ORIOLA. ORIOLA CORPORATION January June 2017 Eero Hautaniemi, President and CEO 21 July Oriola Corporation

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1 ORIOLA ORIOLA CORPORATION January June Eero Hautaniemi, President and CEO 21 July 1

2 April June highlights 2 Consumer Q2 result did not reach previous year level Online sales grew by 91% in Q2 In Services distribution of Meda started successfully, IT go-live postponed Norrland ramp-up still burdened Healthcare Oriola s and Kesko s joint health and wellbeing store chain was approved by the competition authorities, and the joint venture agreement was finalized on June 30 Oriola has decided to divest its businesses in the Baltic countries Oriola has signed an agreement to acquire the Swedish company ICTHS Health Support AB

3 Oriola Key Figures continuing operations INVOICING // NET SALES // ADJUSTED EBIT // / invoicing at comparable EUR/SEK rate EUR million 1-6/ net sales at comparable EUR/SEK rate EUR million 1-6/ adjusted EBIT at comparable EUR/SEK rate EUR 24.4 million 3

4 Adjusted EBIT January June continuing operations ADJUSTED EBIT // ADJUSTED EBIT, WATERFALL // Q2 Q3 Q4 Q1 Q2 Q2 Consumer Services Healthcare Group administration Q2 4

5 Pharmaceutical market forecast Sweden The market is forecast to grow at a rate of 3.9% reaching SEK42.5B by 2021 (WS prices) 5 Source: QuintilesIMS

6 Pharmaceutical market forecast Finland The market is forecast to grow at a rate of 1.5% reaching 2.43B by 2021 (WS prices) 6 Source: QuintilesIMS

7 Reporting Segments January June 7

8 Consumer Segment Focuses 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 Pharmacy retail market in Sweden 18% 4.2 BEUR 50 % 50 % Source: IMS Health, ATY, Apoteksförening and Oriola 8

9 Swedish Pharmacy market PHARMACIES // MARKET SHARE // Others Apotea Apoteksgruppen LloydsApoteket 9% 3% 4% 3% 31% Apotek Hjärtat & CURA % % Pharmacies 2010 Established net Established net H1/17 Pharmacy market growth 3% Apoteket The share of online sales 6% 9 Source: Apoteksförening and Oriola

10 Consumer January June continuing operations Pharmacy market grew by 2.6 % in Sweden Oriola sales in SEK increased by 0.4% Growth of online sales faster than market 14 ADJUSTED EBIT // Sales of Rx and Traded goods improving, OTC prices under pressure Share of OTC and traded goods of net sales 26.6 (27.1) % Sales margin improved slightly, but the costs from the established pharmacies and online development and marketing weakened profitability Planned to open stores and webshop in Finland in 0 Q2 Q3 Q4 Q1 Q2 10

11 Services Segment Focuses on long-term customer relationships and a wide service offering Provides logistics services and wide range of value adding services for Pharmaceutical companies and pharmacies Purchase and distribution services of OTC and traded goods in Sweden Staffing Services for Finnish pharmacies Sweden Wholesale Finland Wholesale 47 % 2.3 BEUR BEUR 34 % 3 TG/OTC for pharmacies in Sweden 31 % 1 BEUR Source: QuintilesIMS, ATY, Apoteksförening and Oriola Services for healthcare actors who want to succeed in the Nordic countries We provide high quality and ensure that products are delivered unchanged from Oriola s warehouses to the pharmacies, hospitals and veterinaries

12 Services January June continuing operations Market growth: Sweden 4.1 per cent and Finland 1.9 per cent ADJUSTED EBIT // IT go-live in Finland postponed to Q3 14 Invoicing decreased by 3.4 per cent in comparable EUR/SEK Distribution of Meda in Sweden started in May Profitability was at the previous year level Mölnlycke warehouse extension completed Oriola has signed an agreement to acquire the Swedish company ICTHS Health Support AB 2 0 Q2 Q3 Q4 Q1 Q2 12

13 Healthcare Segment The Healthcare segment offers dose dispensing services in Sweden and Finland The segment also offers services to hospitals, healthcare centres and other healthcare operators in Sweden Many growing business opportunities, such as hospital pharmaceutical care, dose dispensing and home distribution of pharmaceuticals Finnish healthcare sector in transformation DOSE DISPENSING SERVICES Svensk Dos in Sweden and PharmaService in Finland are part of Oriola Group and specialized in dose dispensing services MARKET SHARE DOSE DISPENSING Sweden 25% Finland Circa 30 MEUR PharmaService 50% PharmaService Pharmac YA Pharmados Circa 230 MEUR Svensk dos Svensk Dos Apoteket AB Apotekstjänst 13 Source: QuintilesIMS, ATY, Apoteksförening and Oriola

14 Healthcare January June continuing operations Ramp up costs of Norrland dose dispensing higher than anticipated Result of the Healthcare Business Area will stay negative in Amortisation cost EUR 0.9 million in H ADJUSTED EBIT // Q2 Q3 Q4 Q1 Q2 14

15 Development projects Warehouse extension in Mölnlycke was finished in June, building of distribution center continues in Enköping Oriola s and Kesko s health and wellbeing store chain in Finland: Oriola s share of investment 12 MEUR within next three years, estimated 3 MEUR in The IT platform renewal continues after Finland in Sweden; investment of 11 MEUR Investments in estimated to be approximately 50 MEUR 15

16 Outlook Revised outlook for The Adjusted EBIT of continuing operations on constant currency basis is estimated to decrease from the level. The Adjusted EBIT from continuing operations, at comparable currencies, was EUR 59.3 million Structural changes: Loss from JV during chain establishment in EBIT, sale of Baltic businesses Consumer business area performance improved from Q1, but not possible to reach full year result 16

17 Key Figures January June 17

18 Cash flow including discontinued operations QUARTERLY NET CASH FLOW FROM OPERATING ACTIVITIES // / 1-6/ Change in working capital Net cash flow from operating activities Net cash flow from investing activities Net cash flow from financing activities *) Net change in cash Cash and cash equivalents at the end of period *) Dividend of 25.4 MEUR (23.6 MEUR) was paid out in Q2 18

19 Net Interest-Bearing Debt including discontinued operations NET INTEREST-BEARING DEBT // 101 Bank loans (syndicated & term) 30 Jun 30 Jun Commercial papers Advance payment from pharmacies Other Cash and cash equivalents Net interest-bearing debt Sold trade receivables Gearing, % Q3/2015 Q4/2015 Q1/ Q2/ Q3/ Q4/ Q1/ Q2/ 19

20 Key Figures continuing operations Change % Change % 1-12 Net sales Adjusted EBITDA Adjusted EBIT EBIT Profit for the period ,

21 Balance Sheet and Key Ratios including discontinued operations 30 Jun 30 Jun 31 Dec Goodwill Equity Interest-bearing debt Interest-bearing net debt Balance sheet total Equity ratio, % Return on equity (ROE), % Return on capital employed (ROCE), % Gearing, % Equity per share, EUR Earnings per share (EPS), EUR (cont. operations) Average number of shares, 1000 pcs 181, , ,389 21

22 Sustainability in Oriola Responsible employer Responsible partner Environmental Responsibility 3,000 employees whereof 1,600 pharmacists Safe and reliable delivery of pharmaceuticals Sustainable delivery chain Financial Responsibility Responsible business operations ROCE 15.2 % 22

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