eero hautaniemi, president and ceo 19 july 2016 · january – june 2016 eero hautaniemi, president...

Oriola-KD Corporation1

ORIOLA-KD CORPORATION January – June 2016

Eero Hautaniemi, President and CEO19 July 2016


• Consumer performance was supported by good seasonal sales• Share of OTC and TG continued to grow

• Significant volume growth in Services• Increased number of order lines together with declining value/order

line adversely affected efficiency and profitability• Agreement with Meda signed. Starting during Summer 2017

• Healthcare segment ramp-up continued according to plan• In addition to dose dispensing, capabilities for hospital and

veterinary services have been developed in Sweden• In Sweden the Supreme Administrative Court did not accept

Sjuklövern county councils appeal and hence the country councils have to renew the tendering process for dose dispensing.

Oriola-KD April–June 2016


Oriola-KD Key FiguresAdjusted Operating profitNet SalesInvoicing

All figures for Continuing operations

1-6/2016 net sales at comparable EUR/SEK rate EUR 819 million

1-6/2016 adjusted operating profit at comparable EUR/SEK rateEUR 28.6 million


Adjusted operating Profit January – June 2016Adjusted Operating profit Adjusted Operating profit, waterfall


Reporting segments January – June 2016


Solid Position in Selected MarketsMARKET SHARE

TG/OTC for pharmacies in Sweden

40%

SwedenWholesale

46%

FinlandWholesale

MARKET SIZE (BEUR) AND GROWTH

0

1

2

3

4

2015-2020CAGR 4.2 %

2015

0

1

2

3

SWEDEN

2015

31%

2015-2020CAGR 1.1 %

FINLAND

18%

SwedenRetail

Source: IMS Health, ATY, Apoteksförening and Oriola-KD


• Focus on the needs of consumers in health and wellbeing related products and services.

• Offers expert advice on health and wellbeing as well as an extensive and high-quality selection of products in own pharmacies.

• Consistent service experience throughout all service channels, from local pharmacies to online services.

316PHARMACIES

Of which 314 are Kronans ApotekPharmacies in Sweden

and 2 are pharmacies in Latvia

Consumer Segment

NET SALES

Sweden

Latvia

Finland


• On a constant currency basis the net sales increased by 4.3 (5.2) per cent

• Positive development of Sales mix supported margin and Operating profit• Share of OTC and traded goods of net sales

increased to 27.1 (26.0) per cent• Net increase of five pharmacies in Sweden

in January-June 2016 • Five new establishments• Two acquired from Hjärtat• Two closed

• Parallel imports’ share of the Swedish pharmaceutical market was approximately 10.8 (10.6) per cent (source: IMS Health)

Consumer January – June 2016

Adjusted Operating profit


Pharmacy Chains in SwedenMarket SharePharmacies

Apoteket

Apotek Hjärtat & CURA

Apoteksgruppen

LloydsApoteket

Pharmacies 2010Established net 2010 - 2015

Established net 2016

Source: Apoteksförening and Oriola-KD


• Focuses on long-term customer relationships and a wide service offering

• Provides logistics services and wide range of value adding services for Pharmaceutical companies and pharmacies

• Purchase and distribution services of OTC and traded goods in Sweden

• Sales and marketing services of large assortment of traded goods in Finland and in the Baltic countries

Services Segment

INVOICING

Sweden

Finland

Baltics

Services for healthcare actors who want to succeed in the Nordic and Baltic countries.

We provide high quality and ensure that products are delivered unchanged from Oriola’s warehouses to the pharmacies, hospitals and veterinaries.

Purchase and distribution services

Logistic services Value adding services

Sales and marketing services


• On a constant currency basis the invoicing increased by 6.3 (11.7) per cent.

• Strong growth in invoicing was driven by Swedish operations• Growth in both services to pharmaceutical

companies and to pharmacies• Increased number of order lines

together with declining value/order line adversely affected efficiency and profitability

• Contract with Meda signed• Distribution center in Oulu closed• Negative cash flow from operations

due to contractual changes

Services January – June 2016



• Oriola-KD group acquired the capital stock of PharmaserviceOy on 18 July 2016

• The company offers pharmaceutical dose dispensing services in Finland

• Pharmaservice Oy will be consolidated into Oriola-KD group from July 2016 and reported as part of Healthcare segment• Oriola-KD aims to be the leading dose dispensing company in

Sweden and Finland through the acquisitions of Svensk Dos in February 2016 and Pharmaservice in July 2016

Events after the review period


• Built on Oriola-KD’s knowledge of market and customers

• Providing new services for healthcare organizations like clinics and hospitals

• The Healthcare segment offers services to hospitals, healthcare centres and other healthcare operators in Sweden.

• Many growing business opportunities, such as hospital pharmaceutical care, dose dispensing and home distribution of pharmaceuticals.

• Finnish healthcare sector in transformation.

HEALTHCARE BUSINESS GOALS

26,000

60EMPLOYEES

Healthcare Segment DOSE DISPENSING SERVICES

Svensk Dos in Sweden and PharmaService in Finland are part of Oriola-KD Group and specialized in dose dispensing services.

50

NET SALES(2015)

EUR MILLION

PATIENTS

28 EUR MILLION 14

20,000


• Acquisitions of Svensk Dos in February 2016 and Pharmaservice in July 2016

• Number of dose dispensing patients continued to grow

• Sjuklövern tender process to be renewed

• New digital platform for veterinarians launched in Sweden and capabilities to serve hospitals developed

• Amortisation EUR 0.7 million in Jan-June 2016, estimated EUR 1.5 million in 2016

Healthcare January – June 2016



Key Focus Areas in 2016

Active development of digital business

Continue developing the Healthcare channel

Successful execution of the efficiency improving strategic development initiatives


Key Figures January – June 2016


EUR million 1-6/2016 1-6/2015

Change in working capital -47.1 10.0Net cash flow from operating activities -5.1 38.9

Net cash flow from investing activities -29.2 -8.0

Net cash flow from financing activities 1)

-2.0 -31.0

Net change in cash -36.3 -0.1Cash and cash equivalents at the end of period 85.7 91.5

Cash flowQuarterly net cash flow from operating activities

1) Dividend of 23.6 MEUR was paid out in Q2


EUR million 30 June2016

30 June2015

Syndicated bank loans 69.0 76.0Commercial papers 45.0 10.4Advance payment from pharmacies 34.5 27.7

Other 3.6 19.4

Cash and cash equivalents 85.7 91.5

Net interest-bearing debt 66.2 42.0Sold trade receivables 116.3 113.6Gearing, % 35.8 25.9

Net interest-Bearing DebtNet Interest-Bearing Debt


EUR million 4-6 2016

4-6 2015

Change%

1-6 2016

1-6 2015

Change%

1-12 2015

Net sales 420.2 417.1 0.8 821.5 828.4 -0.8 1,626.3

Adjusted EBITDA 21.3 20.6 3.5 41.4 39.3 5.4 83.4

EBITDA 20.5 20.8 -1.5 40.6 38.1 6.5 85.1

Adjusted Operating profit 14.8 14.9 -1.1 28.7 28.1 2.3 60.8

Operating profit 14.0 15.2 -7.8 27.9 26.9 3.8 62.6

Profit for the period 9.7 10.9 -10.8 19.8 18.3 7.9 44.5

Key Figures


EUR million 30 June2016

30 June20151)

31 Dec2015

Goodwill 264.7 255.8 256.5Equity 184.9 162.5 194.6Interest-bearing debt 151.9 133.5 128.6Interest-bearing net debt 66.2 42.0 6.6Balance sheet total 934.1 911.9 946.9

Equity ratio, % 20.6 18.4 21.1Return on equity (ROE), % 21.9 28.5 29.1Return on capital employed (ROCE), % 17.6 18.7 19.9Gearing, % 35.8 25.9 3.4

Equity per share, EUR 1.02 0.90 1.07Earnings per share (EPS), EUR 0.11 0.11 0.25Average number of shares, 1000 pcs 181,389 169,984 177,502

Balance Sheet and Key Ratios

1) Equity-related key figures restated as a result of correction of an error relating to previous financial periods. The correction was made in 2015 Financial Statements


Outlook for 2016

• Oriola-KD estimates its full-year Net Sales to remain at the 2015 level on a constant currency basis. Adjusted Operating Profit is estimated to remain at 2015 level or to increase, on a constant currency basis. Full-year Net Sales in 2015 were EUR 1,626.3 million and Adjusted Operating Profit was EUR 60.8 million.

• Adjusted Operating Profit excludes gains and losses from the sale or discontinuation of business operations or assets, gains and losses from restructuring business operations, and impairment losses of goodwill and other non-current assets, or other income or expenses arising form rare events and, changes in estimates regarding the realisation of contingent consideration arising from business acquisitions.

eero hautaniemi, president and ceo 19 july 2016 · january – june 2016 eero hautaniemi, president...

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