Oriola Corporation Stock Exchange Release 4 March 2025 at 8.30 a.m. EET

Oriola Corporation's Financial Statements Release 1 January-31 December 2024

Strategy implementation enhances financial performance

October-December 2024 highlights

• Invoicing increased by 2.1 % to EUR 983.5 (963.4) million.
• Net sales increased by 14.0% to EUR 440.7 (386.6) million.
• Adjusted EBIT was EUR 6.4 (5.4) million.
• EBIT was EUR 4.0 (5.2) million and included adjusting items of EUR -2.4 (-0.2) million mainly related to the implementation costs of the ERP investment.
• Loss for the period totalled EUR -17.8 (-2.8) million and earnings per share were EUR -0.10 (-0.02). The loss includes Oriola's share of the impairment of goodwill in Kronans Apotek amounting to EUR 16.3 million.

Excluding Swedish dose business:

• At the end of April, the Swedish Competition Authority announced its decision to prohibit the sale of Svensk dos AB due to negative effects on competition in the market. The Swedish Patent and Market Court rejected Apotekstjänst Sverige AB's appeal in November 2024 and consequently the Swedish Competition Authority's decision from April 2024 remains in effect. Apotekstjänst Sverige AB has appealed the decision to the Patent and Market Court of Appeal. The final ruling is expected in March 2025. Oriola announced the sale of Svensk dos AB to Apotekstjänst Sverige AB in October 2023.
• Net sales were EUR 436.8 (384.1) million.
• Adjusted EBIT was EUR 6.1 (6.2) million.

January-December 2024 highlights:

• Invoicing increased by 5.1% to EUR 3,771.8 (3,587.7) million.
• Net sales increased by 12.4% to EUR 1,679.7 (1,493.8) million.
• Adjusted EBIT was EUR 21.7 (16.7) million.
• EBIT was EUR 13.6 (-5.3) million and included adjusting items of EUR -8.1 (-21.9) mainly related to the implementation cost of the ERP investment.
• Loss for the period totalled EUR -20.1 (-20.7) million and earnings per share were EUR -0.11 (-0.11). The loss includes Oriola's share of the impairment of goodwill in Kronans Apotek amounting to EUR 16.3 million.

• The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.07 (0.07) per share be paid for 2024.

Excluding Swedish dose business:

• Net sales were EUR 1,665.7 (1,475.7) million.
• Adjusted EBIT was EUR 21.6 (19.5) million.

1 Adjusting items are specified in note Adjusting items on page 20.

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 Financial Statements Release.

Outlook for 2025

In 2025, the pharmaceutical distribution market is expected to continue to grow. Value growth is expected to be driven by high-value pharmaceuticals and products requiring advanced logistics. The uncertainty in the geopolitical environment remains, and the availability issues of certain pharmaceuticals are expected to continue.

Consumer confidence is expected to remain weak, which may have an impact on the wholesale market. Typically in economic uncertainty, consumers tend to shift purchases to low-price categories. 

For 2025, Oriola expects the adjusted EBITDA excluding the Swedish dose dispensing business to increase from the previous year (2024: EUR 33.3 million). The expectation of improved adjusted EBITDA is based on growing markets and strategy execution.

From the start of 2025, Oriola introduces adjusted EBITDA (earnings before interest, taxes, depreciation and amortisation) as a new alternative performance measure. EBITDA is widely used by management and investors when assessing the profitability of a company and cash flow generation. Oriola publishes adjusted EBITDA for all quarters of 2024 separately.

CEO Katarina Gabrielson:

For Oriola, 2024 was a good year and I am pleased with our accomplishments and financial development, marked by sales growth and improved profitability. Throughout the year we progressed well with our refined strategy. We strengthened customer-centricity to build strong partnerships, expanded our wholesale business and introduced new data-driven services. Additionally, we announced a new operating model aimed to accelerate strategy execution. In 2024, our organic net sales growth reached 3%, driven by both distribution and wholesale. Excluding the Swedish dose dispensing business, our adjusted EBIT exceeded previous year's level, amounting to EUR 21.6 million.

In Q4, Oriola's organic net sales growth was 3% while reported net sales grew by 14% to EUR 441 million. Adjusted EBIT excluding the Swedish dose dispensing business was EUR 6.1 (6.2) million and reported adjusted EBIT was EUR 6.4 (5.4) million.

The Distribution segment's organic net sales growth was 2% in Q4. Market volumes continued to grow, although we saw significant fluctuation of volumes within the quarter, partly due to VAT and reimbursement changes in Finland. Sales growth and lower freight costs improved the segment's profitability, while operating expenses were above last year due to high volumes in December. Adjusted EBIT increased by 22% to EUR 5.9 million. In 2024, a strategic focus area within distribution was to enhance customer-centricity through close relationships with customers, applying a structured approach and increasing dialogue with them. Thanks to these efforts, we retained all strategic accounts and have new customers onboarding at the start of 2025.

In Q4, net sales in the Wholesale segment grew by 5% supported by growth both in Finland and Sweden. Profitability improved by 10% with adjusted EBIT reaching EUR 2.0 million. During the year - in line with our refined strategy - we built the base to grow the wholesale business in Finland by developing our capabilities and competences as well as by expanding our offering. This took somewhat longer than anticipated but we achieved gradual increase and in the end a strong Q4 with double-digit growth in key sales channels. In advisory services, the recently launched data-driven service that provides market insights to support pharmaceutical companies in their decision-making, quickly gained traction among our customers.

Our strategic investment to renew Oriola's ERP (enterprise resource planning) and WMS (warehouse management systems) has proceeded according to plan. By the end of 2024 we completed the design phase and we will continue to work diligently as the first deployment in Sweden approaches.

We are proud of our societal role in ensuring safe and accurate deliveries of pharmaceuticals and other health products. Our commitment is to deliver pharmaceuticals within 24 hours of ordering and we measure our success by the picking quality of deliveries, which in 2024 reached 99.8%. We have decreased Scope 1 and 2 carbon emissions by 90% from the base year 2019. Going forwards, as part of our commitment to set science-based targets, we will expand our emissions reporting especially for Scope 3 carbon emissions. Wholesale and distribution typically create large amounts of waste, which is why enhancing recycling is a critical initiative for us. In 2024, our recycling rate improved to 85% (81%).

During 2024, the joint venture company Kronans Apotek continued to develop its broad network of almost 500 pharmacies and enhance its e-commerce sales. With a total market share of 21%, ranking third in size in the Swedish market and experiencing double-digit growth in the digital sales channel, the company is well-positioned to further improve its profitability and competitiveness in 2025. Oriola expects Kronans Apotek to reach profitability level representing industry benchmark by 2027. The integration process has been more complex and slower than expected, especially related to the ERP integration and organisation setup. Kronans Apotek is a key strategic partner for Oriola, and we will actively support its value creation as a major shareholder.

At the end of the year, we announced plans to renew our operating model and subsequently made new appointments to our management team. The aim of these initiatives is to further enhance customer focus, drive sales growth and strengthen our competitiveness in a changing business environment. I am confident that we are well-positioned to accelerate the execution of our refined strategy, and together with our people, explore new growth opportunities and enhance value creation to our customers and stakeholders. I would like to take this opportunity and thank everyone at Oriola for their dedication and hard work over the past year. I also extend my gratitude to our customers, partners and shareholders for their continued support and trust in us.

Disclosure procedure

This stock exchange release is a summary of Oriola Corporation's Financial Statements Release 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.

Oriola's CEO Katarina Gabrielson and CFO Mats Danielsson will present the full-year results at a live webcast meeting today at 10.00 a.m. Join the meeting: https://oriola.events.inderes.com/q4-2024  

Next financial reports

Oriola Corporation will publish its Annual Report 2024 during week 11 (latest 12 March 2025) and the Interim Report for January-March 2025 on Tuesday 29 April 2025.

Further information:

Mats Danielsson
CFO
email: mats.danielsson@oriola.com

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

Distribution:
Nasdaq Helsinki Ltd
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