Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP...

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13.2.2018 1 Oriola Corporation Financial Statements 2017 13 February 2018

Transcript of Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP...

Page 1: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

13.2.2018 1

Oriola Corporation Financial Statements 201713 February 2018

Page 2: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Oriola 2017

13.2.2018 2

New contracts in Healthcare Sweden

doubled the business area net

sales

Oriola expert services portfolio grew with Swedish ICTHS

Health Support AB

Sale of the Baltic businesses in

October, focus on Finland and

Sweden

CEO change: Robert Andersson started

on 12 February 2018

Oriola’s and Kesko’sjoint venture

Hehku established, first stores and online shop

opened in January 2018

ERP and warehouse

management system

implementation in Finland was

difficult – delivery reliability at good

level, efficiency and customer

experience to improve

Page 3: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Invoicing Net sales Adjusted EBIT

Oriola Key Figurescontinuing operations

1-12/2017 adjusted EBIT at comparableEUR/SEK rate EUR 40.6 million

EUR million

1 579 1 566 1 578 1 589 1 528

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2013 2014 2015 2016 2017 0

500

1 000

1 500

2 000

2 500

3 000

3 500

2013 2014 2015 2016 2017

EUR million

36.2

57.8 59.8 59.9

39.9

0

10

20

30

40

50

60

70

2013 2014 2015 2016 2017

EUR million

313.2.2018

3 032 3 012 3 2113 364 3 336

Page 4: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Adjusted EBIT, Quarters Adjusted EBIT

Adjusted EBIT January – December 2017 continuing operations

59.9

-8.0

-11.1 -0.7 -0.1

39.9

0,0

10,0

20,0

30,0

40,0

50,0

60,0

70,0

2016 Consumer Services Healthcare Group Items 2017

EUR million

15.3

11.0

13.0

9.7

6.2

0

2

4

6

8

10

12

14

16

18

Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017

EUR million

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Page 5: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

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Business AreasJanuary –December 2017

Page 6: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Consumer Segment• Focuses on the needs of consumers for products and services related to health and

wellbeing

• Offers expert advice as well as an extensive selection of products in own pharmacies

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

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18 %

82 %

4.2 BEUR

Pharmacy market in Sweden (Apoteksförening)

Oriola/Kronans ApotekOthers

74 %

10 %

16 %

4.2 BEUR

RxOTC

TG

Page 7: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

• Pharmacy market grew by 3.2% in Sweden, online sales grew by 58% to 7% of the market

• Net sales increased by 0.4% in SEK, online sales grew faster than market. Online sales 2%

• Profitability was weakened by cost of newly established pharmacies, online development and marketing

• Share of OTC and traded goods of net sales 26.6 (27.1)%

• Oriola’s joint venture with Kesko, Hehku chain of comprehensive wellbeing, was launched in Finland

• The first stores and online shop were opened in 25 January 2018. Oriola’s investment in 2017 was EUR 1.6 million and the adjusted EBIT impact EUR -1.1 million

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Consumer January – December 2017continuing operations

Adjusted EBIT

7.3

5.38.0

7.6

4.4

0

2

4

6

8

10

12

14

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

EUR million

Page 8: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

13.2.2018

Swedish Pharmacy retail marketPharmacies Market share (Apoteksförening)

Pharmacies 2010Established net 2010 - 2016Established net 2017

Kronans Apotek

Lloyds Apoteket

Others

Apoteksgruppen

Apoteket

Apotek Hjärtat& CURA

Oriola/Kronans ApotekApoteketApotek Hjärtat & CURA

OthersLloyds ApoteketApoteksgruppen

Apotea

31%

32%

18%

9%

4%3%

4%

0

8

2

8

0

4

0 100 200 300 400 500

388

397388

397

46

81

326

186

Page 9: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Digitalisation opens new business opportunities• Oriola online sales grew faster than the

market in 2017 in Sweden• Cooperation with online medical center

Doktor.se in Sweden• Mobile apps supporting customers

prescription medication • Comprehensive wellbeing online shop

hehku.fi in Finland

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Page 10: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Hehku enters growing wellbeing market in Finland• Hehku offers unique selection of products

and services promoting wellbeing.• First stores were opened in Helsinki and

Vantaa as well as the online shop at 25 January 2018.

• Totally 30 new shops will be opened from Helsinki to Oulu in 2018.

• The new chain will create approximately1 000 new jobs, 200 in the first year.

• Medicines will become part of the concept when the regulation so allows.

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Page 11: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Finland Wholesale (ATY) Sweden Wholesale (Reveal and Oriola estimate)

Services

36 %

64 %4.2 BEUR

• Focuses on long-term customer relationship and wide service offering• Provides wholesale and logistics services with wide range of expert services for

pharmaceutical companies and pharmacies• Offers customized wholesale services of OTC and traded goods in Sweden • Provides staffing services for Finnish pharmacies

46 %54 % 2.3 BEUR

Oriola Oriola Others Others

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Page 12: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

• Market growth: Sweden 2.1% and Finland 1.2%• Invoicing decreased by 1.3% with comparable

currency, Q4 invoicing grew by 1.0%• The decrease is mainly due to the end of the

distribution agreement with Abbvie in the beginning of 2017, Meda distribution started in May

• Expert services growth was strong• ICTHS acquisition completed

• ERP and warehouse management system go-live in Finland, adjusted EBIT impact EUR -9 million (EUR -4 million in Q4)

• Roche distribution agreement in Finland was lost in the end of the year, limited assortment of Orion products in multichannel distribution in 2018

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Services January – December 2017continuing operations

Adjusted EBIT

9.27.7 8.0

3.6 3.2

0

2

4

6

8

10

12

14

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

EUR million

Page 13: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Investments in efficiency of logistics• Capacity expansion in the Central Warehouse in

Mölnlycke in May 2017• Facilitate our new cooperation with Meda

• Improvements to the ERP and warehouse management system in Finland continue

• Deliveries are working well but improvement of efficiency and customer experience is needed

• The start-up of the new automated warehouse is anticipated in the fourth quarter 2018 in Enköping, Sweden

• Phased start-up to minimise the risks• ERP and EWM implementation being re-

evaluated

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Page 14: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Unique services for pharma industry and pharmacies

• Expert services are growing through acquisitions

• Farenta 2016• ICTHS Health Support 2017

• Services for pharmaceutical companies and pharmacies

• Research and development services• Market access• Regulatory Life Cycle Management• Commercial services • Staffing services

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Page 15: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Healthcare Segment• The Healthcare segment offers pharmaceutical distribution and dose dispensing services for public

and private healthcare providers

• Services to veterinarians in Sweden

• Dose dispensing market ca. 200,000 patients in Sweden, 45,000 in Finland

• Oriola dose dispensing companies cover services for 69,000 persons in Sweden and Finland

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Market share dose dispensing (Oriola estimate)

45 %

44 %

4 %7 %

Circa 30 MEUR

Finland

25 %

36 %

39 %Circa

230 MEUR

Sweden

OriolaPharmacYAPharma Dos

OriolaApoteket ABApotekstjänst

Page 16: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

• Dose dispensing volume in Sweden doubled when Norrland service started in May

• Finnish Pharmaservice continued to perform well• Dose fee in Swedish tenders under pressure -

latest tenders with zero or negative dose fee• First contract to supply pharmaceuticals to county

council hospitals started in October with deliveries to Västmanland in Sweden

• The sales doubled in 2017 as a result of new contracts, but ramp-up costs weakened the result

• Amortisation related to acquisitions EUR -1.4 (-1.7) million

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Healthcare January – December 2017continuing operations

Adjusted EBIT

0.2

-0.5 -0.8 -0.3 -0.2

-2

0

2

2016Q4

2017Q1

2017Q2

2017Q3

2017Q4

EUR million

Page 17: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

We operate in regulated markets

• Sweden: • Pharmacy Bill 2018, obligations to wholesale concerning deliveries to pharmacies and product

returns• Investigation (SOU 2016:95), parallel and direct import by pharmacies to be restricted?• Public tenders in perpetual appeal process

• Finland:• “Sote” - social and healthcare reform - impact to pharmaceutical supply chain still largely

unknown• Pharmacy regulation, studies ongoing• Dose dispensing services underutilized• Distribution system discussion ongoing

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Page 18: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

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Key Figures January –December 2017

Page 19: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

EUR million 1-12/2017

1-12/2016

Change in working capital -18.2 -41.2

Net cash flow from operating activities

23.7 40.2

Net cash flow from investing activities

-37.7 -80.7

Net cash flow from financing activities

-29.7 -20.5

Net change in cash -43.7 -61.0

Cash and equivalents at the end of period

17.0 60.8

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Cash flowincluding discontinued operations

Quarterly net cash flow from operating activities

-27

22 1926

-15

51

-24

11

-40

-30

-20

-10

0

10

20

30

40

50

60

Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017

EUR million

Page 20: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

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Net Interest-Bearing Debtincluding discontinued operations

Net interest-bearing debt EUR million 31 Dec 2017

31 Dec 2016

Bank loans (syndicated & term)

60.6 93.9

Commercial papers 50.0 15.0

Advance payment from pharmacies

15.0 21.5

Other 1.7 2.7

Cash and cash equivalents 17.0 60.8

Net interest-bearing debt 110.2 72.3

Sold trade receivables 94.8 118.5

Gearing, % 55.7 35.2

51

66

8272

101

84

121110

0

20

40

60

80

100

120

140

Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q2/2017 Q3/2017 Q4/2017

EUR million

Page 21: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Key Figures

EUR million 10-122017

10-122016

Change%

1-122017

1-122016

Change%

Invoicing 871.6 858.5 1.5 3,336.3 3,364.2 -0.8

Net sales 395.2 411.2 -3.9 1,527.7 1,588.6 -3.8

Adjusted EBITDA 13.1 21.7 -39.6 67.6 85.4 -20.8

Adjusted EBIT 6.2 15.3 -59.4 39.9 59.9 -33.3

EBIT 3.9 14.1 -72.1 37.8 57.6 -34.4

Profit for the period 2.1 10.8 -80.2 25.9 41.8 -38.0

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continuing operations

Page 22: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Balance sheet and key ratios

13.2.2018 22

Including discontinued operationsEUR million 31 Dec

201731 Dec

2016

Goodwill 282.7 286.8Equity 197.7 205.2Interest-bearing debt 127.2 133.1Interest-bearing net debt 100.2 72.3Balance sheet total 922.4 925.4

Equity ratio, % 21.8 22.7Return on equity (ROE), % 13.0 21.4Return on capital employed (ROCE), % 11.7 17.8Gearing, % 55.7 35.2

Equity per share, EUR 1.09 1.13

Earnings per share (EPS), EUR (cont. operations) 0.14 0.23Average number of shares, 1000 pcs 181,328 181,389

Page 23: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

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Dividend Proposal

• The Board proposes to theAnnual General Meeting thatdividend of EUR 0.09 per sharewill be paid.

EUR million

0,11

0,270,25

0,23

0,14

0,00 0,00

0,13 0,14

0,09 *

0,00

0,05

0,10

0,15

0,20

0,25

0,30

2013 2014 2015 2016 2017

EPS, continuing operations Dividend

Page 24: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Outlook 2018

• Adjusted EBIT of continuing operations on constant currency basis is estimated to increase from the 2017 level

• Pharmaceutical market growth forecast in Sweden 3.9% and in Finland 1.5%, however:

• Services Business Area development projects ongoing: Enköping DC and IT-systems in Finland impacting the 2018 efficiency

• Hehku chain expanding network of stores

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Page 25: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

13.2.2018 25

Operatingenvironment 2018

Page 26: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

-2%

0%

2%

4%

6%

8%

10%

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

40 000

45 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

MSEK Market growth Sweden

Total Market (MSEK) Annual growth (%)

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

8%

0

500

1 000

1 500

2 000

2 500

3 000

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

MEURMarket growth Finland

Total Market (MEUR) Annual growth (%)

Pharmaceutical markets are growingSource: IQVIA

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Page 27: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Megatrends support business growth

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Ageing population, increasing healthcare costs

Specialty pharmaceuticals growth needs supporting

services

Increasing spending on health and wellbeing

Digitalisation- opportunities and challenges

Page 28: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Online pharmacies are growing fast in Sweden• Online trade is growing by 20 % each year while other retail is growing only 4 %• Over 70 % of Swedes under 50 years have shopped online last month• Every 5th Swede had bought at least one product in a month by smartphone, 1 in 8 had bought

two or more products• Declining prices and lower margins in campaigns

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Page 29: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

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Sustainability

Page 30: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Sustainability in Oriola

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Environment

Energy efficiencyClimate actionsWaste reduction and safehandling

Compliance and supply chainTransparent governanceEthical business and practicesSafety and availability of products and servicesResponsibility in the supply chain

People and Society

Competent and contentedstaffDiversity and equalityStakeholder responsibilty

The Channel for Health

Oriola started preparing reporting in 2016First CDP report in 2017

Page 31: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Energy efficiency improvements in premises in Finland and Sweden underway

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Delivery to 800 pharmacies in Finland, 1 400 in Sweden

Pharmaceutical waste from distribution and collected from consumers

EnvironmentNon-financial information

10 548

12 694

6 843

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

2016 2017

Energy Consumption by Source (MWh)

District heatingRenewable electricityElectricity from mixed resources

242 79016 %

1 301 39184 %

Goods transports: CO2 emissions, kg

Finland Sweden

67 40

413 453

0

100

200

300

400

500

600

2016 2017

Pharmaceutical waste (tonnes)

Finland Sweden

3 446

19 237

5 902

Page 32: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

Sweden Finland Other countries

30 %

45 %

25 %

- under 30 years - 30-49 years- 50 years and over

79 %

21 %

Female Male

Employees by country (FTE)

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Employees by gender (headcount) Employees by age groups (headcount)

PeopleNon-financial information

Total FTE 31 December 2017: 2619

73 %

27 % 0%

Page 33: Oriola Corporation Financial Statements 2017 · stores and online shop opened in January 2018 ERP and warehouse management system implementation in Finland was difficult – delivery

13.2.2018 33