Oriola Corporation Stock Exchange Release 22 July 2022 at 8.30 a.m.
Oriola Corporation's Half Year Financial Report 1 January - 30 June 2022
Q2 2022: Solid performance continued - operating environment remains uncertain
Reporting information for 2021 has been restated to reflect Oriola's operating
model change announced in October 2021 and the framework merger agreement with
Euroapotheca to combine the respective pharmacy businesses in Sweden, announced
in February 2022. The restated information, which was published on 26 April
2022, includes the new segment structure. Continuing operations include the old
business areas Pharma and Retail combined into a new Oriola Services segment,
and discontinued operations consist of the Consumer segment which includes the
pharmacy operations in Sweden planned to be merged with Euroapotheca's
Apoteksgruppen.
April-June 2022 highlights
Continuing operations
· Invoicing increased by 3.7% to EUR 903.9 (871.6) million. On a constant
currency basis, invoicing increased by 6.0% and was EUR 923.6 million.
· Net sales increased by 9.5% to EUR 394.6 (360.3) million. On a constant
currency basis, net sales increased by 12.0% and were EUR 403.4 million.
· Comparable adjusted EBIT and adjusted EBIT was EUR 5.5 (2.0) million for
continuing operations. On a constant currency basis, the comparable adjusted
EBIT and adjusted EBIT was EUR 5.6 million.
· EBIT was EUR 7.0 (1.2) million. On a constant currency basis, EBIT was EUR
7.2 million.
· Profit for the period totalled EUR 5.5 (0.7) million and earnings per share
were EUR 0.03 (0.00).
Discontinued operations
· Invoicing decreased by 2.4% to EUR 208.0 (213.1) million. On a constant
currency basis, invoicing increased by 0.8% and was EUR 214.9 million.
· Net sales decreased by 2.5% to EUR 202.3 (207.5) million. On a constant
currency basis, net sales increased by 0.7% and were EUR 209.0 million.
· Comparable adjusted EBIT was EUR 3.1 (2.0) million. On a constant currency
basis, the comparable adjusted EBIT was EUR 3.0 million.
· Adjusted EBIT was EUR 9.8 (2.0) million. On a constant currency basis, the
adjusted EBIT was EUR 9.9 million.
· Adjusted EBIT includes a positive impact of EUR 6.8 million from lower
depreciations, as non-current assets of discontinued operations are classified
as held for sale and not depreciated. Comparable adjusted EBIT excludes the
positive impact from depreciations.
· EBIT was EUR 9.7 (1.9) million. On a constant currency basis, EBIT was EUR
9.8 million.
· Profit for the period totalled EUR 6.5 (0.3) million and earnings per share
were EUR 0.04 (0.00).
Continuing and discontinued operations
· Invoicing increased by 3.5% to EUR 1,019.0 (984.5) million. On a constant
currency basis, invoicing increased by 5.9% and was EUR 1,042.5 million.
· Net sales increased by 7.8% to EUR 504.0 (467.5) million. On a constant
currency basis, net sales increased by 10.4% and were EUR 516.4 million.
· Comparable adjusted EBIT was EUR 8.6 (4.1) million. On a constant currency
basis, the comparable adjusted EBIT was EUR 8.6 million.
· Adjusted EBIT was EUR 15.3 (4.1) million. On a constant currency basis, the
adjusted EBIT was EUR 15.6 million.
· Adjusted EBIT includes a positive impact of EUR 6.8 million from lower
depreciations, as non-current assets of discontinued operations are classified
as held for sale and not depreciated. Comparable adjusted EBIT excludes the
positive impact from depreciations.
· EBIT was EUR 16.7 (3.0) million. On a constant currency basis, EBIT was EUR
17.0 million.
· Profit for the period totalled EUR 12.0 (0.9) million and earnings per share
were EUR 0.07 (0.01).
January-June 2022 highlights
Continuing operations
· Invoicing increased by 5.0% to EUR 1,790.6 (1,705.8) million. On a constant
currency basis, invoicing increased by 7.4% and was EUR 1,831.6 million.
· Net sales increased by 8.6% to EUR 767.4 (706.7) million. On a constant
currency basis, net sales increased by 11.1% and were EUR 785.3 million.
· Comparable adjusted EBIT and adjusted EBIT was EUR 10.2 (2.9) million for
continuing operations. On a constant currency basis, the comparable adjusted
EBIT and adjusted EBIT was EUR 10.4 million.
· EBIT was EUR 10.3 (1.1) million. On a constant currency basis, EBIT was EUR
10.6 million.
· Profit for the period totalled EUR 7.6 (0.5) million and earnings per share
were EUR 0.04 (0.00).
Discontinued operations
· Invoicing was EUR 417.5 (417.4) million and remained at the previous year's
level. On a constant currency basis, invoicing increased by 3.5% and was EUR
431.9 million.
· Net sales were EUR 407.4 (407.2) million and remained at the previous year's
level. On a constant currency basis, net sales increased by 3.5% and were EUR
421.4 million.
· Comparable adjusted EBIT was EUR 9.9 (1.5) million. On a constant currency
basis, the comparable adjusted EBIT was EUR 9.9 million.
· Adjusted EBIT was EUR 20.2 (1.5) million. On a constant currency basis, the
adjusted EBIT was EUR 20.5 million.
· Adjusted EBIT includes a positive impact of EUR 10.2 million from lower
depreciations, as non-current assets of discontinued operations are classified
as held for sale and not depreciated. Comparable adjusted EBIT excludes the
positive impact from depreciations.
· EBIT was EUR 19.7 (1.4) million. On a constant currency basis, EBIT was EUR
20.0 million.
· Profit for the period totalled EUR 13.3 (-1.3) million and earnings per
share were EUR 0.07 (-0.01).
Continuing and discontinued operations
· Invoicing increased by 4.8% to EUR 2,019.6 (1,927.0) million. On a constant
currency basis invoicing increased by 7.4% and was EUR 2,068.6 million.
· Net sales increased by 7.5% to EUR 986.2 (917.7) million. On a constant
currency basis net sales increased by 10.2% and were EUR 1,011.7 million.
· Comparable adjusted EBIT was EUR 20.1 (4.4) million. On a constant currency
basis, the comparable adjusted EBIT was EUR 20.4 million.
· Adjusted EBIT was EUR 30.3 (4.4) million. On a constant currency basis, the
adjusted EBIT was EUR 31.0 million.
· Adjusted EBIT includes a positive impact of EUR 10.2 million from lower
depreciations, as non-current assets of discontinued operations are classified
as held for sale and not depreciated. Comparable adjusted EBIT excludes the
positive impact from depreciations.
· EBIT was EUR 30.0 (2.5) million. On a constant currency basis, EBIT was EUR
30.6 million.
· Profit for the period totalled EUR 20.8 (-0.7) million and earnings per
share were EUR 0.11 (-0.00).
Key figures 2022 2021 Change 2022 2021 Change 2021
EUR million 4-6 4-6 % 1-6 1-6 % 1-12
Continuing
operations
Invoicing 903.9 871.6 3.7 1,790.6 1,705.8 5.0 3,506.9
Net sales 394.6 360.3 9.5 767.4 706.7 8.6 1,452.2
Comparable 5.5 2.0 170.0 10.2 2.9 250.7 14.9
adjusted
EBIT1
Adjusted 5.5 2.0 170.0 10.2 2.9 250.7 14.9
EBIT1
EBIT 7.0 1.2 503.6 10.3 1.1 819.7 10.7
Adjusted 1.4 0.6 1.3 0.4 1.0
EBIT %
EBIT % 1.8 0.3 1.3 0.2 0.7
Profit for 5.5 0.7 721.2 7.6 0.5 1,384.0 8.6
the period
Earnings per 0.03 0.00 0.04 0.00 0.05
share, EUR,
continuing
operations
Earnings per 0.04 0.00 0.07 -0.01 0.01
share, EUR,
discontinued
operations
Continuing
and
discontinued
operations
Invoicing 1,019.0 984.5 3.5 2,019.6 1,927.0 4.8 3,959.1
Net sales 504.0 467.5 7.8 986.2 917.7 7.5 1,882.4
Comparable 8.6 4.1 110.7 20.1 4.4 361.1 26.3
adjusted
EBIT1, 4
Adjusted 15.3 4.1 276.7 30.3 4.4 596.0 26.3
EBIT1, 2
EBIT2 16.7 3.0 449.7 30.0 2.5 1,086.4 20.5
Comparable 1.7 0.9 2.0 0.5 1.4
adjusted
EBIT
%4
Adjusted 3.0 0.9 3.1 0.5 1.4
EBIT %2
EBIT %2 3.3 0.7 3.0 0.3 1.1
Net cash 38.9 28.2 38.0 67.7 14.0 382.3 40.0
flow from
operating
activities3
Gearing, % 3 18.7 53.8 46.5
Equity 19.8 18.0 20.1
ratio, % 3
Return on 14.5 1.1 4.6
capital
employed
(ROCE), % 3
1 Adjusting items are specified in note 13 Adjusting items.
2 The periods presented in the table are not fully comparable, because a non
-current asset classified as held for sale is not depreciated.
3 Includes discontinued operations.
4 Includes depreciations for the period in which the non-current assets are
classified as held for sale.
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 12 Alternative
performance measures in the notes to this Half Year Financial Report.
Outlook for 2022
The comparable adjusted EBIT is estimated to increase from the 2021 level.
The COVID-19 pandemic continues, and severity as well as duration of the
pandemic remain unclear in Oriola's operating environment. Furthermore, the
recent overall inflationary increases and related cost pressures may have a
significant impact on Oriola's profitability.
The outlook remains based on current group structure, including both continuing
operations and discontinued operations. The comparable adjusted EBIT in 2021 was
EUR 26.3 million.
CEO Katarina Gabrielson:
“In the second quarter, Oriola delivered a solid performance in both Oriola
Services and Oriola Consumer. The comparable adjusted EBIT for Oriola Group
increased to EUR 8.6 million, which is 111% higher than in 2021. For continuing
operations adjusted EBIT improved clearly, reaching EUR 5.5 million (+170%). The
improved result was driven by continuing high market demand and increased sales
in all areas, particularly in Finland. In addition, our turnaround measures,
especially in operational efficiency and product pricing and portfolio
management, progressed well. Furthermore, overall cost savings contributed to
mitigating inflationary cost pressures.
At the end of June, we received positive news from The Swedish Competition
Authority (Konkurrensverket), as they approved the planned merger of Oriola's
Kronans Apotek and Euroapotheca's Apoteksgruppen pharmacy businesses in Sweden.
Preparations for the completion of the merger are ongoing and the completion of
the merger is expected to take place in early October 2022. The transaction is
motivated by the opportunity to create significant synergies and increase the
scale and market presence for the new joint pharmacy company.
During the second quarter, we continued implementing our short-term action plan
to secure Oriola's turnaround. We proceeded with further improving our
efficiency and paid special attention to portfolio management and product
pricing. In April, we divested our pharmacy staffing business in Finland to
focus on our core businesses. These actions are even more important now, as we
are witnessing an all-time high inflation. Oriola's business is affected by the
increasing fuel, energy and labour costs as well as weakening consumer
confidence. We also must, once again, pay attention to the increasing COVID-19
infection levels.
Our focus at Oriola is to continue the rigorous turnaround measures and our work
for the successful merger of our pharmacy operations. We also want to keep our
customer promise and secure the wellbeing of our employees at all times. Our new
streamlined operating model enables us to work even more efficiently and in
agile ways, so that we can fulfil our purpose of “Health for life” to all our
stakeholders, every day.
In addition, I would like to express my thanks to all our employees for their
great work that has enabled us to keep our customer promise. Without your
everyday commitment, this would not have been possible.”
Disclosure procedure
This stock exchange release is a summary of Oriola Corporation's Half Year
Financial Report January-June 2022. 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 Friday, 22 July 2022 at 10.00 a.m. The event can be followed as
a live-webcast accessible through this link: https://oriola.videosync.fi/2022
-q2. The event will be arranged only as a webcast.
Further information
Tuula Lehto
VP, Communications and Sustainability
tel. +358 40 5885 343
email: tuula.lehto@oriola.com
Sari Pohjonen, CFO
email: investor.relations@oriola.com
Distribution:
Nasdaq Helsinki Ltd.
Key media
Released by:
Oriola Corporation
Corporate Communications
Orionintie 5
FI-02200 Espoo, Finland
www.oriola.com