Risks
Risk management
The Board of Directors of Oriola approves the company’s risk management policy in which the risk management operating model, principles, responsibilities and reporting are specified. The Board assesses the Company’s long-term strategic risks and oversees the effectiveness of the risk management. The Board-appointed Audit Committee regularly reviews and monitors the implementation of the risk management policy in the Group and the risk management process.
Oriola has specified the company’s risk management model, principles, organisation and process in the Group Risk Management Policy. The Group Risk Management Policy defines the enterprise risk management system, objectives, roles and responsibilities within Oriola in order to identify and manage risks related to execution of the company’s strategy and operations. The Group Risk Management Policy is the main risk management document within Oriola and must be followed by all Oriola business units, subsidiaries and entities. Additionally, the Group has e.g. a Code of Conduct, a Treasury policy and an Approval policy covering compliance and financial risks. Risk assessment and management are key elements in the strategic planning, operations and daily decision making in the company.
Risk review
Key external factors/trends impacting Oriola’s business environment include ageing of the population, increased spending on health and wellbeing, growth in speciality pharmaceuticals, the digitalisation of the retail trade and services, sustainability as well as ongoing global health challenges.
Strategic and financial risks
Oriola’s risk management framework was updated in 2024 to reflect the current business and regulatory environment. The Group’s risk management policy outlines the principles, processes and organisation designed to identify, measure and manage risks impacting operations and strategic goals. The Group’s risk management seeks to identify, measure and manage risks and opportunities that may have an adverse or beneficial impact on Oriola’s operations and strategic goals.
Oriola’s risk appetite reflects a balanced approach to taking well-considered risks while maintaining strong financial stability and operational continuity. Oriola’s risk management principles emphasise proportionality, reasonableness, and disaster avoidance, ensuring that risks are managed effectively and in alignment with our long-term strategic goals.
Oriola also adheres to a Code of Conduct policy and a Treasury policy covering compliance and financial risks. The internal control and risk management systems related to Oriola’s financial reporting are aimed at ensuring the reliability of the company’s financial statements and financial reporting, as well as the company’s compliance with legislation and generally approved operating principles.
Oriola continuously monitors changes in the risk landscape and adjusts the company’s risk and opportunity exposure in response to shifts in the market, society, and geopolitical environment.
Changes in the pharmaceutical market regulation and related licences, pricing, parallel import and public reimbursement, as well as increased competition through e.g. growing number of companies and pharmacies in e-commerce, decreasing share of single channel distribution, and loss of several key pharmaceutical company agreements, are examples of strategic and operational risks that may have an impact on the performance of the Group.
Regulatory and market risks
Oriola operates in regulated pharmaceutical distribution and retail markets closely monitored by authorities in both operating countries.
The reform of social and healthcare (Sote), was approved in Finland in 2021. In the beginning of 2022, 21 new county councils were elected, and these new political bodies will decide on social, healthcare and rescue services in each wellbeing services county. New regions were affected from the beginning of 2023.
Oriola assesses ESG-related (Environment, Social and Governance) risks as part of the regular risk management process. ESG related impacts, risks and opportunities are presented in Oriola’s Sustainability Statement.
The main financial risks for Oriola involve currency rate, liquidity, interest rate and credit risks. Changes in the value of the Swedish krona have an impact on Oriola’s net sales, earnings and consolidated statement of financial position. Changes in cash flow forecasts may cause impairment of goodwill. More information about financial risk management can be found in note 8.3. in the notes to the Consolidated Financial Statements.