Oriola Corporation Interim Report January March 2020 Q1 2020 - PowerPoint PPT Presentation

Oriola Corporation Interim Report January – March 2020

Q1 2020 highlights • Strong invoicing and net sales growth continued, partially driven by COVID-19 pandemic • Increase in profit mainly driven by good sales • Additional costs due to pandemic demand peak • Logistics Finland continued solid performance • Ramp-up of distribution centre in Sweden delayed due to pandemic • Commitment to strategic programmes remains, but day to day operations prioritised in current market environment

COVID-19 pandemic impact • Extra safety measures for our employees starting from February • Historically high order levels of pharmaceuticals and cold and pain products from pharmacy customers in Finland and Sweden in March • Safeguarding availability of medicines in line with our purpose “Health for Life” • Business environment has changed extremely fast, as governments’ restrictions impacted consumer behavior in late March • Short-term market environment uncertain 24.4.2020 3

Key figures continuing operations Net sales Adjusted EBIT 1 Invoicing EUR million EUR million EUR million 1 721 4 000 1 800 70 3 733 1 589 3 518 1 552 1 528 3 364 58.7 1 600 3 336 3 500 60 1 400 3 000 50 1 200 2 500 39.0 40 1 000 34.4 2 000 800 30 1 500 20.5 399 897 600 20 1 000 400 10 6,6 460 965 500 894 388 388 397 848 200 820 797 367 13.3 10.8 6.9 5.8 3.7 0 0 0 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 1 The figures in 2016–2019 have been restated due to an error related to previous periods Q1 Q1/2020 adjusted EBIT at comparable EUR/SEK rate EUR 7.1 million 24.4.2020 4

Adjusted EBIT Adjusted EBIT 1 Adjusted EBIT development 1 EUR million EUR million 10 10 8 8 -0.3 0.8 0.0 6 6 2.6 9.1 4 4 6.9 6.9 5.6 2 2 3.7 3.7 2.1 0 0 2019 Consumer Pharma Retail Group 2020 Q1 items Q1 2019 2019 2019 2019 2020 Q1 Q2 Q3 Q4 Q1 1 The figures for Q1-Q3 2019 have been restated due to an error 1 Q1/2020 adjusted EBIT at comparable EUR/SEK rate EUR 7.1 million related to previous periods 24.4.2020 5

Operating environment

Consumer markets Online share of Swedish Market shares Pharmacy market 388 Pharmacy market 387 397 16% 396 397 14% 12% 326 4.6 BEUR 4.6 BEUR 327 10% 187 188 8% 6% 79 79 4% Oriola/Kronans Apotek 17% (17%) Rx 74% (74%) 48 2% Apoteket 31% (31%) OTC 9% (9%) Apotek Hjärtat & CURA 31% (31%) TG 17% (17%) 0% 2017 Q1 2017 Q2 2017 Q3 2017 Q4 2018 Q1 2018 Q2 2018 Q3 2018 Q4 2019 Q1 2019 Q2 2019 Q3 2019 Q4 2020 Q1 Apoteksgruppen 9% (9%) Apotea 7% (5%) Lloyds Apoteket 4% (3%) Market shares are Q1 figures and market size Others 2% (3%) rolling 12 month figure. Source: Apoteksförening 24.4.2020 7 24.4.2020

Wholesale markets Pharmaceutical market growth in Q1: Finland 10.9% and Sweden 14.7% Finland Wholesale Sweden Wholesale 2.8 BEUR 4.5 BEUR Oriola 43% (45%) Oriola 46% (40%) Others 57% (55%) Others 54% (60%) Market shares are Q1 figures and Source: IQVIA and Oriola estimate Source: LTK and Oriola estimate market size rolling 12 month figure 24.4.2020 8

Retail markets Market share dose dispensing TG/OTC products supply for pharmacies in Sweden Sweden 25% Oriola 43% (44%) Others 57% (56%) from the total market of EUR 1.2 billion Market share is Q1 figure and market size rolling 12 month figure Total 225,000 patients Staffing services in Finland Finland in 167 pharmacies in Q1 Oriola 40% (39%) Others 60% (61%) of a total of 819 pharmacies Total 55,000 patients 24.4.2020 9 Source: Oriola estimate

Business Area reviews Q1 2020

Three customer-centric business areas Consumer business area Pharma business area Retail business area Retail services and products for consumer Tailored logistics, expert and advisory A wide range of health and wellbeing health and wellbeing in Sweden in services for pharmaceutical companies, products for pharmacies, veterinarians, Kronans Apotek and in cooperation with and a wide range of pharmaceutical private and public healthcare operators and Doktor.se. products for pharmacies, hospital retailers, as well as services for pharmacies, pharmacies and veterinarians. including dose services and staffing. 40% of 44% of 16% of Group net sales Group net sales Group net sales Operations group function Serving all business areas, focus on logistics operations, direct and indirect sourcing, dose manufacturing. External Net sales, 2019. 24.4.2020 11

Consumer Q1 2020 Adjusted EBIT 1 • Net sales increased by 10.3% to 207.2 M€ EUR million in constant currency • High sales in March, driven by the 6 increased demand due to COVID-19 5 pandemic 4 • Kronans Apotek’s online sales continued to 3 grow (+45% vs the market +48%) 5.4 4.9 2 • Share of OTC and traded goods of net 2.9 2.8 sales 24.2% (24.8%) 1 1.1 • Share of low margin RX is increasing 0 2019 2019 2019 2019 2020 Q1 Q2 Q3 Q4 Q1 1 The figures for Q1-Q3 2019 have been restated due to an error related to previous periods as reported in December 2019. 24.4.2020 12

Pharma Q1 2020 Adjusted EBIT • Net Sales increased by 22.4% to 244.2 M€, EUR million and in constant currency by 24.2% • Sales development driven by 6 the pharmaceutical market growth, 5 changes in pharmaceuticals distribution 4 agreements and COVID-19 pandemic related demand increase 3 5.2 4.7 • Profitability impacted by the personnel and 4.2 2 3.5 3.6 freight cost level increase mainly in 1 Sweden due to exceptional COVID-19 0 volume increase 2019 2019 2019 2019 2020 Q1 Q2 Q3 Q4 Q1 24.4.2020 13

Retail Q1 2020 • Net sales increased by 8.6% to Adjusted EBIT EUR million 121.2 M€, and increased by 10.9% in constant currency 2.0 • Growth driven by number of dose dispensing patients in Sweden and increased demand for healthcare 0.3 0.2 0.2 products at the end of Q1 0.0 -0.6 -0.8 • Strong sales in healthcare products in Finland and growth in dose dispensing impacted EBIT positively -2.0 • High operations costs in Sweden 2019 2019 2019 2019 2020 Q1 Q2 Q3 Q4 Q1 impacted profitability 24.4.2020 14

Financial review Q1 2020

Invoicing and net sales Net sales Invoicing Invoicing EUR million EUR million 1 000 500 900 450 400 800 700 350 600 300 500 979 250 965 942 917 460 894 448 447 429 979 397 400 200 300 150 200 100 100 50 0 0 2019 2019 2019 2019 2020 2019 2019 2019 2019 2020 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1/2020 Invoicing at comparable EUR/SEK rate EUR 982 million Q1/2020 Net Sales at comparable EUR/SEK rate EUR 468 million 24.4.2020 16

Adjusted EBIT Adjusted EBIT 1 Adjusted EBIT development 1 EUR million EUR million 10 10 8 8 -0.3 0.8 0.0 6 6 2.6 9.1 4 4 6.9 6.9 5.6 2 2 3.7 3.7 2.1 0 0 2019 Consumer Pharma Retail Group 2020 Q1 items Q1 2019 2019 2019 2019 2020 Q1 Q2 Q3 Q4 Q1 1 The figures for Q1-Q3 2019 have been restated due to an error 1 Q1/2020 adjusted EBIT at comparable EUR/SEK rate EUR 7.1 million related to previous periods 24.4.2020 17

Profit for the period and earnings per share Profit for the period 1 Earnings per share 1 EUR million EUR 6 0,08 0,06 4 0,04 5.1 4.5 2 0,02 2.0 1.7 0.03 0.02 0.01 0.01 0 -0.2 0.00 0,00 -2 -0,02 2019 2019 2019 2019 2020 2019 2019 2019 2019 2020 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 1 The figures for Q1-Q3 2019 have been restated due to an error related to previous periods 24.4.2020 18

Cash flow Quarterly net cash flow from operating activities Q1 YTD 2020 change in cash EUR million EUR million 80 140 60 120 100 40 51.4 70 48 80 20 - 0.5 - 4.0 27 18 60 117.7 13 3 -1 0 40 70.8 -25 -20 20 -40 0 2018 2018 2018 2019 2019 2019 2019 2020 Cash Q4 2019 Operating Investing Financing Cash Q1 2020 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 activities activities activities 24.4.2020 19

Net Interest-Bearing Debt Net interest-bearing debt EUR million 31 Mar 31 Mar 31 Dec 2020 2019 2019 EUR million Bank loans 56.3 58.6 57.8 250 (syndicated Bank & term) Commercial papers 88.9 53.0 35.0 200 Advance payment from 15.4 15.3 13.2 pharmacies 150 Lease liabilities 79.3 100.2 84.3 199 Cash and cash 117.7 27.9 70.8 100 equivalents 150 133 122 120 Net interest-bearing debt¹ 122.2 199.1 119.6 105 100 50 64 Sold trade receivables 174.9 150.9 166.5 Gearing %² 91.8 129.4 76.1 0 2018 2018 2018 2019 2019 2019 2019 2020 ¹ Figure in Q1 2020 includes EUR 79.0 (99.4) million lease liabilities recognised Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 due to application of IFRS 16 ² Excluding the impact of IFRS 16 gearing would have been 31.2% (62.4%) 24.4.2020 20

Q1 2020 Key take-aways COVID-19 Digital and online Strong invoicing Peak volumes pandemic effects gaining importance and net sales caused additional on business in the market growth continued costs environment 24.4.2020 21

Outlook for 2020 Adjusted EBIT on a constant currency basis is estimated to increase from the 2019 level Oriola’s business outlook for 2020 is based on external market forecasts, agreements with pharmaceutical companies and pharmacies, and management assessments. 24.4.2020 22