Oriola Corp Class B · OMXHEX:ORIOLA
Oriola Corp Class B — Investor Day (November 2022)
59 slides from Oriola Corp Class B's investor day presentation, Nov 30, 2022
Slide 1: Oriola Corporation Investor Day
Oriola Corporation Investor Day 30 November 2022 Helsinki
Slide 2: Disclaimer
Disclaimer The following applies to this presentation, the oral presentation of the information in this presentation by Oriola Corporation (the “Company” or “Oriola”) or any person on behalf of the Company, and any question-and-answer session that follows the oral presentation (collectively, the “In
Slide 3: Program
Program Opening remarks 10:00 Mikael Wegmüller, VP, Communications and Sustainability Oriola today and transformation going forward Katarina Gabrielson, CEO Supply chain as a service Petri Boman, Chief Supply Chain Officer Introduction of Timo Leinonen, incoming CFO 11:10– Coffee break 11:30 Data-dr
Slide 4: Oriola today and transformation going forward
Oriola today and transformation going forward Katarina Gabrielson CEO
Slide 5: We create value through the entire healthcare value chain
We create value through the entire healthcare value chain “ Securing the distribution of medicines to patients and customers is a key element in the Nordic welfare societies and the health care system. Oriola has been serving customers in this area since the establishment of its first medicine whole
Slide 6: A preferred partner in securing the availability of pharmaceuticals
A preferred partner in securing the availability of pharmaceuticals • We create value by securing health for life • A leading distributor of pharmaceuticals in Sweden and Finland and a forerunner in providing advisory services to pharmaceutical companies • Our assortment includes a broad range of he
Slide 7: Strong position in the health and wellbeing markets
Strong position in the health and wellbeing markets • Strong market positions in both Sweden and Finland • Competitive advantage through local scale and services • Wide offering of high-quality expert services • Long experience in a stable operating environment • Professional supply chain and wareho
Slide 8: From short-term initiatives to long-term transformation
From short-term initiatives to long-term transformation
Slide 9: Short-term turnaround and transformation
Short-term turnaround and transformation Pharmacy New Actions leading operations operating model Turnaround and in Sweden to improve transformation to annual EUR 7 million combined into operational, plan initiated. a new commercial and cost savings completed. jointly owned supply chain company. exce
Slide 10: We are delivering on our strategic initiatives
We are delivering on our strategic initiatives Oriola’s turnaround Deliveries during 2022 Focus on transformation Simplified operating model and increased New operating model to ensure cross-market efficiency through common goals and by combining our knowledge and expertise to effectively serve our
Slide 11: On track to meet turnaround initiatives
On track to meet turnaround initiatives Performance indicators Performance YTD Q3/2022 Savings target of EUR 7M* EUR 7M* Growth at market growth +6.3% cc Adjusted EBIT to increase from the 2021 level EUR 16.8M vs 8.3 PY Net working capital 4 MEUR improvement Y/Y Inventory rotation ~4 day improvement
Slide 12: Combining of pharmacy businesses into a new company
Combining of pharmacy businesses into a new company • Oriola and Euroapotheca combined their consumer pharmacy businesses in Sweden into a new company named Kronans Apotek • Third-largest player in the Swedish pharmacy market by revenue • The new company is owned 50/50 percent, Oriola is committed t
Slide 13: Our transformation continues
Our transformation continues 2023 • Focus on profitable growth 2021 2022–2023 • Commercial model renewal Oriola’s short-term Customer-oriented services throughout initiative to drive the lifecycle of medicine • Operating model evolution profitability and Transformation and profitability in focus eff
Slide 14: Our key priorities 2023
Our key priorities 2023 Profitable Efficiency Culture Growth Enhance value Drive focused and Increase operational creation through a profitable growth and capital efficiency collaborative culture The preferred business partner in the Nordics Sustainability at the core The forerunner in the advanced
Slide 15: Our key priorities 2023: Profitable growth
Our key priorities 2023 Profitable Profitable Commercial excellence Growth growth • Customer experience, account management Drive focused Drive focused and and • Proactive services and joint business opportunities with customers profitable growth profitable growth Margin management and pricing model
Slide 16: Our key priorities 2023: Efficiency
Our key priorities 2023 Profitable Operational efficiency Growth • Stability and performance in delivery capability Drive focused and • Efficiency through unit sizes of packaging profitable growth Centralised sourcing • Common management systems Efficiency • Strategic sourcing Reduction in indirect
Slide 17: Our key priorities 2023: Culture
Our key priorities 2023 Profitable New organization implementation Growth • Continue the evolution of business model and Drive focused and organisational setup profitable growth Common processes • Ways of working and simplifying work Efficiency • Accountability and empowerment Leadership training In
Slide 18: Summary of key financials
Summary of key financials
Slide 19: Market growth reflected in sales and invoicing
Market growth reflected in sales and invoicing Continuing operations: Invoicing Continuing operations: Net Sales MEUR MEUR Continuing operations: Invoicing Continuing operations: Net Sales 960 400 942.2 394.6 940 390 386.2 920 903.9 380 900 372.7 373.9 886.7 370 880 871.6 870.6 858.7 360.3 359.3 860
Slide 20: Clear improving trend in financial performance
Clear improving trend in financial performance Continuing operations: Adjusted EBIT • Turnaround initiatives MEUR Continuing operations: Adjusted EBIT • Measures to achieve EUR 7 million in cost savings implemented and realised 7 6.6 6.6 • Improved operational efficiency in 6 5.5 5.4 distribution ce
Slide 21: Strong year-to-date cash flow and balance sheet
Strong year-to-date cash flow and balance sheet Q3 YTD 2022 change in cash1 Net interest-bearing debt items Net interest-bearing debt item, 30 Sep 2022 30 Sep 20211 EUR million MEUR 200 Bank loans 61.6 65.5 (syndicated Bank & term) Commercial papers 59.9 49.6 150 Advance payment from pharmacies 22.7
Slide 22: Long-term financial targets
Long-term financial targets – Continuing operations, excl. IFRS16 Business growth at Annual EPS growth Adjusted gearing Target ROCE over 20% the market growth over 5%, w/o adj. items lower than 70% Achievement 6.3% (LTM)1 124% (LTM) 12.4% (LTM)2 54.8% (end of Q3/2022) 1 Invoicing growth, 2 Including
Slide 23: Markets and trends
Markets and trends
Slide 24: Pharmaceutical wholesale markets are growing
Pharmaceutical wholesale markets are growing Finland and Sweden combined market size BEUR 8.5 8.0 +6% CAGR 7.5 7.0 6.5 0.0 Jan-19 Jul-19 Jan-20 Jul-20 Jan-21 Jul-21 Jan-22 Jul-22 Jan-23 Source: IQVIA, LTK. Market size is 12 month rolling market value 24
Slide 25: Market trends and drivers
Market trends and drivers Increasing spending Increased volume Ageing population in wellbeing and of generics healthcare products in all markets Sales of specialty Online pharma / Growing interest in products growing Digitalization OTC*, traded goods faster than the total and services increasing mar
Slide 26: Cost inflation visible in multiple areas
Cost inflation visible in multiple areas Selected statistics from Finland and Sweden Diesel price in Sweden Electricity price in Sweden Index, Jan 2021 = 100 Actions to mitigate Diesel price in Finland Labour costs in Sweden cost inflation 200 Electricity price in Finland Labour costs in Finland 175
Slide 27: Sustainability at the core
Sustainability at the core
Slide 28: Sustainability is at the core of our business
Sustainability is at the core of our business Committed to the UN Sustainable Development Goals (SDGs) 28
Slide 29: Long-term sustainability goals
Long-term sustainability goals Society: Improving people’s health People: Sustainable Employee Journey Planet: Carbon neutrality by 2030 We have set six KPIs to measure our achievement until the end of 2023. Society People Planet • Safe and correct • Employee engagement • Renewable electricity usage
Slide 30: Sustainability performance ratings
Sustainability performance ratings ISS ESG Sustainability performance recognised by ISS ESG Corporate Rating with the Prime C+ status. Oriola is among the highest decile in its sector, excelling in especially society and product responsibility and environmental management MSCI ESG Renewed leader rat
Slide 31: Our people are the enablers
& Oriola Our people are the enablers
Slide 32: Our people and culture as enablers
Our people and culture as enablers Modern people Well functioning Enabling leaders Capable People services organisation • People policies that • Harmonised and • Value driven Oriola • Oriola future promote equality, balanced organisation leadership model competence model diversity and wellbeing stru
Slide 33: Our management team driving the transformation
Our management team driving the transformation Katarina Gabrielson Petter Sandström CEO General Counsel (GC) Petri Boman Timo Leinonen* Chief Supply Chain Officer Chief Financial Officer (CSCO) (CFO) Hannes Hasselrot Mikael Nurmi** Chief Commercial Officer Chief Digital Officer (CCO) (CDO) Elina Nie
Slide 34: Key takeaways
Key takeaways
Slide 35: Key takeaways
Key takeaways • The preferred partner in securing the availability of pharmaceuticals • Sustainability is at the core of our business • We have delivered on our strategic agenda in 2021-2022 • Transformation continues with key priorities: Profitable growth, Efficiency and Culture • We operate in sta
Slide 36: Supply Chain as a Service
Supply Chain as a Service Petri Boman Chief Supply Chain Officer
Slide 37: Our supply network is close to major volumes
Our supply network is close to major volumes Enköping • Distribution Center • In-bound 100 trucks/wk 7% • Out-bound 210 trucks/wk Uppsala Mölnlycke Dose dispensing 26% • Central warehouse • • Vaccine distribution In-bound 150 trucks/wk 51% • Out-bound 800 trucks/wk Espoo • Central Warehouse and Dist
Slide 38: Overview of GDP logistics setup
Overview of GDP logistics setup Pharma Vaccination centers suppliers Central Warehouse Export Wholesale eTailers Retail suppliers Hospital centers Brick & mortar Distribution Center Regional terminals through partners * GDP = Good Distribution Practice 38
Slide 39: Overview of GDP logistics setup
Overview of GDP logistics setup Buffer stock Wholesale Vets Vaccination centers Pharma and Other (shops, opticians) Retail suppliers Hospital centers Brick & mortar Central Warehouse & Regional terminals Distribution Center through partners * GDP = Good Distribution Practice 39
Slide 40: Quality drives us – Our partners fulfil all GDP requirements
Quality drives us – Our partners fulfil all GDP* requirements GDP approved GDP trained drivers transportation fleet Temperature Delivery monitoring monitoring and reporting We are systematically seeking ways to cut emissions together with our transport partners * GDP = Good Distribution Practice 40
Slide 41: Our supply chain as a service
Our supply chain as a service Pharmaceutical Pharmaceutical products products Invoice for the service Purchase order Pharmaceutical Pharmacy company • Oriola provides logistics services to the pharmaceutical companies – it does not sell the products • In addition, Oriola offers financial management
Slide 42: Example of supply chain services
Example of supply chain services Warehousing Picking, packing Returns and Stock counting and delivery reclamations Storing according Fiscal Handling product GDP* Batch traceability stock count returns requirements once per year Disposal of Special picking Additional Continuous stock products and pac
Slide 43: Case: Oriola distributes all influenza vaccines in Sweden
Case: Oriola distributes all influenza vaccines in Sweden • Oriola has a long experience from influenza vaccine distribution • The 5-6-week operation requires a seamlessly working high-quality distribution chain • 2,5 million doses of influenza vaccines • 198 cold chain pallets • Reusable validated
Slide 44: Building a new base for further improvements
Building a new base for further improvements • Efficiency through delivery capability and execution performance • Savings from operating costs • Resources and facilities • Simpler processes • Demand-supply planning • Automation • Setting-up leadership and organizational structures • Simplification a
Slide 45: Key takeaways
Key takeaways • Supply chain is a service • Supply chain services can include: • Warehousing • Picking, packing and delivery • Returns and reclamations • Stock counting • We are building a new base to further improve our supply chain 45
Slide 46: Timo Leinonen, incoming CFO
& Oriola XK Oriole Timo Leinonen incoming CFO
Slide 47: Data-driven commercial model
Data-driven commercial model Hannes Hasselrot Chief Commercial Officer
Slide 48: Data-driven business for optimised customer and shareholder value
Data-driven business for optimised customer and shareholder value TRENDS OUR RESPONSE Dose dispensing, homecare services Ageing population and medical advice Increased spending Comprehensive service and product offering on wellbeing for pharmacies and consumers Streamlined operative model through In
Slide 49: A unified customer experience creating value through the healthcare value chain
A unified customer experience creating value through the entire healthcare value chain 49
Slide 50: Partnering with leading global pharmaceutical companies for sustainable growth
Partnering with leading global pharmaceutical companies for sustainable growth 50
Slide 51: Main market players
Main market players SWEDEN Competitor 1 Competitor 2 Competitor 3 Company • Market leader • Market #2 (45%) • E-commerce player • E-commerce player position FINLAND Competitor 1 Competitor 2 Competitor 3 Company • Market leader • Market #2 (44%) • Niche player • Niche player position 51
Slide 52: Experts in two markets from a regulatory point of view
Experts in two markets from a regulatory point of view Sweden Finland Channel distribution Single channel / DTP* distribution Single channel / DTP* distribution Pharmacy establishment Free establishment Regulated establishment Pharmacy chain operations Allowed Not allowed Allowed for prescription an
Slide 53: A new commercial excellence model, fit for future
A new commercial excellence model, fit for future Purpose Personalisation Precision • Improved segmentation • Improve customer centricity • Harvest GDP* expertise • Accepted attribution • Unified customer experience • Increased frequency • Streamlined offering • Harvest full service • Aligned and pr
Slide 54: Case: Customer lifecycle management as a service
Case: Customer lifecycle management as a service In addition to providing pharmaceutical distribution services to one of our customer in Finland and Sweden, we have successfully also provided expert and advisory services for them across four Nordic markets during the past 6 years. These services inc
Slide 55: Key takeaways
Key takeaways • We create value via data-driven services • We offer a unified customer experience through the entire healthcare value chain • We partner with leading global pharmaceutical companies for sustainable growth • We are experts in two unique markets from a regulatory perspective • We focus
Slide 56: Key take aways from Investor Day
Key take aways from Investor Day
Slide 57: Key focus points in our strategy work
Key focus points in our strategy work • Profitable growth and efficiency • Supply chain and supply chain services • Data-driven business and commercial excellence • Digital capabilities • People and Culture • Sustainability 57
Slide 58: & Oriola
& Oriola
Slide 59: Our next events / Thank you!
Our next events 16/2/2023 Financial Statements Release 2022 Contact: [email protected] Thank you!