year 2024 to increase from the adjusted EBIT for 2023 (EUR 19.5
million).

CEO Katarina Gabrielson:

We had a good start of the year with net sales growing and profitability
improving from the previous year. The pharmaceutical distribution market
continued a steady growth and we saw the overall operating environment somewhat
stabilising from last year, although consumer confidence remained weak.

In the first quarter, Oriola's net sales grew by 4% to EUR 375 million, driven
by both Distribution and Wholesale segments. Profitability improved from the
previous year and was EUR 4.0 (3.5) million. When excluding the impact of the
Swedish dose dispensing business, the adjusted EBIT improved by 14% to EUR 4.5
(3.9) million. Profitability improvement was supported by lower operating
expenses compared with the previous year, and lower freight costs. The decrease
in freight costs was related to operational improvement and lower fuel prices.
Oriola's financial position has remained strong with net interest-bearing debt
decreasing.

From the start of this year, we have two reporting segments - Distribution and
Wholesale. This change in reporting reflects our strategy and also provides
better visibility into the financial development of our business.

In the Distribution segment, which includes pharmaceutical logistics and dose
dispensing services, net sales grew by 4% to EUR 294 million and were largely
driven by the steady market growth. Profitability improved by 29% to EUR 4.1
(3.2) million, supported mainly by a lower cost base compared with the previous
year. In the distribution business, we focus on our core and continue to build
on the steady development we saw last year. Our market shares were stable year
-on-year both in Finland and Sweden. We have gained new customers and renewed
important distribution contracts to support our growth going forward.

The Wholesale segment includes the wholesale of traded goods and OTC products,
parallel import, special-licensed medicines as well as advisory services. Net
sales in the Wholesale segment grew by 5% to EUR 81 million, with solid growth
in the Swedish wholesale business and good development of advisory services.
Profitability declined slightly to EUR 2.8 (3.0) million. The profitability
decline was related to lower volumes in the Finnish wholesale business. Our long
-term strategic goal is to grow the wholesale business by developing our brand
portfolio and product categories. Early this year, our focus has been on
building our range and technical capabilities to better meet the needs of our
growing customer segments. We have also made appointments in key leadership
positions.

The implementation of our refined strategy, launched at the end of last year,
has progressed well. A key milestone in January was the announcement of the
investment to renew Oriola's ERP (enterprise resource planning) and warehouse
management in 2025-2027. This important investment aims to enhance efficiency
and operational excellence, and enables us to better respond to future customer
and business needs. The project was started in the first quarter and is
proceeding according to plan. An essential part of rolling out the strategy is
actively engaging with our senior management to ensure alignment, strengthen our
common understanding and develop our leadership. This will remain a focus
throughout the year.

In the joint venture company, Kronans Apotek, e-commerce continued to grow
steadily, while the weaker customer flow in the brick-and-mortar compared with
Q1 2023 reduced volumes, market share and adjusted EBIT. Kronans Apotek
continues to develop its customer experience and product range, both in physical
and digital stores. The focus remains on long-term profitability improvement,
integration activities and business development. In 2024, Kronans Apotek's
profitability is expected to be positively impacted by new legislation on
pharmaceutical compensations. On 17 April, Kronans Apotek announced the
appointment of Tomas Rupšys as the new CEO. Kronans Apotek is an important
strategic partner for us, and we will actively support its value creation as a
major shareholder. Kronans Apotek expects its full profit potential to
materialise by the end of 2025.

I am very pleased with the positive beginning to the year at Oriola. With the
refined strategy we have a clear direction forward and a good understanding of
our long-term goals. I want to take this opportunity and thank everyone at
Oriola for all their efforts at the start of the year and their commitment to
our shared priorities.

Disclosure procedure

This stock exchange release is a summary of Oriola Corporation's Interim Report
January-March 2024. The complete report is attached to this release in pdf
format and is also available on Oriola's website at www.oriola.com.

Analyst and investor meeting at 10.00 a.m. EEST

Oriola's CEO Katarina Gabrielson and CFO Timo Leinonen will present the Q1
Interim Report at a live webcast meeting today at 10.00 a.m. EEST. Join the
meeting: https://oriola.videosync.fi/q1-2024

Financial reporting in 2024

Oriola will publish financial reports in 2024 as follows:

  · 18 July 2024: Half Year Financial Report 1-6/2024
  · 30 October 2024: Interim Report 1-9/2024

Further information:

Timo Leinonen
CFO
email: timo.leinonen@oriola.com

Mikael Wegmüller
VP, Communications and Sustainability
email: mikael.wegmuller@oriola.com

Distribution:
Nasdaq Helsinki Ltd
Key media

Attachments:

04247358.pdf