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Oriola-KD Corporation's financial statements for 1 January - 31 December 2007
7.2.2008
Oriola-KD Corporation stock exchange release 7 February 2008 at
8.30am
This financial statement bulletin presents the figures of the
Oriola-KD Group (hereinafter Oriola-KD) for January-December 2007,
which have been prepared in accordance with the recognition and
valuation principles of the IFRS standards and have been audited.
Comparable January - December 2006 figures are unaudited pro forma
figures.
Key figures 1 January - 31 December 2007
* Invoicing in the period was EUR 2,524.5 million (1-12/2006: EUR
2,340.1 million) and net sales were EUR 1,377.3 million
(1-12/2006: EUR 1,334.7 million).
* Operating profit excluding one-off items was EUR 29.1 million
(1-12/2006: EUR 22.6 million).
* Operating profit including one-off items was EUR 29.1 million
(1-12/2006: EUR 17.4 million).
* Return on capital employed was 14.2 percent (1-12/2006 8.6
percent).
* Earnings per share were EUR 0.16 (1-12/2006: EUR 0.10).
* The Board proposes to the AGM that a dividend of EUR 0.08 per
share be paid for 2007 (EUR 0.06 per share).
President and CEO Eero Hautaniemi: "Oriola-KD intensely developed its
core business and pruned non-profitable businesses in 2007. Our cost
efficiency programme was implemented in full and our operating profit
saw clear improvement from the previous year in keeping with our
target. Our dental trade business was merged with Lifco Dental AB and
our goal is to make the new company the leading northern European
dental trade wholesaler. In addition, we continued our active
examination of growth ventures and our preparations for the possible
deregulation of the Swedish pharmacy market. We are poised to
capitalise on the opportunities presented by critical changes in the
market and to finance potential growth ventures."
Invoicing and net sales
Oriola-KD's invoicing in 2007 was EUR 2,524.5 million (EUR 2,340.1
million) and net sales were EUR 1,377.3 million (EUR 1,334.7
million). Fourth-quarter invoicing came to EUR 640.0 million (EUR
603.0 million) and net sales to EUR 331.6 million (EUR 343.7
million).
Financial performance
Oriola-KD's operating profit excluding one-off items was EUR 29.1
million (EUR 22.6 million) and profit after financial income and
expenses excluding one-off items was EUR 31.0 million (EUR 23.6
million) in the review period. Fourth-quarter operating profit
excluding one-off items was EUR 7.0 million (EUR 5.5 million).
Oriola-KD's operating profit including one-off items in the review
period was EUR 29.1 million (EUR 17.4 million). Fourth-quarter
operating profit including one-off items was EUR 7.0 million (EUR 5.3
million).
Profit after financial income and expenses and including one-off
items came to EUR 31.0 million (EUR 18.4 million) and net profit to
EUR 23.7 million (EUR 14.0 million) in the year under review. One-off
expenses in the period under review amounted to EUR 0.0 million (EUR
5.2 million). Fourth-quarter profit after financial income and
expenses and including one-off items was EUR 7.4 million (EUR 5.7
million).
Oriola-KD had net financing income of EUR 1.9 million (EUR 1.0
million) in the period under review.
Taxes amounted to EUR 7.3 million (EUR 4.4 million). Taxes
corresponding to the result for the period under review are accounted
as taxes.
Earnings per share were EUR 0.16 (EUR 0.10). Return on capital
employed was 14.2 percent (8.6 percent) and return on equity 12.0
percent (7.4 percent).
Balance sheet, financing and cash flow
Oriola-KD's total assets at 31 December 2007 stood at EUR 645.4
million (EUR 611.2 million). Interest-bearing net debt amounted to
EUR -90.0 million (EUR -80.6 million) and the gearing ratio was -44.2
percent (-42.0 percent). Cash assets at the end of December 2007
stood at EUR 131.0 million (EUR 112.9 million). Interest-bearing debt
consisted mainly of pharmacies' advance payments in Finland and stood
at EUR 41.0 million at 31 December 2007 (EUR 32.3 million).
Oriola-KD has credit facilities of EUR 25 million with banks and a
commercial paper programme of EUR 100 million, which remained
untapped at the end of the period under review. The Group has no
significant business transactions with related parties except for
pension expenses arising from defined benefit plans with the Oriola
Pension Foundation.
Cash flow from operations in 2007 was EUR 39.0 million (EUR 52.7
million), of which changes in working capital accounted for EUR 6.8
million (EUR 25.9 million). Cash flow from investments was EUR -19.1
million (EUR -10.2 million). Cash flow after investments in the
period was EUR 19.8 million (EUR 42.5 million). Cash flow from
financing includes the EUR 8.5 million in dividends paid on 23 March
2007 to shareholders in Oriola-KD Corporation and the dividend of EUR
0.4 million paid to Kronans Droghandel AB's minority shareholders.
Oriola-KD's equity ratio stood at 33.7 percent (33.1 percent).
Investments
Investments in the period under review amounted to EUR 32.1 million
(EUR 16.6 million) and include an investment of EUR 26.2 million in
new dental trade wholesaler Lifco Dental International AB, which sum
breaks down into a cash payment of EUR 15.8 million and the
transferred business. Maintenance and PPE investments, the Medith
business acquisition in Pharmaceutical Trade and other minor
investments came to a total of EUR 5.9 million in 2007.
Personnel
At the end of the period under review, Oriola-KD had a payroll of
1302 employees (1495), 54 percent of whom worked in Finland (57
percent), 28 percent in Sweden (26 percent) and a total of 18 percent
in the Baltic countries and Denmark (17 percent). The cost efficiency
programme and the dental trade merger resulted in a downsizing of
personnel in 2007.
Management
At 31 December 2007, the management team of the Oriola-KD Group
consisted of:
Eero Hautaniemi President and CEO
Claes von Bonsdorff CIO
Birgitta Gunneflo Vice President, Pharmaceutical
Distribution, Sweden
Henry Haarla General Counsel
Pellervo Hämäläinen Vice President, Corporate
Communications and IR
Anne Kariniemi Vice President, Logistics and
Sourcing
Matti Lievonen Vice President, Pharmaceutical
Distribution, Finland
Jukka Niemi Vice President, Pharmacy and
Retail Marketing
Teija Silver Vice President, Human Resources
Ilari Vaalavirta Vice President, Healthcare Trade
Kimmo Virtanen CFO
Anne Kariniemi joined Oriola-KD Corporation as Vice President,
Sourcing and Logistics in January 2007. Matti Lievonen was appointed
Deputy Managing Director of Oriola-KD Corporation's subsidiary Oriola
Oy in February 2007. Senja Tynkkynen, Vice President of Oriola-KD
Group's Dental Trade business and member of the Group's management
team, resigned from the company in June 2007.
Business segments
Oriola-KD has two business segments: the Pharmaceutical Trade
business segment and the Healthcare and Dental Trade business
segment. The Healthcare and Dental Trade business segment will be
renamed the Healthcare Trade business segment at the beginning of the
2008 financial year but the share of profits from the associated
company in dental trade will continue to be recognised for the
segment.
Pharmaceutical Trade business segment
The Pharmaceutical Trade business segment's invoicing in
January-December 2007 was EUR 2253.4 million (EUR 2,064.7 million)
and net sales were EUR 1,135.8 million (EUR 1,098.7 million).
Operating profit excluding one-off items was EUR 17.4 million (EUR
15.6 million). Damage to batches of pharmaceuticals occurring in
Sweden, settlement of a claim relating to a Norwegian business
transfer of Kronans Droghandel AB in 2002 and the costs arising from
strategic investments at Kronans Droghandel AB relating to the
potential deregulation of the Swedish pharmacy market eroded profits
in 2007 by a combined total of two million euro, of which more than
one million euro was recognised in the fourth quarter.
Fourth-quarter invoicing came to EUR 571.4 million (EUR 527.7
million) and net sales to EUR 270.7 million (EUR 278.6 million).
Fourth-quarter operating profit excluding one-off items was EUR 2.7
million (EUR 4.1 million).
In Finland, the pharmaceutical market grew by 7.2 percent (-0.4
percent). Commensurate growth in the Finnish pharmaceutical market,
excluding a single large batch of vaccines in the late part of the
year, came to 5.4 percent. In Sweden, the pharmaceutical market grew
by 6.8 percent (4.5 percent) (source: IMS Health).
Oriola-KD's market share in pharmaceutical distribution in Finland
was 43.7 percent (39.8 percent) in December 2007 and 45.9 percent
(41.4 percent) in January-December 2007. Oriola-KD's market share in
pharmaceutical distribution in Sweden was 40.3 percent (41.4 percent)
in December 2007 and 42.0 percent (43.2 percent) in January-December
2007 (source: ATY and IMS Health).
The streamlining measures implemented in 2006 allowed us to achieve
in full our goal of EUR 5 million in cost savings in 2007. These
savings enhanced the profitability of the Pharmaceutical Trade
business segment in particular in 2007. Kronans Droghandel AB closed
down an unprofitable packaging line at Mölnlycke in Sweden in the
second quarter of the year.
The number of employees within the Pharmaceutical Trade business
segment at year-end 2007 was 856 (925).
New distribution agreements
Oriola-KD took over the distribution of Schering-Plough and Roche
pharmaceuticals in Finland at the beginning of 2007.
Schering-Plough's share of the Finnish pharmaceutical market is two
percent and Roche's four percent (source: IMS Health). In Sweden,
Oriola-KD started distributing Meda pharmaceuticals as of 1 January
2007 and assumed responsibility for all Pfizer distribution at the
end of May 2007, having before that distributed half of Pfizer's
pharmaceutical brands in Sweden. Meda has a one percent share of the
Swedish pharmaceutical market while Pfizer holds nine percent of the
market (source: IMS Health).
Negotiations with principals in the year under review resulted in
Oriola-KD agreeing to assume responsibility for the distribution of
McNeil products in Sweden and of Wyeth products in Finland at the
beginning of 2008. McNeil holds two percent of the market in Sweden
and Wyeth two percent of the Finnish market (source: IMS Health).
In the Pharmacy and Retail Marketing business, Oriola-KD and the
Finnish Valio Ltd signed a cooperation agreement in August for Oriola
to assume responsibility for the manufacture, distribution, sales and
marketing of Valio Gefilus capsules. The cooperation agreement
concerns the Finnish, Baltic and Swedish markets.
Transferring distribution agreements
The pharmaceutical principals transferring from Oriola-KD in the
period under review hold a total combined share of some two percent
of the pharmaceutical market in Finland and some three percent in
Sweden. Transferring pharmaceutical principals were Amgen and Leo
Pharma in Finland and Schering Nordiska and Amgen in Sweden.
Negotiations initiated by Oriola-KD in Q2 with unprofitable, mainly
small and medium-sized pharmaceutical principals on renewing
distribution agreements in Finland and Sweden were completed by the
end of the year. The new contracts are estimated to contribute to
improved profitability starting in 2008.
According to the situation at year-end 2007, Oriola-KD's share of the
pharmaceutical distribution market in 2008 is estimated at some 45
percent in Finland and approximately 42 percent in Sweden.
Healthcare and Dental Trade business segment
The Healthcare and Dental Trade business segment's invoicing in
January-December 2007 was EUR 271.2 million (EUR 275.4 million) and
net sales were EUR 241.5 million (EUR 236.0 million). Operating
profit excluding one-off items was EUR 14.9 million (EUR 10.4
million).
Fourth-quarter invoicing came to EUR 68.6 million (EUR 75.3 million)
and net sales to EUR 60.8 million (EUR 65.2 million). Fourth-quarter
operating profit excluding one-off items was EUR 4.8 million (EUR 3.1
million).
Significant changes in principals occurred in the Healthcare Trade
business segment. Ties with Teleflex Medical were strengthened in
Denmark, Sweden and Finland by including in the product range the
Hudson anaesthesia products earlier acquired by the company. The part
of Medith Oy's business acquired in early 2007 developed as planned
and strengthened market standing in Finland. The product range will
be augmented with Carl Zeiss Meditec's opthalmic surgery products in
early 2008. A letter of intent was signed in September on the sale in
spring 2008 of the marketing business of Zimmer orthopaedic products,
marketed in Finland by Oriola-KD, to a Finnish sales company
established by Zimmer. An agreement was also reached, as part of a
wider international arrangement, on transferring the sale of Sysmex
haematology products in Finland and the Baltics to Roche Diagnostics
at the beginning of 2008. During Q2, Kronans Droghandel AB sold its
home distribution business in the Swedish province of Skåne to
Schenker Dedicated Service AB.
The dental businesses in Sweden and Denmark were merged under an
agreement concluded between Oriola-KD Corporation and Lifco AB on 7
June 2007. The merger of the businesses in Finland took place on 1
October 2007 and in the Baltics on 2 January 2008. Approval from the
competition authorities was obtained in the third quarter. Subsequent
to the merger and the cash contribution paid on 1 October 2007,
Oriola-KD holds a 30 percent share of the merged dental business
while the remaining 70 percent are held by Lifco. Dental trade
invoicing in 2007 came to EUR 36.5 million (EUR 45.0 million), net
sales to EUR 35.6 million (EUR 44.0 million) and operating profit
excluding one-off items to EUR 2.2 million (EUR1.4 million). The
operating profit in dental trade includes a EUR 1.0 million share of
associated company's profit, i.e. 30 percent of the fourth-quarter
net profit of associated company Lifco Dental International AB. The
merger in the Dental Trade segment resulted in roughly 120 employees
transferring to the new joint venture under their current terms and
conditions of employment.
The Healthcare and Dental Trade business segment had a payroll of 446
(570) employees at the end of the period under review.
Board of Directors
According to the company's corporate governance principles, the
Chairman of the Board is elected by the General Meeting of
Shareholders. The Vice Chairman is elected by the Board. The Board
appoints the President and CEO of Oriola-KD and decides on the terms
and conditions of his/her employment. The President and CEO has a
six-month period of notice and is entitled to severance pay equal to
12 months' salary.
The Annual General Meeting of Oriola-KD held on 13 March 2007
confirmed that the Board of Directors of Oriola-KD shall comprise
seven members. Elected to seats on the Board of Directors for the
current term of office were Pauli Kulvik, M.Sc. (Eng.) , MBA; Outi
Raitasuo, attorney-at-law; Antti Remes, Honorary Counsellor; Olli
Riikkala, M.Sc. (Eng.) , MBA; Jaakko Uotila, president and CEO; and
Mika Vidgrén, pharmacist. Harry Brade, M.Sc. (Eng.), MBA, was elected
to the Board as a new member. Olli Riikkala was elected as Chairman
of the Board. Ernst & Young Oy was elected as Oriola-KD Corporation's
auditor for the current term of office and it has designated Rabbe
Nevalainen, Authorised Public Accountant, as principal auditor. APA
Anu Ojala was elected deputy auditor.
On 13 March 2007, Oriola-KD Corporation's Board of Directors elected
from amongst their number Antti Remes as vice chairman and the
following to the Audit and Compensation Committees:
Audit Committee:
Antti Remes, Chairman
Harry Brade
Outi Raitasuo
Mika Vidgrén
Compensation Committee:
Olli Riikkala (Chairman)
Pauli Kulvik
Jaakko Uotila
On 24 October 2007, the Board of Oriola-KD Corporation elected the
following to serve on the company's Nomination Committee:
Into Ylppö, Chairman
Timo Maasilta
Risto Murto
Olli Riikkala
Under the Rules of Procedure of the Nomination Committee adopted by
the Board, the Committee is a body which has been established by the
Board and tasked with preparing and presenting to the Board a
recommendation for a proposal to be put before the Annual General
Meeting of Shareholders concerning the composition and remuneration
of the Board.
The Board has assessed the independence of its members and determined
all members to be independent both of the company and of its majority
shareholders.
Related parties
Related parties in the Oriola-KD Group are deemed to comprise parent
company Oriola-KD Corporation, subsidiaries and associated companies,
the members of the Board and the President and CEO of Oriola-KD
Corporation, other members of the management team of the Oriola-KD
Group, the immediate family of the aforementioned persons, the
companies controlled by the aforementioned persons, and the Oriola
Pension Foundation. The Group has no significant business
transactions with related parties except for pension expenses arising
from defined benefit plans with the Oriola Pension Foundation. The
notes to the financial statements of Oriola-KD Corporation provide
additional information on intra-Group liabilities and guarantees
given on behalf of Group companies. Oriola-KD Corporation has given
no significant guarantees on behalf of Group companies.
Oriola-KD Corporation share
Trading volume of Oriola-KD Corporation's Class A and B shares in
January-December 2007:
Class A Class B
Trading volume, million 12.1 71.6
Trading volume, EUR million 40.2 231.8
High, EUR 3.70 3.68
Low, EUR 2.64 2.57
Close at 31 Dec 2007, EUR 3.00 3.00
The traded volume of Oriola-KD Corporation shares in the review
period equalled 59.2 percent of total outstanding shares. The traded
volume of Class A shares in the period under review amounted to 23.1
percent of average outstanding stock and that of Class B shares to
80.5 percent.
Oriola-KD Corporation had a market capitalisation of EUR 423.8
million at 31 December 2007.
Under Article 3 of the Articles of Association, a shareholder may
demand conversion of Class A shares into Class B shares. During 2007,
a total of 5,049,235 Class A shares were converted into Class B
shares. At the end of the year under review, the company had
51,245,405 Class A shares and 90,012,423 Class B shares.
On 17 October 2007, the American Deccan Value Advisors L.P. informed
Oriola-KD Corporation in accordance with Chapter 2, section 9 of the
Finnish Securities Market Act that due to share transactions made on
17 October 2007, the holdings of the companies administered by Deccan
Value Advisors L.P. had fallen below one twentieth (1/20) of the
share capital of Oriola-KD Corporation.
The Annual General Meeting of 13 March 2007 authorised the Board to
decide on a directed acquisition of treasury shares and a bonus issue
to the company. The number of Class B shares thus acquired or issued
shall not exceed 1,450,000. The authorisation to acquire remains in
force for a period not to exceed eighteen (18) months from the
decision taken by the Annual General Meeting. On the same occasion,
the AGM authorised the Board to allocate 650,000 B shares to a share
incentive scheme for top management in the Oriola-KD Group and to
sell no more than 800,000 B shares in public trading organised by OMX
Nordic Exchange Helsinki.
Companies in the Oriola-KD Group held no parent company shares at the
end of the review period.
In November 2006, the Board of Oriola-KD Corporation decided on a new
share incentive scheme for key employees in the Oriola-KD Group. Some
twelve key employees are eligible for the scheme. The scheme
encourages sustained effort on the part of key employees by
strengthening their commitment to the operation and development of
the company. Any bonuses are determined on the basis of the
development of Oriola-KD's operating profit and return on capital
employed (ROCE) in 2007-2009. Bonuses are payable in 2008-2010 in the
form of stock, cash or a combination of the two. Except for certain
special circumstances, the bonus shares may not be transferred for a
period of one year from payment of the bonus. The number of Class B
shares included in the scheme may not exceed 650,000. The incentive
scheme comprises three earning periods of one year. The Board decides
on the target group of the earning period and the bonuses of the key
employees in the target group at the beginning of each earning
period.
Proposal for distribution of dividend
The parent company of Oriola-KD is Oriola-KD Corporation, which
according to the balance sheet of 31 December 2007 held distributable
assets of EUR 63.1 million (EUR 59.7 million). The Board proposes to
the AGM that a dividend of EUR 0.08 per share be paid for 2007 (EUR
0.06 per share).
General Meeting of Shareholders
The Annual General Meeting of Shareholders of Oriola-KD Corporation
will be held on 17 March 2008 starting at 5pm at Helsinki Fair
Centre. It will address the matters mentioned in Article 10 of the
Articles of Association as well as any proposals by the Board of
Directors. The Board will decide on a later date on the notice of the
meeting and the proposals to be included therein. The notice of the
meeting will be published in newspaper Helsingin Sanomat on or about
24 February 2008.
Publication of Annual Report
Oriola-KD Corporation will publish its Annual Report for 2007 in the
week of 3 March 2008.
Environment
Oriola-KD supports sustainable development in all its activities and
attends to environmental concerns by conforming to an environmental
system consistent with its operations and aiming to minimise adverse
environmental impacts. Transportation and the logistics management of
large flows of goods are an essential part of operations at
Oriola-KD. The efficiency and economy of distribution are based on a
scheduled route network according to which goods deliveries are timed
in a bid to minimise total travel. Deliveries are optimised with
information systems developed for this purpose. Deliveries to
established customers are packed in recyclable plastic boxes that can
be used hundreds of times. Large volumes of goods are delivered in
recyclable packaging or on pallets or rolls.
Waste prevention, reuse, sorting and recycling are essential
principles of waste management. Pharmaceutical and other hazardous
waste is sorted and delivered to a hazardous waste treatment plant
for disposal with the methods required by medical and environmental
authorities.
Risks
The Board of Directors of Oriola-KD has approved the company's risk
management policy in which the operational model, principles,
responsibilities and reporting in risk management have been
determined. The Group's risk management seeks to identify, measure
and manage risks that may threaten the operations of the company and
the achievement of goals set for them. Roles and responsibilities
relating to risk management have been determined in the Group.
Oriola-KD's risks are classified as strategic, operative and
financial. Risk management is a key element of the strategic process,
operative planning and daily decision-making at Oriola-KD.
Oriola-KD has identified the following most significant strategic and
operative risks in its business:
* changes in bargaining position vis-à-vis suppliers and customers
* impacts on business concepts of potential changes in the
structure of the Swedish market
* maintenance of cost-effectiveness and flexibility in costs
* provision of competitive products and services in expanding and
consolidating markets
* expansion-related risks in new markets and businesses
* commitment of key employees
The major financial risks for Oriola-KD involve currency exchange
rates, interest rates, liquidity and credit.
During the period under review, there were no material changes in the
risks and uncertainty factors faced by Oriola-KD in the near future.
Events after the period under review
The dental trade businesses of Oriola-KD in Estonia, Latvia and
Lithuania were merged with and into Lifco Dental on 2 January 2008.
A government-appointed advisor recommended on 8 January 2008 that the
Swedish pharmacy market be deregulated by the year 2009. The decision
on deregulation is proposed for 2008. Oriola-KD is preparing for
possible changes in the pharmacy market.
The Nomination Committee of Oriola-KD Corporation gave its
recommendation to the Board of Directors for the proposal to the
Annual General Meeting on 17 March 2008 concerning the composition of
the Board of Directors as follows:
* The number of Board members would be seven
* As Board members would be re-elected Mr. Harry Brade, Mr. Pauli
Kulvik, Ms. Outi Raitasuo, Mr. Antti Remes, Mr. Olli Riikkala,
Mr. Jaakko Uotila and Mr. Mika Vidgrén
* Mr. Olli Riikkala would be re-elected as Chairman of the Board
Following remunerations are recommended to be paid to the Board of
Directors:
* Chairman: annual fee EUR 44,000, fee for each meeting EUR 800,
telephone as a fringe benefit
* Vice Chairman: annual fee EUR 27,500, fee for each meeting EUR
400
* Other members of the Board: annual fee EUR 22,000, fee for each
meeting EUR 400
* The annual fees to be paid in cash no later than 1 April, 2008
* Fees for meetings would be paid respectively also to members of
the Corporate or Board Committees
* Travel expenses would be paid in accordance with the travel
policy of the company
Future outlook
Oriola-KD's outlook for 2008 is based on external market forecasts,
agreements with principals, cumulative orders and management's
estimates.
Long term fundamentals and growth prospects are deemed favourable in
the healthcare market. Oriola-KD estimates that the pharmaceutical
market in Finland and Sweden will grow by about 3-5 percent annually
over the next few years, which is in line with the longer-term
average growth rate of these markets. Oriola-KD estimates that growth
in the market for healthcare equipment and supplies will outpace that
of the pharmaceutical market in Finland and in Sweden.
Oriola-KD's invoicing in 2008 is projected as higher than the
previous year's comparable invoicing, mainly due to the growth of the
pharmaceutical market. Invoicing in the Healthcare and Dental Trade
business segment is projected as lower than in the previous year due
to the merger of Dental business with and into Lifco Dental and the
sale of the home distribution business in Sweden.
Operating profit in the Pharmaceutical Trade business segment is
anticipated to see positive development in 2008. Oriola-KD invests in
growth initiatives and to the potential deregulation of the Swedish
pharmaceutical market, which may cause additional costs in 2008. The
merger in the dental business is estimated to improve comparable
operating profit for 2008. Operating profit for 2008 in the
healthcare trade business is expected to fall from the previous year
due to the reported changes in principals in Finland. Oriola-KD's
operating profit excluding one-off items for 2008 is expected to
exceed the previous year's comparable operating profit.
Tables
Income
Statement, 1.1.- Pro forma 1.10.- Pro forma 1.7.-
EUR million 31.12.2007 1.1.-31.12.2006 31.12.2007 1.10.-31.12.2006 31.12.2006
Net sales 1377.3 1334.7 331.6 343.7 662.7
Cost of goods
sold -1232.0 -1195.4 -294.6 -306.7 -592.0
Gross profit 145.2 139.2 37.0 37.0 70.7
Other
operating
income 2.3 4.0 0.8 2.7 3.2
Selling and
distribution
expenses -104.5 -105.5 -27.5 -28.2 -51.3
Administrative
expenses -14.9 -20.3 -4.2 -6.1 -10.4
Profit from
associated
company 1.0 0.0 1.0 0.0 0.0
Operating
profit 29.1 17.4 7.0 5.3 12.2
Financial
income
and expenses 1.9 1.0 0.4 0.3 0.5
Profit before
taxes 31.0 18.4 7.4 5.7 12.7
Tax expense*) -7.3 -4.4 -1.5 -1.1 -2.8
Profit for the
period 23.7 14.0 5.9 4.6 9.9
of which
available for:
Parent company
shareholders 23.3 13.6 5.9 4.5 9.6
Minority
interest 0.4 0.5 0.0 0.1 0.4
Earnings per
share:
- Basic, EUR 0.16 0.10 0.04 0.03 0.07
*) The tax expense for the period 2007
has been calculated as the proportional
share of the total estimated taxes for the
financial year. The tax expense for 2006
Pro forma are based on published figures
for Orion Corporation's Wholesale and
Distribution Division extracted from financial
data for Orion Corporation.
Income
statement
excluding
one-off items, 1.1.- Pro forma 1.10.- Pro forma 1.7.-
EUR million 31.12.2007 1.1.-31.12.2006 31.12.2007 1.10.-31.12.2006 31.12.2006
Net Sales 1377.3 1334.7 331.6 343.7 662.7
Cost of goods
sold -1232.0 -1193.8 -294.6 -306.7 -592.0
Gross profit 145.2 140.8 37.0 37.0 70.7
Other
operating
income 2.3 1.9 0.8 0.6 1.1
Selling and
distribution
expenses -104.5 -102.3 -27.5 -26.6 -49.7
Administrative
expenses -14.9 -17.9 -4.2 -5.5 -9.3
Profit from
associated
company 1.0 0.0 1.0 0.0 0.0
Operating
profit 29.1 22.6 7.0 5.5 12.8
Financial
income
and expenses 1.9 1.0 0.4 0.3 0.5
Profit before
taxes 31.0 23.6 7.4 5.9 13.3
Balance sheet,
EUR million 31.12.2007 31.12.2006
Non-current assets
Property, plant
and equipment 56.3 63.3
Goodwill 33.9 34.7
Other intangible
assets 4.5 7.5
Investments in
associates and
available-for-sale
investments 27.1 0.0
Other non-current
receivables 10.6 10.0
Deferred tax assets 0.2 0.0
Non-current assets
total 132.5 115.6
Current assets
Inventories 180.9 181.0
Trade and other
receivables 201.0 201.8
Cash and cash
equivalents 131.0 112.9
Current assets
total 512.9 495.6
ASSETS TOTAL 645.4 611.2
Balance sheet,
EUR million 31.12.2007 31.12.2006
Non-current
liabilities
Share capital 36.2 36.2
Other funds 30.1 30.1
Retained earnings 129.2 116.9
Net assets of the
parent company
shareholders 195.5 183.2
Minority interest 8.1 8.5
Net assets total 203.6 191.8
Non-current liabilities
Deferred tax liabilities 8.7 9.7
Pension liability 4.4 4.1
Provisions 0.0 0.0
Interest-bearing
non-current liabilities 0.3 0.5
Other non-current
liabilities 0.4 0.4
Current liabilities
total 13.8 14.8
Current liabilities
Trade payables and
other current liabilities 387.4 370.9
Provisions 0.0 1.9
Interest-bearing current
liabilities 40.7 31.8
Current liabilities total 428.1 404.6
EQUITY AND LIABILITIES
TOTAL 645.4 611.2
Changes in
shareholder's
equity:
Equity of
the
parent
Share Other Translation Retained company Minority
EUR million capital funds differences earnings shareholders interest Total
Shareholder's
equity
1.1.2007 36.2 30.1 0.0 116.9 183.3 8.5 191.8
Translation
differences -2.5 -2.5 -0.4 -2.9
Dividend Paid -8.5 -8.5 -0.4 -8.9
Hedge on net
investment in
foreign
subsidiary
Change in
minority
interest
Other changes -0.4 -0.4 -0.4
Share based
payments 0.4 0.4 0.4
Taxes related
to
items booked
into equity
Items booked
into equity
Profit for
the
period 23.3 23.3 0.4 23.7
Shareholder's
equity
31.12.2007 36.2 30.1 -2.5 131.7 195.5 8.1 203.6
Cash flow statement, 1.1.- Pro forma 1.1.-
EUR million 31.12.2007 31.12.2006
Operating profit 29.1 17.4
Depreciation 10.4 11.7
Change in
working capital 6.8 25.9
Cash flow from
financial items and taxes -5.5 -6.3
Other adjustments -1.9 3.9
Cash flow from
operating activities 39.0 52.7
Cash flow from
investing activities -19.1 -10.2
Cash flow from
financing activities -0.7 35.1
Net change in cash
and cash equivalents 19.1 77.6
Cash and cash equivalents
at beginning of period 112.9 35.0
Foreign exchange difference -1.0 0.4
Net change in cash and
cash equivalents 19.1 77.6
Cash and cash equivalents
at end of period 131.0 112.9
Change in property,
plant and equipment
Pro forma
1.1.- 1.1.-
milj.EUR 31.12.2007 31.12.2006
Carrying amount at
the beginning of the period 63.3 70.2
Additions 5.1 7.3
Disposals -3.5 -7.6
Depreciation -7.3 -8.0
Translation differencies -1.4 1.3
Carrying amount at
the end of the period 56.3 63.3
Key figures 1.1.- Pro forma
and rations 31.12.2007 31.12.2006 31.12.2006
Equity ratio, % 33.7% 33.1% 33.1%
Equity per share, EUR 1.38 1.30 1.30
Return on capital
employed (ROCE), % 14.2% 8.6% 12.1%
Return on equity, % 12.0% 7.4% 10.3%
Net interest bearing
debt, Me -90.0 Me -80.6 Me -80.6 Me
Gearing, % -44.2% -42.0% -42.0%
Earnings per share,
EUR 0.16 0.10 0.07
Average number of
share, tpcs *) 141 258 141 258 141 258
*) In the calculation for the share related
key figures of 2006, number of shares at
the end of period has been used. In the
calculation for the share related key figures
for the period 1.1-30.6.2006 average number
of shares for the period has been used.
Forward contracts and
contingent liabilities
31.12.2007
Positive Negative Nominal values
EUR million fair value fair value of contracts
Hedging of a net
investment in an
independent foreign
unit 0.0
Other forward and
currency swap contracts -0.0 53.0
31.12.2006
Positive Negative Nominal values
EUR million fair value fair value of contracts
Hedging of a net
investment in an
independent foreign
unit -0.3 26.5
Other forward and
currency swap contracts 0.0 0.0 4.6
Pro forma
EUR million 31.12.2007 31.12.2006 31.12.2006
Contingent for
own liabilities
Guarantees given 3.1 4.8 4.8
Real-estate
mortgages given 2.0 1.0 1.0
Mortgages on
company assets 21.9 22.9 22.9
Other guarantees
and liabilities 1.9 2.5 2.5
Total 28.9 31.2 31.2
Contingent for
liabilities of other
parties
Guarantees given
on behalf of external
parties 0.0 0.0 0.0
Leasing-liabilities
(operating liabilities) 0.3 0.6 0.6
Rent contingent 5.0 6.5 6.5
Invoicing by Pro forma
business segment, 1.1.- 1.1.- 1.7.-
EUR million 31.12.2007 31.12.2006 31.12.2006
Pharmaceutical Trade
business segment 2253.4 2064.7 1027.7
Healthcare Trade 234.7 230.4 115.5
Dental Trade 36.5 45.0 22.8
Group Total 2524.5 2340.1 1166.0
Oriola-KD has two business segments:
the Pharmaceutical Trade business segment
and the Healthcare and Dental Trade business segment.
The Healthcare and Dental Trade business segment
will be renamed the Healthcare Trade business segment
at the beginning of the 2008 financial year but the
share of profits from the associated company in dental trade
will continue to be recognised for the segment
Pro forma
Net sales by business 1.1.- 1.1.- 1.7.-
segment, EUR million 31.12.2007 31.12.2006 31.12.2006
Pharmaceutical Trade
business segment 1135.8 1098.7 543.5
Healthcare Trade 205.9 192.0 97.0
Dental Trade 35.6 44.0 22.2
Group Total 1377.3 1334.7 662.7
Operating profit by Pro forma
business segment, 1.1.- 1.1.- 1.7.-
EUR million 31.12.2007 31.12.2006 31.12.2006
Pharmaceutical Trade
business segment 17.4 13.0 8.6
Healthcare Trade 12.6 7.2 5.4
Dental Trade 2.2 1.0 0.7
Group items -3.2 -3.8 -2.6
Group total 29.1 17.4 12.2
Average number
of personnel 1 432 1 548 1 556
Number of personnel
at the end of the period 1 302 1 495 1 495
Operating profit by
business segment Pro forma
excluding one-off items, 1.1.- 1.1.- 1.7.-
EUR million 31.12.2007 31.12.2006 31.12.2006
Pharmaceutical Trade
business segment 17.4 15.6 9.0
Healthcare Trade 12.6 9.0 5.6
Dental Trade 2.2 1.4 0.7
Group items -3.2 -3.4 -2.6
Group total 29.1 22.6 12.8
Invoicing by
business segment, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
EUR million 2007 2007 2007 2007 2006 2006 2006 2006
Pharmaceutical
Trade
business segment 571.4 543.0 575.9 563.2 527.7 500.0 529.0 508.1
Healthcare Trade 67.3 52.1 56.7 58.6 62.7 52.8 55.5 59.4
Dental Trade 1.3 10.2 11.8 13.2 12.6 10.2 10.2 11.9
Group Total 640.0 605.2 644.4 634.9 603.0 563.0 594.7 579.4
Net sales by
business segment, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
EUR million 2007 2007 2007 2007 2006 2006 2006 2006
Pharmaceutical
Trade business
segment 270.7 278.3 295.5 291.3 278.6 264.9 280.2 275.0
Healthcare Trade 59.5 45.6 49.2 51.7 52.8 44.2 45.6 49.4
Dental Trade 1.3 9.9 11.5 12.9 12.3 9.9 10.0 11.7
Group Total 331.6 333.8 356.1 355.8 343.7 319.0 335.8 336.1
Operating profit by
business segment, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
EUR million 2007 2007 2007 2007 2006 2006 2006 2006
Pharmaceutical
Trade
business segment 2.7 5.0 4.6 5.1 4.0 4.5 1.8 2.7
Healthcare Trade 3.9 3.4 2.8 2.6 2.8 2.6 1.1 0.7
Dental Trade 1.0 0.1 0.2 1.1 0.1 0.7 -0.2 0.5
Group items -0.5 -0.5 -1.2 -1.0 -1.6 -0.9 -0.6 -0.6
Group total 7.0 8.0 6.3 7.8 5.3 6.8 2.1 3.3
Operating profit by
business segment
excluding one-off items, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
EUR million 2007 2007 2007 2007 2006 2006 2006 2006
Pharmaceutical Trade
business segment 2.7 5.0 4.6 5.1 4.1 4.9 3.9 2.7
Healthcare Trade 3.9 3.4 2.8 2.6 3.0 2.6 1.2 2.1
Dental Trade 1.0 0.1 0.2 1.1 0.1 0.7 0.0 0.7
Group items -0.5 -0.5 -1.2 -1.0 -1.7 -0.9 -0.6 -0.2
Group total 7.0 8.0 6.3 7.8 5.5 7.2 4.6 5.3
Pro forma
Net sales by market, 1.1.- 1.1.- 1.7.-
EUR million 31.12.2007 31.12.2006 31.12.2006
Finland 570.1 538.6 270.7
Other Nordic countries 756.5 751.4 369.6
Other Europe 49.2 43.2 21.6
Other countries 1.4 1.5 0.8
Total 1377.3 1334.7 662.7
Net sales by
market, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/
EUR million 2007 2007 2007 2007 2006 2006 2006 2006
Finland 143.4 135.3 143.4 148.1 139.5 130.7 133.5 134.9
Other Nordic
countries 174.9 187.1 199.6 195.0 191.8 178.3 191.7 189.5
Other Europe 12.8 11.3 12.5 12.6 12.3 9.3 10.1 11.6
Other countries 0.5 0.1 0.7 0.2 0.2 0.7 0.5 0.1
Total 331.6 333.8 356.1 355.8 343.7 319.0 335.8 336.2
Espoo, 6 February 2008
Board of Directors of Oriola-KD Corporation
Oriola-KD Corporation
Eero Hautaniemi
President and CEO
Kimmo Virtanen
CFO
Further information:
Eero Hautaniemi
President and CEO
Tel. +358 (0)10 429 2109
Email: eero.hautaniemi@oriola-kd.com
Kimmo Virtanen
CFO
Tel. +358 (0)10 429 2069
Email: kimmo.virtanen@oriola-kd.com
Pellervo Hämäläinen
Vice President, Communications and IR
Tel. +358 (0)10 429 2497
Email: pellervo.hamalainen@oriola-kd.com
Distribution:
OMX Nordic Exchange Helsinki Oy
Main media
Released by:
Oriola-KD Corporation
Corporate Communications
Orionintie 5
FI-02200 Espoo, Finland
www.oriola-kd.com