ORIOLA-KD CORPORATION January – September 2016 Eero Hautaniemi, President and CEO 20 October 2016 1 Oriola-KD Corporation
Oriola-KD Key Figures I nvoicing Net Sales Adjusted Operating profit 3 262 3 500 1 800 1 522 1 620 1 612 1 626 90 2 951 3 074 3 060 1 600 80 3 000 1 400 70 60,8 59,1 2 500 1 200 60 EUR million EUR million EUR million 2 000 1 000 50 37,0 1-9 1-9 800 40 1 500 29,1 45,5 45,7 1-9 1-9 1-9 1-9 600 30 2 547 1 217 1 205 2 404 1 000 400 20 200 10 500 0 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 1-9/ 2016 adjusted operating profit at 1-9/ 2016 net sales at comparable EUR/ SEK rate EUR 1 218 million comparable EUR/ SEK rate EUR 45.7 million All figures for Continuing operations 2 Oriola-KD Corporation
Adjusted operating Profit January – Septem ber 2 0 1 6 Adjusted Operating profit Adjusted Operating profit, w aterfall 20 1.3 0.3 18 17,5 16 17,0 -0.1 -1.2 45.7 45.5 15,3 14 14,8 EUR million 13,9 EUR million 12 10 8 6 4 2 0 2015 2015 2016 2016 2016 Q3 Q4 Q1 Q2 Q3 3 Oriola-KD Corporation
Reporting segm ents January – Septem ber 2 0 1 6 4 Oriola-KD Corporation
Solid Position in Selected Markets MARKET SHARE MARKET SI ZE ( BEUR) AND GROW TH Sw eden TG/ OTC for FI NLAND Retail pharm acies in Sw eden 2 0 1 5 -2 0 2 0 CAGR 1 .1 % 3 1 9 % 3 2 % Q3 / 2 0 1 5 Q3 / 2 0 1 5 1 8 % SW EDEN 3 1 % 2 0 1 5 -2 0 2 0 2 CAGR 4 .2 % 1 4 0 3 2 0 1 5 2 Finland Sw eden W holesale W holesale 1 0 4 6 % 3 9 % Q3 / 2 0 1 5 Q3 / 2 0 1 5 2 0 1 5 4 6 % 4 0 % Source: IMS Health, ATY, Apoteksförening and Oriola-KD 5 Oriola-KD Corporation
Consum er Segm ent • 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. 317 NET SALES PHARMACIES Sw eden Of which 3 1 5 are Latvia Kronans Apotek Pharmacies in Sweden Finland and 2 are pharmacies Application for Sw edish prescription in Latvia m edicine custom ers launched in Septem ber 6 Oriola-KD Corporation
Pharm acy chains in Sw eden Pharm acies Market Share LloydsApoteket 389 -2 Apoteksgruppen Apotek Hjärtat & 382 10 CURA 315 6 177 8 80 0 4 0 100 200 300 400 500 Apoteket Pharmacies 2010 online sales 4% The share of Established net 2010 - 2015 Established net 2016 Source: Apoteksförening and Oriola-KD 7 Oriola-KD Corporation
Consum er January – Septem ber 2 0 1 6 Adjusted Operating profit • On a constant currency basis the net sales increased by 3.6 per cent 14,0 • Third quarter result impacted by establishment costs and less successful 12,0 campaigns. 10,0 10,3 • Market share declined due to weaker 9,5 Milj. EUR 8,9 8,0 growth in Rx, OTC and Traded goods 7,7 7,6 6,0 developed well. 4,0 • Share of OTC and traded goods of net sales increased to 27.2 (26.2) per cent 2,0 • Net increase of six pharmacies in Sweden 0,0 in January-September 2016 2015 2015 2016 2016 2016 Q3 Q4 Q1 Q2 Q3 • Parallel imports’ share of the Swedish pharmaceutical market was approximately 11.3 (10.6) per cent (source: IMS Health) 8 Oriola-KD Corporation
Services Segm ent • Focuses on long-term customer relationships and a wide service offering • Provides logistics services and wide range of value adding Services for healthcare actors w ho w ant to services for Pharmaceutical companies and pharmacies succeed in the Nordic and Baltic countries. • Purchase and distribution services of OTC and traded goods in We provide high quality and ensure that products are Sweden delivered unchanged from Oriola’s warehouses to the pharmacies, hospitals and veterinaries. • Sales and marketing services of large assortment of traded goods in Finland and in the Baltic countries • Staffing Services for Finnish pharmacies I NVOI CI NG Logistic Staffing Sales and Sw eden services services marketing services Baltics Finland Purchase and distribution services Value adding services 9 Oriola-KD Corporation
Farenta in a Nutshell • A complete professional service offering for pharma companies starting from clinical trials to consumer services • Unique career development possibilities for pharmacists • Connecting customers, 14.6 employees and patients every Finland: 160 pharmacies EUR RESEARCH day life with digital channels NET SALES Poland: 170 pharmacies MI LLI ON NETW ORK ( 2 0 1 5 ) • High seasonal demand for staffing services 400 Pharmacies: 350 Pharmaceutical companies: 113 CUSTOMERS EMPLOYEES 10 Oriola-KD Corporation
Services January – Septem ber 2 0 1 6 • On a constant currency basis the Adjusted Operating profit invoicing increased by 5.9 per cent. • Profitability developed well in all 14,0 operating countries. 12,0 • Efficiency in Sweden improved back 10,0 Milj. EUR to normal. 9,1 9,0 8,8 8,0 8,5 8,0 • Farenta acquisition complements 6,0 services offering to pharma 4,0 companies and pharmacies. 2,0 • Negative cash flow from operations 0,0 2015 2015 2016 2016 2016 due to contractual changes Q3 Q4 Q1 Q2 Q3 11 Oriola-KD Corporation
Oriola-KD invests in the services and efficiency • The investments in 2016-2018 will be approximately EUR 35 million annually • Without M&A • Investments in the logistics efficiency • Group operative IT-platform 2015-2018 • Automation in the Distribution Centre in Finland 2015-2016 • Expansion and automation of the Distribution Centre and warehouse in Sweden 2016-2018 • Investments in digital services • Investments in the pharmacy chain in Sweden 12 Oriola-KD Corporation
Healthcare Segm ent DOSE DI SPENSI NG SERVI CES • The Healthcare segment offers services to hospitals, healthcare centres and other healthcare operators in Svensk dos in Sweden and Sweden. PharmaService in Finland are part of Oriola-KD • Many growing business opportunities, such as Group and specialized in hospital pharmaceutical care, dose dispensing and dose dispensing services. home distribution of pharmaceuticals. • Finnish healthcare sector in transformation. 28 EUR 14 EUR MI LLI ON MI LLI ON NET SALES HEALTHCARE BUSI NESS GOALS ( 2 0 1 5 ) 60 50 • Built on Oriola-KD’s EMPLOYEES knowledge of market and customers PATI ENTS ~ 26,000 ~ 20,000 Typically 8 5 years old • Providing new services for healthcare organizations like DOSE 26 MI LLI ON 22 MI LLI ON clinics and hospitals POACHES ANNUALLY 13 Oriola-KD Corporation
Dose Dispensing DOSE MARKET MARKET SHARE FI NLAND 4% 4% Pharm ac Finland Oy 1 0 % ~ 4 0 ,0 0 0 50% 42% University Pharm acy ( YA) PATI ENTS ANNUAL GROW TH I N AVERAGE Pharm ados Oy SW EDEN 14% 8 % 22% ~ 2 0 0 ,0 0 0 10% Apoteket AB Svensk Dos as of February 2 0 1 7 ANNUAL PATI ENTS GROW TH I N SKÅNE AREA Apoteket AB ( ESTI MATE) 54% Apotekstjänst Source: Oriola-KD 14 Oriola-KD Corporation
Healthcare January – Septem ber 2 0 1 6 Adjusted Operating profit • Dose dispensing developed through acquisitions of Svensk dos in February 8 2016 and Pharmaservice in July 2016. • New digital platform for veterinarians 6 launched in Sweden and capabilities to EUR million serve hospitals developed. 4 • Contract with Evidensia in Sweden. 2 • Amortisation cost EUR 1.1 million in 0,0 Jan-Sep 2016, estimated EUR 1.5 0 -0,6 -0.6 million in 2016. -2 2015 2015 2015 2016 2016 2016 Q2 Q3 Q4 Q1 Q2 Q3 15 Oriola-KD Corporation
Key Focus Areas in 2 0 1 6 Successful execution of Continue developing Active the efficiency the Healthcare development of improving strategic channel digital business development initiatives 2 0 1 6 • New mobile app in • Acquisition of Svensk dos • Investments in IT Kronans Apotek • Acquisition of • Investments in • New Oriola4Care – platform Pharmaservice automation in in Sweden • Hospital and Vet deals in Enköping, Mölnlycke Sweden and Mankkaa • Closing of Oulu DC 16 Oriola-KD Corporation
Key Figures January – Septem ber 2 0 1 6 17 Oriola-KD Corporation
Cash flow Quarterly net cash flow from operating activities EUR m illion 1 -9 / 2 0 1 5 1 -9 / 2 0 1 6 40 Change in working capital 30 -49.6 4.5 31 20 26 EUR million Net cash flow from 22 19 16 13 10 operating activities 14.3 55.1 8 0 Net cash flow from -10 investing activities -27 -13.1 -64.8 -20 Net cash flow from -30 financing activities -34.0 -2.1 Net change in cash 8.0 -52.6 Cash and cash equivalents 99.5 at the end of period 69.5 18 Oriola-KD Corporation
Net I nterest-Bearing Debt Net I nterest-Bearing Debt 3 0 Sep 3 0 Sep EUR m illion 120 2 0 1 5 2 0 1 6 Syndicated bank loans 74.4 67.6 100 Commercial papers 102 3.0 45.0 Advance payment from 33.2 34.4 80 82 pharmacies EUR million Other 17.7 4.2 66 60 63 69.5 99.5 Cash and cash equivalents 51 Net interest-bearing debt 2 8 .9 8 1 .7 40 42 Sold trade receivables 111.2 115.2 29 16.6 Gearing, % 42.5 20 7 0 Q4/2014 Q1/2015 Q2/2015 Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 19 Oriola-KD Corporation
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