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This report is translated, non-official version of Oriola Corporation’s
Financial review 2023 presented in the ESEF-format.
Financial review
Table of contents
Report of the Board of Directors .......... 71
1. Business review ........................................................71
2. Personnel ....................................................................73
3. Governance ...............................................................75
4. Oriola Corporation shares .................................... 76
Shares and shareholders ........................................... 77
Largest shareholders ................................................. 78
5. Non-financial information....................................79
6. EU Taxonomy ............................................................83
7. Risk review .................................................................. 87
Profit distribution proposal ......................................88
Annual General Meeting 2024 ................................88
Outlook for 2024...........................................................88
Events after the balance sheet date .....................88
Information on shares ................................... 89
Share-related key figures ......................................... 89
Financial indicators and
performance measures .................................. 91
Financial indicators 2019–2023 ...............................91
Alternative performance measures ......................93
Financial statements 2023 ..........................94
Consolidated statement of
comprehensive income (IFRS) ................................. 95
Consolidated statement of
financial position (IFRS) .............................................96
Consolidated statement of cash flows (IFRS) ....97
Consolidated statement of
changes in equity (IFRS) ............................................98
Notes to the consolidated financial
statements ...................................................................... 99
1. Basic information on the company ..................99
2. Basis of presentation .............................................. 99
3. Use of estimates and judgement .................. 100
4. Operating result ................................................... 100
4.1. Segment reporting .................................... 100
4.2. Net sales and other
operating income ........................................101
4.3. Operating expenses ..................................102
4.4. Employee benefits .....................................103
5. Working capital .....................................................106
5.1. Trade and other receivables ...................106
5.2. Inventories ..................................................... 117
5.3. Trade payables and other liabilities .....107
5.4. Provisions .......................................................107
6. Tangible and intangible assets and
other non-current assets.........................................108
6.1. Property, plant and equipment ............108
6.2. Goodwill and other intangible assets ..109
6.3. Other non-current assets ......................... 111
7. Leases ........................................................................ 112
7.1. Leases in the statement of
financial position ......................................... 113
7.2. Leases in the statement of
comprehensive income ............................. 113
8. Capital structure ...................................................114
8.1. Financial income and expenses ............ 114
8.2. Financial assets and liabilities ................ 114
8.3. Financial risk management .....................118
8.4. Equity, shares and authorisations ..........121
8.5. Earnings per share, dividend
and other equity distribution ................124
9. Income taxes ..........................................................125
9.1. Taxes recognised in the comprehensive
income for the period ................................125
9.2. Deferred tax assets and liabilities ......... 125
10. Group structure ..................................................127
10.1. Subsidiaries ...................................................128
10.2. Related party transactions ......................128
10.3. Discontinued operations ..........................129
10.4. Investments in joint ventures .................131
11. Unrecognised items ...........................................132
11.1. Commitments and
contingent liabilities .................................. 132
11.2. Future lease payments ............................132
11.3. Litigation ....................................................... 132
11.4. Events after the balance sheet date .....132
12. Other notes ...........................................................132
12.1. Application of new and amended IFRS
standards and IFRIC interpretations .... 132
Parent company financial statements ...............133
Parent company income statement (FAS) ...133
Parent company balance sheet (FAS) ............133
Parent company cash flow statement (FAS) ...134
Notes to the parent company financial
statements (FAS) ...................................................135
The Board of Directors’ proposal
for the profit distribution
and Auditor’s Note ........................................ 140
Auditor’s report
.................................................141
Auditor’s assurance report on
ESEF Financial Statements
........................145
Basis for preparation
The accounting principles are presented
in the relevant parts of the notes to the
financial statements in order to make the
report more user-friendly. The basis for
preparation part of the note is highlighted.
Use of estimates and judgement
If the accounting area presented in the
note involves estimates and judgement,
those estimates and judgements are
described separately in the relevant note.
The description of the use of estimate and
judgement in the note is highlighted.
Non-financial information
Oriola gives the non-financial information
according to the Finnish Accounting Act
and using the Nasdaq ESG Reporting Guide
as appropriate in the Report of the Board
of Directors. The non-financial information
and related key performance indicators
are presented in chapter 5. Non-financial
information of the Report of the Board of
Directors.
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Financial review Oriola Annual Report 2023 |
28%
72%
44%
56%
44%
56%
Report of the Board of Directors
Oriola offers advanced distribution, expert and advisory services
for pharmaceutical companies and a wide range of health and
wellbeing products for pharmacies, veterinarians, other healthcare
operators and retail operators in the Finnish and Swedish markets.
Additionally, Oriola offers dose dispensing services for pharmacies
and healthcare operators.
Reporting segments
At the beginning of 2022, Oriola implemented a country-based
organisation. Since then, Oriola’s continuing operations have
included one reportable segment, which includes business areas
Oriola Finland and Oriola Sweden. From the beginning of 2024
Oriola’s reporting segments will be Distribution and Wholesale.
Distribution segment will consist of pharmaceutical logistics
and dose dispensing services. Wholesale segment will consist of
wholesale of traded goods and over-the-counter (OTC) products,
parallel import and special licensed medicines, as well as advisory
services. Oriola will publish the comparative information for 2023
before the release of the first quarter 2024 results.
1. Business review
Operating environment
High cost inflation and rising interest rates have impacted
consumer confidence and weakened consumers’ expectations
oftheir own economy.
In the fourth quarter, volumes in the pharmaceutical distribution
market in Sweden grew while volumes in Finland declined.
Marketvalue continued steady growth in both countries.
Pharmaceutical wholesale - market share
Oriola Others
Finland
Sweden
60 BSEK
+9.8%
~110,000
patients
3 BEUR
+3.4%
Thesolidunderlying long-term market drivers such as ageing
population, wellbeing and health remain unchanged.
The challenges in the availability of some pharmaceuticals
have remained tight across Europe. Energy and fuel prices have
stabilised.
Market environment
In Sweden, the value of the pharmaceutical distribution market at
wholesale prices, measured in Swedish krona, grew by 9.8% (8.0%)
in 2023 (source: IQVIA). In Finland, the market value grew by 3.4%
(3.9%) (source: LTK).
According to Oriola’s estimate, Oriola’s share of the pharmaceutical
wholesale market in Sweden was approximately 44% (45%) and in
Finland approximately 44% (44%) in 2023.
Dose dispensing - market share
Oriola Others
Finland
The Group’s financial performance
Invoicing and net sales, continuing operations
Invoicing increased by 0.6% (increased 1.7%) to EUR 3,587.7
(3,568.0) million. On a constant currency basis invoicing increased
by 5.7% (increased 4.9%). The weak Swedish krona had a negative
impact on invoicing and net sales.
Invoicing
EUR million
Net sales decreased by 2.9% (increased 4.4%) to EUR 1,493.8
(1,539.1) million. On a constant currency basis, net sales increased
4,000
3,000
2,000
1,000
0
3,327
3,345
3,507
3,568
3,588
2019 2020 2021 2022 2023
In the dose dispensing business, Oriola offers pharmaceuticals and
dose dispensing for private and public healthcare sector operators.
The total market size for dose dispensing in Finland is 110,000
(100,000) patients of which Oriola serves approximately 30,000
(30,000).
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Adjusted EBIT
EUR million
20
15
10
5
0
8.7
6.6
14.9
19.7
16.7
2019 2020 2021 2022 2023
by 2.0% (increased 7.6%). Sales were supported by the solid
development in the distribution of pharmaceuticals.
Profitability
Adjusted EBIT decreased by 15.4% (increased 32.3%) to EUR 16.7
(19.7) million due to lower volumes in Swedish dose dispensing.
This decline was related to the loss of public tenders and
consequently fewer patients. The adjusted EBIT excluding the
impact of the Swedish dose dispensing business was EUR 19.5
(11.9) million. As a result of cost reductions in the Swedish dose
dispensing and strict cost control, operating expenses were below
last year’s level despite the inflationary environment. The efficiency
improvements in operations also contributed positively on
theresult. Adjusting items totalled EUR -21.9 (-10.2) million mainly
related to an impairment loss of goodwill in dose dispensing cash
generating unit. Adjusted EBIT on a constant currency basis was
EUR 17.1 million. EBIT was EUR -5.3 (9.5) million.
For more information on the Group’s financial performance, please
see the section Financial indicators 2019-2023.
Balance sheet, cash flow and financing
Oriola’s total assets at the end of December 2023 were EUR 934.7
(960.9) million. Equity attributable to the equity holders was EUR
171.3 (225.6) million. The equity was decreased by the dividend
of EUR 10.9 million distributed to the shareholders in April 2023.
In2023, Oriola recognised a decrease of EUR 20.6 million in the fair
value of shareholdings in Doktor.se due to the realised transactions
at lower price. Oriola’s ownership of shares in Doktor.se has not
changed during the financial year.
Cash and cash equivalents totalled EUR 138.4 (160.6) million.
Netcash flow from operating activities in 2023 was EUR 9.6
(77.9) million, of which changes in working capital accounted
for EUR-13.2(27.7) million. Increase in inventories and in trade
receivables have impacted working capital negatively. Strong
fluctuation in working capital is typical to Oriola’s industry.
Netcashflow from investing activities was EUR -3.5 (3.0) million.
Netcash flow from financing activities was EUR -28.3 (-29.3) million.
At the end of December 2023, interest-bearing debt was EUR
117.7 (136.9) million. The non-current interest-bearing liabilities
amounted to EUR 7.1 (69.9) million and current interest-bearing
liabilities amounted to EUR 110.7 (67.0) million. Non-current
interest-bearing liabilities mainly consist of loans from financial
institutions totalling EUR 1.0 (59.1) million and non-current lease
liabilities totalling EUR6.1 (10.9) million. Current interest-bearing
liabilities mainly consist of commercial paper issues of EUR 39.3
(49.8) million, advance payments from Finnish pharmacies totalling
EUR 10.4 (11.8)million, loans from financial institutions totalling
EUR 58.1 (2.0)million and current lease liabilities totalling EUR 2.8
(3.4) million. Interest-bearing net debt was EUR -20.6 (-23.7) million
andgearing -12.1% (-10.5%).
The non-recourse trade receivables sales programmes are in use in
Sweden. At the end of December 2023, a total of EUR 97.1 (100.8)
million in trade receivables had been sold. The average interest
rate on the interest-bearing liabilities excluding lease liabilities
was 3.76% (2.59%). Interest rate risk relating to the cash flow from
selling of trade receivables has been partly hedged with interest
rate swaps.
In June 2021, Oriola signed a new unsecured revolving credit
facility agreement for a total of EUR 140 million. In April 2023,
thematurity of the agreement was extended by one year, and
the revolving credit facility will mature in June 2026. Thefacility
iscommitted. The margin of the revolving credit facility is
linked toOriola’s financial covenants and the performance
of sustainability targets. The committed long-term revolving
credit facility of EUR 140.0 million and the credit limits totalling
EUR34.5million were unused at the end of December 2023.
At the end of December 2023, Oriola’s equity ratio was 18.5%
(23.8%). Return on capital employed was -1.6% (2.4%) and
returnon equity -10.4% (2.2%).
Net cash flow from operating activities
EUR million
Net financial expenses were EUR 7.6 (0.7) million. Increase was
mainly related to the higher interest rates in loans and sold
receivables and that the comparative information includes EUR
3.5 million interest income from discontinued operations. Loss for
the period from continuing operations was EUR -20.7 (4.8) million.
Income taxes were EUR -3.1 (-2.1) million, which corresponds to an
effective tax rate of -17.4% (30.8%). Earnings per share were EUR
-0.11 (0.03).
50
30
10
-10
-30
-50
29
-26
36
39
19
-43
10
23
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2022
2023
For more information on the Group’s balance sheet and cash
flow and related key figures, see the section Financial indicators
2019–2023.
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Financial review Oriola Annual Report 2023 |
Investments and depreciation
Gross investments in 2023 totalled EUR 3.5 (3.4) million
andconsisted mainly of investments in logistics and
informationsystems.
Depreciation, amortisation and impairment amounted to EUR 35.4
(25.2) million. Oriola recognized an impairment loss of goodwill
totalling EUR 21.4 million in dose dispensing cash generating unit.
In 2022, Oriola recognized an EUR 9.8 million impairment of other
tangible and intangible assets not yet available for use and which
have been development in progress.
Joint venture Swedish Pharmacy Holding AB
(Kronans Apotek)
From the beginning of 2023, Oriola reports its 50% share of the
net result in the Swedish Pharmacy Holding AB under the EBIT
line in the consolidated statement of comprehensive income.
Comparative information has been restated accordingly.
In2022consolidated financial statements the share of the net
resultwas reported above the EBIT line. The change clarifies
the reporting and communication of Oriola’s own operations
performance andprofitability.
In 2023, Swedish Pharmacy Holding AB reported net sales of
EUR1,126.9 (1,158.2) million. EBITA (Earnings before interest,
taxes and amortisation) was EUR 0.7 million. Adjusted EBIT was
EUR-2.0million, synergies during the reporting period totalled to
EUR 13.5 million and one-off costs related to the integration of the
two companies were EUR 6.0 million. At the end of December 2023,
netinterest-bearing debt was EUR 93.0 (95.3) million.
In 2023, Oriola booked a loss of EUR 4.8 (loss of 2.0) million
fromSwedish Pharmacy Holding AB.
Assets held for sale
Oriola announced on 13 October 2023 that it has signed an
agreement to sell all shares in Svensk dos AB to Apotekstjänst
Sverige AB and is thereby exiting the dose dispensing business in
Sweden as part of Oriola’s strategic decision to strengthen focus
on wholesale business. Svensk dos AB has lost market share due
to the loss of public tender contracts and during the strategy
process Oriola has not identified a recovery of the business within
a foreseeable future. Svensk dos AB has been classified as held for
sale in the consolidated financial statements. The transaction is
subject to theapproval of the Swedish Competition Authority and
is expected to be completed in the second quarter of 2024.
In dose dispensing business, Svensk dos AB offers pharmaceuticals
and dose dispensing for private and public healthcare sector
operators. The net sales of dose dispensing Sweden was
EUR25.3million in 2023 and EBIT was EUR -6.1 million, of which
EUR -3.3 million relates to the goodwill impairment loss.
2. Personnel
At the end of December 2023, the number of employees in full-
time equivalents (FTE) was 801 (833), of which 412 (402) worked
inFinland and 389 (431) in Sweden. The decrease in the number
ofpersonnel was due to organizational changes in the Swedish
dose business. The average number of employees (FTE) in 2023
was800 (914).
The total amount of wages, salaries and bonuses in 2023 was EUR
39.8 million (EUR 45.3 million in 2022 and EUR 54.6 million in 2021).
For more information about the employee benefits please
referto note 4.4. Employee benefits in the Consolidated
FinancialStatements.
Short-term performance bonuses
The performance bonus is based on the achievement of the
company’s financial targets and personal targets. The maximum
performance bonus in 2023 for the President and CEO and for
the Oriola Management Team was 60% of the annual salary.
TheBoardof Directors decides annually on the earnings criteria
and the determination of the performance bonuses based on the
proposal of the Compensation and Human Resources Committee.
Share-based incentive programmes
The members of Oriola’s Oriola Management Team are part of
the company’s long-term share incentive scheme. The scheme
unites the objectives of shareholders and key personnel to
increase thevalue of the company, commits the key personnel to
thecompany, and offers key personnel a competitive remuneration
system based on ownership of shares in the company.
The Board of Directors of Oriola Corporation decided on 20 May
2022 on the establishment of a new share-based long-term
incentive plan for the company’s key employees, including the CEO
and theOriola Management Team. At the same time, the Board
decided to terminate the previous long-term incentive plan for the
years 2019-2023.
The new incentive plan comprises a Performance Share Plan (also
“PSP”) and a share-based bridge plan to cover the transition phase
to the new LTI structure (the “Bridge Plan”). In addition, the long-
term incentive scheme comprises a Restricted Share Plan (also
“RSP”) as a complementary long-term share-based retention plan
for individually selected key employees in specific situations.
The Performance Share Plan
The Performance Share Plan for the years 2022-2025 consists of
annually commencing individual performance share plans, each
of which is subject to separate decision of the Board of Directors.
Eachplan comprises a performance period followed by the
payment of the potential share rewards in listed class B shares of
Oriola. The length of the performance period of the first plan, PSP
2022, is four calendar years. The possible subsequent plans will
include a three-year performance period as separately decided
by the Board of Directors. Eligible for participation in the first PSP
2022 are approximately 20 individuals, including the members of
the Oriola Management Team. The performance measures based
on which the potential share rewards under PSP 2022 will be paid
are earnings per share (EPS) and an environment-related target
(CO2). The first plan, PSP 2022, commences effective as of the
beginning of 2022. It comprises a performance period covering
74
Business review Sustainability Governance
Financial review Oriola Annual Report 2023 |
the calendar years 2022–2025, and the share rewards potentially
payable thereunder will be paid during the first half of 2026.
Thepayment of the rewards is conditional on the achievement of
the performance targets which the Board of Directors has set for
the plan and the individual participant’s continued employment
orservice relationship with Oriola. If all the performance targets for
the PSP 2022 are fully achieved, the aggregate maximum number
of shares to be paid based on this plan is approximately 2,254,000
class B shares (referring to gross earning, from which the applicable
payroll tax is withheld).
The Bridge Plan
The Bridge Plan for the years 2022-2023 covers specific incentive
and retention needs during the transition phase to the new LTI
structure. Eligible for participation in the Bridge Plan are thesame
individuals as for PSP 2022. The Bridge Plan is a one-off plan
commencing effective for the years 2022–2023. The potential
share rewards payable based on the Bridge Plan will be paid in
listed class B shares during the first half of 2024. Theperformance
measures based on which the potential share rewards under
theBridge Plan will be paid are the development of share
price of Oriola’s class B share (excluding dividends and other
distribution to shareholders), earnings per share (EPS) and an
environment-related target (CO2). If all the performance targets
set for the Bridge Plan are fully achieved, the aggregate maximum
number of shares to bepaid based on this plan is approximately
1,127,000 class Bshares(referring to gross earning, from which the
applicablepayroll tax is withheld).
The Restricted Share Plan
The Restricted Share Plan for the years 2022-2024 consists of
annually commencing individual restricted share plans which
aresubject to a separate decision of the Board of Directors.
Eachplan comprises a restriction period with an overall length
of three years, extending to first half of the fourth year of the
individual plan. During the plan period, the company may grant
fixed share rewards to individually selected key employees.
Thegranted share rewards are paid to the selected participants in
one or several tranches latest by the end of the restriction period.
The share rewards are paid in listed class B shares. The first plan,
RSP 2022, commences effective as of the beginning of 2022.
Theaggregate maximum number of shares payable as a reward
isapproximately 225,400 class B shares (referring to gross earning,
from which the applicable payroll tax is withheld).
For all three programs, if the individual’s employment with
OriolaCorporation terminates before the payment of the reward,
the individual is, as a main rule, not entitled to any reward.
Thevalue of the reward payable to each individual participant
based on the plans is limited by a maximum cap linked to a
multiplier of the individual’s annual salary. Oriola applies a share
ownership requirement to the CEO and the members of Oriola
Management Team. They are expected to retain ownership at least
half of the shares received under the incentive plans until thevalue
of his/her ownership in the company, in the case of theCEO,
corresponds to at least his/her annual gross base salary, and in
thecase of the other the members of the Oriola Management
Team, to at least half of his/her annual gross base salary.
Share savings plan
The share savings plan for the key personnel that Oriola has
hadsince 2013 was terminated in 2022 and a total of 22,138
OriolaCorporation’s class B treasury shares were conveyed
in 2023without consideration to the key personnel who
participatedin the plan.
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3. Governance
Separate Corporate Governance Statement 2023 and Remuneration
Report 2023 can be found in Annual Report 2023.
Annual General Meeting 2023
The Annual General Meeting of Oriola, held on 21 March 2023,
adopted the financial statements and discharged the members
ofthe Board of Directors and the President and CEO from liability
for the financial year ending 31 December 2022. According
to thedecision of the Annual General Meeting, a dividend of
EUR0.06per share was paid on the basis of the balance sheet
adopted for the financial year ending 31 December 2022.
Auditor
Authorised Public Accountants KPMG Oy Ab, who has put forward
authorised public accountant Ms Kirsi Jantunen as principal auditor,
was re-elected as the auditor of the company. The auditor’s fees
shall be paid according to an invoice approved by the company.
Board of Directors
The AGM confirmed that the Board of Directors is composed
of six members. Ms Eva Nilsson Bågenholm, Ms Nina Mähönen
and Mr Harri Pärssinen were re-elected to the Board of Directors
and Ms Ellinor Persdotter Nilsson, Mr Yrjö Närhinen and Mr
Heikki Westerlund were elected as new members of the Board of
Directors. Mr Heikki Westerlund was elected as Chairman of the
Board of Directors.
Board remuneration
The AGM confirmed that the fee for the term of office of the
Chairman of the Board of Directors is EUR 60,000, the fee for the
term of office of the Vice Chairman of the Board of Directors and for
the Chairman of the Board’s Audit Committee is EUR 36,000 and the
fee for the term of office of other members of the Board of Directors
is EUR 30,000. Of the annual fee, 60 per cent is paid in cash and 40
per cent is used to acquire Oriola Corporation’s class B shares for
the Board members on the Nasdaq Helsinki Stock Exchange. The
Chairman of the Board of Directors receives an attendance fee
of EUR 1,000 per meetings of the Board of Directors held in the
Chairman’s home country and EUR 2,000 for meetings of the Board
of Directors held elsewhere and the other members of the Board
of Directors receive attendance fees of EUR 500 per meeting for
meetings held in the home country of the respective member of
the Board of Directors and EUR 1,000 for meetings held elsewhere.
Attendance fees are correspondingly also paid to the Chairman
and members of company committees. Travel expenses are
compensated in accordance with the travel policy of the company.
Authorisations
The Annual General Meeting authorised the Board to decide on
a share issue against payment in one or more issues, including
the right to issue new shares or to assign treasury shares held by
the company. The authorisation covers a combined maximum
of 5,500,000 class A shares and 12,500,000 class B shares of the
company and includes the right to derogate from the shareholders’
pre-emptive subscription right. The authorisation is in force for
eighteen (18) months following the decision of the Annual General
Meeting.
The Board was also authorised to decide on a share issue against
payment of class B shares in one or more issues including the right
to issue new class B shares or assign class B treasury shares held
by the company. The authorisation covers a combined maximum
of 18,000,000 class B shares of the company including the right
to derogate from the shareholders’ pre-emptive subscription
right. The authorisation is in force for a maximum of eighteen (18)
months following the decision of the Annual General Meeting.
The Annual General Meeting authorised the Board to decide on a
share issue of class B shares without payment to the Company and
on a directed share issue of class B shares in order to execute the
share-based incentive plan for Oriola Group’s executives and the
share savings plan for Oriola Group’s key personnel. The maximum
number of new class B shares to be issued under this authorisation
is 250,000, which represents of 0.14% of all shares in the Company.
The authorisation is in force for eighteen (18) months from the
decision of the Annual General Meeting.
The Annual General Meeting authorised the Board to decide on
repurchasing up to 18,000,000 of the company’s own class B shares.
Shares may be repurchased also in a proportion other than in
which shares are owned by the shareholders. The authorisation
is in force for a maximum of eighteen (18) months following the
decision of the Annual General Meeting.
All decisions of the Annual General Meeting 2023 are available on
the company’s website www.oriola.com.
Shareholder’s Nomination Board
The Shareholders’ Nomination Board consists of five members
appointed by the shareholders. In addition, the Chairman
of the Board of Directors acts as an expert member of
the Nomination Board.
The largest shareholders of Oriola Corporation elected on
27 September 2023 the following persons as members of
the Nomination Board:
- Annika Ekman
- Peter Immonen
- Timo Maasilta
- Pekka Pajamo
- Jukka Ylppö
Pekka Pajamo was elected Chairman of the Nomination Board.
Heikki Westerlund, Chairman of the Board of Directors of Oriola,
serves as an expert member of the Nomination Board.
CEO and Oriola Management Team
At the end of the year 2023, the Oriola Management Team
consisted of seven members, including the President and CEO, to
whom the other Oriola Management Team members report.
On 23 May 2023 Niklas Lindholm, Ph. D. (Econ) was appointed Chief
People Officer and member of the Oriola Management Team as of
1 August 2023.
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The following persons were members of Oriola Management Team
on 31 December 2023:
- Katarina Gabrielson, President and CEO
- Petri Boman, Chief Supply Chain Officer
- Hannes Hasselrot, Chief Commercial Officer
- Timo Leinonen, Chief Financial Officer
- Niklas Lindholm, Chief People Officer
- Mikael Nurmi, Chief Digital Officer
- Petter Sandström, General Counsel
4. Oriola Corporation shares
Oriola Corporation’s market capitalisation on 31 December 2023
was EUR 199.2 (321.4) million.
Jan–Dec 2023 Jan–Dec 2022
Trading of shares class A class B class A class B
Trading volume, million 3.1 57.1 6.6 29.9
Trading volume, EUR million 4.0 61.6 13.2 59.2
Highest price, EUR 1.93 1.82 2.30 2.31
Lowest price, EUR 1.02 0.89 1.75 1.70
Closing quotation, end of
period, EUR 1.12 1.09 1.85 1.74
In 2023, the traded volume of Oriola Corporation shares, excluding
treasury shares, corresponded to 33.2% (20.1%) of the total number
of shares.
At the end of 2023, the company had a total of 181,486,213
(181,486,213) shares, of which 53,748,313 (53,748,313) were class
A shares and 127,737,900 (127,737,900) were class B shares. The
company held a total of 87,426 (109,564) treasury shares, of which
63,650 (63,650) were class A shares and 23,776 (45,914) were class B
shares. The treasury shares held by the company account for 0.05%
(0.06%) of the company’s shares and 0.11% (0.11%) of the votes.
Under Article 3 of the Articles of Association, a shareholder may
demand conversion of class A-shares into class B shares. In 2023
and 2022, no class A shares were converted into class B shares.
Management’s holding
On 31 December 2023, the members of the Board of Directors, the
CEO and the members of the Oriola Management Team, including
their controlled corporations, owned a total of 495,506 class B
shares corresponding to 0.27% of the total number of shares and
0.04% of the votes.
Flagging notifications
No flagging notifications during 2023.
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Shares and shareholders
Shareholders by type of owner, 31 December 2023
Shareholders % of shareholders % of shares
A shares B shares Total A shares B shares Total A shares B shares Total
Individuals 12,395 25,776 33,774 97.3 95.8 96.2 44.1 44.0 44.1
Corporations and partnerships 214 740 888 1.7 2.8 2.5 29.9 29.4 29.6
Banks and insurance companies 13 48 50 0.1 0.2 0.1 1.6 7.7 5.9
Public entities 8 17 22 0.1 0.1 0.1 14.8 7.1 9.4
Non-profit institutions 51 179 209 0.4 0.7 0.6 8.1 2.8 4.4
Foreign shareholders 60 138 172 0.5 0.5 0.5 0.3 0.3 0.3
Total 12,741 26,898 35,115 100.0 100.0 100.0 98.9 91.4 93.6
Nominee registrations 1.1 8.6 6.4
Shareholders by number of shares held, 31 December 2023
Shareholders % of shareholders
Number of shares A shares B shares Total A shares B shares Total
1–100 3,023 3,901 5,906 23.7 14.5 16.8
101–1,000 6,212 13,650 17,401 48.8 50.7 49.6
1,001–10,000 3,143 8,327 10,374 24.7 31.0 29.5
10,001–100,000 323 939 1,318 2.5 3.5 3.8
over 100,001 40 81 116 0.3 0.3 0.3
Total 12,741 26,898 35,115 100.0 100.0 100.0
Of which nominee registered 9 10 10
Shares % of shares
Number of shares A shares B shares Total A shares B shares Total
1-100 139,652 201,587 341,239 0.3 0.2 0.2
101-1,000 2,685,103 6,186,422 8,871,525 5.0 4.8 4.9
1,001-10,000 8,964,608 24,862,802 33,827,410 16.7 19.5 18.6
10,001-100,000 8,327,437 23,404,106 31,731,543 15.5 18.3 17.5
over 100,001 33,631,513 73,082,983 106,714,496 62.6 57.2 58.8
Total 53,748,313 127,737,900 181,486,213 100.0 100.0 100.0
Of which nominee registered 607,788 11,005,668 11,613,456 1.1 8.6 6.4
Total number of shares 53,748,313 127,737,900 181,486,213 100.0 100.0 100.0
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Largest shareholders, 31 December 2023
By number of shares held A shares B shares Total shares % of total shares Votes % of total votes
1. Mariatorp Oy 7,100,000 19,200,000 26,300,000 14.49 161,200,000 13.40
2. Wipunen Varainhallinta Oy 2,600,000 6,400,000 9,000,000 4.96 58,400,000 4.86
3. Keskinäinen Työeläkevakuutusyhtiö Varma 4,320,600 3,273,000 7,593,600 4.18 89,685,000 7.46
4. Keskinäinen Eläkevakuutusyhtiö Ilmarinen 3,606,414 2,289,018 5,895,432 3.25 74,417,298 6.19
5. Vakuutusosakeyhtiö Henki-Fennia 555,000 3,869,835 4,424,835 2.44 14,969,835 1.24
6. Maa- ja Vesitekniikan Tuki ry. 4,025,358 0 4,025,358 2.22 80,507,160 6.69
7. Greenzap Oy 2,850,000 80,000 2,930,000 1.61 57,080,000 4.75
8. Kansaneläkelaitos. KELA 0 1,991,481 1,991,481 1.10 1,991,481 0.17
9. Ylppö Jukka 1,496,562 286,992 1,783,554 0.98 30,218,232 2.51
10. Sijoitusrahasto Seligson & Co Phoebus 220,000 1,280,000 1,500,000 0.83 5,680,000 0.47
11. Ehnrooth Helene 0 1,304,333 1,304,333 0.72 1,304,333 0.11
12. S-Pankki Fenno Osake Sijoitusrahasto 0 1,238,654 1,238,654 0.68 1,238,654 0.10
13. Herlin Olli 200,000 1,000,000 1,200,000 0.66 5,000,000 0.42
14. Proprius Partners Micro Finland 0 1,100,000 1,100,000 0.61 1,100,000 0.09
15. Medical Investment Trust Oy 181,000 852,540 1,033,540 0.57 4,472,540 0.37
16. Drumbo Oy 0 1,000,000 1,000,000 0.55 1,000,000 0.08
17. Paloniemi Jari 0 1,000,000 1,000,000 0.55 1,000,000 0.08
18. Säästöpankki Kotimaa-sijoitusrahasto 619,649 376,939 996,588 0.55 12,769,919 1.06
19. Ylppö Into 693,522 240,200 933,722 0.51 14,110,640 1.17
20. Laakkonen Mikko 196,320 689,080 885,400 0.49 4,615,480 0.38
Total 28,664,425 47,472,072 76,136,497 41.95 620,760,572 51.61
Nominee registred 607,788 11,005,668 11,613,456 6.40 23,161,428 1.93
Oriola Corporation 63,650 23,776 87,426 0.05 1,296,776 0.11
Other 24,412,450 69,236,384 93,648,834 51.60 557,485,384 46.35
All shareholders total 53,748,313 127,737,900 181,486, 213 100.00 1,202,704,160 100.00
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5. Non-financial information
Business model and value creation
Oriola operates in the health and wellbeing market in Finland
and Sweden and employed 930 people at the end of 2023.
Thecompany serves its markets with a modern and customer-
focused assortment and services, and connects all actors within
the field, from pharmaceutical companies to pharmacies.
Oriolapromotes wellbeing by ensuring that pharmaceuticals
as well as health and wellbeing products are delivered in a safe,
accurate manner, and on time. Oriola’s wide range of services help
pharmaceutical companies and other operators in the healthcare
sector to succeed and promote a healthier life for people.
Orioladoes not have product manufacturing of its own.
Oriola creates value for different stakeholders, from societal
operators to patients, suppliers, consumers, and its shareholders.
As Oriola provides logistics and expert services to the
pharmaceutical companies and pharmacies, the company’s supply
network consists of pharmaceutical suppliers and retail suppliers
and covers both Finland and Sweden. These include, for example,
manufacturers of healthcare products as well as suppliers of
packaging materials used in the warehousing of these products.
As Oriola does not operate its own fleet of transport vehicles,
working closely with transport service providers is essential in
warehousing and distribution operations. The main part of Oriola’s
direct non-pharmaceutical product purchases come from Europe.
Being a preferred partner and building the supply and partner
network on trust and accountability is a prerequisite for Oriola’s
whole value chain. Standardised procurement principles, as well
as supplier selection and approval processes, are important to the
company. With these tools Oriola assesses the business partners’
ways of operating and ensure that they meet the requirements
set by the company. Systematic risk management with supplier
evaluation process and audits and compliance with national and
international pharmaceutical sector laws and regulations form the
foundation of a continuous improvement at Oriola.
Sustainability agenda and reporting
Oriola discloses its short and long-term sustainability objectives on
a periodical basis. The scope of the reporting concentrates on the
areas in which Oriola has the biggest impact and opportunities and
which are defined material for the company based on a double-
materiality assessment.
During 2023, Oriola updated its materiality process and conducted
a double-materiality assessment. Double materiality in sustainability
is defined by two dimensions: impact materiality and financial
materiality. Consistent with this principle, the assessment involved
considering both the effect the company has on society (impact
materiality) and the potential risks and opportunities that these
identified themes may pose for its business (financial materiality).
In addition to defining the focus areas of sustainability efforts,
the materiality analysis guides the company’s work and actions
related to sustainability. Through this analysis, Oriola has identified,
evaluated and prioritised the key topics in the value chain that are
important to its stakeholders and business.
The identified material topics reflect Oriola’s business and strategy.
They address the company’s ongoing efforts to enhance the
wellbeing of people and minimise the negative environmental
impact of Oriola’s operations. Going forward, the company
will alsoincreasingly focus on the sustainability of the value
chain, bothin terms of climate impact and human rights. Oriola
will reportaccording to the new materiality and the updated
sustainability agenda with its objectives and indicators from
theyear2024 onwards.
Human rights due diligence at Oriola is an ongoing process as
guided by United Nations Guiding Principles on Business and
Human Rights (UNGP). It entails identification and assessment
of potential and actual negative impacts on people, addressing
those impacts, tracking the effectiveness of actions as well as
communicating about the actions and results. As a part of its
sustainability agenda, Oriola has committed to further develop
thesepractices.
Oriola reports the disclosed information in accordance with
the Accounting Act amendment 1376/2016, which is based
on the EU Directive 2014/95/EU on the disclosure of non-
financial and diversity information. More information about
the key sustainability topics, data and time series is reported
inaccordance to the GRI (Global Reporting Initiative) Standards.
The environmental data published in this statement of non-
financial information and elsewhere in the Annual Report has
been assured by a third party (limited assurance).
Oriola is committed to the UN’s Sustainable Development Goals.
Oriola reports on risk management and management practices
related to climate change in CDP’s climate change programme.
For 2023, Oriola’s CDP score was C. The company was also
awarded with a gold medal in the EcoVadis sustainability rating.
ESG risk management
ESG (environment, social and governance) risks, including
climate-related risks, are assessed as part of the regular risk
management process. The risk management team monitors
the level of risks and ensures that the risks are processed
appropriately by Oriola’s businesses and shared functions.
Monitoring and mitigating risks through open discussion with
customers and partners as well as with decision-makers is an
important part of the process.
Transition risks related to climate change, such as changes
infossil fuel pricing or stricter environmental regulation causing
increased operational expenses, are identified in theprocess.
Risks related to anti-bribery and corruption as wellas
information security are recognised in the process.
People related risks such as human rights violations in own
operations and/or supply chain as well as health and safety
risks are highlighted, and mitigation activities assessed along
with the Code of Conduct process. Furthermore, Oriola is
committed to integrating human rights considerations into
its various policies and processes, thereby ensuring alignment
with Group risk management. Other sustainability risks include
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information security risks related to information security and
cyber-attack, which Oriola mitigates through security trainings and
implementation of data protection tools. As part of information
security, continuous mitigations and improvements are done
within technical protection, security organisation and security
awareness.
Oriola responds to these challenges and sees business
opportunities in systematic development of environmental work
in collaboration with customers, partners and decision makers.
Oriola follows the development of environmental legislation.
Commitment to reduce CO2 emissions is one of the selection
criteria for Oriola’s transport partners. Oriola evaluates product
sustainability in its assortment decisions to meet the increasing
demands of consumers.
Environmental matters
Oriola’s environmental work is based on the ISO 14 001 framework
for environmental management, which, as part of Oriola’s common
management system, creates a consistent way of working for the
entire company. In 2023, the company’s operations in Sweden
(Oriola Sweden AB) and Finland (Oriola Corporation and Oriola
Finland) renewed their ISO 14001 environmental management
standard certifications. Environmental management based
on the standard aims at continual improvement of company’s
environmental performance and enhances sustainable growth.
Local environmental risks, such as environmental incidents and
climate-related risks are assessed according to the requirements
of the ISO 14001 environmental management system. Through
systematic environmental management, Oriola assesses the
environmental impacts of the business, addresses the relevant
environmental risks, sets ambitious environmental targets, and
plans and carries out actions, monitors the performance and seeks
improvement opportunities. Oriola’s Environmental Policy outlines
the commitment to reduce the environmental impacts of the
company’s operations and steers decision-making.
Inpractice, this means, for example, optimising routes, using
capacity efficiently and expanding the use of alternative fuels.
In2023, Oriola’s total Scope 3 emissions decreased by 16% from
the 2019 baseline.
The emissions can also be impacted at distribution centres,
forexample, by improving the filling rate of transport boxes,
which reduces the number of boxes delivered to customers.
In October 2023, Oriola implemented new order times for
pharmacies in Finland. Driven by customer feedback on transport
boxes’ low filling rate, the company aimed for operational
efficiency and sustainability improvements. This change showed
positive results already in following months, with a significant
improvement in the filling rate. Furthermore, emission reduction
potential has been observed in the transition of several last-mile
routes to electric vehicles by our transport partners.
MANAGING CLIMATE CHANGE RISK
Oriola manages climate risks by focusing on most relevant low
carbon technologies when acquiring new or modernising existing
equipment. In addition, physical climate risks are managed
byadopting clear risk management practices.
Since 2019, Oriola has used the Task Force on Climate-related
Financial Disclosures (TCFD) guidance to analyse and understand
its key climate-related risks and opportunities, by reviewing
bothaspects of climate change as guided by TCFD – how does
climate change affect Oriola and how does Oriola contribute
toclimate change.
With growing customer interest and gradually changing
behaviour, the company sees increasing opportunities in
pharmaceutical companies’ search for sustainable service
providers. Oriola can respond to this by setting high requirements
for its own climate work. Secondly, with systematic management
of climate related matters Oriola can respond to its customers’
increasing expectations regarding ambitious sustainability work.
Climate change
Climate change is the single biggest health threat facing humanity,
impacting both health and healthcare systems. As a health and
wellbeing company, Oriola has a unique responsibility to take
action, in accordance with its vision, for a healthier tomorrow.
Reducing environmental impacts – using resources more efficiently
and minimising emissions and waste – is a high priority for Oriola.
Oriola is committed to achieving carbon-neutrality in own
operations by 2025 and across the value chain by 2030.
Thetargetrelated to own operations means reducing to
zero carbon emissions from sources owned by the company
and purchased energy. To reach the target Oriola continues
its consistent work to change to renewable and carbon
neutral energysources and to find low-emissions options for
refrigerants used in cold storage. Oriola’s carbon footprint
has been calculatedin accordance with the Greenhouse Gas
Protocol accounting principles and covers the entire company.
Thecompany is also committed to initiate the Science Based
Targets (SBT) process in2024.
Oriola has worked for years to reduce its carbon footprint with
systematic targets and plans. Compared to the company’s base
year 2019 level, the initiatives have reduced Oriola’s carbon
footprint. In 2023, Oriola’s CO2 emissions from the own operations
(Scope 1 & 2) decreased by 73% compared to the 2019 level.
Thishas been driven by energy optimisation and increasing the
share of renewable electricity. As much as 91% of Oriola’s total
energy consumption now comes from renewable or carbon-
neutralsources.
The most significant environmental impacts of Oriola’s business
and operations stem from transport emissions and packaging
waste (Scope 3) due to wholesale and distribution operations.
Around 85% of Oriola’s emissions originate from the supply chain,
and transport is Oriola’s largest source of indirect emissions.
Thecompany continuously works together with its transport
service providers to find opportunities to reduce emissions
and requires its partners to report emissions on a regular basis.
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MANAGING ENERGY SUPPLY RISK
Increasing energy self-sufficiency in Europe and use of fossil-free
energy requires new thinking in terms of energy production, and
especially energy consumption. Energy transition requires users
to actively choose fossil-free energy and makes Oriola’s carbon
neutrality target even more important.
Managing energy supply risk is crucial for Oriola because it could
impact on Oriola’s ability to ensure that pharmaceuticals, essential
for health and wellbeing, have the right conditions during storage
and transport. Oriola’s general business continuity plan covers the
preparedness for potential power outages in the daily operating
environment. The continuity plan includes and defines the critical
functions to be maintained or run down in a controlled manner
during a possible power outage.
Recycling and waste prevention and management
In addition to cutting CO2 emissions, one of Oriola’s main
environmental goals is to decrease waste, use materials effectively
and increase recycling. Oriola delivers products from its distribution
centres to recipients mainly in reusable transport boxes. This way,
the company contributes to minimising the amount of packaging
waste in the logistics chain of the products it distributes.
Most of the waste generated in Oriola’s operations comes from
the packaging materials of the goods arriving at its warehouses
and distribution centres. Oriola’s capability to sort waste has
been systematically increased in recent years, and currently
there are over 10 different sorting categories available in the
company’s biggest warehouses in Finland and Sweden, with
cardboard, plasticand waste to energy being the largest
categories. Inaddition, new waste compactors to mitigate waste
managementhave been introduced.
In 2023, the company’s recycling rate of non-pharmaceutical
wastewas 81% (2022: 83%). The company aims to further increase
Group-level recycling rate to 90% by 2025.
Social and human resources related matters
Oriola employs professionals in numerous positions in distribution
and warehouse centres, dose units and various expert roles.
Employees are the company’s most important asset: their
expertise and know-how are a prerequisite for excellent customer
experience, responsible business and for meeting the strict
quality requirements of the pharmaceutical industry. Investing
in personnel development and wellbeing also builds Oriola’s
competitiveness in a rapidly changing market. To attract the
right talent and enable employees to focus on what they do best,
Oriolawants to offer a fair and equal workplace, where everyone
can succeed and develop.
Change leadership is one of the key areas in Oriola’s leadership
development, as the company’s business environment, structure,
culture and ways of working are changing. In 2023, special
attention was paid to collaborative culture, which is based on
thecompany’s refreshed values and reflects more what Oriola
is today. To ensure continuous development, Oriola annually
measures thequality of leadership. In 2023, leadership index
improved slightly to79 from 78 (2022).
All Oriola’s employees are subject to annual performance and
development discussions, which set personal goals to guide
the work and on the other hand, map out each person’s own
development goals and measures.
During the first half of the year, the People team examined the
whole lifecycle of employment and its processes. Transforming
from country based organisational structures to a common cross-
functional organisation has required harmonisation of processes
between business units. In 2023, some 140 managers attended
monthly information and training sessions to enhance the common
ways of working.
Oriola stresses the importance of a healthy and safe working
environment. That starts from the prevention of work-related
accidents and illnesses and extends into maintaining employees’
functional capacity at the various stages of their working lives.
The company has set a long-term target to have zero accidents
and will monitor this target. Health and safety training is
included in the induction process, consisting of guidelines
and instructions to ensure safe work for all, especially in our
distribution centres. In addition, Oriola’s businesses provide
tailored occupational safety training when needed.
Oriola’s annual employee satisfaction survey was conducted in
November. One of the important indicators is eNPS. The target
for 2023 was to improve the eNPS by 21%-points. However, the
result declined and was -25 (2022: -22), reflecting the ongoing
changes in the company. On the other hand, the employee
engagement rate remained at the same high level as in 2022
(76/100), which shows that the personnel are committed to the
company.
Diversity and inclusion
As an employer, promoting equality is a priority for Oriola. Oriola
provides a fair and equal workplace that supports diversity
and inclusion. For example, the recruitment of new employees
is based on their expertise and skills, regardless of cultural
background, age, gender or religion. The company’s Code of
Conduct outlines the 17 principles which all employees and
businesses are expected to comply with. Each year the company
conducts a salary review to enhance pay equality.
The current gender balance for all Oriola employees is 54%
female and 46% male. At the end of 2023, 14% of the members
of the Oriola Management Team were women (2022: 33%).
Oriola does not approve discrimination in any form and has
an anonymous reporting channel for reporting misconduct or
conduct that does not accord with company values. In 2023,
the channel received 3 reports (2022: 8) related to among
others health and safety. No cases related to corruption or
discrimination were reported. All reports were investigated, and
necessary actions were taken accordingly.
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Respect for human rights
Respect for human rights and compliance with relevant laws are
fundamental principles for Oriola. The company supports and
respects the protection of internationally proclaimed human rights
and ensures that the company is not complicit in human rights
abuse, considering the due diligence obligation in its activities.
Thecompany’s human rights focus is on the due diligence efforts
on which its operations can have the most severe impact.
Human rights due diligence at Oriola is an ongoing process as
guided by United Nations Guiding Principles on Business and
Human Rights (UNGP). With the help of a third-party service
provider, Oriola conducted corporate-level human rights impact
mapping in 2023. The mapping covered Oriola’s own operations
and its value chain upstream and downstream. In the mapping
Oriola identified its salient human rights issues, meaning the
most important human rights topics that we must attend to as
a company. The process showed that in many parts of its value
chain Oriola already has processes in place for managing human
rights impacts, but there are some considerations for future and
clear development areas where the company can still improve
the integration of human rights perspectives into its operations.
Oriola aims to strengthen its supply chain due diligence further
by integrating human rights aspects in its existing supplier and
subcontractor evaluation and engagement processes. This includes
additional elaboration of the group’s expectations towards its
suppliers and subcontractors and enhancing its screening and
assessment methods to better manage the salient issues occurring
further along the supply chain.
Integrating human rights due diligence practices in a more
profound manner in the current core processes will also enable
Oriola to act upon the findings and monitor efficiently how impacts
are addressed across the value chain.
Oriola also has an anonymous reporting channel for reporting
misconduct or conduct that does not accord with company values.
Additionally, human rights are addressed in the company’s People
policy, which is under preparations. To ensure that human rights
are also respected in Oriola’s supply chain, business partners
are expected to commit to the same principles as specified in
the company’s Business Partner Code of Conduct. The company
regularly conducts scheduled risk-based re-evaluations to ensure
continued compliance of direct nonpharmaceutical suppliers
and promotes close cooperation with the transport partners to
strengthen their commitment to responsible business conduct.
Society related matters
Ensuring pharmaceutical safety and the delivery of pharmaceuticals
is the highest priority in Oriola’s operations and the most significant
task societally for Oriola. Pharmaceuticals must be delivered safely
and on-time irrespective of external conditions. Oriola’s operations
are designed to ensure that pharmaceuticals with marketing
authorisation are handled in a manner compliant with the
pharmaceutical sector’s regulatory requirements.
Oriola delivers pharmaceuticals within 24 hours of ordering to all
pharmacies and hospital pharmacies, as well as other healthcare
units in Sweden and Finland. During 2023, the company continued
the work on simplification and harmonisation of processes,
including core IT systems. Oriola has also improved efficiency in
deliveries through improved demand-supply planning and tighter
collaboration with the sales teams. Additionally, optimisation of
delivery routes in the supply chain has been one of our initiatives.
Oriola closely monitors the quality and accuracy of pharmaceutical
deliveries. In 2023, the picking quality was at 99.8% (2022 for
Finland only: 99.6%).
Quality management
Oriola operates in a regulated market. The company’s quality
management is based on laws and regulatory requirements
applicable in the pharmaceutical sector, as well as Oriola’s common
management system, which provides a framework for common
operating and governance practices. Pharmaceutical distribution
and wholesale are regulated by Good Distribution Practice (GDP)
of the European Medicines Agency (EMA). In Finland, compliance
with the GDP is monitored by the Finnish Medicines Agency FIMEA
and in Sweden by the Medical Product Agency (MPA). GDP defines
the common rules for handling pharmaceuticals. Where applicable,
Oriola’s operations are also guided by Good Manufacturing
Practices (GMP) and other regulation concerning products that
come under regulatory control, such as food and cosmetics
regulation.
Tax footprint
Oriola’s tax footprint consists of income taxes and other taxes,
as well as corresponding charges related to business operations.
Oriola pays taxes to Finland and to Sweden in accordance with
local legislation. Oriola does not have subsidiaries in countries seen
as tax havens. Oriola’s tax footprint is described on the company’s
website www.oriola.com.
Supply chain management
The company’s procurement policy defines responsible
procurement principles, that are ethical, meet quality criteria and
respect supplier cooperation. Procurement principles, as well as
supplier selection and approval processes are important to Oriola,
and they assess the business partners’ way of operating to meet
the requirements set by Oriola, in particular to ensure patient
safety. Oriola evaluates suppliers’ sustainability performance in
environmental and social issues as part of company’s regular
supplier assessment process.
Supplier climate strategy is an integral part of the supplier selection
process and Oriola requires transport companies to disclose their
CO2 strategy with targets for the short- (1-3 years) and long-term
(5+ years) period. Along with that, the requirement for emissions
reporting is added to the transport agreements and as part of
the supplier selection. In addition, the evaluation criteria have
been changed based on risk. The frequency of re-evaluation is
determined by e.g. based on the supplier’s product category and
previous evaluation result.
Oriola’s Code of Conduct forms the basis for ethical sourcing.
Thecompany requires direct and indirect suppliers either to
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commit to our Business Partner Code of Conduct, or to their own
similar policy, covering principles related to anti-bribery, anti-
corruption, and discrimination, respecting labour and human
rights, and promoting occupational safety and health. 89% of
Oriola’s key suppliers have signed our Business Partner of Code
of Conduct. The main part of Oriola’s direct non-pharmaceutical
product purchases come from Europe. In Sweden, 28 supplier
evaluations were performed in 2023 and 14 of them were new
suppliers. In Finland, 10 supplier evaluations were performed in
2023 and all of them were new suppliers.
Responsible business conduct
Oriola’s purpose “Health for life” steers the company’s activities and
provides it with a meaning. According to its vision, Oriola promotes
a healthier tomorrow. Oriola’s values – “openness”, “together”,
“responsibility” and “initiative” – guide the company’s way of
operating.
Oriola is committed to promoting ethical and sustainable
business practices. Oriola’s Code of Conduct guides management
and personnel and presents Oriola’s way of working, which
is based on law and good corporate governance, openness,
fairness and confidentiality. The code contains the company’s
commitment to anti-bribery and anti-corruption, compliance
with all competition laws, and engagement in collaboration and
dialogue with stakeholders. Oriola promotes equality. For example,
therecruitment of new employees is based on their expertise and
skills, regardless of cultural background, age, gender or religion.
The company also requires all employees to commit to
confidentiality obligations and avoid conflicts of interest.
Employees and other stakeholders are encouraged to report
suspected cases of misconduct or unethical behaviour. Oriola
has a confidential whistleblowing channel for reporting actions
that are suspected to be in violation of the Code of Conduct. The
company’s Board of Directors monitors compliance with the Code
of Conduct and is responsible for approving the Code of Conduct.
Anti-Corruption matters and Oriola’s zero-tolerance approach are
also addressed in training, which is part of the onboarding process
for all employees. Oriola’s target is that 100% of its own workforce
complete the Code of Conduct training as well as other mandatory
trainings annually from 2025 onwards.
6. EU Taxonomy
The EU taxonomy is a classification system for environmentally
sustainable economic activities for directing investments at
more sustainable activities. Economic activities are classified
as taxonomy-eligible or taxonomy-non-eligible according to
the delegated acts supplementing the Taxonomy Regulation
(Regulation (EU) 2020/852).
Taxonomy-eligible activities are considered as taxonomy-aligned
ifthey comply with the technical screening criteria as defined
in thedelegated act (commission delegated regulation (EU)
2021/2139, partially supplemented by the delegated act (EU)
2023/2486) and are carried out in compliance with minimum
safeguards. In order to meet the technical screening criteria an
economic activity must contribute substantially to one or more
environmental objectives while not doing significant harm to any
of the other environmental objectives. Environmental objectives in
the EU taxonomy include the following: climate change mitigation,
climate change adaptation, sustainable use and protection of
water and marine resources, transition to a circular economy,
pollution prevention and control and protection and restoration
ofbiodiversity and ecosystems.
Oriola is required to disclose information about environmentally
sustainable economic activities in accordance with the Finnish
Accounting Act as defined in the EU taxonomy. Reporting
in accordance with the EU taxonomy requires presenting
the shares oftaxonomy-eligible, taxonomy non-eligible and
taxonomy-aligned turnover, capital expenditure (CapEx) and
operating expenditure (OpEx) as defined in the delegated act
(EU)2021/2178).
Oriola has conducted an analysis all of its economic activities to
identify taxonomy eligible activities as described in the delegated
regulations ((EU) 2021/2139 and (EU) 2023/2486). Based on the
assessment and the company’s best interpretation of the EU
taxonomy regulation no economic activities have been identified
as taxonomy eligible. As part of the assessment process, a few
economic activities have been considered as possibly eligible for
which further analysis has been conducted on. However, after
further considerations these have been concluded on being
non-eligible. Therefore, no further assessment on the taxonomy-
alignment has been conducted as there are no eligible activities
forwhich alignment should be evaluated for.
As there are neither eligible nor aligned activities sections A.1.
(taxonomy-aligned) and A.2. (taxonomy-eligible, but not aligned)
include only zero values on the KPI tables below. Accordingly
in theKPI templates section B (non-eligible) the proportion of
turnover, CapEx and OpEx is 100%.
Oriola notes that the EU Taxonomy Regulation will keep
evolvingand will continue to consider its impacts as well
asfuturereporting obligations.
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Substantial Contribution Criteria
DNSH criteria
(‘Does Not Significantly Harm’) (h)
Economic activities (1)
Code (a) (2)
Turnover (3)
Proportion of Turnover, year N (4)
Climate Change Mitigation (5)
Climate Change Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards (17)
Proportion of Taxonomy aligned
(A.1.) or eligible (A.2.) turnover, year
N-1 (18)
Category enabling activity (19)
Category transitional activity (20)
€ % N/EL N/EL N/EL N/EL N/EL N/EL N N N N N N N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
Turnover of environmentally sustainable activities
0 0% - - - - - - - - - - - - - -
Of which Enabling
0 0% - - - - - - - - - - - - - - E
Of which Transitional
0 0% - - - - - - - - T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not
Taxonomy-aligned activities) (g)
N/EL N/EL N/EL N/EL N/EL N/EL -
Turnover of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
0 0% - - - - - - -
A. Turnover of Taxonomy eligible activities (A.1+A.2)
0 0% - - - - - - -
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of Taxonomy-non-eligible activities
1,493.8 100 %
TOTAL
1,493.8 100 %
Proportion of turnover from products or services associated with Taxonomy-aligned economic activities -
disclosure covering year2023
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Substantial Contribution Criteria
DNSH criteria
(‘Does Not Significantly Harm’) (h)
Economic Activities (1)
Code (a) (2)
CapEx (3)
Proportion of CapEx, year N (4)
Climate Change Mitigation (5)
Climate Change Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards (17)
Proportion of Taxonomy aligned (A.1.)
or eligible (A.2.) CapEx, year N-1 (18)
Category enabling activity (19)
Category transitional activity (20)
€ % N/EL N/EL N/EL N/EL N/EL N/EL N N N N N N N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
CapEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)
0 0% - - - - - - - - - - - - - -
Of which Enabling
0 0% - - - - - - - - - - - - - - E
Of which Transitional
0 0% - - - - - - - - - T
A.2 Taxonomy-Eligible but not environmentally sustainable activities (not
Taxonomy-aligned activities) (g)
N/EL N/EL N/EL N/EL N/EL N/EL
CapEx of Taxonomy-eligible but not environmentally sustainable activities (not
Taxonomy-aligned activities) (A.2)
0 0% - - - - - - -
A. CapEx of Taxonomy eligible activities (A.1+A.2)
0 0% - - - - - - -
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of Taxonomy-non-eligible activities
3.5 100 %
TOTAL
3.5 100 %
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities -
disclosure covering year2023
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Substantial contribution criteria DNSH criteria
Economic Activities (1)
Code (a) (2)
OpEx (3)
Proportion of OpEx, year N (4)
Climate Change Mitigation (5)
Climate Change Adaptation (6)
Water (7)
Pollution (8)
Circular Economy (9)
Biodiversity (10)
Climate Change Mitigation (11)
Climate Change Adaptation (12)
Water (13)
Pollution (14)
Circular Economy (15)
Biodiversity (16)
Minimum Safeguards (17)
Proportion of Taxonomy aligned (A.1.)
or eligible (A.2.) OpEx, year N-1 (18)
Category enabling activity (19)
Category transitional activity (20)
€ % N/EL N/EL N/EL N/EL N/EL N/EL N N N N N N N % E T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1. Environmentally sustainable activities (Taxonomy-aligned)
OpEx of environmentally sustainable activities (Taxonomy-aligned) (A.1)
0 0% - - - - - - - - - - - - - -
Of which Enabling
0 0% - - - - - - - - - - - - - - E
Of which Transitional
0 0% - - - - - - - - - T
A.2 Taxonomy-Eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (g)
N/EL N/EL N/EL N/EL N/EL N/EL -
OpEx of Taxonomy-eligible but not environmentally sustainable activities
(not Taxonomy-aligned activities) (A.2)
0 0% - - - - - - -
A. OpEx of Taxonomy eligible activities (A.1+A.2)
0 0% - - - - - - -
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-non-eligible activities
1,417.6 100%
TOTAL
1,417.6 100%
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities -
disclosure covering year2023
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7. Risk review
Strategic and financial risks
Oriola has specified the company’s risk management model,
principles, organisation and process in its Risk management
policy. The Group’s risk management seeks to identify, measure
and manage risks that may have an adverse or beneficial
impact on Oriola’s operations and achievement of the set goals.
TheGroup also has 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 operates in regulated pharmaceutical distribution and
retailmarkets monitored by authorities in both operating
countries.The main megatrends impacting Oriola’s business
environment are 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 eventual pandemics.
Oriola has identified the following principal strategic and
operational risks that may have an adverse impact on the results:
Changes in the pharmaceutical market regulation and related
licences, pricing, parallel import and public reimbursement,
aswell as increased competition through the growing number of
companies and pharmacies in e-commerce, the decreasing share
of single channel distribution in public healthcare, and the loss
of several key pharmaceutical company agreements. In addition,
thechanges in the resources of public healthcare as well as
restrictions set by the authorities on companies’ businesses and
citizens’ mobility caused by the pandemic may have an adverse
impact on Oriola’s result.
The Dental and Pharmaceutical Benefits Agency (TLV) in Sweden
has proposed a monthly list of generic pharmaceuticals to be
introduced in Swedish dose distribution operations as well.
Thenew legislation is expected to enter into force in 2024 at
theearliest. The change would have a negative impact on Oriola’s
dose distribution margins and operating costs. In Oriola’s view,
itispossible to control the possible effects.
In Finland, the pandemic has accelerated the need to find
savingsfrom the area of the Ministry of Social Affairs and Health
tobe able to cover costs caused by the pandemic, on top of the
earlier pressure for savings. The government has stated the total
cost of pharmaceutical treatment to be as one of the targets.
Thesaving measures are not expected to have a direct impact
onOriola’s business.
The reform of social and healthcare (Sote), was approved 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. A more
detailed description of ESG risks can be found in section 5 of this
report: Non-financial information.
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.
Near-term risks and uncertainty factors
Risks related to instability in financial markets, cost inflation,
salary inflation and overheated labour markets, uncertain product
availability due to material and supply chain constraints, and
electricity shortages, remain. In addition, cyber-attacks against
critical areas of society are expected to increase. These factors
may have a significant impact on Oriola’s operations, net sales
andprofitability.
Oriola is deemed as a critical entity under the directive (2022/2557)
of the European Parliament on the resilience of critical entities.
Recognition of full-service healthcare distributors as critical
infrastructure reduces Oriola’s risks. The directive entered
intoforceon 16 January 2023 and will have to be implemented
atnational level.
In regular contingency planning, the company has focused
especially on securing the health of its personnel, availability of
workforce and safety in the distribution centres, as well as the
growing need for pharmaceutical stocking. In addition, Oriola
engages in active dialogue with both customers and authorities
about the quickly changing requirements and how to manage
them. Oriola also aims to actively mitigate cost pressures.
Oriola’s strategic development projects involve operational
riskswhich may have an effect on the company’s profitability if
realised. Oriola has IT system projects underway. The company
hasdefined separate risk management plans for all major
IT projects and aims to ensure seamless implementation of
thesystems through careful planning.
Oriola’s distribution capabilities relies on well-functioning
distribution centres with automation and information systems.
Ifthe systems experience long or short-term malfunctions,
Oriola’sdelivery accuracy might be affected.
From time to time, Oriola is involved in legal actions, claims and
other proceedings. It is Oriola’s policy to provide for amounts
related to the proceedings if liability is probable, and such amounts
can be estimated with reasonable accuracy. Taking into account
all available information to date, legal actions, claims and other
proceedings are not expected to have a material impact on
thefinancial position of the Group.
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Profit distribution proposal
Oriola Group’s parent company is Oriola Corporation, whose
distributable funds according to the balance sheet as at
31 December 2023 were EUR 190.7 (208.6) million. Oriola
Corporation’s result for the financial year 2023 was EUR -6.9
(-49.4) million. Earnings per share of the Oriola Group were
EUR-0.11 (-0.01).
The Board of Directors proposes to the Annual General
Meeting that a dividend of EUR 0.07 (0.06) per share would
be paid for 2023. The Board of Directors further proposes that
the remainingnon-restricted equity, EUR 177,991,837.01 be
retainedand carried forward.
Annual General Meeting 2024
Oriola Corporation’s Annual General Meeting will be held on
19 March 2024. The matters specified in article 10 of the Articles
of Association and other proposals of the Board of Directors,
ifany, will be dealt with at the meeting. The notice to convene
will be available on the company’s website at www.oriola.com
on26February 2024 at the latest.
Outlook for 2024
In 2024, the pharmaceutical distribution market is expected to
continue to grow. A continuation of a weak consumer confidence
might impact the wholesale market development. The recent
overall inflationary environment and related cost pressures
mayhave an impact on Oriola’s profitability.
Oriola expects the adjusted EBIT, excluding the dose dispensing
business in Sweden, for the year 2024 to increase from
theadjusted EBIT for 2023 (EUR 19.5 million).
Events after the balance sheet date
Oriola to invest in ERP and warehouse management as part
of the recently launched strategy to enhance efficiency and
operational excellence
On 10 January 2024, Oriola announced that it will be investing
in its infrastructure as part of its refined strategy, published in
October 2023, with the aim to enhance efficiency and operational
excellence. Enhanced efficiency is one of the three goals set
byOriola to drive the strategy forward.
The investment comprises the renewal of Oriola’s ERP
(enterprise resource planning) and warehouse management
during the years 2025−2027. The aim of the project is to
have one common system which will enable to harmonise
business processes, strengthen data management and enhance
customer experience. The value of the total investment is about
EUR35million. The new ERP and warehouse management
system will replace the current two separate systems in
Sweden and Finland. The project will start in 2024 and the
new system will be deployed in phases during 2025−2027.
Thefirstdeployment will be in Sweden followed by the
deployment in Finland.
The Swedish Competition Authority moves its investigation
ofOriola’s sale of Svensk dos AB to Apotekstjänst Sverige AB
into phase II
On 31 January 2024, Oriola announced that the Swedish
Competition Authority (Konkurrensverket) moved its investigation
of Oriola’s sale of Svensk dos AB to Apotekstjänst Sverige AB into
phase II. Oriola expects, based on currently available information,
that the transaction will be completed in the second quarter
of2024.
Reporting segments
Oriola’s reporting segments from 1 January 2024 are
Distributionand Wholesale.
Espoo, 15 February 2024
Oriola Corporation
Board of Directors
Financial Statements 2023
Consolidated statement of comprehensive income (IFRS)
EUR million
Note
2023
2022*
Continuing operations
Net sales
1,493.8
1,539.1
Other operating income
4.2.
2.9
5.8
Materials and supplies
4.3.
-1,334.1
-1,353.2
Employee benefit expenses
4.4.
-52.8
-61.1
Other operating expenses
4.3.
-79.8
-95.9
Depreciation, amortisation and impairments
6.1./6.2.
-35.4
-25.2
EBIT
-5.3
9.5
Financial income and expenses
8.1.
-7.6
-0.7
Share of results in joint venture
10.4.
-4.8
-2.0
Profit before taxes
-17.6
6.9
Income taxes
9.1.
-3.1
-2.1
Profit for the period from continuing operations
-20.7
4.8
Profit for the period from discontinued operations
10.3.
-
-7.2
Profit for the period
-20.7
-2.4
Other comprehensive income
Items which may be reclassified subsequently to profit or loss:
Translation differences recognised in comprehensive income
during the reporting period
0.1
40.8
Translation differences reclassified to profit and loss during
the reporting period
-
-29.0
Cash flow hedge
8.3.
-1.8
2.8
Income tax relating to other comprehensive income
9.1.
0.4
-0.6
-1.4
13.9
Items which will not be reclassified to profit or loss:
Financial assets recognised at fair value through other comprehensive
income
8.2.
-20.6
-
Actuarial gains/losses on defined benefit plans
4.4.
-1.4
5.2
Income tax relating to other comprehensive income
9.1.
0.3
-1.1
-21.7
4.2
Total comprehensive income for the period
-43.8
15.7
EUR million
Note
2023
2022*
Profit attributable to
Parent company shareholders
-20.7
-2.4
Total comprehensive income attributable to
Parent company shareholders
-43.8
15.7
Earnings per share attributable to parent company shareholders:
Basic earnings per share, EUR
From continuing operations
8.5.
-0.11
0.03
From discontinued operations
8.5.
-
-0.04
From profit for the period
8.5.
-0.11
-0.01
Diluted earnings per share, EUR
From continuing operations
8.5.
-0.11
0.03
From discontinued operations
8.5.
-
-0.04
From profit for the period
8.5.
-0.11
-0.01
* Comparative information has been restated due to a correction of an error in the elimination of net sales and cost of goods sold.
The gross effect on the total correction was EUR 23.6 million. The correction has no impact on the Group’s profit or the statement
of financial position.
Year 2022 EBIT has been changed retroactively and no longer includes the share of result in joint venture (presented below EBIT).
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Consolidated statement of financial position (IFRS)
EUR million
Note
2023
2022
EUR million
Note
2023
2022
ASSETS EQUITY AND LIABILITIES
Non-current assetsEquity
Property, plant and equipment
6.1.
45.0
57.7
Share capital
36.2
36.2
Goodwill
6.2.
35.2
61.1
Fair value reserve
6.6
28.7
Other intangible assets
6.2.
16.0
20.6
Contingency fund
19.4
19.4
Investments in joint ventures
10.4.
235.4
240.4
Invested unrestricted equity reserve
74.8
74.8
Other non-current assets
6.3.
15.5
38.3
Other reserves
0.1
0.1
Deferred tax assets
9.2.
0.4
1.2
Translation differences
-16.7
-16.7
Non-current assets total
347.5
419.1
Retained earnings
50.8
83.2
Equity attributable to the parent company shareholders
8.4.
171.3
225.6
Current assets
Inventories
5.2.
162.9
148.5
Non-current liabilities
Trade receivables
5.1.
259.5
226.8
Deferred tax liabilities
9.2.
2.9
4.9
Income tax receivables
5.1.
0.6
1.1
Pension obligations
4.4.
13.4
11.8
Other receivables
5.1.
13.8
4.7
Interest-bearing liabilities
8.2.
7.1
69.9
Cash and cash equivalents
8.2.
138.4
160.6
Other non-current liabilities
5.3.
0.8
0.7
Assets held for sale
10.3.
12.0
-
Non-current liabilities total
24.3
87.3
Current assets total
587.1
541.8
Current liabilities
ASSETS TOTAL
934.7
960.9
Trade payables
5.3.
607.5
557.3
Interest-bearing liabilities
8.2.
110.7
67.0
Income tax payables
5.3.
0.1
1.0
Other current liabilities
5.3.
19.1
22.8
Liabilities related to assets held for sale
10.3.
1.8
-
Current liabilities total
739.1
648.0
EQUITY AND LIABILITIES TOTAL
934.7
960.9
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Consolidated statement of cash flows (IFRS)
EUR million
Note
2023
2022
EUR million
Note
2023
2022
Net cash flow from operating activities
Profit for the period
-20.7
-2.4
Net cash flow from financing activities
Adjustments
Repayments of long-term loans
-2.0
-2.0
Depreciation and amortisation
6.1./6.2.
13.8
18.3
Change in other current financing *
-11.9
-4.2
Impairment
6.1./6.2.
21.6
9.8
Amortisations of lease liabilities
-3.5
-15.7
Share of results in joint venture
6.3.
4.8
2.0
Purchasing of own shares
-0.1
-0.1
Financial income and expenses
8.1.
7.6
5.5
Dividends paid
-10.9
-7.3
Loss on sale of discontinued operations
10.3.
-
29.4
Net cash flow from financing activities
-28.3
-29.3
Income taxes
9.1.
3.1
7.9
Change in pension asset and pension obligation
0.2
0.4
Net change in cash and cash equivalents
-22.3
51.6
Other adjustments
1.7
-1.3
32.0
69.6
Cash and cash equivalents at the beginning of the period
160.6
109.1
Change in working capital
Translation differences
0.0
-0.1
Change in current receivables increase (-)/ decrease (+)
-38.6
-12.0
Net change in cash and cash equivalents
-22.3
51.6
Cash and cash equivalents at the end of the period
8.2.
138.4
160.6
Change in inventories increase (-)/ decrease (+)
-14.9
10.8
Change in non-interest-bearing current liabilities increase (+)/ decrease
(-)
40.4
28.8
-13.2
27.7
Interest paid and other financial expenses
-9.0
-16.6
Interest received and other financial income
4.1
1.2
Income taxes paid
-4.4
-4.0
Net cash flow from operating activities
9.6
77.9
Net cash flow from investing activities
Investments in property, plant and equipment and intangible assets
6.1./6.2.
-3.6
-8.5
Proceeds from sales of property, plant and equipment and
intangible assets
6.1./6.2.
0.0
0.4
Investments in joint ventures
10.4.
-
24.3
Investments in other shares and shareholdings
6.3.
-
-0.0
Sales of business operations, net of cash disposed
-
3.2
Sales of discontinued operations, net of cash disposed
10.3.
-
-16.3
Net cash flow from investing activities
-3.5
3.0
* Includes cash flows from commercial papers.
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Consolidated statement of changes in equity (IFRS)
Translation Retained
EUR million
Note
Share capital
Funds
differences
earnings
Equity total
Equity 1 January 2022
36.2
120.7
-28.5
88.3
216.8
Comprehensive income for the period
Net profit for the period
-
-
-
-2.4
-2.4
Other comprehensive income:
Cash flow hedge
8.3.
-
2.8
-
-
2.8
Actuarial gains and losses
4.4.
-
-
-
5.2
5.2
Income tax relating to other comprehensive income
9.1.
-
-0.6
-
-1.1
-1.6
Translation difference
-
-
40.8
-
40.8
Translation difference reclassified to profit and loss
-
-
-29.0
-
-29.0
Comprehensive income for the period, total
-
2.2
11.7
1.8
15.7
Transactions with owners
Dividend distribution
8.5.
-
-
-
-7.3
-7.3
Share-based incentive
4.4.
-
-
-
0.5
0.5
Purchase of own shares
-
-
-
-0.1
-0.1
Transactions with owners, total
-
-
-
-6.9
-6.9
Equity 31 December 2022
36.2
122.9
-16.7
83.2
225.6
Comprehensive income for the period
Net profit for the period
-
-
-
-20.7
-20.7
Other comprehensive income:
Financial assets recognised at fair value through other
comprehensive income:
Change in fair value
8.2.
-
-20.6
-
-
-20.6
Cash flow hedge
8.3.
-
-1.8
-
-
-1.8
Actuarial gains and losses
4.4.
-
-
-
-1.4
-1.4
Income tax relating to other comprehensive income
9.1.
-
0.4
-
0.3
0.7
Translation difference
-
-
0.1
-
0.1
Comprehensive income for the period, total
-
-22.1
0.1
-21.8
-43.8
Transactions with owners
Dividend distribution
8.5.
-
-
-
-10.9
-10.9
Share-based incentive
4.4.
-
-
-
0.5
0.5
Purchase of own shares
-
-
-
-0.1
-0.1
Transactions with owners, total
-
-
-
-10.5
-10.5
Equity 31 December 2023
36.2
100.9
-16.7
50.8
171.3
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1. Basic information on the company
Oriola Corporation is a Finnish public limited company, domiciled
in Espoo, Finland. Oriola and its subsidiaries together form the
consolidated Oriola Group. The consolidated financial statements
were approved for publication by the Board of Directors of Oriola
Corporation on 15 February 2024. In accordance with Finland’s
Limited Liability Companies Act, the shareholders have the right to
approve or reject the financial statements at the General Meeting
held after their publication. The General Meeting may also decide
to make amendments to the financial statements. The company’s
business ID is 1999215-0. Copies of the consolidated financial
statements of the Oriola Group are available from the head office of
Oriola Corporation at the following address: Orionintie 5, FI-02200
Espoo, Finland ([email protected]).
The consolidated financial statements are prepared in
accordance with International Financial Reporting Standards
(IFRSs) including the IAS and IFRS standards as well as the
SIC and IFRIC interpretations valid as of 31 December 2023.
The International Financial Reporting Standards refer to
standards and interpretations that have been approved for
application in the EU in the Finnish Accounting Act and the
provisions issued pursuant to it according to the procedures
provided for in EU regulation (EC) No. 1606/2002.
The consolidated financial statements are presented for
the 12-month period 1 January - 31 December 2023. The
financial statements are presented in EUR million and they
have been prepared under the historical cost convention,
except for financial assets recognised at fair value through
profit or loss, financial assets recognised at fair value through
other comprehensive income, derivatives and share-based
payments. The Group has applied the standards and
interpretations published by the International Accounting
Standards Board (IASB) that are mandatory as of 1 January
2023. These standards did not have a significant impact
on the Group in the current reporting period and they are
not expected to have a material impact on the Group in
the current or future reporting periods and on foreseeable
future transactions.
From the beginning of 2023, Oriola has reported its share of the
net result in the Swedish Pharmacy Holding AB under the EBIT
line in the consolidated statement of comprehensive income.
Comparative information has been restated accordingly. In 2022
consolidated financial statements the share of the net result was
reported above the EBIT line. The change clarifies the reporting
and communication of Oriola’s own operations performance and
profitability.
Comparative information has been restated due to a correction of
an error in elimination of net sales and cost of goods sold. The cross
effect on the total correction was EUR 23.6 million. The correction
has no impact on the Group’s profit or the statement of financial
position.
In October 2023, Oriola signed an agreement to sell all shares
in Svensk dos AB to Apotekstjänst Sverige AB, and is thereby
exiting the dose dispensing business in Sweden. The transaction
is subject to the approval of the Swedish Competition Authority
and is expected to be completed no later than in the second
quarter of 2024. Svensk dos AB was classified as held for sale in the
consolidated financial statements starting from October 2023.
Notes to the consolidated financial statements
2. Basis of presentation
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Use of judgements
Information about judgements the Group management has made
in applying accounting policies that have the most significant effect
on the amounts recognised in the financial statements is included
in the following notes:
Item Nature of management judgement Note
Revenue recognition Principal vs. agent assessment 4.2.
Other shares Changes in the fair value of the investment 6.3.
Lease liabilities Determining lease term for contracts 7.1.
Estimates and assumptions
Information about assumptions and estimation uncertainties at the
reporting date that have a significant risk of resulting in a material
adjustment to the carrying amounts of assets and liabilities within
the next financial year in included in the following notes:
Item Nature of assumptions and estimates Note
Defined benefits Key actuarial assumptions 4.4.
Impairment testing
Projection parameters and key assumptions
used in determining the underlying
recoverable amounts 6.2 .
4. Operating result
4.1. Segment reporting
Oriola’s operating and reporting segments are reported
in accordance with internal reporting provided to the
Chief Executive Officer, the chief operating decision
maker responsible for allocating resources and assessing
performance of the business areas.
Oriola has two business areas, Oriola Finland and Oriola
Sweden. Both markets are served with similar type
of products and services. Main ways to distribute the
pharmaceutical, health and wellbeing products are
similar between the countries. The pharmacy market
regulation is different in Finland and Sweden, but that
does not substantially impact Oriola's operating segments.
Additionally, difference in regulation does not impact
how Oriola's principals operate or how pharmaceuticals
are delivered to the pharmacies. Thus, the operations and
profitability of Oriola are reported as one segment.
At the beginning of 2022, Oriola implemented a country-based
organisation with two business areas, Oriola Finland and Oriola
Sweden. Oriola reports these operations as one reportable segment.
From the beginning of 2024 Oriola’s reporting segments will be
Distribution and Wholesale.
Oriola offers advanced distribution, expert and advisory services
for pharmaceutical companies and wide range of health and
wellbeing products for pharmacies, veterinarians, other healthcare
operators and retail operators in the Finnish and Swedish markets.
Additionally, Oriola offers dose dispensing services for pharmacies
and healthcare operators.
The geographical areas of Oriola are Finland (the country of
domicile), Sweden and other countries. Net sales are divided by
the countries in which the customers are located. Assets and
investments are divided according to the country in which they
are located.
In order to reflect the underlying business performance and to
enhance comparability between financial periods Oriola discloses
Adjusted EBIT as permitted in ESMA (European Securities and
Markets Authority) guidelines on Alternative Performance
Measures. These measures should not be considered as a substitute
for measures of performance in accordance with the IFRS. Adjusted
EBIT is reported excluding adjusting items. In addition, Oriola uses
“Invoicing” as the measure to describe the business volume.
Adjusted EBIT excludes gains or losses from the sale or
discontinuation of business operations or assets, gains or losses
from restructuring business operations, and impairment losses
of goodwill and other non-current assets, or other income or
expenses arising from rare events and changes in estimates
regarding the realisation of contingent consideration arising from
business acquisitions.
Oriola’s agreements with pharmaceutical companies are either
wholesale agreements where Oriola buys the products into own
stock and acts as a principal or agreements where Oriola delivers
the products from consignment stock and acts as an agent.
Oriola reports invoicing of both type of agreements as it describes
the volume of the business.
Adjusting items
Adjusting items included in EBIT
EUR million 2023 2022
Restructuring costs -0.2 -0.5
Impairments and write-downs -21.6 -9.8
Other -0.2 0.1
Total -21.9 -10.2
The preparation of consolidated financial statements in
accordance with IFRS requires the application of judgement
by management in making estimates and assumptions. Such
estimates and assumptions have an impact on the assets and
liabilities reported as at the end of the reporting period, and
on the presentation of contingent assets and liabilities in the
notes to the consolidated financial statements as well as on
the income and expenses reported for the financial year. The
estimates are based on the management’s best knowledge
about the facts and as such actual results may differ from
the estimates and assumptions used. The application of
accounting principles also requires judgement .
3. Use of estimates and judgement
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4.2. Net sales and other operating income
The Group’s net sales include income from the sale of goods,
distribution fees and the sale of services adjusted with
indirect taxes, discounts and currency translation differences
resulting from sales in foreign currencies. Revenue is
measured based on the consideration specified in a contract
with a customer and excludes amounts collected on behalf
of third parties. The Group recognises revenue when it
transfers control over a product or service to a customer.
Oriola’s agreements with pharmaceutical companies are
either wholesale agreements where Oriola buys the products
into own stock and acts as a principal or agreements where
Oriola delivers the products from consignment stock and
acts as an agent. For agreements in which Oriola acts as
a principal the revenue is recognized on gross basis. For
consignment agreements where Oriola acts as an agent,
only the distribution fee is recognized as revenue. Oriola
reports invoicing of both type of agreements as it describes
the volume of the business. The definition of invoicing is
described in section Alternative performance measures.
The Group’s revenues derive from the following revenue
streams: Wholesale, sale of logistics services, dose
dispensing, and sale of other services. In the following
section the principal activities of the different revenue
streams are described as well as the nature of performance
obligations.
Wholesale: The Group sells pharmaceutical and other
healthcare and wellbeing products to pharmacies,
veterinarians, hospitals and other retailers. The performance
obligation is sale of goods, which is based on sales order. The
transaction price is the price of goods. Revenue is recognised
when the Group transfers control of goods to customer at
the amount which the Group expects to be entitled, i.e. the
price of goods sold less any possible discounts.
Services: The Group offers a variety of services to the
customers. These services can be divided to the following
revenue streams: Sale of logistics services, dose dispensing
and sale of other services.
- Sales of logistics services: The Group has contracts
based on consignment inventory with pharmaceutical
companies. In such contracts the Group acts as an
agent between the pharmaceutical company and the
end-customer and the performance obligation is sale of
logistics and transportation services to pharmaceutical
companies. The revenue is recognised at the time when
actual services have been performed on a net basis as a
fee or commission.
- Dose dispensing: The Group offers dose dispensing
services to pharmacies in Sweden and Finland and county
councils in Sweden. The performance obligation is sale
of dose dispensed goods. The transaction price includes
the price of goods sold and the price of dose dispensing.
The revenue is recognised when the control of the dose
dispensed goods is transferred to the customer.
- Sale of other services: The Group sells logistics, web
and other value-added services to pharmaceutical
companies, retailers and hospitals. The performance
obligation is sales of services, which is based on a contract
for delivering services to the customer. The revenue is
recognised over the period during which the service is
performed at the amount totalling the price of service
performed less any possible discounts.
Adjusting items in 2023 include an impairment loss on goodwill
totalling EUR 21.4 million in the dose dispensing cash generating
unit and a write-down of assets of EUR 0.2 million at Brunna
warehouse, which was closed. Restructuring costs in 2023 relate to
expert services and other adjusting items relate to the sale of dose
dispensing business in Sweden.
Adjusting items in 2022 relate to impairment of other tangible
and intangible assets not yet available for use, organisational
restructuring costs and divestment of the staffing services business.
Geographical information
EUR million
2023 Sweden Finland
Other
countries Total
Sales to external customers 836.7 536.5 120.7 1,493.8
Non-current assets* 55.1 290.2 - 345.3
Investments 0.8 2.7 - 3.5
Average number of personnel,
full time equivalents 389 411 - 800
EUR million
2022 Sweden Finland
Other
countries Total
Sales to external customers 917.3 508.4 113.4 1,539.1
Non-current assets* 81.5 332.5 - 414.0
Investments 1.4 2.0 - 3.4
Average number of personnel,
full time equivalents 466 448 - 914
* Non-current assets exclude financial instruments and deferred tax assets.
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Contract balances
The Group has recognised the following liabilities related to
contracts with customers:
EUR million 31 Dec 2023 31 Dec 2022
Advances received from pharmacies 10.4 11.8
Advances received related to other services 0.2 0.2
Total 10.6 12.0
Advances received from pharmacies are presented as current
interest-bearing liabilities in the statement of financial position.
Additional information on the interest-bearing liabilities can be
found in note 8.2. Financial assets and liabilities.
Other operating income
EUR million 2023 2022
Gains on sales of tangible and intangible assets 0.0 0.0
Rental income 0.2 0.5
Service charges 1.3 0.6
Other operating income 1.4 4.7
Total 2.9 5.8
Other operating income consists mainly of business support
services provided to discontinued operations.
4.3. Operating expenses
Operating expenses include material purchases, employee benefit
expenses and other operating expenses as presented on the face
of the statement of comprehensive income. Employee benefit
expenses are specified in note 4.4. Employee benefits.
Materials and supplies
Materials and supplies include materials, procurement and
other costs related to procurement.
Materials and supplies
EUR million 2023 2022
Purchases during the period 1,348.1 1,346.0
Change in inventories -13.8 7.3
Products for own use -0.1 0.0
Foreign exchange differences -0.1 -0.1
Total 1,334.1 1,353.2
Materials and supplies by currency
2023
Million SEK EUR
Sweden 9,857.4 858.7
Finland 475.3
Total 1,334.1
2022
Million SEK EUR
Sweden 9,629.4 905.9
Finland 447.3
Total 1,353.2
Use of judgements: Oriola’s agreements with
pharmaceutical companies are either wholesale agreements
where Oriola buys the products into own stock and acts
as a principal or agreements where Oriola delivers the
products from consignment stock and acts as an agent.
For agreements where Oriola acts as a principal the legal
title, control and payment liability has been transferred to
Oriola and the revenue is recognized on gross basis. For
consignment agreements where Oriola acts as an agent,
only the distribution fee is recognized as revenue. Oriola is
the principal if it controls the goods and services before they
are provided to the customer. Analysis of the agreements
and the related revenue recognition method requires
management judgement, considering various contractual
terms. In such cases, the Group assesses, for example,
whether Oriola has the primary responsibility for the supply
of the goods or services in question, the risk associated with
inventories and the discretion to determine the price of the
goods and services.
Net sales by currency
2023 2022
Million SEK EUR SEK EUR
Sweden 10,864.3 946.5 10,846.7 1,020.4
Finland 547.4 518.7
Total 1,493.8 1,539.1
Disaggregation of revenue
In the following table, the Group’s external revenue is
disaggregated by the Group’s major revenue streams.
EUR million 2023 2022
Wholesale 1,347.8 1,311.5
Other* 146.1 227.6
Total 1,493.8 1,539.1
* Other includes sales of logistics services, dose dispensing, staffing and other services.
Sale of staffing services has been included in other sales until March 2022.
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4.4. Employee benefits
The Group’s employee benefits include wages, salaries and
bonuses paid to employees, pension benefits, other long-
term employee benefits and share-based payments.
Pension benefits: The Group’s pension arrangements
are in compliance with each country’s local regulations
and practices. The pension arrangements of the Group
companies comprise both defined contribution plans
and defined benefit plans. The payments to the defined
contribution plans are recognised as expenses in the
statement of comprehensive income in the period in which
they incur. Under a defined benefit pension plan, the Group’s
obligation is not limited to the payments made under the
plan but also includes the actuarial and investment risks
related to the pension plan in question.
The pension expenses related to defined benefits have
been calculated using the projected unit credit method.
Pension expenses are recognised as expenses by distributing
them over the estimated period of service of the personnel
concerned. The amount of the pension obligation is the
present value of the estimated future pensions payable.
Other long-term employee benefits consist of a long-
service benefit scheme operated by the Group. The long-
service benefit scheme is presented as other non-current
liabilities in the statement of financial position.
Share-based payments: Share incentive plans are measured
at fair value at the grant date, and are recognised as
expenses over the vesting period. The fair value of the share
is the share price on the date at which the target group has
agreed to the conditions of the plan. Share-based payments
are paid in cash and in equity.
Government grants received to compensate costs are
recognised in the statement of comprehensive income as
reduction of expenses in the reporting period, for which the
compensation is received.
Employee benefit expenses
EUR million 2023 2022
Wages, salaries and bonuses 39.8 45.3
Share-based payments 0.5 0.6
Pension costs
Defined contribution plans 5.2 5.9
Defined benefit plans 0.3 0.4
Other personnel expenses 7.0 8.8
Total 52.8 61.1
Government grants were not received in 2023 and in 2022.
Post-employment benefits
The Oriola Group has defined benefit pension plans in Finland and
Sweden.
In Finland, the defined benefits plans consist of a voluntary
insurance plan, which is a final average pay pension plan
concerning additional pensions. The benefits are insured with OP
Life Assurance.
In Sweden, some of the office employees are covered by the
defined benefit plan ITP 2 and others by the defined contribution
plan ITP 1. The employees have a defined contribution plan
according to local legislation. In ITP 2, the company can recognise
the old age pension liabilities in its statement of financial position
or, alternatively, pay the pension expenses to the pension
insurance company Alecta.
Other operating expenses
EUR million 2023 2022
Freights and other variable costs 32.4 38.0
Marketing 0.4 0.4
Information management 9.3 10.5
Premises 5.9 5.1
External services 21.8 30.1
Other operating expenses 9.9 11.9
Total 79.8 95.9
Audit fees
EUR million 2023 2022
To member firms of KPMG network
Audit related services 0.3 0.3
Total 0.3 0.3
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Change in defined benefit obligation and plan assets:
EUR million
Present value
of funded
obligation
Fair value of
plan assets Total
1 Jan 2022 20.0 -2.0 18.0
Current service cost 0.8 - 0.8
Interest cost or income 0.3 -0.0 0.3
21.0 -2.0 19.0
Remeasurements
Actuarial gains (-) and losses
(+) arising from changes in
demographical assumptions 0.5 - 0.5
Actuarial gains (-) and losses (+)
arising from changes in financial
assumptions -7.3 0.4 -6.9
Experience profits (-) or losses (+) 1.2 - 1.2
15.4 -1.6 13.8
Differences in foreign exchange rates -1.4 - -1.4
Contributions
Plan participants - -0.0 -0.0
Expenses arising from the plans
Benefits paid -0.7 0.2 -0.6
31 Dec 2022 13.2 -1.4 11.8
Current service cost 0.4 - 0.4
Interest cost or income 0.5 -0.1 0.4
14.1 -1.5 12.6
Remeasurements
Actuarial gains (-) and losses
(+) arising from changes in
demographical assumptions 0.2 - 0.2
Actuarial gains (-) and losses (+)
arising from changes in financial
assumptions 0.7 0.1 0.8
Experience profits (-) or losses (+) 0.5 - 0.5
15.4 -1.4 14.0
Differences in foreign exchange rates 0.1 - 0.1
Contributions
Plan participants - -0.1 -0.1
Expenses arising from the plans
Benefits paid -0.7 0.2 -0.5
31 Dec 2023 14.8 -1.4 13.4
Significant actuarial assumptions 31 Dec: 2023 2022
Discount rate (%) 3.10-4.00 3.60-3.70
Salary increases (%) 2.80-3.40 2.90-3.60
Mortality assumptions are made on the basis of actuarial guidelines
and they are founded on statistics published in each region and on
experience.
Sensitivity of the defined benefit obligation to changes in the most
significant assumptions:
Assumption
Change in assumption
as percentage point
Effect of change
in assumption %
Decrease in discount rate -0.5 increase by 10.3
Increase in discount rate +0.5 reduce by 9.1
Increase in salaries +0.5 increase by 1.9
Increase in benefits +0.5 increase by 10.1
The table presents a sensitivity analysis for the most significant
actuarial assumptions, showing the effect of any change in actuarial
assumptions on the defined benefit pension obligation.
The effects of the above sensitivity analysis have been calculated so
that when the effect of the change in the assumption is calculated
all other assumptions are expected to remain unchanged. This is
unlikely to happen and in some assumptions changes may correlate
with each other. The sensitivity of the defined benefit obligation
has been calculated using the same method as in the calculation of
the pension obligation to be entered in the statement of financial
position (the current value of the defined benefit obligation at the
end of the reporting period using the projected unit credit method).
The most significant risks arising from defined benefit pension
plans:
Life expectancy: Most of the plan obligations are connected with
generating life-long benefits for employees and for this reason a
higher life expectancy will mean more obligations under the plan .
Oriola Sweden AB has recognised its ITP 2 old age pension liabilities
in full in its statement of financial position. Oriola Sweden AB’s old
age pension benefits other than ITP 2 are insured with Alecta.
Employer contributions to post-employment benefit plans are
expected to be EUR 0.5 million during 2024 financial year. The
weighted average duration of the defined benefit obligation is 19.4
years.
All plan assets of the Group relate to the Finnish voluntary insurance
plan and are held by the insurance company. They are part of the
insurance company’s investment assets and are considered to be
unquoted.
Net defined benefit liability in the statement of financial position is
defined as follows:
EUR million 2023 2022
Present value of funded obligations 14.8 13.2
Fair value of plan assets -1.4 -1.4
Deficit/surplus 13.4 11.8
Net liability (+) / assets (-) in the statement of
financial position 13.4 11.8
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is four calendar years. The possible subsequent plans will include
a three-year performance period as separately decided by the
Board of Directors. Eligible for participation in the first PSP 2022
are approximately 20 individuals, including the members of the
Oriola Management Team. The performance measures based on
which the potential share rewards under PSP 2022 will be paid
are earnings per share (EPS) and an environment-related target
(CO2). The first plan, PSP 2022, commenced effective as of the
beginning of 2022. It comprises a performance period covering
the calendar years 2022-2025, and the share rewards potentially
payable thereunder will be paid during the first half of 2026. The
payment of the rewards is conditional on the achievement of the
performance targets which the Board of Directors has set for the
plan and the individual participant’s continued employment or
service relationship with Oriola. If all the performance targets for
the PSP 2022 are fully achieved, the aggregate maximum number
of shares to be paid based on this plan is approximately 2,254,000
class B shares (referring to gross earning, from which the applicable
payroll tax is withheld).
The expenses recognised for the Performance Share Plan were EUR
0.4 (0.2) million in 2023.
THE BRIDGE PLAN (EQUITY-SETTLED)
The Bridge Plan for the years 2022-2023 covers specific incentive
and retention needs during the transition phase to the new LTI
structure. Eligible for participation in the Bridge Plan are the
same individuals as for PSP 2022. The Bridge Plan is a one-off plan
commencing effective for the years 2022-2023. The potential share
rewards payable based on the Bridge Plan will be paid in listed class
B shares during the first half of 2024. The performance measures
based on which the potential share rewards under the Bridge Plan
will be paid are the development of share price of Oriola’s class B
share (excluding dividends and other distribution to shareholders),
earnings per share (EPS) and an environment-related target (CO2). If
all the performance targets set for the Bridge Plan are fully achieved,
the aggregate maximum number of shares to be paid based on this
plan is approximately 1,127,000 class B shares (referring to gross
earning, from which the applicable payroll tax is withheld).
The expenses recognised for the Bridge Plan were EUR 0.1 (0.1)
million in 2023.
THE RESTRICTED SHARE PLAN (EQUITY-SETTLED)
The Restricted Share Plan for the years 2022-2024 consists of
annually commencing individual restricted share plans which
are subject to a separate decision of the Board of Directors. Each
plan comprises a restriction period with an overall length of three
years, extending to first half of the fourth year of the individual
plan. During the plan period, the company may grant fixed share
rewards to individually selected key employees. The granted share
rewards are paid to the selected participants in one or several
tranches latest by the end of the restriction period. The share
rewards are paid in listed class B shares. The first plan, RSP 2022,
commenced effective as of the beginning of 2022. The aggregate
maximum number of shares payable as a reward is approximately
225,400 class B shares (referring to gross earning, from which the
applicable payroll tax is withheld).
For all three programs, if the individual’s employment with Oriola
Corporation terminates before the payment of the reward, the
individual is, as a main rule, not entitled to any reward. The value
of the reward payable to each individual participant based on
the plans is limited by a maximum cap linked to a multiplier of
the individual’s annual salary. Oriola applies a share ownership
requirement to the CEO and the members of Oriola Management
Team. They are expected to retain ownership at least half of the
shares received under the incentive plans until the value of his/
her ownership in the company, in the case of the CEO, corresponds
to at least his/her annual gross base salary, and in the case of the
other the members of the Oriola Management Team, to at least half
of his/her annual gross base salary.’
SHARE SAVINGS PLAN
The share savings plan for the key personnel that Oriola
Corporation has had since 2013 was terminated in 2022 and a
total of 22,138 Oriola Corporation’s class B treasury shares were
conveyed in 2023 without consideration to the key personnel who
participated in the plan.
Inflation risk: Some of the Group’s pension obligations are linked
to inflation, and higher inflation will lead to higher liabilities.
Changes in bond yields: A decrease in bond yields will increase
plan liabilities, although this will be partially offset by an increase in
the value of the plans’ assets.
Use of estimates: The discounted value of the pension
obligation is based on several actuarial assumptions.
Changes in the assumptions have an impact on the carrying
amount of the pension obligation. Discount rate used is
one of the assumptions used. The interest rate used is
determined at the date of measurement by reference to
the maturity of corporate bonds issued by financially sound
companies that is similar to that of the pension obligation.
Other key assumptions impacting pension liabilities are
based on the circumstances valid at the time.
Share-based payments
Oriola has a share-based long-term incentive plan for the
company’s key employees, including the CEO and the Oriola
Management Team.
The incentive plan comprises a Performance Share Plan (the “PSP”)
and a share-based bridge plan to cover the transition phase to the
new LTI structure (the “Bridge Plan”). In addition, the long-term
incentive scheme comprises a Restricted Share Plan (the “RSP”)
as a complementary long-term share-based retention plan for
individually selected key employees in specific situations.
THE PERFORMANCE SHARE PLAN (EQUITY-SETTLED)
The Performance Share Plan for the years 2022-2025 consists of
annually commencing individual performance share plans, each of
which is subject to separate decision of the Board of Directors. Each
plan comprises a performance period followed by the payment
of the potential share rewards in listed class B shares of Oriola.
The length of the performance period of the first plan, PSP 2022,
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5. Working capital
5.1. Trade and other receivables
Trade receivables are amounts due from customers for
goods sold or services performed in the ordinary course of
business. Trade receivables are initially recognised when
they are originated and subsequently carried at amortised
cost. The Group applies the simplified approach to providing
for expected credit losses, which permits the use of the
lifetime expected loss allowance for all trade receivables.
Loss allowances are recognised as an expense in the
consolidated statement of comprehensive income. The part
of the trade receivables, which is held for sale, is classified
to measurement category fair value through profit and
loss. Sold non-recourse trade receivables’ credit risk and
contractual rights are transferred from the Group on the
selling date and related expenses are recognised as financial
expenses. Additional information on sales arrangement
for trade receivables can be found in note 8.3 Financial risk
management.
EUR million 2023 2022
Trade receivables 259.5 226.8
Income tax receivables 0.6 1.1
Prepaid expenses and accrued income 2.0 2.1
VAT receivables 10.4 1.7
Rental prepayments -0.1 0.1
Prepayments 0.0 0.0
Other receivables 1.5 0.8
Total 273.9 232.7
As a part of managing liquidity risk Oriola has open-ended frame
agreements in Sweden that allows the company to sell trade
receivables relating to Swedish wholesale businesses to the
financial institutions on non-recourse basis. Sold and from the
statement of financial position derecognised non-recourse trade
receivables were EUR 97.1 (100.8) million on the balance sheet
date. No significant changes are anticipated in the scope of the
agreements to sell trade receivables in 2024.
The credit risk in Finland is reduced by interest-bearing advance
payments from pharmacies. These interest-bearing advance
payments are presented as current interest-bearing liabilities in
the statement of financial position. On the balance sheet date, the
amount of prepayments was EUR 10.4 (11.8) million. Additional
information on the interest-bearing advance payments can be
found in note 8.2. Financial assets and liabilities.
Information about the Group’s exposure to credit and market risks,
and impairment losses for trade receivables is included in note 8.3.
Financial risk management.
Ageing and loss allowance of trade receivables at the closing date
2023 2022
EUR million
Gross
carrying
amount
Loss
allowance
Gross
carrying
amount
Loss
allowance
Not past due 239.3 -0.0 220.2 -0.0
Past due 1 - 30 days 7.7 -0.0 5.4 -0.0
Past due 31 - 180 days 12.9 -0.2 1.4 -0.0
Past due more than 180 days -0.0 -0.1 -0.1 0.0
Total 259.8 -0.3 226.9 -0.0
The carrying amount of trade receivables corresponds to the
maximum amount of credit risk relating to them at the balance
sheet date.
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5.3. Trade payables and other liabilities
EUR million 2023 2022
Trade payables 607.5 557.3
Income tax payables 0.1 1.0
Accrued liabilities 10.8 15.0
Derivatives measured at fair value through profit
and loss 0.6 0.0
VAT liabilities 5.6 5.9
Other current liabilities 2.1 1.8
Total 626.7 581.0
Material items included in accrued liabilities
EUR million 2023 2022
Accrued wages, salaries and social security
payments 7.9 10.7
Other accrued liabilities 2.9 4.3
Total 10.8 15.0
Other non-current liabilities
EUR million 2023 2022
Derivatives 0.4 0.5
Other non-current liabilities * 0.4 0.3
Total 0.8 0.7
* Other non-current liabilities include long-service benefit liability.
5.4. Provisions
A provision is recognised in the consolidated statement
of financial position when the Group has a present legal
or contractual obligation as a result of a past event and
it is probable that an outflow of resources embodying
economic benefits will be required to settle the obligation
and a reliable estimate can be made of the amount of the
obligation.
A restructuring provision is recognised when the Group
has a detailed, formal restructuring plan, has started the
implementation of the plan or has informed those affected
by the plan. No provision related to costs for continuing
operations is recognised.
At the end of 2023 and 2022 the Group did not have any provisions
in the consolidated statement of financial position.
5.2. Inventories
Inventories are presented in the consolidated statement
of financial position at the lower of cost and net realisable
value. The net realisable value is the estimated selling price
in the ordinary course of business less the estimated costs
of completion and the estimated necessary direct costs
of sale. The cost of inventories is determined on the basis
of FIFO principle. If the net realisable value is lower than
cost, a valuation allowance is recognised for inventory
obsolescence.
EUR million 2023 2022
Raw materials and consumables 0.1 0.1
Work in progress 0.0 0.6
Finished goods 162.8 147.8
Total 162.9 148.5
The inventories as of 31 December 2023 included pharmaceuticals
and health related products. No significant valuation allowances
have been recognised on inventories.
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6. Tangible and intangible assets and
other non-current assets
6.1. Property, plant and equipment
Tangible assets are initially recognised at historical cost
and they are subsequently measured at historical cost
less depreciation and impairment losses. The assets are
depreciated over their estimated useful life using the
straight-line method. The useful life of assets is reviewed
at least annually, and it is adjusted if necessary. The
estimated useful lives are as follows:
- Buildings 20–50 years
- Machinery and equipment 5–10 years
- Other tangible assets 3–10 years
Land areas are not subject to depreciation. Repair and
maintenance costs are recognised as expenses for
the period. Improvement investments are capitalised
providing they are expected to generate future economic
benefits. Gains and losses resulting from the disposal of
tangible assets are recognised as other operating income
or expense in the statement of comprehensive income.
Impairment of tangible assets is disclosed in the note 6.2.
Property. plant and equipment
EUR million
2023
Land and
water
Buildings
and
constructions
Machinery
and
equipment
Right-of-use
assets*
Other
tangible
assets
Advance payments
and construction in
progress Total
Historical cost 1 Jan 2023 1.8 59.7 60.0 31.6 0.7 3.4 157.2
Increases - 0.5 0.4 3.2 0.1 0.4 4.7
Decreases - -0.2 -2.9 -6.5 -0.0 -0.0 -9.6
Reclassifications - 0.1 0.2 - - -0.3 0.0
Transfer to assets held for sale (note 10.3.) - - -5.4 -3.6 -0.2 - -9.3
Foreign exchange rate differences 0.0 0.0 0.1 0.1 0.0 0.0 0.2
Historical cost 31 Dec 2023 1.8 60.1 52.4 24.7 0.5 3.5 143.2
Accumulated depreciation 1 Jan 2023 - -42.6 -35.5 -17.8 0.3 -3.2 -99.5
Accumulated depreciation related to decreases and reclassifications - 0.2 2.3 1.6 - - 4.1
Depreciation for the financial year - -1.7 -4.3 -3.1 -0.1 - -9.1
Impairments - - -0.2 - - - -0.2
Transfer to assets held for sale (note 10.3.) - - 3.4 3.3 0.1 - 6.9
Foreign exchange rate differences - -0.0 -0.2 -0.1 -0.0 -0.0 -0.3
Accumulated depreciation 31 Dec 2023 - -44.1 -34.4 -16.1 -0.3 -3.3 -98.2
Carrying amount 1 Jan 2023 1.8 17.1 24.5 13.8 0.3 0.1 57.7
Carrying amount 31 Dec 2023 1.8 16.0 18.0 8.6 0.3 0.3 45.0
2022
Historical cost 1 Jan 2022 1.9 60.1 102.4 241.3 43.0 9.8 458.5
Increases - 0.0 1.5 5.5 0.4 1.3 8.7
Disposal of operations (note 10.3.) - -0.0 -40.6 -189.0 -39.3 -2.2 -271.2
Decreases - - -0.5 -8.0 - -0.0 -8.6
Reclassifications - 1.2 3.8 - 0.0 -4.7 0.4
Foreign exchange rate differences -0.0 -1.6 -6.6 -18.2 -3.3 -0.8 -30.6
Historical cost 31 Dec 2022 1.8 59.7 60.0 31.6 0.7 3.4 157.2
Accumulated depreciation 1 Jan 2022 - -41.3 -71.2 -162.0 -28.1 - -302.5
Accumulated depreciation related to disposal of operations - - 35.5 129.7 25.8 - 191.0
Accumulated depreciation related to decreases and reclassifications - - 0.5 7.4 - - 7.9
Depreciation for the financial year, continuing operations - -1.9 -4.6 -4.0 -0.0 - -10.6
Depreciation for the financial year, discontinued operations (note 10.3.) - - -0.2 -1.7 -0.3 - -2.2
Impairments, continuing operations - - - - - -3.4 -3.4
Impairments, discontinued operations (note 10.3.) - -0.1 -0.2 - - - -0.3
Foreign exchange rate differences - 0.8 4.7 12.7 2.3 0.2 20.6
Accumulated depreciation 31 Dec 2022 - -42.6 -35.5 -17.8 -0.3 -3.2 -99.5
Carrying amount 1 Jan 2022 1.9 18.8 31.2 79.4 14.9 9.8 155.9
Carrying amount 31 Dec 2022 1.8 17.1 24.5 13.8 0.3 0.1 57.7
* Decreases in 2023 mainly relate to Brunna
warehouse, which was closed. For more details
about the right-of-use assets please refer to
section 7. Leases.
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6.2. Goodwill and other intangible assets
Goodwill: Goodwill arising from business combinations is recognised
as the amount by which the aggregate of the fair value of the
consideration transferred, the acquisition date fair value of any
previously held interest and any non-controlling interest exceeds the
fair value of the net assets acquired. Goodwill is not amortised but
is tested for impairment at least annually according to the business
structure in force at the time of impairment testing. For impairment
testing, goodwill is allocated to cash-generating units. Goodwill is
measured at cost less accumulated impairment losses. Impairment
losses are recognised in the statement of comprehensive income.
Other intangible assets: Other intangible assets are initially
recognised at historical cost and they are subsequently measured at
historical cost less amortisation and impairment losses. Intangible
assets not yet available for use are tested annually for impairment.
Other intangible assets include sales licences, trademarks, patents,
software licences and product and marketing rights. Assets with finite
useful life are amortised over their useful life, using the straight-line
method. Research and development costs are normally expensed
as other operating expenses for the reporting period in which they
are incurred. Expenditures on development is capitalised only
when it relates to new products or services that are technically and
commercially feasible. The majority of the Group’s development
expenditure does not meet the criteria for capitalisation and are
recognised as expenses as incurred. Configuration and customisation
costs in a cloud service contract, which do not meet the definition
of an intangible asset, and which are distinct from the actual cloud
service, are recognised as expense when the service is received.
Customisation costs which are not distinct from the actual cloud
services, are recognised as advance payments in the statement of
financial position and expensed over the estimated term of the cloud
service contract. The estimated useful lives of other intangible assets
are as follows:
Intangible rights:
- Patents and trademarks 10 years
- Software 5–10 years
Other intangible assets 3–10 years
6.2. Goodwill and other intangible assets
EUR million
2023 Goodwill
Intangible
rights
Other
intangible
assets*
Advance payments
and construction in
progress ** Total
Historical cost 1 Jan 2023 61.1 20.1 32.4 7.0 120.6
Increases - 0.1 0.1 1.8 2.0
Decreases - -0.6 -1.9 -5.9 -8.4
Impairments -21.4 - - - -21.4
Reclassifications - 0.5 0.1 -0.6 -0.0
Transfer to assets held for sale (note 10.3.) -4.5 -4.5 - - -9.0
Foreign exchange rate differences 0.0 0.0 - 0.0 0.0
Historical cost 31 Dec 2023 35.2 15.5 30.8 2.4 83.9
Accumulated amortisation 1 Jan 2023 - -17.6 -14.9 -6.4 -38.9
Accumulated amortisation related to decreases and reclassifications - 0.6 1.9 5.9 8.4
Amortisation for the financial year - -0.6 -4.2 - -4.7
Transfer to assets held for sale (note 10.3.) - 2.6 - - 2.6
Foreign exchange rate differences - -0.0 - -0.0 -0.0
Accumulated amortisation 31 Dec 2023 - -15.1 -17.2 -0.5 -32.7
Carrying amount 1 Jan 2023 61.1 2.5 17.5 0.6 81.7
Carrying amount 31 Dec 2023 35.2 0.5 13.6 1.9 51.2
2022
Historical cost 1 Jan 2022 273.5 111.3 35.5 22.3 442.6
Increases - 0.8 0.5 3.9 5.2
Disposal of operations (note 10.3.) -196.6 -84.0 -0.8 -14.7 -296.1
Decreases - -0.8 -4.9 -0.1 -5.8
Reclassifications - 0.7 2.2 -3.3 -0.4
Foreign exchange rate differences -15.8 -8.0 - -1.1 -25.0
Historical cost 31 Dec 2022 61.1 20.1 32.4 7.0 120.6
Accumulated amortisation 1 Jan 2022 - -82.5 -15.6 - -98.1
Accumulated amortisation related to disposal of operations (note 10.3.) - 59.4 0.3 - 59.7
Accumulated amortisation related to decreases and reclassifications - 0.7 4.6 - 5.3
Amortisation for the financial year. continuing operations - -0.8 -4.0 - -4.8
Amortisation for the financial year. discontinued operations (note 10.3.) - -0.5 -0.3 - -0.8
Impairments - - - -6.4 -6.4
Foreign exchange rate differences - 6.0 - 0.0 6.0
Accumulated amortisation 31 Dec 2022 - -17.6 -14.9 -6.4 -38.9
Carrying amount 1 Jan 2022 273.5 28.8 19.9 22.3 344.5
Carrying amount 31 Dec 2022 61.1 2.5 17.5 0.6 81.7
* Other intangible assets include significant expenses for installation and specialist work related to the implementation of computer software.
** Advance payments and construction in progress include mainly costs related to software.
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Impairments
Impairment of tangible and intangible assets:
The Group assesses at each reporting date whether there
is any indication that an asset may be impaired. If any
indication exists, the Group estimates the asset’s recoverable
amount. The recoverable amount is the higher of the net
sales price or value in use, which is the present value of the
expected future cash flows expected to be derived from the
asset.
The impairment loss is recognised in the statement of
comprehensive income if the carrying amount of the asset
exceeds the recoverable amount. An impairment loss is
reversed if there is a change in the circumstances and
the recoverable amount exceeds the carrying amount.
The reversal of impairment loss cannot exceed the asset’s
carrying amount without any impairment loss.
Allocation and impairment testing of goodwill:
The goodwill impairment test is conducted at least annually
or more frequently if there is any indication that goodwill
may be impaired. Impairment testing is conducted according
to the business structure in force at the time of impairment
testing. Impairment is recognised in the statement of
comprehensive income under Depreciation, amortisation
and impairments. Goodwill impairment losses are not
reversed.
IMPAIRMENT OF TANGIBLE AND INTANGIBLE ASSETS
The Group has recognised an EUR 0.2 million impairment of
machinery and equipment related to Brunna warehouse in
Sweden, which was closed.
In 2022, an impairment loss of EUR 3.4 million recorded in
other tangible assets and EUR 6.4 million in other intangible
assets not yet available for use relate to the earlier automation
development, outdated technology and partially implemented
project that were discontinued.
GOODWILL IMPAIRMENT TESTING
The recoverable amount of the cash-generating units (CGUs) in
impairment testing was based on value-in-use calculations. Value-
in-use has been determined based on discounted cash flows (DCF-
model). The cash flow forecasts are based on three-year strategic
plans approved by the management and are consistent with the
current business structure. The most important assumptions in the
strategic plans are estimates of overall long-term growth in the
market and the market position as well as the profitability of the
Group businesses. The foreign exchange rates used in converting
the calculations into euros are those prevailing at the time of
testing.
The main parameters used in the impairment testing are net sales
growth percentage, EBIT percentage, terminal growth percentage
and discount rate.
The three-year net sales forecasts are based on the management's
assessment of the net sales growth, market development forecasts
available from external information sources and sales growth based
on the Group’s actions.
The terminal growth rate used in the calculations is based on the
management’s assessments of the long-term growth. In estimating
the terminal growth rate, both country-specific and business sector
growth forecasts available from external information sources as
well as the characteristic features of each operating segment and
cash generating unit are considered. Terminal growth rate for cash
generating units was 2.0% from the year 2026. The discount rate
used in the calculation is based on the Group’s weighted average
cost of capital, taking into account the industry and country specific
risks in each of the Group's operating segment. When defining the
discount rates, Oriola has acquired the necessary information from
an external information source.
RESULT OF GOODWILL IMPAIRMENT TESTING
Oriola announced in October 2023 that it will divest its dose
dispensing business in Sweden and in the third quarter of the year
recognised a goodwill impairment loss of EUR 21.4 million in the
dose dispensing cash generating unit. The result of impairment
testing performed in the last quarter of the year shows that the
“value in use” in the tested cash generating units exceeds the book
value of the carrying amounts, and thus no further impairment
of goodwill was recognised in 2023. In 2022, no impairment of
goodwill was recognised.
GOODWILL AND PROJECTION PARAMETERS APPLIED
2023
Dose
dispensing
Distribution
services
Expert
services
Goodwill 2.3 25.9 6.9
Pre-tax discount rate % 10.7 9.5 9.9
Terminal growth % 2.0 2.0 2.0
2022
Dose
dispensing
Distribution
services
Expert
services
Goodwill 28.2 25.9 6.9
Pre-tax discount rate % 8.6 9.0 9.1
Terminal growth % 2.0 2.0 2.0
Goodwill of EUR 4.5 million relates to the dose dispensing business
in Sweden and has been classified as held for sale in 2023. More
information is presented in the note 10.3.
Sensitivity analysis for the following projection parameters have
been performed: discount rate, EBIT percentage, terminal growth
percentage, and net sales growth percentage. For Dose dispening
CGU the recoverable amount would equal the carrying amount if
pre-tax rate increased 0.8 percentage points, or if EBIT percentage
decreased 0.2 percentage points, or if terminal growth percentage
decreased 0.9 percentage point, or if sales growth percentage
decreased 0.8 percentage points. For other CGUs, the management
believes that any reasonably possible change in the projection
parameters would not cause carrying amount of the cash-
generating units to exceed its recoverable amount.
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Use of estimates: The Group’s assets with an indefinite
useful life are subject to annual impairment testing and
any indication of impairment of assets is assessed using
information from external sources on market development
as well as information from internal sources on business
performance and estimates. When analysing these sources
and information and making conclusions, estimates are
used. The recoverable values used in impairment testing are
discounted future cash flows that can be obtained through
usage and possible sale of the assets. If the carrying amount
of the asset exceeds either its recoverable amount or fair
value, the difference is recognised as an impairment charge.
The preparation of such calculations requires the use of
estimates.
6.3. Other non-current assets
EUR million
2023
Other shares
and share-
holdings
Other non-
current assets Total
Carrying amount 1 Jan 2023 34.2 4.0 38.3
Decreases - -2.1 -2.1
Changes in fair value -20.6 - -20.6
Foreign exchange rate
differences - 0.0 0.0
Carrying amount 31 Dec 2023 13.6 1.9 15.5
2022
Carrying amount 1 Jan 2022 34.2 0.7 34.9
Increases - 3.4 3.4
Decreases -0.0 -0.0 -0.0
Foreign exchange rate
differences -0.0 -0.0 -0.0
Carrying amount 31 Dec 2022 34.2 4.0 38.3
Other shares and shareholdings
The investment in Doktor.se is accounted for as a financial
asset. Additional information can be found in note 8.2
Financial assets and liabilities. Oriola classifies the shares
of Doktor.se as the investment in Doktor.se is seen as
strategic investment, which supports Oriola’s business
operations. The shares are presented in the consolidated
statement of financial position as part of other non-current
assets. Possible changes in fair value of the investment are
recognised in other comprehensive income and they shall
not subsequently be transferred to profit and loss. Possible
dividends are recognised as dividend income in the profit
and loss.
Other shares and shareholdings include Oriola’s holding in the
Swedish online medical centre Doktor.se. Doktor.se offers personal
digital healthcare services to its customers. Doktor.se has a
comprehensive organisation with specialist nurses, doctors and
psychologists.
The applied valuation method for the shares in Doktor.se is based
on realised transactions. In 2023, a decrease of EUR 20.6 million was
recognised in the fair value of shareholdings in Doktor.se due to
the realised transactions at lower price.
Oriola’s ownership at the end of the reporting period was
approximately 5% of the total number of shares in Doktor.se.
Oriola’s ownership of shares in Doktor.se has not changed during
years 2022 and 2023.
Use of judgements: The management has to evaluate
at each balance sheet date whether there have been any
changes to the fair value of the shares measured at fair value
through other comprehensive income. The applied valuation
method for the shares in Doktor.se is based on realised
transactions.
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7. Leases
whether a contract conveys the right to control the use of
an identified asset, it is assessed whether:
- The contract involves the use of an identified asset
- Oriola has the right to obtain substantially all of the
economic benefits from the use of the asset throughout
the period of use
- Oriola has the right to direct the use of the asset.
The right-of-use asset is initially measured at cost, which
comprises:
- The initial amount of lease liability
- Any lease payments made at or before the
commencement date
- Any initial direct costs incurred by Oriola
- An estimate of costs to be incurred by Oriola in
dismantling and removing the underlying assets or
restoring the site on which the assets are located
The lease liability is initially measured at the present
value of the lease payments that are not paid at the
commencement date. The lease payments included in the
measurement of the lease liability include the following:
- Fixed payments, including in-substance fixed payments
- Variable lease payments that depend on an index or a
rate, initially measured using the index or the rate as at
the commencement date
- Amounts expected to be payable under a residual value
guarantee
- The exercise price of a purchase option that Oriola is
reasonably certain to exercise
- Penalties for early termination of a lease if the
termination is taken into account in determining lease
period.
The lease payments included in the measurement of lease
liability exclude variable elements which are dependent on
sales or usage. Variable payments not included in the initial
measurement of the lease liability are recognised as an
expense over the lease term.
The lease payments are discounted using the interest
rate implicit in the lease or, if that rate cannot be readily
determined, the incremental borrowing rate. The incremental
borrowing rate is the rate of interest that a lessee would
have to pay to borrow over a similar term. and with a
similar security, the funds necessary to obtain an asset of a
similar value to the right of use asset in a similar economic
environment. At Oriola. the incremental borrowing rates
are defined for the lease terms of 1, 3, 5 and 10 years. The
components of the incremental borrowing rate are:
- Risk free rate which reflect the different jurisdictions
- and currencies: SEK and EUR swap rates for 1 to 3 years
and Government bonds for Finland and Sweden for 5
to 10 years
- Oriola’s internal credit rating for the parent company as
a company specific margin. As all the Group’s treasury
functions are centralized to the parent company and
all funding for the Group is managed centrally by the
parent company resulting in the parent providing a
guarantee of the lease payments to the lessor, the
pricing of the lease is more significantly influenced
by the credit standing of the parent than that of the
subsidiary.
- The incremental borrowing rates are reviewed monthly.
The lease term comprises of:
- Non-cancellable period of lease contract
- Periods covered by an option to extend the lease if Oriola is
reasonably certain to exercise that option
Leases: The Group leases various assets, which are divided
into following asset classes:
- Real estate
- IT equipment
- Vehicles
- Other machinery and equipment
The Group’s real estate leases include leases of office
premises and warehouse premises. Also leases for parking
space as well as machinery and equipment of buildings
is included the real estate class. The usual duration of the
leases is 3 years, and the contracts are regularly renewed for
the next lease period. For most of the contracts the lease
payments are adjusted every year based on the change of
the consumer price index.
The Group leases of vehicles consist of company cars, which
are used as part of employee benefits and forklifts, which are
used in warehouses. The lease period for the company cars is
usually 3 years and for forklifts 5 or 6 years.
The Group leases IT equipment such as servers, printers and
laptops. The lease period for IT equipment is usually 3-5
years.
Leases of other machinery and equipment include waste
presses in the warehouses and dose dispensing equipment.
containers, furniture and other machinery and equipment
such as franking machines and coffee machines.
At inception of a contract it is assessed whether a contract
contains a lease. A contract contains a lease if it conveys the
right to control the use of an identified asset for a period
of time in exchange for consideration. In order to assess
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- Periods covered by an option to terminate the lease if the
lessee is reasonably certain not to exercise that option.
The exemption for short term leases is applied to real-estate
leases and the exemption for low-value assets is applied to
leases of IT equipment and other machinery and equipment.
For short term leases of real estate leases that have a lease
term of 12 months or less and for low-value leases of IT
equipment and other machinery equipment the right-of-
use asset and lease liability is not recognised. The lease
payments associated with these leases are recognised as an
expense on a straight-line basis over the lease term. An asset
is considered to be a low-value asset, if the value of the asset
when it is new is less than EUR 5.000 or SEK 50.000.
The right-of-use asset is subsequently measured at cost
less accumulated depreciation and less any accumulated
impairment losses and adjusted for any remeasurements
of the lease liability. Depreciation is calculated using the
straight-line method from the commencement date to the
earlier of the end of useful life of the right-of-use asset or the
end of the lease term. The estimated useful lives of right-
of-use assets are determined on the same basis as those of
property, plant and equipment.
The lease liability is measured at amortised cost using the
effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in
an index or a rate, if there is a change in Oriola’s estimate of
the amount expected to be payable under a residual value
guarantee, or if Oriola changes its assessment of whether
it will exercise a purchase, extension or termination option.
When the lease liability is remeasured, a corresponding
adjustment is made to the carrying amount of the right-of-
use asset or is recognised in the profit or loss if the carrying
amount of the right-of-use asset has been reduced to zero.
The right-of-use assets are presented in property, plant
and equipment and the lease liabilities in interest-bearing
liabilities in the statement of financial position. The lease
liabilities with the maturity of more than 12 months are
presented in the non-current interest-bearing liabilities and
the lease liabilities with the maturity of 12 months or less are
presented in the current interest-bearing liabilities.
The depreciations of right-of-use assets are presented in
depreciation, amortisation and impairments in the statement
of comprehensive income. The interest expense on the lease
liability is presented within the financial expenses. The lease
payments of low-value assets and short-term leases are
included in other operating expenses in the statement of
comprehensive income.
In the statement of cash flows the cash payments for the
principal portion of the lease liability are presented within
financing activities. The cash payments for the interest
portion of the lease liability as well as short term lease
payments. payments for leases of low-value assets and
variable lease payments not included in the measurement of
the lease liabilities are presented within operating activities.
Use of estimates: The Group’s most significant leases
relate to the office and warehouse premises, for which the
management has taken into account the location of the
premises, their importance to the Group’s operations and
the availability of the alternative premises when determining
the lease term. The probable lease term for the leases, which
are valid until further notice is estimated based on the
business plans, taking into account the costs of termination.
Extension options (or periods after termination options)
are only included in the lease term if the lease is reasonably
certain to be extended (or not terminated).
7.1. Leases in the statement of financial position
The Group has recognised following amounts in the statement of
financial position relating to leases:
Right-of-use assets
EUR million 2023 2022
Real estate 7.5 13.1
IT equipment 0.0 0.0
Vehicles 1.0 0.5
Other machinery and equipment 0.1 0.1
Total 8.6 13.8
Lease liabilities
EUR million 2023 2022
Current 2.8 3.4
Non-current 6.1 10.9
Total 8.9 14.3
Additions to the right-of-use assets during year 2023 were EUR 3.2
(5.5) million.
7.2. Leases in the statement of comprehensive income
The Group has recognised following amounts in the statement
of comprehensive income relating to leases:
EUR million 2023 2022
Depreciation charge of right-of-use assets
Real estate -2.6 -3.5
IT equipment -0.0 -0.1
Vehicles -0.4 -0.4
Other machinery and equipment -0.0 -0.0
Total depreciation -3.1 -4.0
Interest expense (included in financial expenses) -0.3 -0.4
Expense relating to short-term leases
Expense relating to short-term leases
(included in other operating expenses) -0.1 -0.2
Expense relating to leases of low-value assets
(included in other operating expenses) -0.3 -0.3
Gains from changes in leases (included in other
operating income) 0.1 0.1
The total cash outflow for leases in 2023 was EUR 4.3 (4.6) million.
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8.1. Financial income and expenses
Interest income and expenses:
Interest income and expenses are recognised on a time-
proportion basis using the effective interest method .
The average interest rate on the interest-bearing liabilities
excluding lease liabilities was 3.76% (2.59%) in 2023.
Financial income and expenses
EUR million 2023 2022
Financial income
Interest income on financial assets measured at
amortised cost 1.8 3.8
Interest income on financial assets and liabilities
recognised at fair value 0.0 0.3
Changes in fair values of financial assets and
liabilities recognised at fair value, net 0.1 -
Foreign exchange rate gains from financial assets
and liabilities measured at amortised cost, net - 2.1
Total 2.0 6.2
Financial expenses
Interest expenses on financial liabilities measured
at amortised cost 5.0 1.8
Interest expenses on leases 0.3 0.4
Changes in fair values of financial assets and
liabilities recognised at fair value, net - 1.9
Foreign exchange rate losses on financial assets
and liabilities measured at amortised cost, net 0.2 -
Other financial expenses 4.1 2.9
Total 9.6 6.9
Financial income and expenses, total -7.6 -0.7
Other financial expenses are mainly related to the sale of trade
receivables in Sweden.
8.2. Financial assets and liabilities
Classification and measurement: Financial assets and
liabilities are recognised at the fair value at the settlement
date except derivatives, which are recognised at the trade
date in the statement of financial position. The Group’s
financial assets and liabilities include cash and cash
equivalents, loans and other financial receivables, trade
receivables, trade payables, loans and derivatives.
Financial assets and liabilities are classified into the following
measurement categories:
- Fair value through profit and loss
- Fair value through other comprehensive income
- Amortised cost
The classification of financial assets into different
measurement categories depends on the business model
for managing the financial asset and the contractual cash
flow characteristics of the financial asset. The classification
of financial liabilities into different measurement categories
depends on the purpose for which the financial liabilities
were initially acquired. The measurement category for
financial assets and liabilities is determined at the acquisition
date. Financial assets are derecognised when the Group
loses the rights to receive the contractual cash flows on the
financial asset or it transfers substantially all the risks and
rewards of ownership outside the Group. Financial liabilities
are derecognised when the obligation specified in the
contract is discharged or cancelled or expires.
Financial assets measured at fair value through profit
and loss: Money market investments, trade receivables held
for sale and derivatives which are not designated as hedges
are measured at fair value through profit and loss. Assets
within this category are short-term assets with a maturity of
less than 12 months and are measured at fair value using the
market price on the balance sheet date.
Both realised and unrealised gains and losses arising from
the changes in fair value are recognised in the consolidated
statement of comprehensive income for the financial period
during which they incurred.
Financial assets measured at amortised cost: Cash and
cash equivalents consist of cash in hand and cash at the bank
accounts. Items classified as cash and cash equivalents have
a maturity of less than 3 months from the acquisition date.
The used credit limits are included in current interest-bearing
liabilities.
Loans and other receivables are measured at amortised cost.
Receivables are classified as current financial assets unless
their maturity date is more than 12 months from the balance
sheet date. Trade and other receivables are included in this
category except for trade receivables held for sale, which
are measured at fair value through profit and loss. Trade
receivables are recognised at their original book value. A
valuation allowance for impairment of trade receivables is
recognised when there is objective evidence that the Group
will not be able to collect all amounts due according to
the original terms of the receivables. Significant financial
difficulties of the debtor, the probability of the debtor’s
bankruptcy, failure to pay and significant delay of payments
are considered to be justified reasons for the impairment of
trade receivables. The Group applies the simplified approach
to providing for expected credit losses, which permits the
use of the lifetime expected loss provision for all trade
receivables. Impairments are recognised as an expense in
the consolidated statement of comprehensive income. Sold
non-recourse trade receivables’ credit risk and contractual
8. Capital structure
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rights are transferred from the Group on the selling date
and related expenses are recognised as financial expenses.
Information about the Group’s exposure to credit and market
risks, and impairment losses for trade receivables is included
in note 8.3. Financial risk management .
Financial assets measured at fair value through
other comprehensive income: In 2018 and 2020, Oriola
Corporation invested a total of EUR 14.2 million in the
Swedish online medical centre Doktor.se. The investment is
accounted for as a financial asset. Oriola classifies the shares
of Doktor.se as fair value through other comprehensive
income. The investment in Doktor.se is seen as strategic
investment, which supports Oriola’s business operations.
The purchase price of the shares is recognised in the
consolidated statement of financial position in other
non-current assets. Possible changes in fair value of the
investment are recognised in other comprehensive income
and they shall not subsequently be transferred to profit and
loss. The applied valuation method for the shares in Doktor.
se is based on realised transactions. Possible dividends are
recognised as dividend income in the profit and loss. In June
2021, Oriola sold approximately 50% of its shareholding
in Doktor.se for EUR 33.9 million. More information on the
investment in Doktor.se can be found in note 6.3. Other non-
current assets.
Financial liabilities measured at amortised cost: Financial
liabilities measured at amortised cost are recognised in
the consolidated statement of financial position at the net
value received on the date of acquisition. Transaction costs
are included in the original carrying amount of financial
liabilities. Financial liabilities are subsequently measured at
amortised cost using the effective interest method. Interest
expenses are recognised in the statement of comprehensive
income using the effective interest method. Financial
liabilities that expire within 12 months from the balance
sheet date, including bank overdrafts in use, are recognised
within current interest-bearing liabilities, and those expiring
in a period exceeding 12 months, are recognised within non-
current interest-bearing liabilities.
Financial assets and liabilities by category
2023 2022
EUR million Note Fair value Book value Hierarchy Fair value Book value Hierarchy
Derivatives designated as hedges 8.3 1.8 1.8 Level 2 3.3 3.3 Level 2
Financial assets recognised at fair value
through profit and loss
Derivatives measured at fair value through profit
and loss 8.3. 0.9 0.9 Level 2 0.8 0.8 Level 2
Other investments measured at fair value through
OCI 6.3. 13.6 13.6 Level 3 34.2 34.2 Level 3
Trade receivables for sale 5.1. 8.0 8.0 Level 2 6.1 6.1 Level 2
Financial assets measured at amortised cost
Cash equivalents 138.4 138.4 Level 2 160.6 160.6 Level 2
Trade receivables and other receivables 5.1. 254.0 254.0 Level 2 223.6 223.6 Level 2
Financial assets, total 416.8 416.8 428.6 428.6
Derivatives designated as hedges 8.3. 0.4 0.4 Level 2 - - Level 2
Financial liabilities recognised at fair value
through profit and loss
Derivatives measured at fair value through profit
and loss 8.3. 0.6 0.6 Level 2 0.5 0.5 Level 2
Financial liabilities measured at amortised cost
Non-current interest-bearing liabilities 7.1 7.1 Level 2 69.9 69.9 Level 2
Current interest-bearing liabilities 110.7 110.7 Level 2 67.0 67.0 Level 2
Trade payables and other current liabilities 5.3. 620.2 620.2 Level 2 573.9 573.9 Level 2
Financial liabilities, total 738.9 738.9 711.3 711.3
Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2: Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
Level 3: Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs).
Financial liabilities measured at fair value through
profit and loss: The Group’s financial liabilities measured
at fair value through profit and loss include derivatives
which are not designated as hedges. More information on
measurement of derivatives can be found from note 8.3.
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Reconciliation of financial assets recognised at fair value according
to the level 3
EUR million 2023 2022
Carrying amount 1 Jan 34.2 34.2
Change in fair value -20.6 -
Carrying amount 31 Dec 13.6 34.2
Financial assets recognised at fair value through other
comprehensive income (level 3) include Oriola’s holding in the
Swedish online medical centre Doktor.se. In 2023 a decrease of EUR
20.6 million was recognised in the fair value of shareholdings in
Doktor.se due to the realised transactions. More information on the
investment in Doktor.se and its valuation can be found in note 6.3.
Other non-current assets.
Net debt
EUR million 2023 2022
Loans from financial institutions 1.0 59.1
Lease liabilities 6.1 10.9
Non-current interest-bearing liabilities 7.1 69.9
Loans from financial institutions 58.1 2.0
Issued commercial papers 39.3 49.8
Advances received from pharmacies 10.4 11.8
Lease liabilities 2.8 3.4
Current interest-bearing liabilities 110.7 67.0
Interest-bearing liabilities, total 117.7 136.9
Cash and cash equivalents 138.4 160.6
Net debt -20.6 -23.7
Interest-bearing liabilities
Non-current
EUR million 2023 2022
Loans from financial institutions 1.0 59.1
Lease liabilities 6.1 10.9
Total 7.1 69.9
Current
EUR million 2023 2022
Loans from financial institutions 58.1 2.0
Issued commercial papers 39.3 49.8
Advances received from pharmacies 10.4 11.8
Lease liabilities 2.8 3.4
Total 110.7 67.0
Interest-bearing liabilities by currency
EUR million 2023 2022
EUR 84.0 97.9
SEK 33.8 39.0
Total 117.7 136.9
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Change in net debt
EUR million
2023
Loans from
financial
institutions
Commercial
papers
Advances from
pharmacies Lease liabilities
Cash and cash
equivalents Total
Carrying value, at 1 January 2023 -61.1 -49.8 -11.8 -14.3 160.6 23.7
Change in net debt, cash:
Repayments of non-current loans 2.0 - - - - 2.0
Repayments of lease liabilities - - - 3.5 - 3.5
Change in other current liabilities - 10.5 1.4 - - 11.9
Change in cash and cash equivalents - - - - -22.3 -22.3
Cash flows, total 2.0 10.5 1.4 3.5 -22.3 -4.9
Change in net debt, non-cash:
Change in lease liabilities - - - 1.6 - 1.6
Changes arising from losing control of subsidiaries - - - 0.2 0.2
Foreign exchange adjustments -0.1 - - 0.1 -0.0 0.1
Non-cash movements, total -0.1 - - 1.9 -0.0 1.8
Carrying value, at 31 December 2023 -59.1 -39.3 -10.4 -8.9 138.4 20.6
EUR million
2022
Loans from
financial
institutions
Commercial
papers
Advances from
pharmacies Lease liabilities
Cash and cash
equivalents Total
Carrying value, at 1 January 2022 -65.3 -49.8 -16.0 -78.8 109.1 -100.8
Change in net debt, cash:
Repayments of non-current loans 2.0 - - - - 2.0
Repayments of lease liabilities - - - 15.7 - 15.7
Change in other current liabilities - -0.0 4.3 - - 4.2
Change in cash and cash equivalents - - - - 51.6 51.6
Cash flows, total 2.0 -0.0 4.3 15.7 51.6 73.6
Change in net debt, non-cash:
Change in lease liabilities - - - -4.8 - -4.8
Changes arising from losing control of subsidiaries - - - 50.2 50.2
Foreign exchange adjustments 2.2 - - 3.4 -0.1 5.5
Non-cash movements, total 2.2 - - 48.8 -0.1 50.9
Carrying value, at 31 December 2022 -61.1 -49.8 -11.8 -14.3 160.6 23.7
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8.3. Financial risk management
The financial risks relating to the business operations of the
Oriola Group are managed in accordance with the treasury
policy approved by the Board of Directors. Oriola’s centralised
Group Treasury is responsible for implementing, monitoring and
reporting of the treasury policy.
Oriola’s Group Treasury’s main objectives are to maintain solid
long-term financial position and secure daily liquidity of the
Group and to efficiently manage currency and interest rate risks.
The objective of financial risk management is to hedge against
unfavourable changes in the financial markets and to minimise
the impact of foreign exchange, interest rate, refinancing
and liquidity risks on the Group’s cash reserves, profits and
shareholders’ equity. Approved hedging instruments are set in
the treasury policy.
Currency risk: The most important country-specific operating
currencies for the Oriola Group are the euro (EUR) and the
Swedish krona (SEK). A substantial proportion of procurements
and sales are conducted in the reporting currency of the
subsidiaries, which considerably reduces the currency risk. In
accordance with its treasury policy, Oriola’s internal loans and
deposits are denominated in the local currency of each subsidiary.
Transaction risk: Transaction risks arise from commercial and
finance-related transactions and payments made by the business
units, which are denominated in a currency other than the unit’s
reporting currency. Due to the nature of business operations,
Oriola’s transaction risks are minor. In accordance with its treasury
policy, Oriola’s internal loans and deposits are denominated in
the local currency of each subsidiary, mainly in Swedish krona.
In addition, Oriola Corporation had an EUR 26.1 (26.1) million
Swedish krona denominated external loan on the balance sheet
date. In accordance of the treasury policy, transaction risk arising
from the items in the statement of financial position recognised
in the statement of comprehensive income is aimed to be fully
hedged with derivatives. On the balance sheet date Swedish
krona denominated open transaction position was EUR 0.0 (0.4)
million.
Translation risk: Oriola’s most significant translation risk
concerns items in Swedish krona. Translation risks arise from
capital investments and goodwill in foreign subsidiaries. On the
balance sheet date Oriola had not hedged the equity-related
translation risks. On the balance sheet date Swedish krona
denominated translation risk position was EUR 66.2 (92.5) million.
Translation risk sensitivity: A 10% weakening/strengthening
of Swedish krona would have an impact of EUR -/+6.0 (-/+8.7)
million in the Group’s equity.
Liquidity risk: The objective of liquidity risk management is to
maintain adequate liquid assets and revolving credit facilities
so that Oriola is able to meet all of its financial obligations. The
Group’s liquidity management is based on 12-month cash flow
forecasts and 4-week rolling cash flow forecasts drawn up on a
weekly basis. Oriola has diversified its refinancing risk among
several different counterparties and various financing sources.
In June 2021, Oriola signed an unsecured revolving credit
facility agreement for a total of EUR 140 million. The facility is
committed. In April 2023, the maturity of the agreement was
extended by one year, and the revolving credit facility matures in
June 2026. The margin of the revolving credit facility is linked to
Oriola’s financial covenants and the performance of sustainability
targets. The committed long-term revolving credit facility of EUR
140.0 million and short-term uncommitted credit account limits
of EUR 34.5 (34.9) million were unused on the balance sheet
date. In addition, Oriola has a EUR 200 (200) million uncommitted
commercial paper programme of which EUR 39.3 (49.8) million
had been issued on the balance sheet date. Maturity distribution
of financial assets and liabilities is presented on the following
page. Oriola’s cash and cash equivalents at the end of 2023
totalled EUR 138.4 (160.6) million.
Oriola’s financial agreements include financial covenants that are
maximum net debt to EBITDA -ratio of 3.0 and maximum net debt
to equity ratio of 100%. In addition to financial covenants, the
margin of the revolving credit facility is linked to the performance
of the Group’s sustainability targets. Regarding the standard IFRS
16 Leases, the Group has agreed with financial institutions on
applying the financial reporting standards in force at the end of
2018 to all of the current long-term agreements. At the end of the
reporting period the financial covenants were fulfilled.
Oriola’s net working capital was EUR -185.0 (-182.0) million on the
balance sheet date. Oriola’s net working capital was negative on
the balance sheet date owing to the terms of payment defined
in principal and customer agreements and to the non-recourse
factoring programmes used in the retail and wholesale businesses
in Sweden. The Group’s principal and customer agreements are
based on established, long-term agreements, and no significant
changes are anticipated in them during 2024.
Oriola has open-ended frame agreements in Sweden that allow the
company to sell trade receivables relating to Swedish wholesale
businesses to the financial institutions on a non-recourse basis.
Sales of trade receivables were EUR 97.1 (100.8) million in total on
the balance sheet date. No significant changes are anticipated in
the scope of the agreements to sell trade receivables in 2024.
Interest rate risk: Interest rate risk arise from changes in interest
payments of floating rate loans due to changes in market interest
rates and market value changes of financial instruments (price
risk). The objective of the interest rate risk management is to
minimise the impact of interest rate fluctuations on the statement
of comprehensive income. The interest rate risk is evaluated using
sensitivity analysis and interest rate duration.
On the balance sheet date, Oriola’s interest rate risk consisted of
EUR 138.4 (160.6) million in cash assets, EUR 117.7 (136.9) million in
interest-bearing liabilities, and EUR 97.1 (100.8) million from sales
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of non-recourse trade receivables in Sweden. The interest-bearing
liabilities at the end of 2023 include lease liabilities totalling EUR
8.9 (14.3) million. On the balance sheet date, a total of EUR 64.8
(64.8) million of the interest rate risk was hedged, which covers
61.7% (60.5%) of total sales of non-recourse trade receivables. The
average interest rate on interest-bearing liabilities excluding lease
liabilities and including the sale of receivables on a non-recourse
basis and interest rate hedges, was 3.76% (2.59%), and the interest
rate duration was 11 (13) months. Interest rate hedges are mainly
long-term contracts. Oriola applies hedge accounting to part of the
interest rate swaps hedging cash flows relating to selling of non-
recourse trade receivables.
Based on the gross debt on the balance sheet date and assuming
that the trade receivables sales programmes will continue as
normal in Sweden, the effect of a one percentage point increase
in market interest rates on the Group’s annual earnings after taxes
would be EUR -2.5 (-4.7) million (including derivatives) and on
equity EUR 3.0 (5.6) million (including derivatives).
Credit and counterparty risks: A credit risk arises from the
possibility of a counterparty failing to meet its contractual payment
obligations or financial institutions failing to meet their obligations
relating to deposits and derivatives trading. Oriola’s treasury policy
provides the framework for credit-, investment- and counterparty
risk management.
Credit limits are determined for investments and derivative
agreement counterparties on the basis of creditworthiness and
solidity and are monitored and updated on a regular basis.
Business areas are responsible for the credit risk management
arising from commercial receivables. The Finnish and Swedish
wholesale business is based on well-established customer
relationships and contractual terms generally observed within the
industry, which significantly reduces the credit risk associated with
trade receivables. Due to the nature of the operations there are no
significant credit risks associated with the Swedish retail business.
The credit risk related to the wholesale business in Finland is
reduced by interest-bearing advance payments from pharmacies.
These interest-bearing advance payments are presented as current
interest-bearing liabilities in the statement of financial position. In
the wholesale business in Sweden, the credit risk is reduced by the
sale of non-recourse receivables to financial institutions and by the
usage of credit loss insurances.
The Group applies the simplified approach to providing for
expected credit losses, which permits the use of the lifetime
expected loss provision for all trade receivables. The Group uses a
provision matrix for loss allowance provision. The matrix is based
on historical observed default rates and incorporates forward
looking information.
Credit losses recognised in the statement of comprehensive
income for the financial year totalled EUR -0.3 (-0.0) million. The
ageing of trade receivables is presented in more detail in note 5.1.
Trade and other receivables.
Capital management: Oriola’s aim is to have an efficient capital
structure that allows the company to manage its ongoing
obligations and enables cost-effective operations under all
circumstances. The return on capital employed (ROCE) and
the gearing ratio are the measurements for monitoring capital
structure.
Oriola’s long-term financial targets are based on growth,
profitability and equity. The Group’s long-term targets are to grow
at the rate of the market, minimum 4%, adjusted EBIT margin above
3% and return on equity over 20%. In addition, Oriola’s aim is to pay
out an increasing annual dividend of 2/3 of its net profit.
For a definition of key figures, please see the section Alternative
performance measures.
Maturity distribution of financial assets and liabilities
31 Dec 2023
EUR million 2024 2025 2026 2027> Tot al
Interest-bearing
Loans from financial institutions and
commercial paper loans 97.5 1.0 - - 98 .5
Lease liabilities 2.8 2.4 2.1 1.6 8 .9
Advance payments received 10.4 - - - 10 .4
Non-interest-bearing
Trade payables and other current
liabilities 620.2 - - - 620 .2
Receivables from interest rate swaps -0.3 -0.8 -1.1 - -2 .2
Liabilities from interest rate swaps - - - 0.4 0 .4
Receivables from foreign currency
derivatives -76.0 - - - -76 .0
Payables on foreign currency
derivatives 76.1 - - - 76 .1
Total 730.5 2.6 1.0 2.0 736 .1
Interest payments 3.6 0.2 0.1 0.0 3 .8
31 Dec 2022
EUR million 2023 2024 2025 2026> Tot al
Interest-bearing
Loans from financial institutions and
commercial paper loans 51.8 58.1 1.0 - 110 .9
Lease liabilities 3.4 3.0 2.7 5.2 14 .3
Advance payments received 11.8 - - - 11 .8
Non-interest-bearing
Trade payables and other current
liabilities 573.9 - - - 573 .9
Receivables from interest rate swaps - -0.7 -1.4 -1.9 -4 .0
Receivables from foreign currency
derivatives -115.5 - - - -115 .5
Payables on foreign currency
derivatives 116.0 - - - 116 .0
Total 641.3 60.4 2.3 3.3 707 .3
Interest payments 3.1 2.5 0.2 0.2 5 .9
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Derivatives and hedge accounting
Recognition and measurement: Derivatives are initially
recognised at fair value on the date a derivative contract is
entered into and are subsequently measured to their fair
value at the end of each reporting month. The accounting for
subsequent changes in fair value depends on whether the
derivative is designated as a hedging instrument. Derivatives
are classified as held for trading and accounted for at fair
value through profit or loss unless they are designated as
hedges. They are presented as current assets or liabilities if
they are expected to be settled within 12 months after the
end of the reporting period.
Oriola has the following derivative instruments:
- Instruments held for trading: Foreign currency forward
and swap contracts, interest rate swaps
- Cash flow hedges: Interest rate swaps
The change in fair value of derivatives held for trading is
recognised either as other income or expense or as financial
income or expense depending on the underlying item being
hedged.
Hedge accounting: Oriola applies hedge accounting to
part of the interest rate swaps hedging cash flows relating
to selling of non-recourse trade receivables. The fluctuating
interest rate has been converted into fixed rate using
interest rate swaps. When initiating hedge accounting, the
relationship between the hedged item and the hedging
instrument is documented along with the objectives of
the Group’s risk management. The effective portion of the
changes in the fair value of interest rate swaps that are
designated and qualify as cash flow hedges is recognised
in other comprehensive income and accumulated in
the reserves in equity. The ineffective portion, if any, is
recognised immediately in the statement of comprehensive
income within the financial items.
The fair value of currency forward and swap contracts is
determined by measuring them at fair value using market
rates on the balance sheet date.
Derivatives
EUR million
2023
Positive fair
value
Negative
fair value
Nominal
value
Derivatives recognised as
cash flow hedges
Interest rate swaps, in hedge accounting 1.8 0.4 54.1
Derivatives measured at fair value
through profit and loss
Interest rate swaps 0.3 - 10.8
Foreign currency forward and swap
contracts 0.6 0.6 75.5
Total 2.8 1.0 140.4
2022
Derivatives recognised as
cash flow hedges
Interest rate swaps, in hedge accounting 3.3 - 53.9
Derivatives measured at fair value
through profit and loss
Interest rate swaps 0.7 - 10.8
Foreign currency forward and swap
contracts 0.1 0.5 115.4
Total 4.1 0.5 180.2
Derivatives that are open on the balance sheet date fall due in the
12-month period except part of the interest rate swaps recognised
as cash flow hedges. Interest rate risk relating to cash flow from
selling of trade receivables has been hedged with interest rate
swaps. The fair value of interest rate derivatives is defined by cash
flows due to contracts. Interest rate swaps are designated as cash
flow hedges and their changes in fair value related to the effective
portion of the hedge are recognised in other comprehensive
income and the potential ineffective part is recognised within
the financial items in the statement of comprehensive income.
Fair values of the derivatives have been recognised in the
statement of financial position in gross amount as the
derivatives contracts are related to credit events and cannot
be netted in financial statements. The Group has not given nor
received collateral to/from derivatives counterparties.
Oriola has derivative positions with several banks and related
transactions are effected under master derivative agreements.
Master derivative agreements allow settlement on a net basis
of all outstanding items within the scope of the agreements for
example in the event of bankruptcy. On the balance sheet date,
the remaining counterparty risk after net settlement, as allowed
in the master derivative agreements, was EUR 2.8 (4.1) for Oriola
and EUR 1.0 (0.5) million for the counterparties.
The nominal amount of foreign currency derivatives is the euro
equivalent of the contracts’ currency denominated amount on
the balance sheet date.
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8.4. Equity, shares and authorisations
Share capital: Oriola Corporation’s share capital on 31 December
2023 stood at EUR 147,899,766.14. All issued shares have been paid
up in full. There were no changes in share capital in 2023.
Fair value reserve: The fair value reserve includes the change in
fair value of financial assets measured at fair value through other
comprehensive income as well as the effective portion of the
change in fair value of derivative financial instruments that are
designated as and qualify for cash flow hedges. At the balance
sheet date, the change in fair value of financial assets measured
at fair value through other comprehensive income recognised in
the fair value reserve totalled EUR -20.6 million. The change in fair
value of derivative financial instruments recognised in the reserve
totalled EUR -1.5 million (net of tax).
Contingency fund: The contingency fund is included in the
unrestricted equity of the company. The contingency fund has
been formed in 2006 when Oriola Corporation was entered into the
Trade Register. There were no changes in the contingency fund in
2023, and the fund stood at EUR 19.4 million on 31 December 2023.
OTHER FUNDS
Invested unrestricted equity reserve: Oriola Corporation
executed a directed share issue against payment in June 2009,
issuing 9,350,000 new class B shares. The net proceeds received
from the share issue amounted to EUR 20.7 million. The proceeds
from the share issue were credited to the reserve of invested
unrestricted equity. In accordance with the decision of the Annual
General Meeting of 6 April 2011, the company distributed on
19 April 2011 EUR 0.13 per share from the reserve of invested
unrestricted equity as repayment of equity, totalling EUR 19.7
million.
Oriola Corporation completed a rights offering in the first quarter
of 2015. The subscription period of the offering ended on 3 March
2015. In the offering 9,429,742 new A shares and 20,798,643
new B shares were subscribed and Oriola Corporation raised
gross proceeds of EUR 75.6 million through the offering. Oriola
Corporation recognised gross proceeds and the transaction costs
less taxes, totalling EUR 73.7 million, in the invested unrestricted
equity fund. There were no changes in the invested unrestricted
equity reserve in 2023, and the fund stood at EUR 74.8 million on 31
December 2023.
Translation differences: Translation differences include translation
differences arisen from the subsidiaries’ equity translation during
the consolidation, change of the fair values of the net investment in
the foreign subsidiary, and foreign exchange rate differences arisen
from the conversion of the foreign subsidiaries’ income statements
using the average exchange rate of the reporting period and the
conversion of their balance sheets using the exchange rate quoted
on the balance sheet date.
Shares: Of the total number of shares in the company, a
maximum of 500,000,000 shall be class A shares and a maximum
of 1,000,000,000 class B shares. At the end of 2023, the company
had a total of 181,486,213 shares, of which 53,748,313 were class A
shares and 127,737,900 were class B shares. The shares do not have
a nominal value.
At General Meetings, each class A share carries 20 votes and each
class B share one vote. No shareholder may vote using a number
of votes that exceeds 1/20 of the total number of votes carried by
the shares of different share classes represented at the General
Meeting. Both share classes give the shareholder the same rights to
the company’s assets and dividend distribution. Under Article 3 of
the Articles of Association, a shareholder may demand conversion
of class A shares into class B shares.
Oriola Corporation’s class A and B shares are quoted on the main
list of the Nasdaq OMX Helsinki exchange. The company’s field of
business on the stock exchange on 31 December 2023 was Health
Care Distributors and the company was classified under Health
Treasury shares: Treasury shares acquired by the company
and the related costs are presented as a deduction of equity.
Gain or loss on surrender of treasury shares are recognised in
equity net of tax.
The company holds a total of 87,426 treasury shares, of which
63,650 are class A shares and 23,776 are class B shares. The treasury
shares held by the company account for 0.05% of the company’s
shares and 0.11% of the votes.
Share trading and prices: In 2023, the traded volume of Oriola
Corporation shares, excluding treasury shares, corresponded to
33.2% of the total number of shares. The traded volume of class A
shares amounted to 5.8% of the average stock, and that of class B
shares, excluding treasury shares, to 44.7% of the average stock.
The average share price of Oriola Corporation’s class A shares was
EUR 1.38 and of its class B shares EUR 1.27. The market value of
all Oriola Corporation shares at 31 December 2023 was EUR 199.2
(321.4) million, of which the market value of class A shares was EUR
60.2 million and of class B shares EUR 139.0 million.
Shareholders: On 31 December 2023 Oriola Corporation had a
total of 35,115 registered shareholders. There were 11,613,456
nominee-registered shares on 31 December 2023, corresponding
to 6.4% of all shares and 1.9% of all votes.
Share conversions: Under Article 3 of the Articles of Association, a
shareholder may demand conversion of class A shares into class B
shares. In 2023, no class A shares were converted into class B shares.
Care. The ticker symbol for the class A shares is OKDAV and for the
class B shares OKDBV.
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Management shareholdings: On 31 December 2023, the
members of the company’s Board of Directors and the President
and CEO, the members of the Oriola Management Team and
the companies controlled by them had a total of 495,506 shares,
corresponding to 0.27% of the total number of shares in the
company and 0.04% of the votes.
Management shareholding
2023
B shares
2022
B shares
Board of Directors
Heikki Westerlund, Chairman (from 16 March
2023) 31,759 -
Heiwes Oy (Heikki Westerlund’s controlling
corporation) 150,000 -
Eva Nilsson Bågenholm, Vice Chairman 50,729 40,674
Nina Mähönen (from 15 March 2022) 16,211 5,832
Yrjö Närhinen (from 16 March 2023) 8,379
Ellinor Persdotter Nilsson (from 16 March 2023) 8,379
Harri Pärssinen 34,647 24,592
JF Capital Oy (Harri Pärssinen’s controlling
corporation) 65,000 -
Lena Ridström (until 16 March 2023) - 31,573
Panu Routila, Chairman (until 16 March 2023) - 35,223
Juko-Juho Hakala (until 16 March 2023) - 38,611
CEO and President
Katarina Gabrielson (from 15 March 2022) 65,124 53,157
Oriola Management team
Petri Boman (from 3 October 2022) - -
Hannes Hasselrot 11,414 4,712
Timo Leinonen (from 1 December 2022) 16,000 6,000
Niklas Lindholm (from 1 August 2023) - -
Mikael Nurmi (from 23 January 2023) 10,000 -
Petter Sandström 27,864 26,521
Elina Niemelä (until 3 March 2023) - -
Authorisations: The Annual General Meeting authorised the
Board to decide on a share issue against payment in one or more
issues, including the right to issue new shares or to assign treasury
shares held by the company. The authorisation covers a combined
maximum of 5,500,000 class A shares and 12,500,000 class B
shares of the company and includes the right to derogate from the
shareholders’ pre-emptive subscription right. The authorisation
is in force for eighteen (18) months following the decision of the
Annual General Meeting.
The Board was also authorised to decide on a share issue against
payment of class B shares in one or more issues including the right
to issue new class B shares or assign class B treasury shares held
by the company. The authorisation covers a combined maximum
of 18,000,000 class B shares of the company including the right
to derogate from the shareholders’ pre-emptive subscription
right. The authorisation is in force for a maximum of eighteen (18)
months following the decision of the Annual General Meeting.
The Annual General Meeting authorised the Board to decide on a
share issue of class B shares without payment to the Company and
on a directed share issue of class B shares in order to execute the
share-based incentive plan for Oriola Group’s executives and the
share savings plan for Oriola Group’s key personnel. The maximum
number of new class B shares to be issued under this authorisation
is 250,000, which represents of 0.14% of all shares in the Company.
The authorisation is in force for eighteen (18) months from the
decision of the Annual General Meeting.
The Annual General Meeting authorised the Board to decide on
repurchasing up to 18,000,000 of the company’s own class B shares.
Shares may be repurchased also in a proportion other than in
which shares are owned by the shareholders. The authorisation
is in force for a maximum of eighteen (18) months following the
decision of the Annual General Meeting.
All decisions of the Annual General Meeting 2023 are available on
the company’s website www.oriola.com.
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Share capital
Share capital A shares B shares Total
Number of shares 1 Jan 2023 pcs 53,748,313 127,737,900 181,486,213
Conversion of A shares to B shares pcs - - 0
Number of shares 31 Dec 2023 pcs 53,748,313 127,737,900 181,486,213
Treasury shares 31 Dec 2023 pcs 63,650 23,776 87,426
Votes 31 Dec 2023 pcs 1,074,966,260 127,737,900 1,202,704,160
Share capital per share class 31 Dec 2023 EUR million 43.8 104.1 147.9
Percentage from the total shares % 29.6 70.4 100.0
Percentage from the total votes % 89.4 10.6 100.0
Number of shares 1 Jan 2022 pcs 53,748,313 127,737,900 181,486,213
Conversion of A shares to B shares pcs - - 0
Number of shares 31 Dec 2022 pcs 53,748,313 127,737,900 181,486,213
Treasury shares 31 Dec 2022 pcs 63,650 45,914 109,564
Votes 31 Dec 2022 pcs 1,074,966,260 127,737,900 1,202,704,160
Share capital per share class 31 Dec 2022 EUR million 43.8 104.1 147.9
Percentage from the total shares % 29.6 70.4 100.0
Percentage from the total votes % 89.4 10.6 100.0
EUR million 2023 2022
Parent company share capital 31 Dec 147.9 147.9
Elimination of the revaluation of subsidiary shares in
the consolidated financial statements -111.7 -111.7
Consolidated share capital 31 Dec 36.2 36.2
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8.5. Earnings per share, dividend and other equity
distribution
Earnings per share: Basic earnings per share is calculated by
dividing the net result attributable to owners of the parent
company by the weighted share issue adjusted average
number of shares outstanding during the period, excluding
shares acquired by the Group and held as treasury shares.
When calculating diluted earnings per share, the weighted
share-issue adjusted average number of shares outstanding
during the period is adjusted by the effect of all dilutive
potential shares.
Dividend and other equity distribution: Dividends or
other equity distribution includes dividends and other
equity distribution approved by the Annual General
Meeting. Dividends and other equity distribution proposed
by the Board of Directors are not recognised in the
financial statements until they have been approved by the
shareholders at the Annual General Meeting. Dividend and
other equity distribution for shareholders is recognised as a
liability in the consolidated statement of financial position
for the period during which the dividend is approved by the
Annual General Meeting.
Dividend policy and distribution proposal: Oriola Corporation
will seek to pay out annually as dividends a 2/3 of the Group’s net
profit. The Company’s strategy and financial position shall be taken
into consideration when determining the annual dividend payout
ratio. The dividend paid for 2022 was EUR 10.9 million (EUR 0.06
per share) and for 2021 EUR 7.3 million (EUR 0.04 per share). The
Board of Directors proposes to the Annual General Meeting that a
dividend of EUR 12.7 million, EUR 0.07 per share is paid for 2023.
Earnings per share
Profit for the period
EUR million 2023 2022
Profit attributable to equity owners of the parent
Continuing operations -20.7 4.8
Discontinued operations - -7.2
Total -20.7 -2.4
Average number of outstanding
shares pcs
Basic 181,389,629 181,371,235
Diluted 181,422,563 181,422,563
Earnings per share, EUR
Basic
Continuing operations -0.11 0.03
Discontinued operations - -0.04
Total -0.11 -0.01
Diluted
Continuing operations -0.11 0.03
Discontinued operations - -0.04
Total -0.11 -0.01
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9. Income taxes
9.1. Taxes recognised in the comprehensive income
for the period
Tax expense in the consolidated statement of
comprehensive income consists of income taxes based
on the taxable profit for the financial year, prior period
adjustments, and changes in deferred tax assets and
liabilities. Income tax for the taxable profit for the period is
calculated based on the effective income tax rate for each tax
jurisdiction. Taxes are recognised in profit and loss, except
when they relate to items recognised directly in equity or
in other comprehensive income, when the taxes are also
recognised in equity or in other comprehensive income
respectively.
Oriola Group is within the scope of the Pillar Two legislation,
where the Group is liable to pay a top-up tax for the difference
between their GloBE effective tax rate per jurisdiction and the 15%
minimum rate. All entities within the Group have an effective tax
rate that exceeds 15% and therefore the Group does not expect to
be subject to the top-up tax. The Group has applied a temporary
mandatory relief from deferred tax accounting for the impacts
of the top-up tax and accounts for it as a current tax when it is
incurred.
Income taxes
EUR million 2023 2022
Taxes for current year 3.1 1.8
Taxes for previous years 0.9 -0.1
Deferred taxes -1.0 0.4
Total 3.1 2.1
Taxes related to other comprehensive income
EUR million
2023 Before taxes Tax effect After taxes
Cash flow hedge -1.8 -0.4 -1.5
Financial assets recognised
at fair value through other
comprehensive income -20.6 - -20.6
Actuarial gains and losses -1.4 -0.3 -1.1
Translation differences 0.0 - 0.0
Total -23.8 -0.7 -23.1
2022
Cash flow hedge 2.8 0.6 2.2
Actuarial gains and losses 5.2 1.1 4.2
Translation differences 11.7 - 11.7
Total 19.7 1.6 18.1
Tax rate reconciliation
EUR million 2023 2022
Profit before taxes -17.6 6.9
Corporate income taxes calculated at Finnish tax
rate -3.5 1.4
Effect of different tax rates of foreign subsidiaries -0.0 0.0
Impairment of goodwill - non-deductible 4.3 -
Non-deductible expenses and tax-exempt income 0.4 0.4
Share of result in joint venture 1.0 0.4
Adjustments recognised for taxes of previous
years 0.9 -0.1
Other items -0.0 -0.1
Income taxes in the income statement 3.1 2.1
Effective tax rate -17.4% 30.8%
Taxes entered with a positive value are recognised as expenses and
taxes entered with a negative value are recognised as income.
The Finnish tax rate used to calculate taxes was 20.0% and the
Swedish tax rate was 20.6%.
9.2. Deferred tax assets and liabilities
Deferred tax is calculated on temporary differences between
the carrying amounts and the taxable values of assets and
liabilities and for tax loss carry-forwards to the extent that it
is probable that these can be utilised against future taxable
profits. The largest temporary differences are caused by lease
agreements, depreciation of property, plant and equipment
and defined pension benefit plans. The deferred taxes are
determined using tax rates and laws that have been enacted
or substantially enacted by the balance sheet date and are
expected to apply when the related deferred income tax
asset is realised, or the deferred income tax liability is settled.
Deferred tax assets and liabilities offset in the consolidated
statement of financial position when there is a legally
enforceable right to offset current tax assets against current
tax liabilities and when the deferred taxes relate to the same
fiscal authority.
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Deferred tax assets and liabilities
2023 1 Jan
Items recognised in
income statement
Items recognised in other
comprehensive income
Classified as
held for sale
Translation
differences 31 Dec
Deferred tax assets
Confirmed losses - 0.8 - -0.8 - -
Pension liabilities 0.7 -0.2 0.3 - 0.0 0.7
Employee benefits 0.2 0.0 - - - 0.3
Lease agreements 3.1 -1.1 - -0.1 0.0 1.9
Other temporary differences 0.0 -0.3 0.4 -0.0 0.0 0.0
Deferred tax assets 4.0 -0.8 0.7 -0.9 0.0 3.0
Set-off of tax -2.8 -2.6
Net deferred tax assets 1.2 0.4
Deferred tax liabilities
Depreciation difference and other
untaxed reserves 4.9 -0.9 - -0.2 0.0 3.8
Acquisitions -0.1 -0.0 - - - -0.1
Lease agreements 2.8 -1.0 - -0.0 0.0 1.8
Other temporary differences 0.1 0.0 - -0.1 - 0.0
Deferred tax liabilities 7.7 -1.9 - -0.4 0.0 5.5
Set-off of tax -2.8 -2.6
Net deferred tax liabilities 4.9 2.9
2022 1 Jan
Items recognised in
income statement
Items recognised in other
comprehensive income
Discontinued
operations
Translation
differences 31 Dec
Deferred tax assets
Inventories 0.3 -0.0 - -0.2 -0.0 0.0
Pension liabilities 2.2 -0.3 -1.1 - -0.2 0.7
Employee benefits 0.3 -0.1 - - - 0.2
Lease agreements 17.5 -0.4 - -12.6 -1.4 3.1
Other temporary differences 0.1 -0.0 - -0.0 -0.0 0.0
Deferred tax assets 20.2 -0.8 -1.1 -12.8 -1.5 4.0
Set-off of tax -16.3 -2.8
Net deferred tax assets 3.9 1.2
Deferred tax liabilities
Depreciation difference and other
untaxed reserves 8.4 -0.5 - -2.4 -0.6 4.9
Acquisitions 3.3 0.5 - -3.7 -0.3 -0.1
Lease agreements 16.3 -0.4 - -11.8 -1.3 2.8
Other temporary differences 0.1 0.0 - - - 0.1
Deferred tax liabilities, total 28.1 -0.4 - -17.8 -2.2 7.7
Set-off of tax -16.3 -2.8
Net deferred tax liabilities 11.8 4.9
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10. Group structure
Consolidation principles: The consolidated financial
statements include Oriola Corporation and those directly or
indirectly owned subsidiaries over which Oriola Corporation
exercises control. Control is presumed to exist when the
Group through participation in an investee becomes
exposed to its variable returns or is entitled to its variable
returns and is able to have an influence on the returns
through exercising power over the investee. Subsidiaries are
consolidated from the date the Group has gained control
and divested companies are consolidated until the date
control is lost.
The acquisition method is used in the accounting for
the elimination of internal ownership. All intra-group
transactions, as well as intra-group receivables, payables,
dividends and unrealised internal margins, are eliminated.
The Group’s profit for the period is attributed to the
equity holders of the parent and non-controlling interests.
Identifiable assets acquired and assumed liabilities of an
acquired entity are measured at their fair value as of the
acquisition date. Any contingent consideration is measured
at fair value at the date of acquisition and classified under
other interest-bearing liabilities. Changes in the contingent
consideration and acquisition-related expenses are
recognised as an expense in the statement of comprehensive
income.
Changes in the parent’s ownership interest in a subsidiary
that do not result in a loss of control are accounted for as
equity transactions. As at the date when control is lost, any
investment retained in the former subsidiary is recognised
at fair value and the difference is recorded through the
statement of comprehensive income.
The consolidation principles for joint ventures are presented
in the note 10.4.
Foreign currency denominated items: The consolidated
financial statements have been presented in euros, which
is the functional and presentation currency of the Group’s
parent company. The items included in the financial
statements of the subsidiaries are valued in the currency,
which best describes the financial operating conditions of
each subsidiary “functional currency”.
Transactions in foreign currencies are translated into
functional currency/euro at the rates of exchange prevailing
at the dates of transactions. Monetary items have been
translated into euros using the rates of exchange as at the
balance sheet date and non-monetary items using the rates
of exchange at the dates of transactions, excluding items
measured at fair value, which have been translated using the
rates of exchange on the date of valuation. Gains and losses
arising from the translation are recognised in the profit or
loss. Foreign exchange gains and losses from operations are
included within the corresponding items above EBIT. Foreign
exchange gains and losses from loans denominated in a
foreign currency are included within financial income and
expenses.
The income statements of foreign group companies outside
the eurozone are translated into euros using the weighted
average rate of exchange of the financial year and the
statements of financial position using the rates of exchange
as at the balance sheet date. Differences resulting from
the translation of the result for the period at a different
rate in the statement of comprehensive income and in the
statement of financial position are recognised as a separate
item within the consolidated statement of comprehensive
income. Translation differences arising from the acquisition
cost elimination of foreign subsidiaries and from the
translation of equity items accrued after the acquisition
date are recognised in other comprehensive income. When
a subsidiary is sold in full or in part, related translation
differences are included in the calculation of gain or loss for
the sale and recognised in the profit or loss for the period.
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10.1. Subsidiaries
Group Parent company
31 Dec 2023 Domicile
Owner-
ship % Share %
Owner-
ship % Share %
Parent company Oriola
Corporation Finland
Oriola Finland Oy Finland 100 100 100 100
Oriola Sweden AB Sweden 100 100 100 100
Svensk dos AB Sweden 100 100 100 100
Pharmaservice Oy Finland 100 100 100 100
Oriola Sweden AB Sweden 100 100 100 100
ICTHS Health
Support AB Sweden 100 100
Group Parent company
31 Dec 2022 Domicile
Owner-
ship % Share %
Owner-
ship % Share %
Parent company Oriola
Corporation Finland
Oriola Finland Oy Finland 100 100 100 100
Oriola Sweden AB Sweden 100 100 100 100
Svensk dos AB Sweden 100 100 100 100
Pharmaservice Oy Finland 100 100 100 100
Oriola Sweden AB Sweden 100 100 100 100
ICTHS Health
Support AB Sweden 100 100
10.2. Related party transactions
Related parties in the Oriola Group are deemed to comprise the
members of the Board of Directors and the President and CEO of
Oriola Corporation, other members of the Oriola Management
Team (key management), the immediate family of the
aforementioned persons and companies in which they have control
or joint control, the Group’s subsidiaries and joint ventures.
The Group has transactions between the group companies and the
joint venture in the ordinary course of business. The Group has no
significant business transactions with other related parties.
Transactions with the joint venture are presented in the following
table:
EUR million 2023 2022
Sales 496.5 130.9
Purchases of goods and services 0.4 0.1
Trade and other receivables 70.5 20.7
Trade and other payables 0.8 0.2
Commitments 0.1 0.3
The income statement items for 2022 do not represent full-year
2022 (1-12) figures.
Key management benefits
EUR thousand 2023 2022
Salaries and other short-term employee benefits 2,515.9 2,286.2
Termination benefits 159.0 408.0
Share-based payments 97.4 168.3
Total 2,772.3 2,862.5
Employee benefits to President and CEO
EUR thousand 2023 2022
Katarina Gabrielson
15 Mar - 9 May 2022 interim CEO, from 10 May 2022 CEO
Basic salary 418.1 448.3
Bonuses 204.9 -
Share-based payments 3.6 22.9
Pension expenses (statutory) 33.0 35.9
Pension expenses (voluntary) 41.9 36.6
Total 701.4 543.8
Elisa Markula
9 Aug 2021 - 15 Mar 2022
Basic salary - 103.5
Termination expenses* - 275.4
Pension expenses (statutory) - 19.5
Total - 398.5
Employee benefits to President and CEO total 701.4 942.3
* Termination expenses include the salary for the notice period.
Employee benefits to other members of the Oriola Management
Team
EUR thousand 2023 2022
Basic salary 1,001.7 1,141.5
Bonuses 337.1 39.5
Share-based payments 5.1 55.3
Termination expenses * 159.0 132.6
Pension expenses (statutory) 238.1 180.0
Pension expenses (voluntary) 23.5 20.4
Total 1,764.4 1,569.2
* Termination expenses include the severance pay equal to 6 months’ salary.
The total benefits of the President and CEO of the Group and
the Oriola Management Team include a supplementary health
insurance. The President and CEO of the Group and the Oriola
Management Team participate in statutory pension schemes. Two
Oriola Management Team members participate in a voluntary
defined contribution plan.
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Salaries and benefits of the members of the Board of Directors
EUR thousand 2023 2022
Heikki Westerlund, Chairman* 75.0 -
Eva Nilsson Bågenholm, Vice Chairman 50.0 60.5
Nina Mähönen** 41.5 38.0
Yrjö Närhinen* 39.5 -
Ellinor Persdotter Nilsson* 38.0 -
Harri Pärssinen 50.0 53.5
Juko-Juho Hakala*** 7.0 54.0
Lena Ridström*** 2.5 45.0
Panu Routila*** 4.5 93.0
Anja Korhonen**** - 7.0
Total 308.0 351.0
* from 21 March 2023
** from 15 March 2022
*** until 21 March 2023
**** until 15 March 2022
Annual General Meeting in 2023 confirmed that the fee for the term
of office of the Chairman of the Board of Directors is EUR 60,000,
the fee for the term of office of the Vice Chairman of the Board of
Directors and for the Chairman of the Board’s Audit Committee
is EUR 36,000 and the fee for the term of office of other members
of the Board of Directors is EUR 30,000. Of the annual fee, 60 per
cent shall be paid in cash and 40 per cent shall be used to acquire
Oriola Corporation’s class B shares. The Chairman of the Board of
Directors receives an attendance fee of EUR 1,000 per meeting for
meetings of the Board of Directors held in the Chairman’s home
country and EUR 2,000 for meetings of the Board of Directors
held elsewhere and the other members of the Board of Directors
receive attendance fees of EUR 500 per meeting for meetings held
in the home country of the respective member of the Board of
Directors and EUR 1,000 for meetings held elsewhere. Attendance
fees are correspondingly also paid to the Chairman and members
of company committees. Travel expenses are compensated in
accordance with the travel policy of the company.
For the apportionment paid in shares, an expense of EUR 0.1 (0.1)
million was recognised in 2023.
Assets held for sale
Oriola announced on 13 October 2023 that it has signed an
agreement to sell all shares in Svensk dos AB to Apotekstjänst
Sverige AB and is thereby exiting the dose dispensing business in
Sweden as part of Oriola’s strategic decision to strengthen focus
on wholesale business. Svensk dos AB has lost market share due
to the loss of public tender contracts and during the strategy
process Oriola has not identified a recovery of the business within
a foreseeable future. Svensk dos AB has been classified as held
for sale in the consolidated financial statements. Transaction is
subject to the approval of the Swedish Competition Authority and
is expected to be completed in the second quarter of 2024.
In dose dispensing business, Svensk dos AB offers pharmaceuticals
and dose dispensing for private and public healthcare sector
operators. The net sales of dose dispensing Sweden was EUR 25.3
million in 2023 and EBIT was EUR -6.1 million, of which EUR -3.3
million relates to the goodwill impairment loss.
The following assets and liabilities were classified as held for sale:
EUR million 2023 2022
Property, plant and equipment 2.4
Goodwill 4.5
Other intangible assets 1.9
Deferred tax assets 0.5
Inventories 1.2
Trade and other receivables 1.5
Cash and cash equivalents 0.0
Total assets 12.0
EUR million
Deferred tax liabilities 0.1
Current interest-bearing liabilities 0.2
Current trade and other payables 1.5
Total liabilities 1.8
10.3. Assets held for sale and discontinued operations
Non-current assets, or disposal groups comprising assets
and liabilities, are classified as held for sale if it is highly
probable that they will be recovered primarily through sale
rather than through continuing use. Such assets, or disposal
groups, are generally measured at the lower of their carrying
amount and fair value less costs to sell. The recognition
criteria are met when a sale is highly probable, the asset or a
disposal group is available for immediate sale in its present
condition subject only to terms that are usual and customary
for the sales of such assets, the management is committed
to the plan to sell the asset and the sale is expected to be
completed within one year from the date of classification.
Once classified as held for sale, intangible assets and
property, plant and equipment are no longer amortised or
depreciated, and any equity-accounted investee is no longer
equity accounted. From the date of the classification, assets
held for sale or disposal group are measured at the lower of
its carrying amount and fair value less costs to sell.
Operations are classified as discontinued operations in case
a component of an entity has either been disposed of, or is
classified as held for sale, and it represents a separate major
line of business or geographical area of operations, it is part
of a single coordinated plan to dispose of a separate major
line of business or geographical area of operations or it is a
subsidiary acquired exclusively with a view to resale.
The result for the period of discontinued operations is
presented as a separate item in the consolidated statement
of comprehensive income.
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Discontinued operations
There were no discontinued operations in 2023.
In 2022, discontinued operations included Consumer business area
until the completion of the divestment on 3 October 2022.
Profit for the period from discontinued operations
EUR million 2023 2022
Net sales 595.5
Other operating income 10.0
Materials and supplies -452.7
Employee benefit expenses -78.4
Other operating expenses -38.6
Depreciation, amortisation and impairments -3.0
EBIT 32.8
Financial income and expenses -4.7
Profit before taxes 28.1
Income taxes -5.8
Results from operating activities 22.3
Loss of sale of business -29.4
Loss for the period from discontinued
operations -7.2
Cash flows from discontinued operations
EUR million 2023 2022
Net cash flow from operating activities 4.7
Net cash flow from investing activities 22.4
Net cash flow from financing activities -12.0
Total cash flows 15.1
Assets and liabilities of discontinued operations
EUR million 2023 2022
Property, plant and equipment 81.6
Goodwill 198.4
Other intangible assets 39.8
Inventories 59.5
Income tax receivables 1.0
Trade and other receivables 26.7
Cash and cash equivalents 15.9
Total assets 423.0
EUR million
Deferred tax liabilities 8.2
Non-current interest-bearing liabilities 36.5
Current interest-bearing liabilities 12.5
Current trade and other payables 101.5
Total liabilities 158.8
Net assets disposed of 264.2
Cash consideration received 24.3
Cash and cash equivalents disposed of -15.9
Impact on cash flows 8.3
Loss on sale of discontinued operations
EUR million 2023 2022
Consideration received in shares 242.3
Consideration received in cash 24.3
Net assets disposed of -264.2
Cost to sell -2.7
Total -0.4
Translation differences reclassified from other
comprehensive income -29.0
Loss on sale of discontinued operations -29.4
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10.4. Investments in joint ventures
Joint ventures are joint arrangements where the Group has
joint control with other parties and the parties have rights to
the arrangement’s net assets.
Interests in joint ventures are accounted for using the
equity method of accounting and are initially recognised at
cost after which the Group’s share of the post-acquisition
retained profits and losses is included as part of investments
in joint ventures in the consolidated statement of financial
position. Under the equity method the share of profits
and losses of joint ventures is presented separately in the
statement of comprehensive income after EBIT.
Oriola has 50% shareholding in Swedish Pharmacy Holding
AB, which controls pharmacy chains Kronans Apotek and
Apoteksgruppen in Sweden.
EUR million 2023 2022
Carrying amount 1 Jan 240.4 -
Increases - 242.3
Share of result for the period -4.8 -2.0
Foreign exchange rate differences -0.2 0.1
Carrying amount 31 Dec 235.4 240.4
Summarised financial information for joint venture
The summary below is based on the financial statements of the
joint venture prepared in accordance with IFRS.
Swedish Pharmacy Holding AB
Balance sheet EUR million 31 Dec 2023 31 Dec 2022
Current assets
Cash and cash equivalents 13.5 30.8
Other current assets 157.2 142.8
Current assets total 170.6 173.6
Non-current assets 587.9 596.7
Current liabilities
Trade payables 114.1 116.9
Other current liabilities 59.9 51.6
Current liabilities total 174.0 168.5
Non-current liabilities 116.5 127.7
Net assets total 468.1 474.1
Reconciliation to carrying amounts
EUR million 31 Dec 2023 31 Dec 2022
Net assets 1 Jan 474.1 -
Investment in joint venture - 484.5
Adjustment to the opening balance 2.7 -
Translation differences 0.8 -6.5
Loss for the period -9.5 -3.9
Net assets 31 Dec 468.1 474.1
Group's share in joint venture 50% 50%
Group's share of net assets 234.0 237.1
Impairment - -
Carrying amount 234.0 237.1
Swedish Pharmacy Holding AB
Income statement EUR million 2023 3 Oct - 31 Dec 2022
Net sales 1,126.9 285.2
Depreciation. amortisation and
impairment losses -45.6 -10.5
Net interest expenses -3.9 -1.1
Income taxes 2.3 0.8
Result for the period -9.5 -3.9
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11.1. Commitments and contingent liabilities
EUR million 2023 2022
Commitments for own liabilities
Guarantees on behalf of subsidiaries 6.6 6.5
Guarantees on behalf of other companies 0.1 0.3
Mortgages on company assets 1.9 1.9
Other guarantees and liabilities 3.8 5.8
Total 12.4 14.5
The most significant guarantees on behalf of subsidiaries are bank
guarantees against Swedish wholesale company’s trade payables.
11.2. Future lease payments
Committed future minimum lease payments:
EUR million 2023 2022
Within one year 0.5 0.6
One to five years 0.4 0.5
Total 0.9 1.1
Future payments consist of minimum leasing commitments
related to low-value assets and short-term leases, to which the
Group elected to apply recognition exemptions permitted by IFRS
16. For details about leases please refer to section 7. Leases. The
leasing expenses related to short-term leases and leases of low-
value assets are presented in note 7.2. Leases in the statement of
comprehensive income.
11.3. Litigation
Oriola is from time to time involved in legal actions, claims and
other proceedings. It is Oriola’s policy to provide for amounts
related to the proceedings if liability is probable and such amounts
can be estimated with reasonable accuracy. Taking into account all
available information to date, the legal actions, claims and other
proceedings are not expected to have material impact on the
financial position of the Group.
11.4. Events after the balance sheet date
Oriola to invest in ERP and warehouse management as part
of the recently launched strategy to enhance efficiency and
operational excellence
In January 2024, Oriola announced that it will be investing in
its infrastructure as part of its refined strategy, published in
October 2023, with the aim to enhance efficiency and operational
excellence. Enhanced efficiency is one of the three goals set by
Oriola to drive the strategy forward.
The investment comprises the renewal of Oriola’s ERP (enterprise
resource planning) and warehouse management system during the
years 2025−2027. The aim of the project is to have one common
system which will enable to harmonise business processes,
strengthen data management and enhance customer experience.
The value of the total investment is about EUR 35 million. The new
ERP and warehouse management system will replace the current
two separate systems in Sweden and Finland. The project will start
in 2024 and the new system will be deployed in phases during
2025−2027. The first deployment will be in Sweden followed by the
deployment in Finland.
12. Other notes
12.1. Application of new and amended IFRS standards
and IFRIC interpretations
Certain new or revised standards and interpretations have been
published by the International Accounting Standards Board (IASB)
that are not mandatory for 31 December 2023 reporting periods
and have not yet been applied by the Group. These standards are
not expected to have a material impact on the Group in the current
or future reporting periods and on foreseeable future transactions.
The Group will apply each new standard and interpretation from
the effective date. If the effective date is other than the first day of
a financial year, the Group will apply the standard or interpretation
from the beginning of the following financial year.
11. Unrecognised items
The Swedish Competition Authority moves its investigation
of Oriola’s sale of Svensk dos AB to Apotekstjänst Sverige AB
into phase II
On 31 January 2024, Oriola announced that the Swedish
Competition Authority (Konkurrensverket) moved its investigation
of Oriola’s sale of Svensk dos AB to Apotekstjänst Sverige AB into
phase II. Oriola expects, based on currently available information,
that the transaction will be completed in the second quarter of
2024.
Reporting segments
Oriola’s reporting segments from 1 January 2024 are Distribution
and Wholesale.
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Parent company financial statements
Parent company income statement (FAS)
EUR thousand Note 2023 2022
Other operating income 2 17,148.6 16,254.6
Personnel expenses 3 -7,777.8 -8,366.6
Depreciation, amortisation
and impairment charges 4 -4,185.0 -10,155.9
Other operating expenses 5 -11,164.2 -17,025.5
Operating result -5,978.5 -19,293.3
Financial income and expenses 6 -18,405.9 -47,827.6
Result before appropriations and taxes -24,384.4 -67,120.9
Appropriations 7 19,663.5 18,086.2
Income taxes 8 -2,214.3 -355.5
Result for the period -6,935.1 -49,390.1
Parent company balance sheet (FAS)
EUR thousand Note 31 Dec 2023 31 Dec 2022
Assets
Non-current assets
Intangible assets 9
Intangible rights 222.9 328.4
Other intangible assets 13,368.1 17,210.5
Advance payments and construction in progress 1,865.6 415.7
15,456.5 17,954.6
Property, plant and equipment 10
Land and water areas 77.4 77.4
Machinery and equipment 2.6 4.4
Other tangible assets 7.5 7.5
87.5 89.3
Investments 11
Holdings in group companies 284,765.1 294,591.2
Holdings in participating interest companies 242,250.0 242,250.0
Other shares 8,203.2 8,203.2
535,218.3 545,044.4
Non-current assets, total 550,762.4 563,088.4
Current assets 12
Receivables
Long-term receivables
Other receivables 1,847.4 3,960.8
Short-term receivables
Trade receivables 233.6 257.9
Receivables from group companies 19,903.1 56,750.7
Other receivables 662.0 269.8
Accrued receivables 1,167.9 1,557.4
23,814.1 62,796.8
Cash and cash equivalents 137,532.8 159,924.5
Current assets, total 161,346.8 222,721.2
Assets total 712,109.2 785,809.6
EUR thousand Note 31 Dec 2023 31 Dec 2022
Equity and liabilities
Equity 13
Share capital 147,899.8 147,899.8
Other funds 19,418.7 19,418.7
Invested unrestricted equity reserve 76,957.5 76,957.5
Retained earnings 101,248.6 161,610.2
Result for the financial year -6,935.1 -49,390.1
338,589.5 356,496.0
Appropriations 14 1,597.4 1,868.4
Liabilities 15
Long-term liabilities
Borrowings 1,000.0 59,074.9
Liabilities to group companies 37,851.5 75,527.3
Accrued liabilities 391.5 471.4
39,243.0 135,073.7
Short-term liabilities
Borrowings 58,135.5 2,000.0
Trade payables 1,936.4 1,473.4
Liabilities to group companies 228,665.5 234,759.0
Other liabilities 41,999.0 52,229.0
Accrued liabilities 1,942.9 1,910.1
332,679.4 292,371.5
Liabilities total 371,922.3 427,445.1
Equity and liabilities total 712,109.2 785,809.6
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Parent company cash flow statement (FAS)
EUR thousand 2023 2022
Cash flow from operating activities
Result before appropriations and taxes -24,384.4 -67,120.9
Adjustments
Depreciation, amortisation
and impairment charges 4,185.0 10,155.9
Unrealised foreign exchange gains and losses 1,989.7 -10,485.2
Other non-cash items -6.9 -160.2
Financial income and expenses 16,416.2 58,312.8
-1,800.4 -9,297.6
Change in working capital
Change in current
non-interest-bearing receivables -941.1 7,165.6
Change in non-interest-bearing current
liabilities 487.2 951.2
-2,254.2 -1,180.8
Paid and received other financial expenses
and income -667.3 -7,523.9
Interest received 4,024.5 2,499.6
Interest paid -9,401.0 -5,393.2
Income taxes paid -1,433.6 -703.8
Cash flow from operating activities -9,731.6 -12,302.0
Cash flow from investing activities
Investments in tangible and intangible assets -1,601.0 -170.5
Proceeds from sale of tangible and
intangible assets - 321.3
Investments to joint ventures - 24,250.0
Change in loan receivables - 21,634.5
Proceeds from sale of other investments - 881.0
Dividends received 38,171.4 -
Cash flow from investing activities 36,570.4 46,916.2
EUR thousand 2023 2022
Cash flow from financing activities
Purchase of own shares -88.8 -88.8
Repayments of long-term loans -40,171.4 -2,000.0
Change in other current financing -16,282.9 12,624.8
Group contributions received 18,181.9 15,453.6
Dividends paid -10,869.2 -7.241.8
Cash flow from financing activities -49,230.5 18,747.9
Change in cash and cash equivalents -22,391.7 53,362.1
Cash and cash equivalents at
the beginning of period 159,924.5 106,562.3
Net change in cash and cash equivalents -22,391.7 53,362.1
Cash and cash equivalents at the end of period 137,532.8 159,924.5
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Notes to the parent company financial statements
(FAS)
1. Accounting principles
Oriola Corporation is the parent company of the Oriola Group,
domiciled in Espoo, Finland. Oriola Corporation provides
administrative services to group companies. These administrative
services are centralised to the parent company. Copies of the
consolidated financial statements of the Oriola Group are available
at the head office of Oriola Corporation, Orionintie 5, FI-02200
Espoo, Finland ([email protected]).
Oriola Corporation´s financial statements are prepared in euros and
according to Generally Accepted Accounting Principles in Finland
(Finnish GAAP) and according to corporate legislation. The financial
statements are presented in thousand euros.
When appropriate, the financial statements of Oriola Corporation
comply with the Group’s accounting principles based on IFRS.
Below are described those accounting principles in which
the financial statements of Oriola Corporation differ from the
accounting principles of the consolidated financial statements. The
accounting principles for the consolidated financial statements are
presented in the notes to the consolidated financial statements.
Financial assets and liabilities: Financial items classified as loans
and receivables or other financial liabilities are carried at amortised
cost.
The change in the fair value of the effective portion of interest rate
derivative agreements under hedge accounting made to hedge
cash flows is directly recognised against the fair value reserve
included in equity. Derivatives acquired to hedge balance sheet
items like bank accounts, loans and receivables denominated in
foreign currencies and derivatives made to hedge cash flows that
are not under hedge accounting are recorded in exchange gains
and losses in the financial items.
Share-based payments: The accounting treatment of Oriola
Corporations share-based incentive plans is described in the
accounting principles for the consolidated financial statements.
The share incentive plans of Oriola Corporation are a combination
of shares and a cash payment. The granted amount of the incentive
plans, settled in shares, is measured at share price of the grant
date less expected dividends. The cash-settled part of the plans is
measured at fair value, which is the share price at the end of the
reporting period. The expenses arising from the incentive plans
are recognised in the income statement over the vesting period.
In the financial statements of the parent company the component
settled in shares as well as the cash-settled part are recognised as
accrued liability until paid out. When paid out the share settled part
is credited to the equity.
Pension arrangements: The Statutory pension coverage of Oriola
Corporation is provided by Ilmarinen Mutual Pension Insurance
Company. Supplementary pension coverage is provided by OP Life
Assurance Company Ltd. Pension-related payments are recognised
as pension expenses on an accrual basis. No other pension liabilities
arising from pension arrangements are recognised in the balance
sheet except for pension-related accruals.
Leases: The lease agreements of Oriola Corporation consist
mainly of information and communication technology equipment.
Lease payments are expensed over the rental period and they are
included in other operating expenses. Assets leased and related
liabilities are not recognised in the parent company’s balance
sheet.
Subsidiary shares: The carrying amounts of subsidiary shares
are assessed as part of the Group’s impairment testing, where
cash flow forecasts based on value-in-use calculations are
prepared for the Group’s cash-generating units. In the impairment
testing of subsidiary shares, the cash flows are further allocated
to subsidiaries’ recoverable amounts. The impairment loss is
recognised, if the carrying amount of the subsidiary shares and
the amount of net loan receivables from the subsidiary exceed the
recoverable amount of the corresponding assets.
2. Other operating income
EUR thousand 2023 2022
Rental income 12.9 11.9
Other service charges 17,124.3 16,209.5
Other operating income 11.4 33.2
Total 17,148.6 16,254.6
3. Personnel
EUR thousand 2023 2022
Personnel costs
Salaries and fees 6,262.9 6,837.7
Pension costs 1,018.2 1,171.8
Other personnel costs 496.7 357.0
Total 7,777.8 8,366.6
Average number of personnel 62 68
Salaries and bonuses to the Management
CEO and Members of the Board of Directors 1,052.4 1,178.3
Remuneration and pension costs for the CEO and the members of
the Board of Directors are disclosed in the consolidated financial
statement in note 10.2. Related party transactions.
4. Depreciation, amortisation and impairment charges
EUR thousand 2023 2022
Depreciation 4,185.0 4,278.2
Impairment charges - 5,877.7
Total 4,185.0 10,155.9
Criteria applied for the straight-line depreciation is disclosed
in notes 6.1. and 6.2. to the consolidated financial statement.
Depreciation by asset class is presented in notes 9-10.
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5. Other operating expenses
EUR thousand 2023 2022
Postage, telephone and banking expenses 144.4 165.4
IT expenses 7,096.3 7,834.2
Travelling and car expenses 240.1 241.6
Administrative consultancy services 2,069.6 6,921.4
Other operating expenses 1,613.7 1,862.8
Total 11,164.2 17,025.5
Other operating costs are mainly costs related to the ownership.
Audit costs included in
other operating costs, EUR thousand 2023 2022
Audit fees 72.8 61.5
Other fees 53.5 27.9
Total 126.4 89.5
6. Financial income and expenses
EUR thousand 2023 2022
Income from group companies
Dividend income from group companies - 37,763.7
Gains on sales of subsidiary shares - 881.0
Other interest and financial income
Interest income from group companies 140.4 3,558.2
Interest income from other companies 3,884.1 993.7
Other financial income 14,647.9 20,129.3
Interest and other financial expenses
Interest expenses to group companies -4,447.1 -3,395.8
Interest expenses to other companies -5,143.9 -1,904.5
Other financial expenses -17,661.2 -17,168.0
Expense from group companies
Expense from sales of subsidiary shares - -88,685.1
Impairment on investments
Impairment on investments
in non-current assets -9,826.1 -
Total -18,405.9 -47,827.6
Financial income and expenses include:
Interest income 4,024.5 4,551.9
Interest expenses -9,591.1 -5,300.3
Exchange rate gains/losses -28.9 758.8
Expense from sales of subsidiary shares in 2022 relate to the loss on
sale of shares in Kronans Apotek AB.
7. Appropriations
EUR thousand 2023 2022
Change in depreciation difference 271.1 -95.7
Group contribution received 19,392.5 18,181.9
Total 19,663.5 18,086.2
8. Income taxes
EUR thousand 2023 2022
Income taxes for the financial period 1,323.4 355.5
Income taxes for previous financial periods 890.9 -
Total 2,214.3 355.5
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9. Intangible assets
EUR thousand
2023
Intangible
rights
Other
intangible
assets
Advance
payments and
construction in
progress Total
Historical cost 1 Jan 940.1 31,404.0 6,312.5 38,656.6
Increases - 117.1 1,568.0 1,685.1
Decreases -127.4 -1,819.4 -5,896.8 -7,843.6
Reclassifications - 118.1 -118.1 -
Historical cost 31 Dec 812.7 29,819.9 1,865.6 32,498.1
Accumulated amortisation 1 Jan 611.7 14,193.5 5,896.8 20,702.0
Accumulated depreciation related to decreases -127.4 -1,819.4 -5,896.8 -7,843.6
Amortisation for the financial year 105.6 4,077.7 - 4,183.3
Accumulated amortisation 31 Dec 589.8 16,451.8 - 17,041.6
Carrying amount 31 Dec 222.9 13,368.1 1,865.6 15,456.5
2022
Historical cost 1 Jan 966.1 30,176.1 8,182.8 39,325.0
Increases - 457.6 361.0 818.6
Decreases -26.1 -1,397.3 -63.7 -1,487.0
Reclassifications - 2.167.6 -2,167.6 -
Historical cost 31 Dec 940.1 31,404.0 6,312.5 38,656.6
Accumulated amortisation 1 Jan 532.2 10,829.6 - 11,361.8
Accumulated depreciation related to decreaes -26.1 -806.4 - -832.4
Amortisation for the financial year 105.6 4,170.2 - 4,275.8
Impairments - - 5,896.8 5,896.8
Accumulated amortisation 31 Dec 611.7 14,193.5 5,896.8 20,702.0
Carrying amount 31 Dec 328.4 17,210.5 415.7 17,954.7
10. Property, plant and equipment
EUR thousand
2023
Land and
water areas
Machinery and
equipment
Other
tangible assets Total
Historical cost 1 Jan 77.4 17.7 7.5 102.6
Historical cost 31 Dec 77.4 17.7 7.5 102.6
Accumulated depreciation 1 Jan - 13.3 - 13.3
Depreciation for the financial year - 1.8 - 1.8
Accumulated depreciation 31 Dec - 15.1 - 15.1
Carrying amount 31 Dec 77.4 2.6 7.5 87.5
2022
Historical cost 1 Jan 77.4 68.0 7.5 152.9
Decreases - -50.3 - -50.3
Historical cost 31 Dec 77.4 17.7 7.5 102.6
Accumulated depreciation 1 Jan - 56.0 - 56.0
Accumulated depreciation related to decreases - -45.1 - -45.1
Depreciation for the financial year - 2.4 - 2.4
Accumulated depreciation 31 Dec - 13.3 - 13.3
Carrying amount 31 Dec 77.4 4.4 7.5 89.3
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11. Investments
EUR thousand
2023
Holdings in group
companies
Holdings in
participating
interest companies Other shares
Receivables from
group companies Total
Historical cost 1 Jan 308,750.9 242,250.0 8,203.2 - 559,204.1
Historical cost 31 Dec 308,750.9 242,250.0 8,203.2 - 559,204.1
Accumulated impairments 1 Jan -14,159.7 - - - -14,159.7
Impairments -9,826.1 - - - -9,826.1
Impairment 31 Dec -23,985.8 - - - -23,985.8
Carrying amount 31 Dec 284,765.1 242,250.0 8,203.2 - 535,218.3
2022
Historical cost 1 Jan 669,844.5 - 8,203.2 28,291.9 706,339.6
Increases 80,491.5 242,250.0 - 6,363.4 329,104.8
Decreases -441,585.1 - - -34,655.2 -476,240.4
Historical cost 31 Dec 308,750.9 242,250.0 8,203.2 - 559,204.1
Accumulated impairments 1 Jan -100,559.7 -100,559.7
Impairments 86,400.0 - - - 86,400.0
Impairment 31 Dec -14,159.7 - - - -14,159.7
Carrying amount 31 Dec 294,591.2 242,250.0 8,203.2 - 545,044.4
Holdings in participating interest companies include Oriola Corporation’s 50% shareholding in Swedish Pharmacy Holding AB, which
controls pharmacy chains Kronans Apotek and Apoteksgruppen in Sweden.
12. Receivables
EUR thousand 2023 2022
Receivables from group companies
Short-term receivables
Trade receivables 35.5 17.5
Other receivables 475.1 787.6
Accrued income and prepaid expenses 19,392.5 55,945.6
Total 19,903.1 56,750.7
Items included in accrued receivables
Arrangement fees relating to loans 236.7 295.2
Income tax receivables - 713.3
Exchange rate profit on hedges 481.5 92.6
Compensations not received 8.0 11.4
Group contribution 19,392.5 18,181.9
Other accrued receivables 441.8 38,208.5
Total 20,560.4 57,503.0
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13. Equity
EUR thousand 2023 2022
Share capital 1 Jan 147,899.8 147,899.8
Share capital 31 Dec 147,899.8 147,899.8
Restricted equity 147,899.8 147,899.8
Contingency fund 1 Jan 19,418.7 19,418.7
Contingency fund 31 Dec 19,418.7 19,418.7
Invested unrestricted equity reserve 1 Jan 76,957.5 76,957.5
Invested unrestricted equity reserve 31 Dec 76,957.5 76,957.5
Profit/ loss from previous years 1 Jan 112,220.0 168,952.9
Dividend paid -10,882.6 -7,253.9
Share-based compensation -121.1 -141.8
Purchase of own shares * -88.8 -88.8
Delivery of own shares 121.1 141.8
Profit/loss from previous years 31 Dec 101,248.6 161,610.2
Result for the period -6,935.1 -49,390.1
Non-restricted equity 190,689.8 208,596.3
Total 338,589.5 356,496.0
* Shares purchased for the share based incentive programme.
Distributable funds 31 Dec 2023 2022
Contingency fund 19,418.7 19,418.7
Invested unrestricted equity reserve 76,957.5 76,957.5
Profit/ loss from previous years 101,248.6 161,610.2
Net profit for the period -6,935.1 -49,390.1
Distributable funds 31 Dec 190,689.8 208,596.3
14. Appropriations
EUR thousand 2023 2022
Cumulative accelerated depreciation difference 1,597.4 1,868.4
Total 1,597.4 1,868.4
15. Liabilities
EUR thousand 2023 2022
Liabilities to group companies
Long-term liabilities
Other liabilities 37,851.5 75,527.3
Short-term liabilities
Trade payables 94.6 75.8
Other liabilities 228,555.9 234,683.1
Accrued liabilities 14.9 -
Total 226,516.9 310,286.3
Items included in accrued liabilities
Long-term accrued liabilities
Change of fair value for interest rate swap 391.5 -
Short-term accrued liabilities
Items related to personnel 1,113.8 1,696.3
Interest 342.0 151.9
Other accrued liabilities 76.4 61.9
Change of fair value for interest rate swap 410.8 471.4
Total 2,334.4 2,381.5
16. Guarantees, liability engagements
and other liabilities
EUR thousand 2023 2022
Guarantees and other liabilities
Guarantees for group companies 86.7 410.8
Other liabilities and engagements 3,000.0 5,000.0
Total 3,086.7 5,410.8
Rental liabilities on real estate
Maturity within one year 33.0 33.0
Total 33.0 33.0
Rental liabilities on machinery and fixtures
Maturity within one year 299.6 268.9
Maturity within 1–5 years 282.2 202.0
Total 581.9 470.8
17. Derivatives and financial risk management
EUR thousand 2023 2022
Book values of derivative instruments
Interest rate swap agreements 64,888.2 64,737.7
Foreign currency forward and swap contracts 57,678.4 106,997.1
Total 122,566.7 171,734.8
Fair values of derivative instruments
Interest rate swap agreements 1,800.3 3,960.8
Foreign currency forward and swap contracts 360.5 -128.3
Total 2,160.9 3,832.5
Oriola Corporation has interest rate swap agreements hedging
the Oriola Group’s cash flows as well as foreign currency forward
and swap contracts with various counterparties. These derivatives
are managed in accordance with the treasury policy approved
by the Oriola Corporation Board of Directors. While the Oriola
Group’s interest rate risks from Oriola Sweden AB’s selling of trade
receivables are hedged with derivative agreements on a group level,
the hedging presents an interest rate risk to Oriola Corporation.
More information on the Oriola Group’s financial risk management
and derivatives are presented in note 8.3. Financial Risk
Management in the notes to the consolidated Financial Statements.
18. Ownership in other companies
The Parent company’s ownership in other companies is presented
in the note 10.1. Subsidiaries, in the notes to the Consolidated
Financial Statements.
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To the Annual General Meeting of Oriola Corporation
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Oriola Corporation
(business identity code 1999215-0) for the year ended December
31, 2023. The financial statements comprise the consolidated
statement of financial position, statement of comprehensive
income, statement of changes in equity, statement of cash flows
and notes, including material accounting policy information, as
well as the parent company’s balance sheet, income statement,
statement of cash flows and notes.
In our opinion
- the consolidated financial statements give a true and fair view
of the group’s financial position, financial performance and cash
flows in accordance with IFRS Accounting Standards as adopted
by the EU
- the financial statements give a true and fair view of the parent
company’s financial performance and financial position in
accordance with the laws and regulations governing the
preparation of financial statements in Finland and comply with
statutory requirements.
Our opinion is consistent with the additional report submitted to
the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice
in Finland. Our responsibilities under good auditing practice are
further described in the Auditor’s Responsibilities for the Audit of
the Financial Statements section of our report.
Auditor’s Report
We are independent of the parent company and of the group
companies in accordance with the ethical requirements that are
applicable in Finland and are relevant to our audit, and we have
fulfilled our other ethical responsibilities in accordance with
these requirements.
In our best knowledge and understanding, the non-audit
services that we have provided to the parent company and
group companies are in compliance with laws and regulations
applicable in Finland regarding these services, and we have
not provided any prohibited non-audit services referred to in
Article 5(1) of regulation (EU) 537/2014. The non-audit services
that we have provided have been disclosed in note 4.3 to the
consolidated financial statements.
We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was influenced by our application
of materiality. The materiality is determined based on our
professional judgement and is used to determine the nature,
timing and extent of our audit procedures and to evaluate
the effect of identified misstatements on the financial
statements as a whole. The level of materiality we set is based
on our assessment of the magnitude of misstatements that,
individually or in aggregate, could reasonably be expected
to have influence on the economic decisions of the users of
the financial statements. We have also taken into account
misstatements and/or possible misstatements that in our
opinion are material for qualitative reasons for the users of the
financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed
in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. The significant risks of material
misstatement referred to in the EU Regulation No 537/2014 point
(c) of Article 10(2) are included in the description of key audit
matters below.
We have also addressed the risk of management override of
internal controls. This includes consideration of whether there was
evidence of management bias that represented a risk of material
misstatement due to fraud.
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THE KEY AUDIT MATTER HOW THE MATTER WAS ADDRESSED IN THE AUDIT
Valuation of goodwill (refer to accounting principles for the consolidated financial statements and note 6.2)
After recognizing an impairment of € 21.4 million in the cash generating unit dose dispensing during the financial year, the
total carrying value of goodwill amounted to € 35.2 million. In addition, the goodwill amounting to € 4.5 million related to dose
dispensing business in Sweden was classified as assets held for sale in 2023.
Goodwill is tested for impairment when indicators of impairment exist, or at least annually. Goodwill impairment testing is
conducted by comparing the carrying value with the recoverable amount. Management estimates the recoverable amount
using a discounted cash flow model.
Determining the key assumptions used in the impairment tests requires management judgement and estimates especially
relating to long term growth, profitability and discount rates.
Valuation of goodwill is considered a key audit matter due to the significant carrying values and high level of management
judgement involved.
We obtained an understanding of management’s impairment assessment process and assessed the impairment tests prepared
by the Company.
Our detailed audit work with the involvement of KPMG valuation specialists included testing the integrity of the calculations
and the technical model. We challenged the assumptions used by management in respect of forecasted growth rates and
profitability as well as the appropriateness of the discount rates used. We also validated the assumptions used in relation to
market and industry information.
We also evaluated the cash flows used by comparing them to the group’s strategic plans and budget, external sources and the
understanding we gained from our audit.
Furthermore, we considered the appropriateness of the group’s disclosures in respect of goodwill and impairment testing.
solu
Revenue recognition (refer to accounting principles for the consolidated financial statements and notes 4.2)
Revenue is mainly generated through the sale of goods and services. The revenue earned is recognized when the control is
transferred to the customer in accordance with the terms of delivery or agreement.
There are two types of agreements with the pharmaceutical companies in which Oriola acts either as a principal or an agent.
For agreements in which Oriola acts as a principal the legal title, control and payment liability has been transferred to Oriola
and the revenue is recognized on gross basis. For consignment agreements where Oriola acts as an agent, only the distribution
fee is recognized as revenue. Analysis of the agreements and the related revenue recognition method requires management
judgement, considering the various contractual terms.
Due to the large volumes of transactions and management judgement involved revenue recognition has been identified as an
area of focus in the audit.
We obtained an understanding of the revenue recognition processes and evaluated the design and tested the controls over
revenue recognition. With special focus on identifying unusual sales transactions we also performed substantive procedures
such as testing samples of sales agreements and year-end transactions to ensure appropriate application of revenue recognition
criteria.
We examined sales contracts with pharmaceutical companies to ensure that revenue was recognized in accordance with the
terms of the contract and the group’s accounting policy.
Audit procedures were performed over revenue recognition at the group level and at each of the reporting components that
were in scope for the group audit.
In addition, we have assessed the appropriateness of accounting policy and disclosure information related to revenue
recognition in the financial statements.
Valuation of Inventories (refer to accounting principles for the consolidated financial statements and note 5.2)
The carrying value of inventories amounted to EUR 162.9 million at the end of the financial year.
Inventory management, stocktaking routines and pricing of inventories are key factors in the valuation of inventories. Oriola has
different types of contracts with pharmaceutical companies which are either accounted for as own inventory or consignment
stock.
In addition, the valuation of inventories requires management estimates in respect of obsolescence assessment.
Due to management judgement and the significant carrying amount involved, valuation of inventories is determined a key
audit matter that our audit is focused on.
We evaluated the appropriateness of the accounting policies by reference to IFRS standards, as well as the functionality of the
key IT systems of inventory management.
We tested the controls over inventory management, accuracy of inventory amounts and valuation of inventories. We performed
substantive audit procedures in relation to pricing of inventory and provision for obsolete inventory.
We reviewed a sample of contracts to ensure that inventory is accounted appropriately in line with the terms of the contract and
the group’s accounting policy.
We also attended physical inventory counting at selected locations to assess the appropriateness of stocktaking routines.
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Holdings in group companies in the parent company’s financial statements (refer to notes 1 and 11 to the parent company’s financial statements)
After recognizing an impairment of EUR 9.8 million, the parent company has investments in subsidiaries amounting to EUR
284.8 million as at December 31, 2023.
The recoverable amounts for holdings in group companies is tested as part of group impairment testing based on the
discounted cash flow model.
Due to the high level of judgment incorporated in respect of the future cash flows and the significant carrying amounts
involved, this is considered one of the key areas that our audit is focused on.
Our audit procedures with the involvement of KPMG valuation specialists included testing the integrity of the calculations
and the technical model. We challenged the assumptions used by management in respect of forecasted growth rates and
profitability as well as the appropriateness of the discount rates used. We also validated the assumptions used in relation to
market and industry information.
We evaluated the cash flows used by comparing them to the group’s budgeting process, external sources and the
understanding we gained from our audit.
Responsibilities of the Board of Directors and the
President and CEO for the Financial Statements
The Board of Directors and the President and CEO are responsible
for the preparation of consolidated financial statements that give
a true and fair view in accordance with IFRS Accounting Standards
as adopted by the EU, and of financial statements that give a
true and fair view in accordance with the laws and regulations
governing the preparation of financial statements in Finland and
comply with statutory requirements. The Board of Directors and the
President and CEO are also responsible for such internal control as
they determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due
to fraud or error.
In preparing the financial statements, the Board of Directors
and the President and CEO are responsible for assessing the
parent company’s and the group’s ability to continue as a going
concern, disclosing, as applicable, matters relating to going
concern and using the going concern basis of accounting. The
financial statements are prepared using the going concern basis
of accounting unless there is an intention to liquidate the parent
company or the group or cease operations, or there is no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit
conducted in accordance with good auditing practice will always
detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence
the economic decisions of users taken on the basis of the financial
statements.
As part of an audit in accordance with good auditing practice,
we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the
financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sufficient and appropriate to provide
a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional
omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the parent company’s or the
group’s internal control.
- Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
- Conclude on the appropriateness of the Board of Directors’
and the President and CEO’s use of the going concern basis of
accounting and based on the audit evidence obtained, whether
a material uncertainty exists related to events or conditions
that may cast significant doubt on the parent company’s or the
group’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw
attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the parent
company or the group to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and
events so that the financial statements give a true and fair view.
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- Obtain sufficient appropriate audit evidence regarding the
financial information of the entities or business activities within
the group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for
our audit opinion.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and communicate with them all relationships and
other matters that may reasonably be thought to bear on our
independence, and where applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the current
period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation
precludes public disclosure about the matter or when, in extremely
rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences
of doing so would reasonably be expected to outweigh the public
interest benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting
on March 19, 2018, and our appointment represents a total period
of uninterrupted engagement of 6 years.
Other Information
The Board of Directors and the President and CEO are responsible
for the other information. The other information comprises the
report of the Board of Directors and the information included in
the Annual Report, but does not include the financial statements
or our auditor’s report thereon. We have obtained the report of
the Board of Directors prior to the date of this auditor’s report, and
the Annual Report is expected to be made available to us after that
date. Our opinion on the financial statements does not cover the
other information.
In connection with our audit of the financial statements, our
responsibility is to read the other information identified above and,
in doing so, consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit, or otherwise appears to be materially
misstated. With respect to the report of the Board of Directors,
our responsibility also includes considering whether the report of
the Board of Directors has been prepared in accordance with the
applicable laws and regulations.
In our opinion, the information in the report of the Board of
Directors is consistent with the information in the financial
statements and the report of the Board of Directors has been
prepared in accordance with the applicable laws and regulations.
If, based on the work we have performed on the other
information that we obtained prior to the date of this auditor’s
report, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have
nothing to report in this regard.
Helsinki, February 15, 2024
KPMG OY AB
Kirsi Jantunen
Authorized Public Accountant, KHT
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To the Board of Directors of Oriola Corporation
We have undertaken a reasonable assurance engagement
in respect of whether the consolidated financial statements
for theyear ended 31 December, 2023 included in the digital
financialstatements 549300UWB1AIR85BM957-2023-12-31-en.zip
of Oriola Corporation (Business ID 1999215-0) have been marked
up withiXBRL markups in accordance with the requirements
ofArticle 4 ofEUDelegated Regulation 2018/815 (ESEF RTS).
The Responsibility of the Board of Directors and
Managing Director
The Board of Directors and Managing Director are responsible
for preparing the report of the Board of Directors and financial
statements (ESEF financial statements) that comply with the
requirements of ESEF RTS. This responsibility includes:
- preparation of ESEF financial statements in XHTML format
inaccordance with Article 3 of the ESEF RTS
- marking up the primary statements and the notes to
the consolidated financial statements, and the company
identification data included in the ESEF financial statements
with iXBRL tags in accordance with Article 4 of the ESEF RTS;
and
- ensuring consistency between ESEF financial statements
andaudited financial statements.
The Board of Directors and the Managing Director are also
responsible for such internal control as they deem necessary
toprepare the ESEF financial statements in accordance with
therequirements of the ESEF RTS.
Independent Auditor’s Reasonable Assurance Report on
Oriola Corporation’s ESEF Financial Statements
Auditor’s Independence and Quality Management
We are independent of the company in accordance with the
ethical requirements applicable in Finland, which apply to the
engagement we have performed, and we have fulfilled our other
ethical responsibilities in accordance with these requirements.
The auditor applies International Standard on Quality Management
ISQM 1, which requires the firm to design, implement and operate
a system of quality management including policies or procedures
regarding compliance with ethical requirements, professional
standards and applicable legal and regulations requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility
is to express an opinion on whether the marking up of the
consolidated financial statements included in the ESEF financial
statements comply in all material respects with the Article 4 of the
ESEF RTS. We conducted our reasonable assurance engagement
in accordance with International Standard on Assurance
Engagements 3000.
The engagement involves procedures to obtain evidence whether;
- the primary statements of the consolidated financial statements
included in the ESEF financial statements are, in all material
respects, marked up with iXBRL tags in accordance with Article 4
of the ESEF RTS, and;
- whether the notes to the consolidated financial statements and
the company identification data included in the ESEF financial
statements data, have been marked up, in all material respects,
with iXBRL tags in accordance with Article 4 of the ESEF RTS; and
- whether the ESEF financial statements and the audited financial
statements are consistent with each other.
The nature, timing and the extent of procedures selected depend
on practitioner’s judgement. This includes the assessment of the
risks of material departures from the requirements set out in the
ESEF RTS, whether due to fraud or error.
We believe that the evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Opinion
In our opinion, the primary statements of the consolidated
financial statements, the notes to the consolidated financial
statements and the company identification data included in the
ESEF financial statements of Oriola Corporation identified as
549300UWB1AIR85BM957-2023-12-31-en.zip for the year ended
31 December, 2023 are, in all material respects, marked up in
compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial
statements of Oriola Corporation for the year ended 31 December,
2023 is set out in our Auditor’s Report dated 15 February, 2024. In
this report, we do not express any audit opinion or other assurance
conclusion on the consolidated financial statements.
Helsinki 23 February, 2024
KPMG OY AB
Kirsi Jantunen
Authorised Public Accountant, KHT
Oriola Corporation
Head office
Orionintie 5, FI-02200 Espoo, Finland
P.O.Box 8, FI-02101 Espoo, Finland
Tel. +358 10 429 99
firstname.lastname@oriola.com
investor.relations@oriola.com
www.oriola.com