Oriola-KD Corporation's interim report for 1 January - 30 June 2009
(Thomson Reuters ONE) - Oriola-KD Corporation Stock Exchange Release 13 August 2009 at 8.30a.m.This review presents financial information for the Oriola-KD Group(hereinafter Oriola-KD) for the period January-June 2009. As of 1January 2009, the company has applied the revised IAS 1 standard andthe IFRS 8 standard. This interim report was drawn up in accordancewith the IAS 34 standard and Oriola-KD's new segmentation. The retailand wholesale businesses OOO Vitim & Co and OOO Moron, acquired inRussia, have been consolidated into Oriola-KD's accounts since 1April 2008. The figures are unaudited.Key figures for 1 January - 30 June 2009 * Net sales increased 11 per cent to EUR 815.8 million (Jan-Jun 2008: EUR 733.3 million). * Operating profit increased 103 per cent to EUR 25.9 million (Jan-Jun 2008: EUR 12.7 million). * Net profit increased 94 per cent to EUR 18.7 million (Jan-Jun 2008: EUR 9.7 million). * Earnings per share were EUR 0.13 (Jan-Jun 2008: EUR 0.07). * Net cash flow from operations was EUR -5,8 million (Jan-Jun 2008: EUR -5,2 million) * Return on capital employed was 16.1 per cent (Jan-Jun 2008: 12.3 per cent) * Oriola-KD's net sales and operating profit for 2009 are forecast to be higher than in 2008.Key figures for 1 April - 30 June 2009 * Net sales decreased one per cent to EUR 412.3 million (Q2/2008: EUR 415 .4 million). * Operating profit increased 219 per cent to EUR 13.5 million (Q2/2008: EUR 4.2 million). * Net profit increased 261 per cent to EUR 9.8 million (Q2/2008: EUR 2.7 million). * Earnings per share were EUR 0.07 (Q2/2008: EUR 0.02).President and CEO Eero Hautaniemi: "Oriola-KD's business developedfavourably in January-June 2009, with net sales increasing 11 percent and operating profit 103 per cent, largely thanks to the verystrong development of business in Russia. In June we reinforced theGroup's capital structure with a directed issue, and reachedagreement with the Swedish company KF (Kooperative Förbundet) oncooperation on the deregulated Swedish pharmacy market. In the secondhalf of 2009, we will focus especially on developing the Russianbusiness, launching pharmacy operations in Sweden and improvingoperating efficiency."Financial performanceOriola-KD's net sales in January-June 2009 were EUR 815.8 million(EUR 733.3 million). Second-quarter net sales were EUR 412.3 million(EUR 415.4 million).Operating profit in January-June 2009 came to EUR 25.9 million (EUR12.7 million) and earnings after financial items to EUR 24.0 million(EUR 12.9 million). Second-quarter operating profit was EUR 13.5million (EUR 4.2 million), and profit after financial items was EUR12.5 million (EUR 3.8 million).Oriola-KD invested in developing its business in Russia, preparingfor the upcoming market change in Sweden and improving its operatingefficiency. The costs incurred in the preparations undertaken inSweden in January-June came to EUR 6.0 million, of which EUR 3.7million was recorded for the second quarter.Oriola-KD's financing expenses in January-June 2009 were EUR 1.8million. A financing income of EUR 0.2 million was recorded for thecorresponding period in 2008. The increase in financing expenses wasmainly due to the execution of the Russian acquisition in April 2008.Taxes for January-June 2009 came to EUR 5.3 million (EUR 3.2million). Taxes corresponding to the result for the period areentered under this figure.Net profit for January-June 2009 was EUR 18.7 million (EUR 9.7million). Second-quarter net profit was EUR 9.8 million (EUR 2.7million).Oriola-KD's earnings per share in January-June 2009 were EUR 0.13(EUR 0.07), and in the second quarter EUR 0.07 (EUR 0.02).Return on capital employed was 16.1 per cent (12.3 per cent) andreturn on equity 19.1 per cent (9.7 per cent) in January-June 2009.Balance sheet, financing and cash flowOriola-KD's balance sheet total on 30 June 2009 stood at EUR 819.2million (EUR 817.0 million). Cash and cash equivalents on 30 June2009 stood at EUR 42.2 million (EUR 42.2 million) and equity was EUR205.5 million (EUR 194.2 million). Oriola-KD's equity ratio was 25.8per cent (24.4 per cent). The weakening of the Swedish krona (SEK)and the Russian ruble (RUB) decreased Oriola-KD's equity incomparison with the corresponding period in 2008.Interest-bearing net debt at the end of June 2009 was EUR 101.1million (EUR 18.9 million) and the gearing ratio was 49.2 per cent(9.7 per cent). Interest-bearing debt, which at the end of June wasEUR 143.3 million (EUR 61.0 million), comprised some EUR 79 millionfrom the commercial paper programme, some EUR 21 million frompharmacy advance payments in Finland and the debt of approximatelyEUR 43 million from the anticipated final price of the remaining 25per cent holding in the Russian companies. Oriola-KD has a EUR 150million commercial paper programme. Oriola-KD's bank creditfacilities of approximately EUR 78 million stood unused at the end ofthe review period.Net cash flow from operations in January-June 2009 was EUR -5.8million (EUR -5.2 million), of which changes in working capitalaccounted for EUR -24.6 million (EUR -17.8 million). Working capitalincreased largely because of the growth of the Russian companies andthe seasonal increase in working capital in Finland associated withthe first quarter. Net cash flow from investments was EUR -26.7million (EUR -74.7 million), including the additional sum of EUR 21.7million paid for the 75 per cent holding in the Russian companies.During the January-June 2009 period, cash flow after investments wasEUR -32.5 million (EUR -79.9 million). Cash flow from financingincludes a dividend of EUR 11.3 million paid in May and the directedissue of EUR 20.6 million carried out in June.InvestmentsInvestments in January-June 2009 came to EUR 24.0 million (EUR 113.2million), mostly associated with the increase of the anticipatedfinal price of the Russian companies, the acquisition of the minorityholding in Kronans Droghandel AB in Sweden and operating investmentsin maintenance and PPE.StaffOn 30 June 2009, Oriola-KD had a payroll of 4399 (4626) employees, 16per cent (15 per cent) of whom worked in Finland, 9 per cent (8 percent) in Sweden, 70 per cent (72 per cent) in Russia and 5 per cent(5 per cent) in the Baltic countries and Denmark combined.Operating segmentsIn accordance with its organisational structure and internalreporting, Oriola-KD's business segments are Pharmaceutical TradeFinland, Pharmaceutical Trade Sweden, Pharmaceutical Trade Russia,Pharmaceutical Trade Baltic Countries, Healthcare Trade and DentalTrade.Pharmaceutical Trade FinlandPharmaceutical Trade Finland's net sales in January-June 2009 wereEUR 258.5 million (EUR 260.3 million) and its operating profit wasEUR 8.8 million (EUR 7.1 million). Second-quarter net sales came toEUR 131.9 million (EUR 132.7 million) and operating profit to EUR 4.9million (EUR 3.2 million).The pharmaceutical market in Finland expanded by 0.2 per cent (6.4per cent) in January-June 2009. The introduction of the referenceprice system in Finland at the beginning of April 2009 is impedingthe growth of net sales of the Pharmaceutical Trade Finland businesssegment in 2009. Oriola-KD's market share in the Finnish wholesalemarket was 46.8 percent (47.9 per cent) in January-June 2009 (source:IMS Health). No significant changes took place in distributionagreements in Finland during the review period.At the end of June 2009, 475 (462) people were employed byPharmaceutical Trade Finland.Pharmaceutical Trade SwedenPharmaceutical Trade Sweden's net sales in January-June 2009 were EUR256.3 million (EUR 280.8 million) and its operating profit was EUR-2.3 million (EUR 3.3 million). Second-quarter net sales came to EUR130.2 million (EUR 141.0 million) and operating profit to EUR -2.0million (EUR 1.6 million).Net sales were reduced by a decline in Oriola-KD's market share andthe weakening of the Swedish krona (SEK). The costs incurred in thepreparations made for the market change in Sweden came to EUR 6.0million in January-June, of which EUR 3.7 million was recorded in thesecond quarter. Of the total costs, EUR 0.6 million has been recordedfor the Group. Excluding these project costs, Pharmaceutical TradeSweden's operating profit in January-June 2009 was EUR 3.1 million.The pharmaceutical market grew 2.8 per cent (5.6 per cent) in Swedenin January-June 2009. Oriola-KD's market share in the Swedishwholesale market was 41.4 per cent (43.9 per cent) in January-June2009 (source: IMS Health). The pharmaceutical manufacturersSchering-Plough and Organon discontinued as pharmaceutical principalsfor Oriola-KD in Sweden during the period under review.On 29 April 2009, the Swedish Parliament decided that the country'spharmacy monopoly would be dismantled as of 1 July 2009. Thederegulation of the pharmacy market makes it possible for otheroperators than Apoteket AB to engage in the pharmacy business inSweden. With the deregulation, 466 pharmacies will be sold to largeand medium-sized companies, while 150 pharmacies remaining in stateownership will be later sold to small entrepreneurs. Apoteket AB willretain ownership of 330 pharmacies. There were a total of 946pharmacies in Sweden at the end of June 2009.On 15 June 2009, Oriola-KD and the Swedish KF (Kooperativa Förbundet)announced that they will be joining forces on the deregulatedpharmacy market. This will include preparation for the sales processof the pharmacy clusters owned by Apoteket AB and the founding of newpharmacies mostly in connection with the Coop hypermarkets andsupermarkets owned by KF. The purpose is to set up a joint venture inwhich Oriola-KD would hold a simple majority and be responsible forthe development and management of the pharmacy chain. A preconditionfor the establishment of the joint venture is the acquisition of asufficient number of pharmacies in the pharmacy cluster divestmentprocess to make the creation of a significant new pharmacy chainpossible. The joint venture would engage in the pharmacy businessunder the Kronans Droghandel brand.Pharmaceutical Trade Sweden had 270 (261) employees at the end ofJune 2009.Pharmaceutical Trade RussiaPharmaceutical Trade Russia's net sales in January-June 2009 were EUR213.9 million (pro forma EUR 189.8 million) and its operating profitwas EUR 16.3 million (pro forma EUR -1.8 million). Second-quarter netsales came to EUR 106.6 million (EUR 93.8 million) and operatingprofit to EUR 8.6 million (EUR -1.0 million). The retail andwholesale businesses OOO Vitim & Co and OOO Moron, acquired inRussia, have been consolidated into Oriola-KD's accounts since 1April 2008.The investments in expansion, efficiency improvements and developmentof the business in Russia had a positive impact on the January-June2009 operating profit.The Russian pharmaceutical market expanded by some 30 per cent andOriola-KD's net sales by more than 35 per cent in Russian rubles(RUB) in January-June 2009 compared with the corresponding period in2008. Oriola-KD maintained 163 (142) pharmacies in the Moscow regionat the end of June 2009Henrijs Fogels was appointed managing director of the pharmaceuticalretail company (OOO Vitim & Co), and Vladimir Kniazev was appointedmanaging director of the pharmaceutical wholesale company (OOOMoron). The founders and minority shareholders of Russian companies,Igor and Oleg Yankov, will continue as members of the Vitim and MoronBoard of Directors.Pharmaceutical Trade Russia had 3119 (3333) employees at the end ofJune 2009.Pharmaceutical Trade Baltic CountriesPharmaceutical Trade Baltic Countries' net sales in January-June 2009were EUR 17.4 million (EUR 19.7 million) and the operating profit wasEUR 0.4 million (EUR 0.6 million). Pharmaceutical Trade Russia'ssecond-quarter net sales were EUR 8.8 million (EUR 9.8 million) andoperating profit EUR 0.2 million (EUR 0.3 million). The Baltic marketwas challenging, which had a negative effect on net sales andoperating profit.Pharmaceutical Trade Baltic Countries had 153 (165) employees at theend of June 2009.Healthcare tradeHealthcare Trade net sales in January-June 2009 were EUR 69.9 million(EUR 78.8 million) and operating profit was EUR 4.7 million (EUR 4.4million). Second-quarter net sales came to EUR 34.9 million (EUR 38.1million) and operating profit to EUR 3.0 million (EUR 1.5 million).The sale of the Finnish ConvaTec wound and stoma care business to themanufacturer of the products improved the second-quarter operatingprofit. Healthcare Trade's business in Sweden developed favourably in2009.The Healthcare Trade business segment had a payroll of 382 (404)employees on 30 June 2009.Dental TradeDental Trade operating profit in January-June 2009 came to EUR 1.8million (EUR 1.0 million) and in the second quarter to EUR 0.7million (EUR 0.4 million). The operating profit improved mainly as aresult of the positive trend in the Finnish, Swedish and Danishbusinesses.The dental trade businesses of Oriola-KD Corporation and Lifco ABwere combined in 2007. Oriola-KD's holding in the Dental Tradebusiness is 30 per cent, while that of Lifco is 70 per cent.Related partiesRelated parties in the Oriola-KD Group are deemed to comprise parentcompany Oriola-KD Corporation, the subsidiaries and associatedcompanies, the members of the Board and the President and CEO ofOriola-KD Corporation, other members of the Group Management Team ofthe Oriola-KD Group, the immediate family of the aforementionedpersons, the companies controlled by the aforementioned persons, andthe Oriola Pension Foundation. The Group has no significant businesstransactions with related parties, except for pension expensesarising from defined benefit plans with the Oriola PensionFoundation. The notes to the financial statements of Oriola-KDCorporation provide additional information on intra-Group liabilitiesand sureties given on behalf of Group companies. Oriola-KDCorporation has given no significant sureties on behalf of Groupcompanies.Oriola-KD Corporation sharesTrading volume of Oriola-KD Corporation's class A and B shares inJanuary-June 2009:Trading volume Jan-Jun 2009 Jan-Jun 2008 Class A Class B Class A Class BTrading volume, million 2.9 42.2 1.9 22.0Trading volume, EUR million 6.3 95.9 5.3 63.3Highest, EUR 2.85 2.85 3.10 3.10Lowest, EUR 1.68 1.68 2.50 2.60Closing quotation, end of period, EUR 2.77 2.76 2.66 2.69In the review period, the traded volume of Oriola-KD Corporationshares, excluding treasury shares, corresponded to 31.6 per cent(16.9 per cent) of the total number of shares. The traded volume ofclass A shares amounted to 6.0 per cent (3.7 per cent) of the averagestock and that of class B shares, excluding treasury shares, 44.8 percent (24.2 per cent).Oriola-KD Corporation's market capitalisation on 30 June 2009 was EUR417 million (EUR 380 million).On 19 March 2009, pursuant to the authorisation granted to it by theAnnual General Meeting of 13 March 2007, the Board of Directors ofOriola-KD Corporation resolved that a directed bonus issue be made,in which a total of 150,480 class B shares held by the company wereassigned to the company's President and CEO and to certain othermembers of Oriola-KD Corporation's Group Management Team and of itsextended Group Management Team, as part of the Group's share-basedincentive scheme for senior management. These shares representapproximately 0.11 per cent of the total number of company shares andapproximately 0.01 per cent of the total number of votes.Following the share issues, the company has 343,472 treasury shares,all of which are class B shares. These account for 0.23 per cent ofthe company's shares and 0.03 per cent of the votes.On 3 June 2009, Oriola-KD Corporation's Board of Directors decided ona directed issue of shares under an authorisation granted by theAnnual General Meeting of 16 April 2009, issuing 9,350,000 new classB shares to institutional investors. The new class B shares in thedirected issue have been entered in the Trade Register and they werelisted for public trading on NASDAQ OMX Helsinki Ltd on 8 June 2009with the old class B shares. Following the share issue the companyhad a total of 151,257,828 shares, of which class A shares accountedfor 48,392,203 and class B shares for 102,865,625.On 26 June 2009 Varma Mutual Pension Insurance Company executed sharetransactions as a result of which the votes conferred by itsOriola-KD Corporation shares exceeded one twentieth (1/20) of thetotal votes as referred to in section 9, chapter 2 of the SecuritiesMarkets Act. The direct share holding of Varma Mutual PensionInsurance Company by share class on 26 June 2009 was 3.56 per cent ofOriola-KD Corporation shares and 5.21 per cent of the votes conferredby the shares.At the end of June 2009, the company had a total of 151,257,828(141,907,828) shares, of which 48,392,203 (48,822,862) were class Ashares and 102,865,625 were class B shares (93,084,966). Pursuant toarticle 3 of the Articles of Association, a shareholder can requestthat class A shares be converted to class B shares. DuringJanuary-June 2009, a total of 300,000 (2,422,543) class A shares wereconverted into class B shares.Decisions of the Annual General MeetingThe Annual General Meeting of Oriola-KD Corporation, held on 16 April2009, confirmed the 2008 financial statements and discharged theBoard members and the President and CEO from liability for thefinancial year ending 31 December 2008.The Annual General Meeting resolved that the sum of EUR 0.08 pershare be paid as dividend on the basis of the balance sheet adoptedfor the financial year ending 31 December 2008. The dividend was paidto those who, on the dividend distribution record date of 21 April2009, were entered as shareholders of the company in the company'sshareholder register kept by Euroclear Finland Ltd. The dividendpayment date was 15 May 2009.The Annual General Meeting confirmed that the Board would continue tocomprise seven members. Harry Brade, Pauli Kulvik, Outi Raitasuo,Antti Remes, Olli Riikkala, Jaakko Uotila and Mika Vidgrén werere-elected to the Board. Olli Riikkala continued as Chairman of theBoard. The Annual General Meeting confirmed that the Chairman of theBoard will receive EUR 44,000 in remuneration for his term of office,the Vice Chairman EUR 27,500 and the other members of the Board EUR22,000 each. The Board's remuneration will be paid in cash. TheChairman of the Board will receive an attendance fee of EUR 800 foreach meeting, and the other Board members EUR 400 per meeting.Meeting fees will also be paid in the same manner to members of anycommittees set up by the Board of Directors or the company. TheChairman of the Board will also have a company-paid phone. Travelexpenses will be paid in accordance with the travel policy of thecompany.The Annual General Meeting re-elected PricewaterhouseCoopers Oy asauditor for the company, with Heikki Lassila APA as principalauditor. The auditor will be remunerated according to invoice.The Annual General Meeting resolved that articles 3, 4, 7, 9, 10 and12 of the Articles of Association be amended. The main content of theamendments is as follows: The references to minimum and maximumauthorised share capital were removed from article 3; the definitionin article 4 concerning the book-entry system was simplified and thereferences concerning the record date procedure were removed; anamendment was made to the wording of article 7 on the right to signon behalf of the company, ensuring that it is consistent with theterminology used in the Limited Liability Companies Act; thereferences to deputy auditor were removed from article 9 (followingthis amendment the company has just one auditor, which must be a firmof authorised public accountants); the phrases in article 10concerning the AGM were amended to ensure consistency with theterminology used in the Limited Liability Companies Act and with thenewly amended article 9; the definition in article 12 concerning thenotice of the annual general meeting was amended such that the noticemust be given at least 21 days prior to the meeting.The Annual General Meeting authorised the Board to decide on thepurchase of Oriola-KD Corporation class B shares. Pursuant to theauthorisation, the Board is authorised to decide on the purchase ofno more than 14,000,000 of the company's own class B shares,corresponding to approximately 9.9 per cent of the total number ofcompany shares. The authorisation can only be used in such a way thatthe company and its subsidiaries together would hold no more than onetenth (1/10) of the total number of company shares at any one time.In accordance with the Board's decision, the company's shares can bepurchased in a manner other than in proportion to the existingholdings of shareholders using assets belonging to the company'snon-restricted equity at the class B share's market price in publictrading arranged by the NASDAQ OMX Helsinki Ltd exchange at the timeof purchase. The shares will be paid for in accordance with the rulesand regulations of NASDAQ OMX Helsinki Ltd and Euroclear Finland Ltd.The Board will decide how the shares are purchased. Derivatives mayalso be used in the purchase. The purchase of the shares will reducethe company's distributable non-restricted equity. The shares can bepurchased for the purpose of developing the company's capitalstructure, implementing any corporate transactions or other businessarrangements, financing investments, inclusion in the company'sincentive schemes or to be otherwise assigned, held by the company orannulled. The Board will decide on all other matters related to thepurchase of class B shares. The purchase authorisation remains inforce no longer than eighteen (18) months following the decision ofthe General Meeting. The authorisation repeals the Annual GeneralMeeting's decision of 17 March 2008 authorising the Board to decideon the purchase of Oriola-KD Corporation class B shares.The Annual General Meeting authorised the Board to decide on a shareissue of the company's class B shares against payment in one or morebatches. The authorisation would include the right to issue new classB shares or to assign class B shares held by the company. Theauthorisation covers no more than 28,000,000 of the company's class Bshares in total, which corresponds to approximately 19.8 per cent ofthe total number of company shares. The authorisation granted to theBoard includes the right to deviate, by means of a directed issue,from the pre-emptive subscription right of shareholders, providedthat there are financial grounds considered important from thecompany's perspective for such a deviation. Subject to therestrictions presented above, the authorisation could be used forpurposes such as payment of consideration in corporate transactionsor other business arrangements and financing and carrying outinvestments, expansion of the company's ownership base, developmentof the capital structure, or as part of incentive and commitmentprogrammes for personnel. On the basis of the authorisation, class Bshares held by the company could also be sold in public tradingarranged by the NASDAQ OMX Helsinki Ltd exchange. The authorisationincludes the right of the Board to determine the terms of the shareissue as specified in the Limited Liability Companies Act, includingthe right to decide whether the subscription price will be partiallyor fully entered in the invested non-restricted equity fund or in theshare capital. The authorisation will remain in force for eighteen(18) months following the decision of the General Meeting. Theauthorisation cancels the share issue authorisations previouslyreceived by the Board, with the exception of the authorisationgranted to the Board by the Annual General Meeting of 13 March 2007,under which the Board may decide on arranging a directed bonus issueconcerning no more than 650,000 class B shares for the purpose ofimplementing the share-based incentive scheme for management.Decisions of the Board's organisational meetingAt the organisational meeting held immediately after the AGM, theBoard resolved to elect Antti Remes to continue serving as ViceChairman of the Board. The composition of the Audit and CompensationCommittees was confirmed as follows.Audit Committee:Antti Remes, ChairmanHarry BradeOuti RaitasuoMika VidgrénCompensation Committee:Olli Riikkala, ChairmanPauli KulvikJaakko UotilaAll members of the Board are independent of the company and its majorshareholders.RisksThe Board of Directors of Oriola-KD has approved the company's riskmanagement policy in which the risk management operating model,principles, responsibilities and reporting are specified. The Group'srisk management seeks to identify, measure and manage risks that maythreaten the operations of the company and the achievement of goalsset for them. The roles and responsibilities relating to riskmanagement have been determined in the Group.Oriola-KD's risks are classified as strategic, operational andfinancial. Risk management is a key element of the strategic process,operational planning and daily decision-making at Oriola-KD.Oriola-KD has identified the following principal strategic andoperational risks in its business: * changes in bargaining position vis-à-vis suppliers and customers * impact on business concepts as a result of 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 employeesThe major financial risks for Oriola-KD involve currency exchangerates, interest rates, liquidity and credit. The anticipatedUSD-denominated purchase price of the remaining 25 per cent holdingin the Russian business acquisition has been hedged in accordancewith the Group's treasury policy.Oriola-KD's exposure to risks relating to new markets and businessesas well as financial risks has increased as a result of the company'sexpansion into the Russian pharmaceutical retail and wholesalemarket. Currency risks are the most significant of Oriola-KD'sfinancial risks in Russia, as any changes in the value of the ruble(RUB) will have an impact on Oriola-KD's financial performance andequity. Oriola-KD has used some EUR 90 million to acquire a 75 percent holding in the Russian companies and anticipates a roughly EUR43 million final price for the remaining 25 per cent. In addition, bythe end of June it had provided the companies with long-termfinancing amounting to approximately EUR 56 million. The Russiancompanies have no loans external to the Group.Goodwill and intangible rights are subject to annual impairmenttesting, which may have a negative effect on Oriola-KD's financialperformance.Near-term risks and uncertainty factorsFactors significantly affecting Oriola-KD's outlook in the short termare the completion of the processes involved in the Russianacquisition, the realisation of the growth potential of the Russianbusinesses, general market trends in Russia and the uncertainty ofthe financial market. The reform of the Swedish pharmacy market issubject to uncertainty factors that may have a substantial effect onOriola-KD's business.Events after the period under reviewOriola-KD Corporation announced on 6 July 2009 that a total of265,170 class A shares had been converted into 265,170 class Bshares. The conversion was entered in the Trade Register on 6 July2009. Subsequent to the conversion, the company has 48,127,033 classA shares and 103,130,795 class B shares. The total number of sharesis 151,257,828 and these confer a total of 1,065,671,455 votes.On 28 July 2009 Oriola-KD Corporation issued preliminary informationon the January-June 2009 result.OutlookOriola-KD's outlook for 2009 is based on external market forecasts,agreements with principals, the order intake and managementassessments. Long-term fundamentals and growth prospects are deemedto remain favourable in the healthcare market.Oriola-KD expects that the pharmaceutical market in Finland andSweden will grow by about 3-5 per cent annually over the next fewyears, which is in line with the longer-term average growth rate ofthese markets. The Russian pharmaceutical market is expected to seeannual growth of approximately 15-20 per cent in Russian rubles (RUB)in the next few years. Growth in the market for healthcare equipmentand supplies in Finland and Sweden is expected to outpace that of thepharmaceutical market.The introduction of the reference price system in Finland in April2009 will hamper the growth of net sales of the Pharmaceutical TradeFinland business segment in 2009. It is too early to foresee thedevelopment of net sales in Pharmaceutical Trade Sweden because ofthe effects of the deregulation of Sweden's pharmacy market. ThePharmaceutical Trade Russia business segment is expected to continuegrowing.Guidelines issued on 29 April 2009 concerning net sales and operatingprofitOriola-KD's net sales for 2009 are forecast to be higher than the netsales for 2008.Oriola-KD's operating profit in 2009, without the costs of theSwedish strategic program preparations, is expected to be higher thanin 2008.New guidelines concerning net sales and operating profitOriola-KD's net sales and operating profit for 2009 are forecast tobe higher than in 2008.TablesConsolidated Statement 1 Jan - 1 Jan - 1 Apr - 1 Apr - 1 Jan -31of 30 June 30 June 30 June 30 June DecComprehensive Income(IFRS), EUR million 2009 2008 2009 2009 2008Net sales 815.8 733.3 412.3 415.4 1580.8Cost of goods sold -696.3 -643.2 -353.8 -361.2 -1370.0Gross profit 119.5 90.1 58.5 54.1 210.8Other operating income 3.2 2.0 2.7 0.9 3.4Selling anddistribution expenses -81.6 -66.7 -41.6 -40.9 -146.7Administrative expenses -17.0 -13.7 -6.9 -10.3 -33.3Profit fromassociated company 1.8 1.0 0.8 0.4 2.2Operating profit 25.9 12.7 13.5 4.2 36.4Financial incomeand expenses -1.8 0.2 -1.0 -0.4 -1.8Profit before taxes 24.0 12.9 12.5 3.8 34.6Tax expense*) -5.3 -3.2 -2.7 -1.1 -7.2Profit for the period 18.7 9.7 9.8 2.7 27.5Other comprehensiveincome:Translation differences -7.0 -0.9 4.1 -1.3 -27.6Total comprehensiveincome for the period 11.7 8.8 13.9 1.4 -0.1Profit attributable to:Parent companyshareholders 18.7 9.6 9.8 2.7 27.4Minority interest 0.0 0.0 0.0 0.0 0.1Total comprehensiveincome attributable to:Parent companyshareholders 11.7 8.7 13.9 1.4 -0.2Minority interest 0.0 0.1 0.0 0.0 0.1Earningsper share:Basic earnings pershare (EUR) 0.13 0.07 0.07 0.02 0.19Diluted earningsper share (EUR) 0.13 0.07 0.07 0.02 0.19*) The tax expense forthe period has been calculated as theproportional share of the total estimated taxes for the financial year.Consolidated Statement ofFinancial Position (IFRS), EURmillionASSETS 30 June 2009 30 June 2008 31 Dec 2008Non-current assetsTangible assets 53.1 60.9 54.5Goodwill 118.9 106.1 105.1Other intangible assets 38.7 46.4 41.9Investments in associates 28.4 27.6 28.5Other non-current receivables 8.7 9.8 9.8Deferred tax assets 2.3 1.6 0.8Non-current assets total 250.1 252.3 240.5Current assetsInventories 261.1 246.1 250.7Trade and other receivables 265.8 276.3 252.9Cash and cash equivalents 42.2 42.2 46.5Current assets total 569.1 564.7 550.1ASSETS TOTAL 819.2 817.0 790.6EQUITY AND LIABILITIES 30 June 2009 30 June 2008 31 Dec 2008EquityShare capital 36.2 36.2 36.2Other funds 50.8 30.1 30.1Retained earnings 118.6 126.8 118.1Equity of the parentcompany shareholders 205.5 193.1 184.4Minority interest 0.0 1.1 1.0Equity total 205.5 194.2 185.5Non-current liabilitiesDeferred tax liabilities 14.1 18.8 16.5Pension liability 4.3 4.4 4.2Provisions 0.0 0.0 0.0Interest-bearing non-currentliabilities 0.1 10.3 27.9Other non-current liabilities 0.0 27.2 0.0Non-current liabilities total 18.5 60.7 48.5Current liabilitiesTrade payables and othercurrent liabilities 451.9 511.2 475.8Provisions 0.0 0.0 0.0Interest-bearing currentliabilities 143.2 50.7 80.8Current liabilities total 595.1 562.0 556.6EQUITY AND LIABILITIES TOTAL 819.2 817.0 790.6ConsolidatedStatement ofChanges inEquity(IFRS): Equity of the parent company Translation Retained share- Minority Share OtherEUR million capital funds differences earnings holders interest TotalEquity1 Jan 2008 36.2 30.1 -2.5 131.7 195.5 8.1 203.6Dividends -11.3 -11.3 0.0 -11.3Change inminorityinterest 0.0 -7.0 -7.0Share basedpayments 0.2 0.2 0.2Totalcomprehensiveincomefor theperiod -0.9 9.6 8.7 0.0 8.7Equity 30 June 2008 36.2 30.1 -3.4 130.2 193.1 1.1 194.2Equity 1 Jan 2009 36.2 30.1 -30.1 148.2 184.4 1.1 185.5Dividends -11.3 -11.3 -11.3Share issue 20.6 20.6 20.6Change inminorityinterest 0.0 -1.1 -1.1Share basedpayments 0.1 0.1 0.1Totalcomprehensiveincomefor theperiod -7.0 18.7 11.7 11.7Equity30 June 2009 36.2 50.8 -37.1 155.7 205.5 0.0 205.5Consolidated Statement of Cash Flows 1 Jan - 30 1 Jan - 30 1 Jan -31(IFRS), June June DecEUR million 2009 2008 2008Operating profit 25.9 12.7 36.4Depreciation 4.8 5.0 9.8Change in working capital -24.6 -17.8 -52.2Cash flow from financialitems and taxes -8.1 -3.6 -6.8Other adjustments -3.8 -1.5 -5.2Net cash from operating activities -5.8 -5.2 -18.1Net cash used in investing activities -26.7 -74.7 -75.3Net cash used in financing activities 28.8 -9.0 10.5Net change in cash and cashequivalents -3.7 -88.9 -82.9Cash and cash equivalentsat beginning of period 46.5 131.0 131.0Foreign exchange difference -0.5 0.1 -1.6Net change in cash and cashequivalents -3.7 -88.9 -82.9Cash and cash equivalents at end ofperiod 42.2 42.2 46.5 1 Jan - 30 1 Jan - 30Change in Tangible Assets June June 1 Jan -31 DecEUR million 2009 2008 2008Carrying amount at the beginningof the period 54.5 56.3 56.3Increase through acquisition ofsubsidiary share 0.0 7.2 6.9Additions 2.8 2.2 4.0Disposals -0.7 -1.4 -2.2Depreciation -3.2 -3.2 -6.7Translation differencies -0.3 -0.1 -3.7Carrying amount at the end of theperiod 53.1 60.9 54.5 1 Jan - 30 1 Jan - 30 June June 1 Jan -31 DecKey Figures 2009 2008 2008Equity ratio, % 25.8% 24.4% 25.1%Equity per share, EUR 1.36 1.37 1.30Return on capital employed(ROCE), % 16.1% 12.3% 13.5%Return on equity, % 19.1% 9.7% 14.1%Net interest bearing debt, Me 101.1 Me 18.9 Me 62.2 MeGearing, % 49.2% 9.7% 33.5%Earnings per share, EUR 0.13 0.07 0.19Average number of share, tpcs 143,044 141,370 141,393Forward Contracts andContingent Liabilities30 June 2009 Positive fair Negative fair Nominal values ofEUR million value value contractsCurrency forward andswap contractsunder hedge accounting 2.1 40.8Other forward andcurrency swap contracts 0.3 20.030 June 2008 Positive fair Negative fair Nominal values ofEUR million value value contractsCurrency forward andswap contractsunder hedge accountingOther forward andcurrency swap contracts -0.1 27.5FX options purchasedContingent for OwnLiabilitiesEUR million 30 June 2009 30 June 2008 31 Dec 2008Guarantees given 35.6 26.8 37.8Real-estate mortgagesgiven 2.0 2.0 2.0Mortgages on companyassets 1.9 21.9 2.2Other guarantees andliabilities 1.4 26.2 1.2Total 41.0 76.9 43.2Guarantees given on behalf of external parties 0.0 0.0 0.0Leasing-liabilities (operating liabilities) 0.4 0.5 0.4Rent contingent 34.7 28.9 33.3 1 Jan - 30 1 Jan - 30 1 Jan -31 June June DecNet Sales by Operating Segments, EURmillion 2009 2008 2008Pharmaceutical Trade Finland 258.5 260.3 533.4Pharmaceutical Trade Sweden 256.3 280.8 535.9Pharmaceutical Trade Russia 213.9 93.8 318.9Pharmaceutical Trade Baltics 17.4 19.7 37.4Healthcare Trade 69.9 78.8 155.2Dental Trade 0.0 0.0 0.0Group Total 815.8 733.3 1580.8Operating Profit by Operating 1 Jan - 30 1 Jan - 30 1 Jan -31Segments, June June DecEUR million 2009 2008 2008Pharmaceutical Trade Finland 8.8 7.1 16.6Pharmaceutical Trade Sweden -2.3 3.3 6.0Pharmaceutical Trade Russia 16.3 -1.0 8.2Pharmaceutical Trade Baltics 0.4 0.6 1.1Healthcare Trade 4.7 4.4 7.9Dental Trade 1.8 1.0 2.1Group Administration and Others -3.7 -2.6 -5.6Group total 25.9 12.7 36.4Average number of personnel 4,460 2,947 3,807Number of personnel at the end of theperiod 4,399 4,626 4,709Net Sales byOperating Segments,EUR million Q2/2009 Q1/2009 Q4/2008 Q3/2008 Q2/2008 Q1/2008Pharmaceutical TradeFinland 131.9 126.6 144.0 129.1 132.7 127.6Pharmaceutical TradeSweden 130.2 126.1 125.9 129.2 141.0 139.8Pharmaceutical TradeRussia 106.6 107.2 127.3 97.9 93.8 0.0Pharmaceutical TradeBaltics 8.8 8.6 9.2 8.4 9.8 10.0Healthcare Trade 34.9 35.0 42.7 33.8 38.1 40.6Dental Trade 0.0 0.0 0.0 0.0 0.0 0.0Group Total 412.3 403.5 449.1 398.4 415.4 318.0Operating Profit byOperating Segments,EUR million Q2/2009 Q1/2009 Q4/2008 Q3/2008 Q2/2008 Q1/2008Pharmaceutical TradeFinland 4.9 3.9 4.7 4.8 3.2 3.9Pharmaceutical TradeSweden -2.0 -0.4 1.3 1.4 1.6 1.7Pharmaceutical TradeRussia 8.6 7.6 8.9 0.3 -1.0 0.0Pharmaceutical TradeBaltics 0.2 0.1 0.3 0.2 0.3 0.3Healthcare Trade 3.0 1.7 1.7 1.8 1.5 2.9Dental Trade 0.7 1.1 0.8 0.3 0.4 0.6Group Administrationand Others -2.0 -1.6 -1.9 -1.0 -1.8 -0.8Group total 13.5 12.4 15.8 7.9 4.2 8.5 1 Jan - 30 1 Jan - 30 June June 1 Jan -31 DecNet Sales by Market, EURmillion 2009 2008 2008Finland 289.2 299.2 618.2Sweden 289.0 313.5 568.9Russia 213.9 93.8 319.0Baltics countries 22.1 25.2 48.2Other countries 1.8 1.6 26.5Total 815.8 733.3 1580.8Net Sales by Market,EUR million Q2/2009 Q1/2009 Q4/2008 Q3/2008 Q2/2008 Q1/2008Finland 146.2 143.0 174.5 144.6 150.5 148.7Sweden 147.5 141.5 111.1 144.4 157.8 155.7Russia 106.6 107.2 127.3 97.9 93.8 0.0Baltics countries 11.1 11.0 12.1 10.9 12.5 12.7Other countries 1.0 0.8 24.1 0.8 0.8 0.8Total 412.3 403.5 449.1 398.4 415.4 318.0Consolidated Proforma net sales for the retail and wholesalebusinesses acquired in Russia was 96 EUR million and consolidatedProforma EBIT -0.8 EUR million for the period January to March 2008.Corporate acquisitionsAcquisition of Vitim & Co and Moron LtdOriola-KD announced in March 2008 that it would acquire 75 percent ofa Moscow-based pharmacy company (Vitim & Co) and of a pharmaceuticalwholesaler (Moron Ltd.) The transaction was executed in April 2008.In addition, Oriola-KD has agreed to buy out the remaining 25-percentholding in 2010 for a consideration based on the companies'performance in 2009. The purchase of the remaining 25-percent holdingis recognized as a liability, the magnitude of which is based on thebest estimate of management.The initial purchase price allocation as of 31 March 2008 has beenfinalised during Q1 2009 as permitted by International FinancialReporting Standards. No material changes have been made compared tothe information disclosed in the Consolidated Financial statementsfor 2008, with the exception of the estimated purchase price for theremaining 25-percent holding. The initial purchase price allocationcalculated in rubles have been translated into euros by using theexchange rate from acquisition date. The balance sheets of theacquired companies have been consolidated into the Oriola-KD Group asof 1 April 2008 and the calculation below includes the acquisition ofboth companies.Details on the net assets and goodwill acquires are as follows: Carrying Fair value Fair value amount EUR allocations EUR EUR million million millionTangible assets 5.0 1.8 6.9Other intangible assets 5.4 41.5 46.9Deferred tax assets 0.7 0.0 0.7Inventories, advancespaid 69.2 0.0 69.2Trade receivables 39.6 0.0 39.6Other receivables 5.0 0.0 5.0Cash and cash equivalents 3.0 0.0 3.0Deferred tax liabilities 0.0 -10.4 -10.4Interest-bearingnon-current liabilities -8.8 0.0 -8.8Trade payables and othercurrent liabilities -108.5 0.0 -108.5Interest-bearing currentliabilities -8.9 0.0 -8.9Net indentifiable assets 1.7 32.9 34.7Acquisition price Purchase price -64.0 Additional purchaseprice and purchase of theremaining 25% -64.6 Costs related toacquisition -4.4Goodwill 98.4Purchase price settled incash -64.0Paid additional purchaseprice -21.7Costs related toacquisition -4.4Cash and cash equivalentsacquired 3.0Cash outflow on acquisition as per 30June 2009 -87.1Estimated purchase pricepayable -42.9Total cash outflow onacquisition -130.0The remaining goodwill arising from the acquisition, is based onsynergy benefits and widened new market area possibilities andbenefits.Espoo 12 August 2009Oriola-KD Corporation's Board of DirectorsOriola-KD CorporationEero HautaniemiPresident and CEOKimmo VirtanenExecutive Vice President and CFOFurther information:Eero HautaniemiPresident and CEOtel. +358 (0)10 429 2109e-mail: eero.hautaniemi(at)oriola-kd.comKimmo VirtanenExecutive Vice President and CFOtel. +358 (0)10 429 2069e-mail: kimmo.virtanen(at)oriola-kd.comPellervo HämäläinenVice President, Communications and Investor Relationstel. +358 (0)10 429 2497e-mail: pellervo.hamalainen(at)oriola-kd.comDistributionNASDAQ OMX Helsinki LtdPrincipal mediaPublished by:Oriola-KD CorporationCorporate CommunicationsOrionintie 5FI-02200 Espoo, Finlandwww.oriola-kd.comThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 13.08.2009 - 07:30 Uhr
Sprache: Deutsch
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