Oriola-KD Corporation Stock Exchange Release 13 February 2017 at 8.30 a.m.
Oriola-KD Corporation's Financial Statements Release 2016
Financial performance October-December 2016
- Invoicing increased by 1.7 (5.3) per cent to EUR 872.7 (858.0) million
- Net sales increased by 0.9 (0.8) per cent to EUR 424.8 (420.9) million
- Adjusted EBITDA increased by 3.8 (1.3) per cent to EUR 21.8 (21.0) million
- Adjusted operating profit was EUR 15.3 (15.3) million
- Profit for the period totalled EUR 10.8 (12.4) million and earnings per share were EUR 0.06 (0.07)
Financial performance January-December 2016
- Invoicing increased by 4.8 (6.6) per cent to EUR 3,420.0 (3,262.2) million
- Net sales increased by 1.0 (0.9) per cent to EUR 1,642.1 (1,626.3) million
- Adjusted EBITDA increased by 4.1 (2.6) per cent to EUR 86.8 (83.4) million
- Adjusted operating profit was EUR 61.1 (60.8) million
- Adjusted operating profit with comparable EUR/SEK rate was EUR 61.7 million
- Profit for the period totalled EUR 42.8 (44.5) million and earnings per share were EUR 0.24 (0.25)
Outlook for 2017
Oriola-KD is undergoing a major development phase which started in 2015 and is estimated to be completed by the end of 2018. The costs related to these development projects and the intensified competition in the Swedish retail, especially online, will negatively impact the 2017 profitability.
Adjusted operating profit (Adjusted EBIT) on constant currency basis is estimated to remain at 2016 level.
President and CEO Eero Hautaniemi:
Oriola-KD's business grew at the pace of the market in 2016. The growth was above the market in Services business, and weaker in the Consumer business. The profitability was supported by the efficiency improvement in the logistics, and the continued favourable development of the sales mix in the Consumer business.
We are successfully executing our strategy in all Business areas. In Consumer business we opened 11 new pharmacies in good locations in Sweden, and closed 3 pharmacies in locations where the customer traffic no longer supported the sales. We launched new online application to improve our service to prescription customers. In 2016 our online sales were two per cent of the total sales and continue to have good growth potential.
As a result of increasing competition, especially online, we will intensify our focus on efficient pharmacy operations, establishment strategy and dynamic online offering in our Consumer business. Despite the increasing competition and 14 new pharmacies the result at the comparable EUR/SEK rate stayed at the previous year level in 2016.
In Services business we extended our services offering to pharmaceutical companies and to pharmacies by acquiring Farenta Oy. We are also amidst a three-year development phase as we are implementing a new operating platform and upgrading the automation level of our distribution centres. Still we were able to reach an all-time high result in Services in 2016.
We started the new business area Healthcare by acquiring dose dispensing companies both in Sweden and in Finland and were successful in increasing the number of persons served by us. The new Business area developed well and was able to deliver a positive contribution already during its first year.
The pharmaceutical distribution and dispensing is very much in the public discussion, both in Sweden and in Finland. The pharmacy trade was opened to competition in Sweden almost a decade ago. As a consequence of the deregulation, the availability of pharmacy services has improved significantly and the patient safety has remained on a high level. The number of pharmacies has increased by over 400, the pharmacies have continued to serve the sparsely populated areas and the competition has lowered the prices of the freely traded products. The customer feedback has been positive. In Finland the discussion has started to acknowledge these facts and the willingness to consider new regulation is increasing.
Our personnel has been working hard with all of our development programs while implementing the new business structure and continuing to serve our customers each and every day. With this dedication to develop our company we are set to continue to improve our businesses and performance.
Impact of new ESMA guidelines
New ESMA (European Securities and Markets Authority) guidelines on Alternative Performance Measures (APMs) are effective for the financial year 2016. Oriola-KD presents APMs to reflect the underlying business performance and to enhance comparability between financial periods. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS. As of Q1 2016, Oriola-KD relabels the previously referenced "excluding non-recurring items" with "adjusted ". Reporting segments' operating profit is reported excluding adjustment items . In addition Oriola-KD uses "invoicing" as the measure to describe the business volume. The reconciliation of the alternative performance measurements to performance measurements defined by IFRS are presented at the end of this interim report.
| Key figures | 2016 | 2015 | Change | 2016 | 2015 | Change | |
| EUR million | 10-12 | 10-12 | % | 1-12 | 1-12 | % | |
| Invoicing | 872.7 | 858.0 | 1.7 | 3,420.0 | 3,262.2 | 4.8 | |
| Net sales | 424.8 | 420.9 | 0.9 | 1,642.1 | 1,626.3 | 1.0 | |
| Adjusted EBITDA | 21.8 | 21.0 | 3.8 | 86.8 | 83.4 | 4.1 | |
| Adjusted EBITDA % | 5.1 | 5.0 | 5.3 | 5.1 | |||
| Adjusted operating profit 1) | 15.3 | 15.3 | 0.4 | 61.1 | 60.8 | 0.4 | |
| Operating profit | 14.1 | 17.3 | -18.3 | 58.8 | 62.6 | -6.0 | |
| Adjusted operating profit % | 3.6 | 3.6 | 3.7 | 3.7 | |||
| Operating profit % | 3.3 | 4.1 | 3.6 | 3.8 | |||
| Profit for the period | 10.8 | 12.4 | -12.9 | 42.8 | 44.5 | -3.8 | |
| Earnings per share, EUR | 0.06 | 0.07 | -13.2 | 0.24 | 0.25 | -5.9 | |
| Net cash flow from operating activities | 25.8 | 30.5 | 40.1 | 85.6 | |||
| Gross investments, EUR million | 88.8 | 20.4 | |||||
| Total assets | 925.4 | 946.9 | |||||
| Net interest-bearing debt | 72.3 | 6.6 | |||||
| Gearing, % | 35.2 | 3.4 | |||||
| Net debt / 12-month EBITDA | 0.8 | 0.1 | |||||
| Equity per share, EUR | 1.13 | 1.07 | |||||
| Equity ratio, % | 22.7 | 21.1 | |||||
| Return on equity (ROE), % | 21.4 | 29.1 | |||||
| Return on capital employed (ROCE), % | 17.8 | 19.9 | |||||
| Average number of shares, 1000 pcs 2) | 181,389 | 177,502 | |||||
| Average number of personnel | 2,582 | 2,327 | |||||
| Number of personnel at the end of the period | 2,821 | 2,353 | |||||
| 1) Adjustment items are specified in table "Adjusting items included in Operating Profit " 2) Treasury shares held by the company not included | |||||||
Disclosure procedure
This stock exchange release is a summary of Oriola-KD Corporation's Financial Statement release January-December 2016. The complete report is attached to this release in pdf format and is also available on Oriola-KD's website at www.oriola-kd.com/investors .
Analyst and investor meeting
Oriola-KD Corporation will organize a meeting for investors, analysts and the press on Monday, 13 February 2017 at 10.00 a.m. at Hotel Scandic Simonkenttä, meeting room Tapiola, Simonkatu 9, 00100 Helsinki, Finland.
A teleconference on the financial information will be held by Oriola-KD Corporation on the same day starting at 2.00 p.m. Finnish time, tel. +44 20 3059 8125, confirmation code "Oriola". The event can be followed live as a audiocast accessible at www.oriola-kd.com/investors. The language of the teleconference will be English.
Next interim report
Oriola-KD Corporation will publish its results for the first quarter of 2017 on 28 April 2016.
Further information:
Eero Hautaniemi, President and CEO tel. +358 (0)10 429 2109 e-mail: eero.hautaniemi@oriola.com
Sari Aitokallio CFO tel. +358 (0)10 429 2112 e-mail: sari.aitokallio@oriola.com
Distribution: NASDAQ OMX Helsinki Ltd Key media
Released by: Oriola-KD Corporation Corporate Communications Orionintie 5, 02200 Espoo www.oriola-kd.com
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