ORIOLA
Financial review 2021
22
Table of contents
Report of the Board of Directors ........... 3
1. Business review ...................................................... 3
2. Risk review ................................................................ 8
3. Governance .............................................................. 9
4. Remuneration ......................................................... 15
5. Non-nancial information .................................. 17
Information on shares .................................... 21
Shares and shareholders ......................................... 21
Share-related key gures ....................................... 22
Largest shareholders ................................................ 24
Financial indicators and
performance measures ................................. 25
Financial indicators 2017–2021 ............................ 25
Alternative performance measures .................... 27
Financial statements 2021 .......................... 28
Consolidated statement
of comprehensive income (IFRS) ......................... 29
Consolidated statement
of nancial position (IFRS) ...................................... 30
Consolidated statement of cash ows (IFRS) .... 31
Consolidated statement
of changes in equity (IFRS) ..................................... 32
Notes to the consolidated
nancial statements .................................................. 33
1. Basic information on the company ............... 33
2. Basis of presentation ............................................ 33
3. Use of estimates and judgement ................... 33
4. Operating result .................................................... 34
4.1. Segment reporting ..................................... 34
4.2. Net sales and other
operating income ........................................ 36
4.3. Operating expenses .................................. 37
4.4. Employee benets ..................................... 38
5. Working capital ...................................................... 42
5.1. Trade and other receivables ................... 42
5.2. Inventories ..................................................... 42
5.3. Trade payables and other liabilities .... 43
5.4. Provisions ....................................................... 43
6. Tangible and intangible assets and other
non-current assets ............................................... 44
6.1. Property, plant and equipment ............ 44
6.2. Goodwill and other intangible assets ... 45
6.3. Other non-current assets ........................ 47
7. Leases ........................................................................ 48
7.1. Leases in the statement
of nancial position ..................................... 49
7.2. Leases in the statement
of comprehensive income ........................ 49
8. Capital structure .................................................... 50
8.1. Financial income and expenses ........... 50
8.2. Financial assets and liabilities ................ 50
8.3. Financial risk management .................... 53
8.4. Equity, shares and authorisations ......... 56
8.5. Earnings per share, dividend and
other equity distribution .......................... 58
9. Income taxes ........................................................... 59
9.1. Taxes recognised in the comprehensive
income for the period ................................ 59
9.2. Deferred tax assets and liabilities ........ 59
10. Group structure ................................................... 61
10.1. Subsidiaries ................................................ 61
10.2. Related party transactions ................... 61
11. Unrecognised items .......................................... 62
11.1. Commitments and
contingent liabilities ................................ 62
11.2. Future lease payments .......................... 62
11.3. Litigation....................................................... 62
11.4. Events after the balance sheet date .. 62
12. Other notes ........................................................... 63
12.1. Application of new
and amended IFRS standards
and IFRIC interpretations ....................... 63
Parent company nancial statements ............... 64
Parent company income statement (FAS) ... 64
Parent company balance sheet (FAS) ............ 64
Parent company cash ow statement (FAS) .. 65
Notes to the parent company
nancial statements (FAS) .................................. 65
The Board of Directors’ proposal
for the prot distribution
and Auditor’s Note ........................................... 70
Auditor’s report ................................................... 71
Auditor's assurance report on
ESEF Financial Statements .......................... 75
Basis for preparation
The accounting principles are presented in the
relevant parts of the notes to the nancial state-
ments 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 judge-
ments are described separately in the relevant note.
The description of the use of estimate and judgement
in the note is marked with italic font and highlighted.
Non-nancial information
Oriola gives the non-nancial information accord-
ing to the Finnish Accounting Act and using the
Nasdaq ESG Reporting Guide as appropriate in the
Report of the Board of Directors. The non-nancial
information and related key performance indica-
tors are presented in chapter 5. Non-nancial in-
formation of the Report of the Board of Directors.
Report of the Board of Directors
Oriola Financial review 2021
33
1. Business review
Operating environment
In the rst quarter of 2021, the COVID-19 pandemic amplied in
Finland and Sweden, which signicantly impacted Oriola’s oper-
ating environment. In the second quarter, the negative impacts
from the pandemic were smaller and the market started to recover,
which continued during the third quarter.
In the fourth quarter, the market growth continued and the volume
demand for pharmaceuticals and other health and wellbeing prod-
ucts were already slightly above 2019 levels.
Throughout the year, market remained volatile and cost pressures
accelerated towards the end of the year.
Oriola estimates that majority of the market impacts related to pan-
demic will be temporary, except for accelerated channel shift to on-
line. In the Swedish pharmacy market, e-commerce is a fast-grow-
ing area with tight competition of market shares. Price attraction
and signicant online marketing spend are typical mechanisms to
grow market shares in e-commerce. Moreover, the pandemic has
increased the societies’ need to be better prepared for emergency
conditions, for instance through enhanced pharmaceutical reserve.
Furthermore, the need for high-quality pharmaceutical availability
compliant with regulations, and particularly expertise in cold chain
management, has increased during the pandemic.
Turnaround highlights
Due to the signicant and amplied COVID-19 driven impacts in
the market environment and their increased temporary eects
on Oriola’s business, Oriola started a short-term initiative, which
progressed rapidly during the rst half of 2021 to drive protabil-
ity and eciency across business areas. Oriola also sold 50% of its
ownership of Doktor.se, a leading Swedish e-health provider.
Report of the Board of Directors
During the second half of the year, Oriola continued its short-term
action plan activities to ensure company’s successful turnaround.
The short-term action plan for turnaround consists of four key ele-
ments:
• Cost savings through simplied operating model, reduction of
operating costs and rigorous cost management.
• Ecient net working capital management through optimised
product portfolio, enhanced supplier management & supply chain
planning.
• Excellent customer relationship management targeting to supe-
rior customer experience with one-touch point to customers.
• Commercial excellence through service portfolio crystallisation,
pricing models and enhanced margin management.
By taking these measures, Oriola streamlines processes to im-
prove operational eciency and reduces cost to increase prot-
ability and cost-competitiveness.
The rst measures of the turnaround action plan were completed
19 December 2021. Oriola announced results from the coopera-
tion negotiations and operating model restructuring. The new
operating model and country-based organisational structure has
been eective as of 1 January 2022. The estimated annual savings
are approximately EUR 7 million and the savings will materialise
in the rst quarter of 2022 onwards. The adjusting items related to
the personnel reductions are estimated to be approximately EUR
2.9 million.
The company continues to seek further measures to improve its
protability, and furthermore, assesses possibilities for the struc-
tural arrangements. Oriola has also initiated a strategy process
and will present its new business strategy at its Capital Markets
Day on 5 May 2022.
Report of the Board of Directors
Oriola Financial review 2021
44
Net nancial expenses were EUR 5.8 (6.0) million. Prot for the year
was EUR 11.3 (11.3) million. Income taxes were EUR 3.4 (3.1) million,
which corresponds to an eective tax rate of 22.9% (21.3%). Earn-
ings per share were EUR 0.06 (0.06).
For more information on the Group’s nancial performance, please
see the section Financial indicators 2017-2021.
Consumer
Consumer business area oers products and services for health and
wellbeing for customers through Kronans Apotek, the third largest
pharmacy chain in Sweden.
Market environment
The pharmacy market in Sweden grew by 2.3% (+4.6%) in Swedish
krona (source: Apoteksförening), however, the number of pharma-
cies decreased by 22 in 2021 to 1,411 pharmacies.
Total online pharmacy market grew by 19% in 2021, slower than in
the comparison period in 2020 (+59%). Online pharmacies’ share of
the total market was approximately 17% (18%) by the end of De-
cember 2021.
Oriola’s market share in the pharmacy market in Sweden in 2021
was 16.3% (16.6%) (source: Apoteksförening). The relative share of
over-the-counter (OTC) pharmaceuticals and traded goods from
the net sales was 25.8% (25.0%). At the end of 2021, Oriola had 319
(325) pharmacies in Sweden. Oriola opened three new pharmacies
and closed nine pharmacies.
Key gures Change
EUR million 2021 2020 %
Invoicing 839.4 798.2 5.2
Net sales 817.5 780.7 4.7
Adjusted EBIT 11.4 14.4 -20.5
EBIT 9.8 15.3 -35.9
Adjusted EBIT % 1.4 1.8
EBIT % 1.2 2.0
Number of personnel
at the end of period 1,598 1,621 -1.4
1
The gures in 2017-2018 have been restated due to an error related to previous periods.
The restatement had an impact on inventories, deferred tax assets and retained earnings
in the consolidated statement of nancial position and on material purchases and income
taxes in the consolidated statement of comprehensive income. More information on
correction of the error is presented in the notes to the Financial statements 2019.
The Group’s nancial performance
for January–December 2021
Invoicing and net sales
Invoicing increased by 5.2% (increased 0.9%). On a constant curren-
cy basis invoicing increased by 2.7% (increased 0.1%).
Net sales increased by 4.5% (increased 4.6%) to EUR 1,882.4
(1,800.8) million. On a constant currency basis net sales increased
by 1.9% (increased 3.8%). In the rst quarter the net sales declined,
driven by decreased demand and low volumes due to amplied
COVID-19 pandemic. In the second, third and fourth quarter the net
sales grew as the markets were recovering.
Protability
Adjusted EBIT increased by 25.5% (increased 2.6%) to EUR 26.3 (21.0)
million. This was driven by improved market environment in both op-
erating countries and the continued good performance of Retail busi-
ness area. Adjusting items totalled EUR -5.9 (-0.6) million, and the EBIT
was EUR 20.5 (20.4) million. The adjusted EBIT on a constant currency
basis was EUR 25.6 million.
The COVID-19 pandemic had around EUR 5 million negative impact
on Oriola’s operations and protability during the rst half of the
year, however there was no signicant impact during the second
half of the year.
Swedish pharmacies
Market share
Kronans Apotek
Others
16%
84%
Invoicing
EUR million
2017 2018 2019 2020 2021
4,000
3,000
2,000
1,000
0
3,765
3,959
3,336
3,518
3,733
Adjusted EBIT
1
EUR million
40
30
20
10
0
2017 2018 2019 2020 2021
21.0
26.3
39.0
34.4
20.5
Report of the Board of Directors
Oriola Financial review 2021
55
Retail
Retail business area oers a wide range of health and wellbeing prod-
ucts to healthcare and retail operators, as well as services for pharma-
cies, including stang and dose-dispensing services.
Market environment
In Retail business, Oriola oers a wide range of healthcare prod-
ucts both in traded goods and in OTC pharmaceuticals. In Sweden,
the traded goods and OTC pharmaceuticals market grew by 5.4%
(+7.7%) in 2021. Oriola’s market share in the supply of these prod-
ucts for pharmacies in Sweden was approximately 24% (25%) in
2021 (Source: Apoteksförening).
In dose dispensing business, Oriola oers pharmaceuticals and
dose dispensing for private and public healthcare sectors. The total
market size for dose dispensing is approximately 250,000 patients
(230,000) in Sweden and 90,000 patients (75,000) in Finland. Oriola
is the market leader in Sweden serving approximately 103,000 pa-
tients. In Finland, Oriola serves approximately 29,000 patients.
Out of the total 822 pharmacies in Finland, 271 pharmacies used
Oriola’s stang services during the year 2021.
Key gures Change
EUR million 2021 2020 %
Invoicing 507.7 486.7 4.3
Net sales 506.7 484.9 4.5
Adjusted EBIT 11.3 2.0 454.7
EBIT 9.3 0.9 894.7
Adjusted EBIT % 2.2 0.4
EBIT % 1.8 0.2
Number of personnel
at the end of period 538 583 -7.6
Financial performance
The net sales increased by 4.7% (increased 4.1%) to EUR 817.5
(780.7) million. On a constant currency basis net sales increased
by 1.3% (increased 3.1%). Pandemic-driven lower demand bur-
dened the rst quarter. Market demand improved in the second,
third and fourth quarter. Oriola’s online sales grew by 31%, faster
than the market (+19%), and it accounts for 8.5% (6.6%) of Oriola’s
Consumer sales. To support the e-commerce business growth, Ori-
ola is investing in a new warehouse dedicated for e-commerce in
Enköping, Sweden. The warehouse is expected to be ready during
the second half of 2022.
Adjusted EBIT decreased by 20.5% (increased 22.8%) to EUR 11.4
(14.4) million. This was due to market driven lower volumes in the
rst quarter, fewer customer visits in pharmacies as well as accel-
erated channel shift to online. Online continues to be a strategic
development area for Oriola. Adjusting items totalled EUR -1.6
(0.9) million, mainly related to restructuring, and EBIT was EUR 9.8
(15.3) million.
Pharma
Pharma business area provides advanced logistics, expert and ad-
visory services for pharmaceutical companies, distributing a wide
range of pharmaceutical products for pharmacies, hospital pharma-
cies and veterinarians, and among other customer groups.
Key gures Change
EUR million 2021 2020 %
Invoicing 3,050.0 2,906.0 5.0
Net sales 996.3 961.2 3.7
Adjusted EBIT 12.4 12.8 -2.8
EBIT 11.9 12.4 -4.0
Adjusted EBIT % 1.2 1.3
EBIT % 1.2 1.3
Number of personnel
at the end of period 436 448 -2.7
Market environment
The pharmaceutical distribution market value at wholesale prices in
Sweden grew by 3.1% (+5.1%) in Swedish krona in 2021 (source: IQVIA).
In Finland the market value at wholesale prices grew by 3.0% (+2.1%) in
2021 (source: LTK).
According to Oriola’s estimate, Oriola’s share of the pharmaceutical
wholesale market was approximately 46% (47%) in Sweden and ap-
proximately 43% (42%) in Finland in 2021.
Financial performance
Invoicing increased by 5.0% (decreased 0.2%) to EUR 3,050.0
(2,906.0) million. On a constant currency basis invoicing increased
by 2.8% (decreased 0.8%). Net sales increased by 3.7% (increased
4.7%) to EUR 996.3 (961.2) million, and on a constant currency ba-
sis, net sales increased by 1.6% (increased 4.0%). This was driven
mainly by the growing pharmaceutical market.
Adjusted EBIT decreased by 2.8% (decreased 27.8%) to EUR 12.4
(12.8) million. This was driven by lower volumes in both countries
in the rst quarter and the related volatility of pharmaceutical vol-
umes which had a negative impact on operational eciency. Ad-
justing items totalled EUR -0.5 (-0.4) million, mainly related to re-
structuring, and EBIT was EUR 11.9 (12.4) million.
Oriola Others
Finland
Wholesale - market share %
Oriola Others
Sweden
46%
54%
50
BSEK
2.9
BEUR
43%
57%
Report of the Board of Directors
Oriola Financial review 2021
66
-17.1 (4.0) million. Strong uctuation in working capital is typi-
cal to Oriola’s industry. Net cash ow from investing activities was
EUR 9.6 (-31.4) million. The impact of the sales of shares in Doktor.
se on net cash ow from investing activities was EUR 32.8 million.
Net cash ow from nancing activities was EUR -108.5 (70.4) mil-
lion.
At the end of December 2021, interest-bearing debt was EUR
209.9 (295.3) million. The non-current interest-bearing liabilities
amounted to EUR 123.5 (127.8) million and current interest-bear-
ing liabilities amounted to EUR 86.4 (167.4) million. Non-current
interest-bearing liabilities mainly consist of loans from nancial
institutions totalling EUR 63.3 (65.9) million and non-current lease
liabilities totalling EUR 60.2 (61.9) million. Current interest-bearing
liabilities mainly consist of commercial paper issues of EUR 49.8
(78.6) million, advance payments from Finnish pharmacies total-
ling EUR 16.0 (17.0) million, loans from nancial institutions to-
talling EUR 2.0 (52.0) million and current lease liabilities totalling
EUR 18.6 (19.8) million. Interest-bearing net debt was EUR 100.8
(127.1) million and gearing 46.5% (75.0%).
The large uctuation in cash ow from nancing activities, in cash
and cash equivalents and in short-term interest-bearing liabilities
between the reporting period and the comparison period is ex-
plained by the preparations for the uncertainty during the COV-
ID-19 pandemic in the comparison period. During the reporting
period, the situation has normalised in this respect.
The non-recourse trade receivables sales programmes are in use
in Sweden. At the end of December 2021, a total of EUR 183.1
(179.6) million in trade receivables had been sold. The average in-
terest rate on the interest-bearing liabilities excluding lease liabili-
ties was 0.96% (1.09%).
In June 2021, Oriola signed a new unsecured revolving credit facil-
ity agreement for a total of EUR 140 million for three years. The fa-
cility is committed and includes an option to be extended by two
years. The new revolving credit facility replaced the existing EUR
100 million agreement that was signed in June 2017. The margin
of the revolving credit facility is linked to Oriola’s nancial cove-
nants and the performance of sustainability targets. The commit-
ted long-term revolving credit facility of EUR 140.0 million and the
credit limits totalling EUR 34.9 million were unused at the end of
December 2021.
At the end of the reporting period Oriola’s equity ratio was 20.1%
(14.8%). Return on capital employed was 4.6% (5.0%) and return
on equity 5.9% (6.9%).
For more information on the Group’s balance sheet and cash ow and
related key gures, see the section Financial indicators 2017–2021.
Financial performance
Net sales increased by 4.5% (increased 6.5%) to EUR 506.7 (484.9)
million. On a constant currency basis net sales increased by 1.5% (in-
creased 5.5%), driven by growth in dose dispensing business and in-
creased demand for health and wellbeing products in Sweden.
Adjusted EBIT increased to EUR 11.3 (2.0) million mainly due to the
positive development of dose dispensing business. Also, improved
pricing and product mix in health and wellbeing product category in
Sweden impacted the result positively. Adjusting items totalled EUR
-1.9 (-1.1) million, mainly related to restructuring, and EBIT was EUR
9.3 (0.9) million.
Balance sheet, cash ow and nancing
Oriola’s total assets at the end of December 2021 were EUR 1,093.2
(1,165.6) million. Equity attributable to the equity holders was EUR
216.8 (169.6) million. In June 2021, Oriola sold approximately 50%
of its shareholding in Doktor.se. The prot from the sale of shares
increased the equity by EUR 21.7 million. In addition, an increase of
EUR 23.1 million was recognised to the value of the remaining in-
vestment. The translation dierences decreased equity by EUR 5.4
million. The equity was decreased by the dividend of EUR 5.4 mil-
lion distributed to the shareholders in June 2021.
Cash and cash equivalents totalled EUR 109.1 (168.2) million. Net
cash ow from operating activities in 2021 was EUR 40.0 (58.3)
million, of which changes in working capital accounted for EUR
Oriola Others
Oriola Others
Sweden Finland
Dose dispensing - market share
41%
59%
33%
67%
Net cash ow from operating activities
EUR million
80
60
40
20
0
-20
-40
Q1
2020
Q2
2020
Q3
2020
Q4
2020
Q1
2021
Q2
2021
Q3
2021
Q4
2021
9
4
-0
46
-14
28
-16
42
Investments and depreciation
Gross investments in 2021 totalled EUR 22.8 (32.8) million and con-
sisted mainly of investments in logistics, information systems, and
renewal of pharmacies.
Depreciation, amortisation and impairment amounted to EUR 44.9
(41.6) million. In the second quarter of 2021, an impairment of good-
will totalling EUR 0.9 million was recognised relating to the close
down of the service centre in Swedish Retail business. Impairment of
property, plant and equipment totalling EUR 0.9 million were related
to the closure of pharmacies and to the IT solutions in Sweden.
Changes in the Group structure
The Group’s parent company Oriola Corporation established a new
subsidiary Farenta Oy in December 2021, to which it transferred the
Report of the Board of Directors
Oriola Financial review 2021
77
owned New Company to be established. In the arrangement, Oriola
contributes its Consumer business area (Kronans Apotek) into the
New Company, for an enterprise value of approximately EUR 400
million. At the closing of the arrangement, Oriola Consumer’s liabili-
ties (IFRS 16 leases and factoring liabilities) of approximately EUR
134 million will be transferred to the New Company. Additionally,
Oriola will receive a cash consideration of approximately EUR 24
million from Euroapotheca. Euroapotheca contributes its Swedish
business, Apoteksgruppen, into the New Company for an enterprise
value of approximately EUR 300 million and transfers net debt of
EUR 82 million into the New Company.
The transaction is subject to competition authorities’ approval and
is expected to close at the latest during the second half of 2022.
The transaction is expected to have a negative impact of approxi-
mately EUR 10 million on consolidated net prot of Oriola Group in-
cluding as a result of realised translation dierences and transaction
related costs. For the parent company, there will be a negative im-
pact of approximately EUR 100 million on net prot as a result of loan
receivables that are not transferred to the New Company, decreasing
the parent company’s distributable funds by an equal amount. At the
end of December 2021 Oriola Corporation’s distributable funds were
EUR 265.3 million.
As a consequence of transferring EUR 134 million of Oriola Consum-
er’s liabilities to the New Company consisting mainly of IFRS 16 re-
lated leasing liabilities as well as factoring, Oriola Group’s net debts
will be decreasing.
Oriola will report the New Company as an associated company un-
der the equity method and present the share of associated compa-
ny’s result above EBIT in the consolidated nancial statements.
Net assets and liabilities of Consumer business area at the end of
December 2021 is presented below:
Jan–Dec 2021 Jan–Dec 2020
Trading of shares class A class B class A class B
Trading volume, million 8.1 50.7 3.3 48.6
Trading volume, EUR million 16.1 98.9 6.7 92.6
Highest price, EUR 2.37 2.20 2.25 2.27
Lowest price, EUR 1.78 1.73 1.62 1.52
Closing quotation,
end of period, EUR 1.99 2.01 1.99 1.90
In 2021, the traded volume of Oriola Corporation shares, excluding
treasury shares, corresponded to 32.5% (28.6%) of the total number
of shares.
At the end of 2021, 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 138,201 (173,206) treasury shares, of
which 63,650 (63,650) were class A shares and 74,551 (109,556)
were class B shares. The treasury shares held by the company
account for 0.08% (0.10%) of the company's shares and 0.11%
(0.11%) of the votes.
stang services business from Oriola Finland Oy. Farenta Oy provides
personnel services for pharmacies.
Personnel
At the end of December 2021, Oriola had 2,645 (2,730) employees, 60%
(59%) of whom worked in Consumer, 16% (16%) in Pharma, and 20%
(21%) in Retail. The Group administration employed 3% (3%) of the total
number of employees. The average number of personnel in January–De-
cember 2021 was 2,760 (2,687). Personnel numbers consist of members
of sta in active employment calculated as full-time equivalents.
The total amount of wages, salaries and bonuses in 2021 was EUR 135,6
million (EUR 126.7 million in 2020 and EUR 127.5 million in 2019).
For more information about the employee benets please refer to note
4.4. Employee benets in the Consolidated Financial Statements.
Oriola Corporation shares
Oriola Corporation's market capitalisation on 31 December 2021
was EUR 362.8 (349.9) million.
Under Article 3 of the Articles of Association, a shareholder may de-
mand conversion of class A-shares into class B shares. In 2021, no
class A shares were converted into class B shares (1,685,960 class A
shares were converted into class B shares in 2020).
More information on shares and shareholders is given in the section
entitled Information on shares.
Outlook for 2022
The adjusted EBIT is estimated to increase from the 2021 level.
The COVID-19 pandemic continues and severity as well as duration
of the pandemic remain unclear in Oriola’s operating environment.
Furthermore, the recent overall inationary increases and related cost
pressures may have a signicant impact on Oriola’s protability.
The outlook is based on current group structure.
Events after the balance sheet date
Oriola announced on 9 February 2022 that Oriola Corporation and
the Euroapotheca group ("Euroapotheca") have signed a framework
merger agreement for combining the respective pharmacy business-
es in Sweden: Oriola’s Consumer business area comprising Kronans
Apotek (“Kronans Apotek” or “Oriola Consumer”) and Euroapotheca’s
Apoteksgruppen into a new company (the “New Company”).
The New Company to be established will have over 470 pharmacies
and full online pharmacy operations, over 2,300 full-time employ-
ees and an illustrative combined revenue of EUR 1,140 million as of
2020 in Sweden. The New Company is expected to be the third larg-
est player in the Swedish pharmacy market by revenue, with an es-
timated combined market share of 25 percent.
Euroapotheca is an international group of companies in the North-
ern Europe region managing pharmacy chains, online pharmacies
and wholesale companies in Estonia, Latvia, Lithuania and Sweden.
The group employs altogether nearly 4,000 people. Euroapotheca
acquired Apoteksgruppen in 2018.
Oriola and Euroapotheca will combine the respective pharmacy
businesses in Sweden into a 50 percent and 50 percent equally
EUR million 31 Dec 2021
Assets 426.6
Liabilities 120.3
Net asset and liabilities total 306.3
Report of the Board of Directors
Oriola Financial review 2021
88
an impact on Oriola’s net sales, earnings and consolidated statement of
nancial position. Changes in cash ow forecasts may cause impairment
of goodwill. More information about nancial risk management can be
found in note 8.3. in the notes to the Consolidated Financial Statements.
Near-term risks and uncertainty factors
Oriola’s strategic development projects involve operational risks which
may have an eect on the protability when realised. Oriola has sev-
eral signicant IT system projects ongoing. The company has dened
separate risk management plans for all IT projects and aims to ensure
the seamless go-lives of the systems through thorough planning. The
automation improvements of the distribution centre in Sweden have
been mostly taken into use during 2021. Improvements in cold chain
automation will continue during rst half of 2022. The process optimi-
sation and eciency improvements will continue in this area.
Since the rst quarter of 2020, the COVID-19 pandemic has impacted
signicantly Oriola’s operating environment as the restrictions set by
the authorities and consumer caution impacted the consumer behav-
iour. The measures caused by the pandemic have led to the decrease
of healthcare services as well as aected the demand for pharmaceuti-
cals and health and wellbeing products. This has inevitably also had an
impact on Oriola’s business. As the pandemic continues, Oriola’s busi-
ness environment stays volatile, which may have an impact on Oriola’s
net sales and protability. The impacts of the pandemic on the valua-
tion of Oriola’s assets are closely monitored. Based on the assessments,
COVID-19 pandemic is currently not expected to have such long-term
impacts on Oriola’s nancial performance, that would require adjust-
ments to the carrying amounts of the assets.
Oriola has prepared its operations for the risks caused by the COVID-19
pandemic. In the contingency planning, the company has considered
especially securing the health of its personnel, availability of workforce,
safety in distribution centres and pharmacies as well as growing need
for pharmaceutical stocking. In addition, Oriola is actively discussing
with both customers and authorities about quickly changing needs and
their management.
Oriola’s operations and protability are impacted by price volatility in
key cost categories. Especially, changes in energy prices, labour and
freight costs may have impact on Oriola’s protability.
Prot distribution proposal
Oriola Group’s parent company is Oriola Corporation, whose dis-
tributable funds according to the balance sheet as at 31 Decem-
ber 2021 were EUR 265.3 (325.6) million. Oriola Corporation’s result
for the nancial year 2021 was EUR -54.8 (6.9) million. Earnings per
share of the Oriola Group were EUR 0.06 (0.06).
The Board of Directors proposes to the Annual General Meeting that
a dividend of EUR 0.04 (0.03) per share would be paid for 2021. The
Board of Directors further proposes that the remaining non-restrict-
ed equity, EUR 258,075,212.87 be retained and carried forward.
Annual General Meeting 2022
Oriola Corporation's Annual General Meeting will be held on 15
March 2022. The matters specied 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 22 Feb-
ruary 2022 at the latest.
2. Risk review
Strategic and nancial risks
Oriola has specied 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 benecial impact on Oriola’s operations and achieve-
ment of the set goals. The Group also has a Code of Conduct policy and
a Treasury policy covering compliance and nancial risks. The internal
control and risk management systems related to Oriola’s nancial report-
ing are aimed at ensuring the reliability of the company's nancial state-
ments and nancial reporting, as well as the company's compliance with
legislation and generally approved operating principles.
Oriola operates in regulated pharmaceutical distribution and retail mar-
kets 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 spe-
ciality pharmaceuticals, the digitalisation of the retail trade and services,
sustainability as well as possible pandemics.
Oriola has identied 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, paral-
lel import and public reimbursement, as well as increased competi-
tion 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 com-
pany 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 Benets 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 ex-
pected to enter into force in 2023 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 eects.
In Finland, the pandemic has accelerated the need to nd savings from
the area of the Ministry of Social Aairs 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 will be aected from the
beginning of 2023. The impact of these changes on Oriola´s activities in
Finland are still somewhat unknown, but according to the company´s es-
timation, not material.
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-
nancial information.
The main nancial risks for Oriola involve currency rate, liquidity, inter-
est rate and credit risks. Changes in the value of the Swedish krona have
Report of the Board of Directors
Oriola Financial review 2021
99
Governing structures of Oriola
SHAREHOLDERS' MEETING
BOARD OF DIRECTORS
CEO
CFO ORIOLA MANAGEMENT TEAM
CONSUMER
BUSINESS AREA
PHARMA
BUSINESS AREA
Compensation and Human
Resources Committee
Reports
Elects
Supervises
Controls
Elects Elects
Establishes
Submits
auditors
report
Proposes Board composition
and remuneration
Audit Committee
RETAIL
BUSINESS AREA
AUDITOR
INTERNAL AUDIT
NOMINATION
BOARD
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 expect-
ed to have material impact on the nancial position of the Group.
3. Governance
Corporate governance statement 2021
This Corporate governance statement has been prepared in accord-
ance with the Finnish Corporate Governance Code 2020 (the “Corpo-
rate Governance Code”) and chapter 7, section 7 of the Finnish Secu-
rities Markets Act.
Oriola Corporation (hereinafter “Oriola” or “the company”) complies
with the provisions of its Articles of Association, the Finnish Compa-
nies Act, the Finnish Securities Markets Act and other similar legisla-
tion. The company also complies with the rules and regulations ap-
plying to listed companies issued by Nasdaq Helsinki Ltd (Helsinki
Exchange) and the Finnish Financial Supervisory Authority. The com-
pany’s head oce is located in Espoo, Finland.
Oriola applies the Corporate Governance Code in its entirety without
any exceptions. The information required by the Corporate Govern-
ance Code is also available on the company’s website www.oriola.
com. An unocial English translation of the Corporate Governance
Code 2020 is in the public domain and available on the Securities
Market Association’s website at www.cgnland..
Oriola prepares its consolidated nancial statements and interim re-
ports in accordance with the EU-approved IFRS reporting standards,
the Securities Markets Act, applicable Financial Supervisory Authority
standards and the rules issued by Nasdaq Helsinki Ltd. The Report of
the Board of Directors and the parent company’s nancial statements
have been prepared in accordance with the Finnish Accounting Act
and the guidelines and statements of the Accounting Board. The audi-
tor’s report covers the Report of the Board of Directors, the consoli-
dated nancial statements and the parent company’s nancial state-
ments.
Report of the Board of Directors
Oriola Financial review 2021
1010
• adoption of the financial statements;
• use of the profit shown on the balance sheet;
• election of the members of the Board of Directors and the
decision on their fees;
• discharging from liability for the members of the Board of
Directors and the President and CEO;
• election of the auditor and the decision on compensation, and
• proposals made by the Board of Directors and shareholders to
the Annual General Meeting (e.g. amendments to the Articles
of Association, repurchase of the company’s own shares, share
issue, giving special authorisations).
Annual General Meeting 2021
The Annual General Meeting of Oriola, held on 16 March 2021,
adopted the nancial statements and discharged the members of
the Board of Directors and the President and CEO from liability for
the nancial year ending 31 December 2020. According to the de-
cision of the Annual General Meeting, a dividend of EUR 0.03 per
share was paid on the basis of the balance sheet adopted for the -
nancial year ending 31 December 2020.
Authorisations
The Annual General Meeting authorised the Board of Directors to
decide at its discretion on the payment of dividend up to a maxi-
mum of EUR 0.03 per share. The authorisation is valid until the be-
ginning of the next Annual General Meeting of the company. The
Board of Directors of Oriola decided on 26 October 2021 that it
will not use the authorisation and no additional dividend for 2020
will be paid.
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 com-
pany and includes the right to derogate from the shareholders'
pre-emptive subscription right. The authorisation is in force for 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 der-
ogate 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 deci-
sion of the Annual General Meeting.
The Annual General Meeting authorised the Board to decide on re-
purchasing 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 2021 are available on
the company's website www.oriola.com.
Shareholders' Nomination Board
The Shareholders' Nomination Board consists of ve members ap-
pointed by the shareholders. In addition, the Chairman of the Board
of Directors acts as an expert member of the Nomination Board.
The Chairman of the Board of Directors annually arranges a meet-
ing to which the Chairman invites the company’s 20 largest share-
holders, by votes, registered as shareholders in the company’s
shareholders’ register maintained by Euroclear Finland Ltd by 31
August preceding the Annual General Meeting. The meeting of the
20 largest shareholders, by votes, elects the members of the Share-
holders’ Nomination Board. One of the members is elected to serve
as the Chairman of the Shareholders’ Nomination Board.
General meeting of shareholders
The general meeting of shareholders decides on the matters that
under the Companies Act and the Articles of Association of Oriola
are within its purview. Each shareholder is entitled to attend general
meetings. Each class A share carries 20 votes and each class B share
1 vote at General Meetings. According to the Articles of Association,
no shareholder may vote using an amount of votes that exceeds 1/20
of the total number of votes carried by the shares of dierent share
classes represented at the general meeting.
The Board of Directors convenes a general meeting of sharehold-
ers. The notice of general meeting is published on the company's
website or in one daily newspaper in Finland’s capital city no earlier
than 2 months and no later than 21 days prior to the meeting. Orio-
la also publishes the notice of general meeting as a stock exchange
release. The documents to be submitted to the general meeting
and the draft resolutions to the general meeting are available on
the company’s website. The notice of the general meeting contains
the proposed agenda for the meeting.
A shareholder has the right to have matters that under the Compa-
nies Act fall within the competence of the general meeting dealt with
by the general meeting, if the shareholder so demands in writing to
the Board of Directors well in advance of the meeting so that the mat-
ter can be included in the notice of general meeting. The demand shall
be considered to have arrived in time, when the Board of Directors has
been informed about the demand at the latest four weeks in advance
of the publication of the notice of the general meeting.
The company's starting point is that the chairman of the Board of
Directors, a sucient number of members of the Board of Directors
and its committees, the President and CEO, and the auditor attend
the general meeting. A person proposed for the rst time as mem-
ber of the Board of Directors shall be present at the general meet-
ing that decides on his or her election unless there are well-found-
ed reasons for absence.
The shareholders shall according to law and the articles of associa-
tion exercise their power of decision at the general meeting. The An-
nual General Meeting is held by the end of May each year. The duties
of the Annual General Meeting include:
Report of the Board of Directors
Oriola Financial review 2021
1111
of the Board of Directors. Anja Korhonen, member of the Board of
Directors since 2014, has informed the Nomination Board that she
is not available for re-election to the Board of Directors.
The biographical details of the proposed Board members are pre-
sented on the company’s website.
Board of Directors
The Board of Directors is responsible for the administration of the
company and the appropriate organisation of its operations.
The Board of Directors is responsible for managing and supervising
the company’s operations in accordance with the law, governmen-
tal regulations and the articles of association. The Board also en-
sures that good corporate governance is complied with throughout
the Oriola Group.
The members of the Board of Directors are elected by the general
meeting of shareholders. The Board of Directors uses the highest
decision-making power in the Oriola Group between the general
meetings of Shareholders. Pursuant to the articles of association,
the Board of Directors consists of no fewer than ve and no more
than eight members. The term of the members of the Board of
Directors expires at the end of the next Annual General Meeting
following their election. The chairman of the Board of Directors
is elected by the general meeting of shareholders. The vice chair-
man of the Board is elected by the Board of Directors from among
its members.
The Board of Directors convenes in accordance with a timetable
agreed in advance and also convenes as required. In addition to
making decisions, the Board of Directors also receives during its
meetings current information about the operations, nances and
risks of the Group. Board meetings are also attended by the Presi-
dent and CEO, the CFO and the General Counsel (who acts as sec-
retary to the Board). Members of the Oriola Management Team
attend Board meetings at the invitation of the Board. Minutes are
kept of all meetings.
Main tasks of the Board of Directors
The main tasks to be dealt with by the Board of Directors are listed in
the Board’s rules of procedure. Accordingly, these are among others:
• approving the company’s strategy;
• approving nancial targets, budgets, major investments and risk
management principles;
• appointment and dismissal of the company’s President and CEO;
• consideration and decision of all signicant matters concerning
the operations of the Group and the business segments; and
• approving the charters of the Audit Committee and the
Compensation and Human Resources Committee.
Diversity on the Board
The ultimate goal in electing members to the Board of Direc-
tors is to ensure that the Board of Directors as a collegium has
a competence profile which supports Oriola’s existing and fu-
ture business. Diversity supports the overall goal that the Board
of Directors has an optimal competence profile to support the
company’s business and is viewed as an integral part and a suc-
cess factor enabling the achievement of Oriola’s strategic goals.
Important factors for the diversity of Oriola’s Board of Directors
are the mutually complementary expertise of the members, their
education and experience in different professional areas and in-
dustrial sectors, businesses in various stages of development,
leadership experience, as well as their personal capacities. The
diversity of the Board of Directors is supported by experience in
operating environments and industries relevant to the company
as well as different cultures and by consideration of the age and
gender breakdown of the members.
Oriola’s Board of Directors has approved the diversity policy of the
Board of Directors in December 2016. According to the diversi-
ty policy of the Board of Directors Oriola’s objective is to maintain
an appropriate balance of representation of both genders on the
Board of Directors.
The company has upheld the requirements set for diversity in the
composition of the Board of Directors. Oriola’s Board of Directors
2021 represents diversity related of nationalities, professional com-
petencies and genders.
The term of oce of the members of the Shareholders’ Nomina-
tion Board expires the year following the appointment upon the
appointment of the new members of the Shareholders’ Nomina-
tion Board pursuant to the rules of procedure of the Shareholders’
Nomination Board.
The Shareholders’ Nomination Board is established to exist and serve
until the Annual General Meeting decides otherwise.
The Nomination Board shall prepare a proposal concerning the com-
position of the Board of Directors for the company’s Annual General
Meeting. The Nomination Board must submit its proposals to the
Board of Directors no later than on the rst day of February preced-
ing the Annual General Meeting. The proposals are published as a
stock exchange release and included in the invitation to the Annual
General Meeting. The Nomination Board shall also present and pro-
vide grounds for its proposals to the Annual General Meeting.
The rules of procedure of the Shareholders’ Nomination Board are
available on the Company’s website www.oriola.com.
The largest shareholders of Oriola Corporation elected on 22 Septem-
ber 2021 the following persons as members of the Nomination Board:
Mikael Aro
Annika Ekman
Peter Immonen
Pekka Pajamo
Into Ylppö
Pekka Pajamo was elected Chairman of the Nomination Board.
Panu Routila, Chairman of the Board of Directors of Oriola, serves as
an expert member of the Nomination Board.
On 22 December 2021, the Shareholders’ Nomination Board sub-
mitted its proposal to the 2022 Annual General Meeting concerning
the composition of the Board of Directors as follows: The number of
members of the Board of Directors would be six. The present mem-
bers of the Board of Directors Eva Nilsson Bågenholm, Juko-Juho
Hakala, Harri Pärssinen, Lena Ridström and Panu Routila would be
re-elected. Nina Mähönen would be elected new member of the
Board of Directors. Panu Routila would be re-elected as Chairman
Report of the Board of Directors
Oriola Financial review 2021
1212
Board of Directors 2021–2022
The Annual General Meeting of Oriola held on 16 March 2021 con-
rmed that the Board of Directors of Oriola shall have six members
and elected the following persons as chairman and members of the
Board of Directors:
Members of Oriola’s Board of Directors 1 January–16 March 2021:
Name
Year of
birth
Education and
independence
Attendance
at Board
Meetings
Attendance
at Committee
Meetings
Mariette
Kristenson 1977
M.Sc. (Economics),
independent
member of the
Board 3/3
Compensation
and HR Com-
mittee 4/4
The Board of Directors has evaluated the independence of its mem-
bers and determined that all members are independent of the com-
pany and its major shareholders. Juko Hakala was during the time
of his interim CEO position (1 February-9 August 2021) determined
to dependent of the company, but independent of its signicant
shareholders. The Board has also conducted an assessment of its
activities and working practices.
In 2021, the Board of Directors of Oriola convened 24 times, of
which 7 were per capsulam meetings.
Board committees
The Board of Directors has an Audit Committee and a Compen-
sation and Human Resources Committee. The committees’ char-
ters are confirmed by the Board. The committees are preparato-
ry bodies that submit proposals to the Board on matters within
their purview. Minutes are kept of the committees’ meetings.
The committees report to the Board at regular intervals. The
committees do not have independent decision-making powers.
Their task is to submit recommendations to the Board on mat-
ters under consideration.
In its constitutive meeting, held after the Annual General Meet-
ing, the Board of Directors appoints, from among its members,
the members and chairman of the Audit Committee and the
Compensation and Human Resources Committee.
In addition to the Audit Committee and Compensation and Hu-
man Resources Committee, the Board of Directors may appoint
ad hoc committees for preparing specific matters. Such commit-
tees do not have Board-approved charters and the Board does
not release information on their term, composition, the number
of meetings or the members’ attendance rates.
Name
Year of
birth
Education and
independence
Attendance
at Board
Meetings
Attendance
at Committee
Meetings
Panu Routila
(Chairman) 1964
M.Sc. (Economics),
independent
member of the
Board 24/24
Compensation
and HR Com-
mittee
13/13 and Audit
Committee
5/5
Juko-Juho
Hakala 1970
M.Sc. (Economics),
independent
member of the
Board 24/24
Compensation
and HR Com-
mittee
9/10 (1 Jan-1
Feb and 1 Sep
2021-)
Anja Korhonen 1953
M.Sc. (Economics),
independent
member of the
Board 24/24
Audit Com-
mittee
5/5
Eva Nilsson
Bågenholm
(Vice Chairman) 1960
Physician,
independent
member of the
Board 24/24
Compensation
and HR Com-
mittee
13/13
Lena Ridström 1965
M.Sc. (Econom-
ics), independent
member of the
Board 24/24
Compensation
and HR Com-
mittee
1/1 (16
March-31 Aug
2021) Audit
Committee
5/5
Harri Pärssinen 1963
M.Sc. (Economics),
independent
member of the
Board 23/24
Audit Com-
mittee
5/5
In its constitutive meeting held later the same day, the Board of Di-
rectors elected Eva Nilsson Bågenholm as its Vice Chairman.
In its constitutive meeting on 16 March the Board decided that
Juko Hakala would not be a member of the Audit Committee or
the Compensation and Human Resources Committee for the time
when he was serving as interim President and CEO of Oriola.
Audit Committee
The task of the Audit Committee is to enhance the control of the
company’s operations and nancial reporting. According to the
charter, the following in particular shall be addressed and prepared
by the Audit Committee:
• reviewing the consolidated nancial statements and interim
reports, together with the auditor;
• reviewing together with the auditor any deciencies in the
supervision systems observed in control inspections and any
other deciencies reported by auditors;
• reviewing any deciencies in the control system observed in internal
audit and other observations and recommendations made;
• reviewing the plans of action for the control inspection and
internal audit and giving recommendations to company
management on focus areas for internal audits; and
• evaluating the appropriateness of the supervision of company
administration and risk management and reviewing changes in
the principles of company accounting and external reporting
prior to their introduction.
In addition, the Audit Committee’s duties include preparatory work
on the decision of electing the auditor, evaluation of the independ-
ence of the auditor, taking into account particularly the eect of the
provision of related services on the independence, and carrying out
any other tasks assigned to it by the Board. The Audit Committee
has at least three members.
As of 16 March 2021, the Chairman of the Audit Committee is Anja
Korhonen and the other members are Harri Pärssinen, Lena Rid-
ström and Panu Routila. The members of the Audit Committee are
independent of the company and its major shareholders.
Compensation and Human Resources Committee
According to the charter, the Compensation and Human Resources
Committee reviews management and personnel remuneration pol-
icies and issues related to management appointments and makes
proposals on such matters to the Board of Directors. The Commit-
tee’s responsibilities include:
• Developing and monitoring effective compensation principles
that promote achievement of the goals of the company
Report of the Board of Directors
Oriola Financial review 2021
1313
• Making proposals to the Board on compensation and incentive
schemes for management and other key personnel
• Evaluating performance management, succession planning and
talent development processes and programmes
• Considering and preparing appointments of top management to
be decided by the Board. Supporting and advising the President
and CEO in the appointments of the Oriola Management Team
• Monitoring and evaluating the performance of the President
and CEO
• Monitoring and evaluating the performance of the members of
the Oriola Management Team based on the CEO´s proposal.
The Compensation and Human Resources Committee has three
members. In its constitutive meeting on 16 March the Board ap-
pointed from among its members the following members to the
Compensation and Human Resources Committee: Eva Nilsson Bå-
genholm (Chairman), Lena Ridström and Panu Routila. After Juko
Hakala’s interim CEO position had ended the Board decided that
Juko Hakala will as of 1 September 2021 replace Lena Ridström in
the Compensation and Human Resources Committee. After the
change, the members of the Compensation and Human Resourc-
es Committee are Eva Nilsson Bågenholm (Chairman), Juko Hakala
and Panu Routila. The members of the Compensation and Human
Resources Committee are independent of the company and its ma-
jor shareholders.
President and CEO and deputy to CEO
The Board of Directors appoints and dismisses the President and
CEO of Oriola and decides on the terms of his/her employment.
At the end of 2021 the President and CEO of the company is Elisa
Markula, M.Sc., MBA, born in 1966.
Robert Andersson, M.Sc., MBA, born in 1960 left his position as the
President and CEO on 1 February 2021. Juko Hakala, member of Ori-
ola’s Board of Directors, M.Sc., born in 1970 served as the President
and CEO for the period between 1 February 2021 and 9 August
2021 when Elisa Markula assumed the position of new permanent
President and CEO of Oriola.
In accordance with the Companies Act, the President and CEO is
responsible for the day-to-day executive management of the com-
pany in accordance with the instructions and orders given by the
Board of Directors. In addition, the President and CEO also ensures
that accounts of the company comply with Finnish law and that its
nancial aairs have been arranged in a reliable manner. The terms
and conditions of the President and CEO’s employment are speci-
ed in a written service contract approved by the Board.
The Board of Directors also appoints, as necessary, a deputy to the
President and CEO. At the end of the year 2021 the Company does
not have an appointed deputy to the President and CEO.
Oriola Management Team
At the end of the year 2021, the Oriola Management Team con-
sisted of ten members, including the President and CEO, to whom
the other Oriola Management Team members report. The Oriola
Management Team is responsible for the operative management
and development of Oriola. It meets regularly and assists CEO for
preparing Oriola’s strategy, annual planning, monitoring the per-
formance against set targets, nancial reporting, risk management
and preparing investments and other decisions. Key duties are also
developing a strong culture and aligned internal ways of working
in Oriola.
The following persons were members of Oriola Management Team
on 31 December 2021:
• Elisa Markula, President and CEO
• Sari Pohjonen, CFO
• Katarina Gabrielson, Vice President, Retail business area
• Hannes Hasselrot, Vice President, Consumer business area
• Anne Kariniemi, Vice President, Operations
• Tuula Lehto, Vice President, Communications and Sustainability
• Elina Niemelä, Vice President, People and Transformation
• Charlotta Nyström, CIO
• Fredrik Pamp, Vice President, Pharma business area
• Petter Sandström, General Counsel
Descriptions of internal control procedures and the
main features of risk management systems
The risk management systems and internal control procedures re-
lated to Oriola’s nancial reporting aim to ensure a reasonable cer-
tainty of the reliability of the company's nancial statements and
nancial reporting, as well as the company's compliance to legisla-
tion and generally approved accounting principles.
Financial reporting
The Board of Directors and the President and CEO have the overall
responsibility for organising the internal control and risk manage-
ment systems pertaining to nancial reporting. The President and
CEO, the members of the Oriola Management Team and the heads
of the business units are responsible for the accounting and admin-
istration of the areas within their spheres of responsibility com-
plying with legislation, the Group's operating principles, and the
guidelines and instructions issued by Oriola's Board of Directors.
The organising and leading of the nancial reporting in the Group
has been centralised under the subordination of the CFO.
Oriola Group follows the International Financial Reporting Stand-
ards (IFRS) approved for application within the European Union. In-
structions and accountancy principles for nancial reporting are col-
lected in an accounting manual that is updated as soon as standards
change, as well as in the nancial department's instructions that are
followed in all Group companies. Group accounting is responsible for
following and keeping up to date with nancial statement standards,
upholding the principles concerning nancial reporting and distrib-
uting information about these to the business units.
Measurement and follow-up
The performance of the Group is monitored in the Oriola Manage-
ment Team with monthly reports as well as in the monthly opera-
tional reviews of the business segments. The nancial situation of
the Group is also monitored in the meetings of the Board of Direc-
tors. The Audit Committee and the Board of Directors examine the
interim reports and nancial statements before their publication.
Monitoring of the monthly reports also ensures the eectiveness of
internal supervision. Each business segment must ensure eective
supervision of its own operations as part of Group-level internal su-
pervision. The business segments and the Group Finance organi-
sation are responsible for the evaluation of the processes cover-
ing nancial reporting. The evaluations must contain balances and
analyses, which are compared with budgets, assessments and vari-
ous economic indicators.
Report of the Board of Directors
Oriola Financial review 2021
1414
Internal control
Internal control forms an essential part of the company's govern-
ance and management systems. It covers all of the Group's func-
tions and organisational levels. The purpose of internal control is
to ensure a sucient certainty that the company will be able to
carry out its strategy. Internal control is not a separate process but a
procedural measure covering all Group-wide operating principles,
guidelines and systems.
The purpose of Oriola’s internal supervision system is to support
the implementation of the Group strategy and to ensure that rules
and regulations are observed. The company’s internal supervision is
based on a Group structure, in which the Group’s operations are or-
ganised into Business Areas and Group functions. Group functions
issue Group-level guidelines laying down the operational frame-
work and the persons responsible for the process. The guidelines
cover such areas as accounting, reporting, nancing, investments
and business principles.
The guidelines aim to ensure that all risks connected to the achieve-
ment of the company’s objectives can be identied and managed.
The control measures cover all Group levels and functions. All new
instructions and guidelines are published on the company’s inter-
nal website and sta members can provide feedback to the man-
agement and anonymously report any questionable activities
through the whistleblowing channel.
Risk management
The Board of Directors of Oriola approves the company’s risk man-
agement policy in which the risk management operating model,
principles, responsibilities and reporting are specied. The Board
assess the Company’s long-term strategic risks and oversees the
eectiveness of the risk management. The Board-appointed Audit
Committee regularly reviews and monitors the implementation
of the risk management policy in the Group and the risk manage-
ment process.
Oriola has specied the company’s risk management model, princi-
ples, organisation and process in the Group Risk Management Policy.
The Group Risk Management Policy denes the enterprise risk man-
agement system, objectives, roles and responsibilities within Oriola in
order to identify and manage risks related to execution of the Com-
pany’s strategy and operations. The Group Risk Management Policy is
the main risk management document within Oriola and must be fol-
lowed by all Oriola business units, subsidiaries and entities. Addition-
ally, the Group has a Code of Conduct policy, a Treasury policy and an
Approval policy covering compliance and nancial risks. Oriola’s risks
are classied as strategic, operational, nancial and hazard risks. Risk
assessment and management are key elements in the strategic plan-
ning, operations and daily decision making in the company.
Risk management and the most signicant risks are described on
the company’s website at www.oriola.com.
Other information to be provided in the CG statement
Internal audit
Oriola uses an outsourced internal audit function for the purpose
of fullling its internal audit requirements. The outsourced internal
audit function is an independent and objective assurance activity
reporting directly to the Audit Committee of the Board of Directors.
The internal audit assignments are carried out on the basis of an In-
ternal Audit Charter approved by the Board of Directors as well as
an Internal Audit Plan annually reviewed and approved by the Au-
dit Committee.
Insider management
Oriola complies with the insider holding guidelines issued by Nas-
daq Helsinki Ltd (January 1, 2021) and the Market Abuse Regulation
(596/2014, “MAR”). Oriola has issued its insider guidelines (“Guide-
lines”) which are based on applicable EU and Finnish legislation (es-
pecially MAR and the Securities Markets Act 746/2012), the insider
guidelines of Nasdaq Helsinki Ltd, and the regulations and guide-
lines of the European Securities Markets Authority and the Finnish
Financial Supervisory Authority.
Members of the company’s Board of Directors, the President and
CEO, the members of the Oriola Management Team that have opera-
tional responsibilities leading a business area of the company as well
as the CFO, CIO and Vice President Operations are considered the
management of the company (“Management”). Management and
their related parties shall notify all transactions with the company’s
securities or nancial instruments made on his or her own account
to the company and the Finnish Financial Supervisory Authority with-
out delay and three working days from the execution of the trans-
action at the latest. The guidelines set trade restrictions prohibiting
Management and the persons who participate in the preparation of
interim and annual nancial statements of Oriola from making trans-
actions with the company’s securities or nancial instruments related
to them during a closed period of no less than 30 days before a nan-
cial report of Oriola is made public (closed period).
Oriola is obliged to draw up the insider lists and keep them up to
date. For the time being, Oriola has determined not to include any
persons as permanent insiders. Consequently, all persons with in-
side information will be included in the event-based insider list for
relevant insider projects. Oriola instructs the persons entered in the
event-based insider list on their obligations and any possible con-
sequences. In addition, Oriola monitors and supervises the proper
management of insider issues.
Related party transactions
Oriola abides by applicable legislation concerning related party
transactions. Oriola’s related parties are the related parties of a list-
ed company in accordance with the Companies Act and IAS 24. The
related parties include Management, their close family members
as well as companies in which the individuals mentioned, alone or
jointly with others, exercise control. Oriola maintains a list of parties
that are related to the company.
Oriola assesses and monitors transactions to be made with related
parties to ensure compliance with applicable laws and regulations,
including the Corporate Governance Code, e.g. to safeguard that
potential conicts of interest are adequately taken into account in
the company’s decision making.
Management of the company has conrmed for 2021 that neither
they nor their related parties have engaged in business transactions
with Oriola during the year in question.
Report of the Board of Directors
Oriola Financial review 2021
1515
External audit
The company has one auditor, which must be a rm of authorised pub-
lic accountants. The auditor is elected annually by the Annual General
Meeting for a term that expires at the end of the next Annual General
Meeting following the election. The task of the auditor is to audit the
consolidated nancial statements, the nancial statements of the par-
ent company, the accounting of the Group and the parent company
and the administration of the parent company. The company’s auditor
submits the auditor’s report to the shareholders in connection with the
annual nancial statements, as required by law, and submits regular re-
ports on its observations to the Board’s Audit Committee.
The Board of Directors and the Audit Committee are responsible for
monitoring the independence of the auditor. For this reason, the com-
pany has implemented a policy covering the provision of non-audit
services by the elected auditors.
The Annual General Meeting of Oriola held on 16 March 2021 re-
elected KPMG Oy Ab, a rm of authorised public accountants, as
the company’s auditor, with Kirsi Jantunen, Authorised Public Ac-
countant, KHT, as the principal auditor. The fees for the statutory
audit paid to the member rms of KPMG network in 2021 totalled
EUR 249 thousand. In addition, EUR 48 thousand was paid for other
audit related services provided to Group companies.
4.Remuneration
Remuneration and other benets of the members of
the Board of Directors
The Annual General Meeting decides annually on the remuneration
payable to members of the Board of Directors for their term of of-
ce. The Shareholders’ Nomination Board prepares a proposal con-
cerning the composition of the Board of Directors for the compa-
ny’s Annual General Meeting.
On 16 March 2021, the Annual General Meeting conrmed that the
fee for the term of oce of the Chairman of the Board of Directors is
EUR 60,000, the fee for the term of oce of the Vice Chairman of the
Board of Directors and for the Chairman of the Board's Audit Commit-
tee is EUR 36,000 and the fee for the term of oce of other members
of the Board of Directors is EUR 30,000. The Chairman of the Board of
Directors receives an attendance fee of EUR 1,000 per meeting and
the other members EUR 500 per meeting. Attendance fees are corre-
spondingly also paid to the chairpersons and members of Board and
company committees. Travel expenses are compensated in accord-
ance with the travel policy of the company.
In accordance with the decision of the Annual General Meeting,
60% of the annual remuneration was paid in cash and 40% in class B
shares. Oriola Corporation class B shares were acquired on the market
for the Board members as follows: Panu Routila 12,293 shares, Anja
Korhonen 7,376 shares, Mariette Kristenson 6,146 shares, Juko-Juho
Hakala 6,146 shares, Eva Nilsson Bågenholm 7,376 shares, Lena Rid-
ström 6,146 shares and Harri Pärssinen 6,146 shares.
Restriction periods are not included in the remuneration paid in
Oriola Corporation class B shares. The members of the Board of Di-
rectors have not received any share-based rights as remuneration.
They are not included in the company’s share incentive scheme.
The company has not granted any loans to Board members nor giv-
en guarantees on their behalf.
The total fees and other benets of the Board members for 2021 and
shareholdings in the company on 31 December 2021 are available in
notes 4.4. and 8.4. to the Consolidated Financial Statements and Re-
muneration report (http://www.oriola.com/investors/corporate-gov-
ernance/remuneration-statement).
Main principles and decision-making process
on the remuneration of the President and CEO
and other executives
The salary of the President and CEO and other members of the Ori-
ola Management Team consists of a xed base salary, fringe ben-
ets, a short-term performance bonus and a long-term share incen-
tive plan. The remuneration commits management to develop the
company and its nancial success in the long-term. The develop-
ment stage and strategy of the company are considered when de-
termining the principles for remuneration.
In accordance with its charter approved by the Board of Directors,
the Compensation and Human Resources Committee monitors the
eectiveness of the incentive schemes to ensure that the schemes
promote the achievement of the company’s short-term and long-
term goals. According to the charter, the Compensation and Hu-
man Resources Committee reviews management and personnel
remuneration policies and issues related to management appoint-
ments and makes proposals on such matters to the Board of Di-
rectors. More information about the Compensation and Human
Resources Committee can be found in the Corporate Governance
statement.
The Board of Directors reviews and decides annually on the remu-
neration and benets of the President and CEO and other mem-
bers of the Oriola Management Team, and the underlying criteria
thereof.
The Board of Directors decides annually on the earnings criteria and
the determination of the performance bonuses based on the pro-
posal of the Compensation and Human Resources Committee.
The company has not granted any loans to the President and
CEO or to the members of the Oriola Management Team, nor
given guarantees on their behalf. The company has no share op-
tion scheme in place. The President and CEO and the members of
the Oriola Management Team have no supplementary pension
scheme, except the Vice President Consumer business area, the
Vice President Pharma business area and the Vice President Retail
business area, who have a dened contribution pension benet
typically applied in Sweden.
Short-term performance bonuses
The performance bonus is based on the achievement of the com-
pany’s nancial targets and personal targets. The maximum perfor-
mance bonus in 2021 for the President and CEO and for the Oriola
Management Team was 60% of the annual salary. The Board of Di-
rectors decides annually on the earnings criteria and the determi-
nation of the performance bonuses based on the proposal of the
Compensation and Human Resources Committee.
Report of the Board of Directors
Oriola Financial review 2021
1616
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 oers key personnel a competitive remuneration system based
on ownership of shares in the company. CEO and new manage-
ment t eam members who joined in 2021 did not participate in the
company's long-term share incentive scheme in 2021.
Executive incentive plan 2019 - 2023
On 14 December 2018 the Board of Directors of Oriola Corporation
resolved to establish a new share-based long-term incentive plan
2019–2023 directed to the Group’s key personnel. The long-term in-
centive plan arrangement has three three-year performance periods
2019–2021, 2020–2022 and 2021–2023. The Board of Directors of the
Company will resolve on the plan's performance criteria and on the re-
quired performance level for each criterion at the beginning of a per-
formance period. Approximately 30 key persons, including the mem-
bers of the Oriola Management Team, belong to the target group of
the plan. The prerequisite for participation in the plan and for receipt
of reward on the basis of the plan is that the key person has enrolled in
the key personnel share savings plan and makes the monthly saving
from his or her xed gross monthly salary, in accordance with the rules
of the key personnel share savings plan in force during the rst year of
the three-year performance period. A member of the Oriola Manage-
ment Team must hold 50% of the net shares given on the basis of the
long-term incentive plans, until his or her shareholding in the Compa-
ny in total equals the value of his or her gross annual salary. Such num-
ber of shares must be held as long as the key person holds a position
as a Oriola Management Team member.
The potential reward from the performance period 2019–2021 will be
based on the Group's earnings per share (EPS) and Group’s total share-
holder return (TSR). The rewards to be paid on the basis of the perfor-
mance period 2019-2021 correspond to the value of an approximate
maximum total of 1,700,000 Oriola Corporation Class B shares includ-
ing also the proportion to be paid in cash. The potential reward will
be paid partly in Oriola Corporation Class B shares and partly in cash
in spring 2022 after the end of the performance period. The potential
reward from the performance period 2020–2022 will be based on the
Group's earnings per share (EPS) and Group’s total shareholder return
(TSR). The rewards to be paid on the basis of the performance period
2020-2022 correspond to the value of an approximate maximum total
of 1,820,000 Oriola Corporation Class B shares including also the pro-
portion to be paid in cash. The potential reward will be paid partly in
Oriola Corporation Class B shares and partly in cash in spring 2023 after
the end of the performance period. The potential reward from the per-
formance period 2021–2023 will also be based on the Group's earnings
per share (EPS) and Group’s total shareholder return (TSR). The rewards
to be paid on the basis of the performance period 2021-2023 corre-
spond to the value of an approximate maximum total of 2,700,000 Ori-
ola Corporation Class B shares including also the proportion to be paid
in cash. The potential reward will be paid partly in Oriola Corporation
Class B shares and partly in cash in spring 2024 after the end of the per-
formance period. The cash proportion is intended to cover taxes and
tax-related costs arising from the reward to a key person.
Share savings plans
Oriola Corporation has had a key personnel share savings plan in
force since 2013. The Board of Directors of Oriola Corporation always
decides on the launch of a new savings period in the plan sepa-
rately. According to the rules of the share savings plan in force, the
maximum monthly saving is 8.3% and the minimum is 2% of each
participant's xed monthly gross salary. The accumulated savings
will be used for purchasing Oriola Corporation class B shares for the
participants at the market price quarterly. In return, each participant
will receive two free class B matching shares for every three acquired
savings shares if the participant holds the acquired shares from the
savings period until the end of the designated holding period and if
his or her employment with a company has not been terminated on
bad leaver terms. The matching shares are paid partly in Oriola’s class
B shares and partly in cash. The cash proportion is intended to cover
taxes and tax-related costs arising from the reward to a key person.
Approximately 50 key employees participated in the Oriola Corpora-
tion key personnel share savings plan for the savings period 1 Janu-
ary – 31 December 2018. The matching shares transferred to eligible
participants in February 2020 corresponded to the value of 78,295
Oriola Class B shares, including the proportion paid in cash.
Approximately 55 key employees participated in the share sav-
ings plan for the savings period 1 January – 31 December 2019. The
matching shares transferred to eligible participants in March 2021
correspond to the value of 70,590 Oriola Class B shares, including the
proportion paid in cash.
Approximately 59 key employees participated in the share savings
plan for the savings period 1 January – 31 December 2020. The hold-
ing period will end on the publication date of the Oriola’s Financial
Statements Release 1 January – 31 December 2021. The matching
shares will be transferred to eligible participants in 2022.
Approximately 60 key employees participated in the share savings
plan for the savings period 1 January – 31 December 2021. The hold-
ing period will end on the publication date of the Oriola’s Financial
Statements Release 1 January – 31 December 2022. The matching
shares will be transferred to eligible participants in 2023.
Financial benets of the President and CEO in 2021
The salary and other remuneration, including fringe benets, paid
to the President and CEO Elisa Markula as of 9 August until 31 De-
cember 2021, amounted to a total of EUR 208,595 as follows:
Fixed base salary of EUR 202,573; and
Fringe benets of EUR 6,022.
The salary and other remuneration, including fringe benets, paid
to Juko Hakala as of 1 February until 8 August 2021 amounted to a
total of EUR 246,138 as follows:
Fixed base salary of EUR 245,992; and
Fringe benets of EUR 145.
The salary and other remuneration, including fringe benets, paid
to Robert Andersson as of 1 January until 1 February 2021 amount-
ed to a total of EUR 495,084 as follows:
Fixed base salary of EUR 489,469; and
Fringe benets of EUR 5,615.
Report of the Board of Directors
Oriola Financial review 2021
1717
Financial benets of other Oriola Management
Team members 2021
The salaries and other remuneration, including fringe benets, paid
in 2021 to the members of the Oriola Management Team totalled
EUR 1,828,134 as follows:
Fixed base salaries totalling EUR 1,629,213;
Fringe benets totalling EUR 50,094;
Performance bonuses totalling EUR 103,431; and
Share-based payments totalling EUR 45,396.
The members of the Oriola Management Team are included in the
company’s share-based incentive scheme. Shareholdings of the
members of the Oriola Management Team in the company are
available in note 8.4. to the Consolidated Financial Statements and
in the Remuneration report on the company web site.
5. Non-nancial information
The sustainability information for 2021 will be reported in two
parts. This non-nancial information included in the Board of Direc-
tors’ report covers sustainability key themes according to the Finn-
ish Accounting Act. Later in the rst quarter of 2022, key sustain-
ability data and time series will be reported in compliance with
the GRI (Global Reporting Initiative) core level. The environmental
data published in this non-nancial information and in the GRI re-
port has been assured by a third party (limited assurance). Oriola
has assessed its operations against EU Taxonomy and as a result the
proportion of taxonomy eligible economic activities in company
turnover, capital expenditures and operational expenditures is 0%.
Accordingly, the proportion of non-eligible economic activities in
company turnover, capital expenditures and operational expendi-
tures is 100 %.
Oriola’s sustainability work is based on a stakeholder material-
ity assessment conducted in 2018 to ensure that the company’s
sustainability programme focuses on material topics. During
2021 the 13 topics identified materiality assessment was re-
viewed with special focus on social responsibility. As a result, the
topics identified in 2018 were evaluated material for Oriola and
its stakeholders still today and no significant changes were done
compared to the previous assessment. Complete description of
the company’s materiality assessments can be found from Orio-
la.com or GRI supplement.
Based on the materiality assessment, Oriola has identified sus-
tainability programme and its three themes: society, people
and planet. Oriola has defined long-term sustainability goals in-
cluded into its sustainability strategy: improving people’s health,
best-in-class employee engagement and carbon neutrality by
2030. The achievement of these goals is guided by the KPIs de-
fined for the strategy period:
1) Society: Improving people´s health
• Development of new health-promoting services
• High-quality pharmaceutical deliveries
• Promoting safe and correct usage of medicines
• Number of sustainable products within our own brands
2) People: Best-in-class employee engagement
• Employee engagement
• Employee turnover
3) Planet: Carbon neutrality by 2030
• Renewable energy and carbon neutral heat
• Recycling rate
Oriola is committed to UN’s Sustainable Development Goals as well
as Global Compact’s principles for responsible business. Oriola re-
ports on risk management and management practices related to
climate change in CDP’s climate change programme. In 2021, Oriola
received recognition for its environmental work by achieving CDP’s
second highest score B. Also, Oriola achieved the silver medal in the
EcoVadis Sustainability rating and was rated among the top 15%
of all companies worldwide. EcoVadis assesses companies’ sustain-
ability performance in the areas of environment, labour and human
rights, ethics, and sustainable procurement.
Business model
Oriola operates in the health and wellbeing market in Sweden and
in Finland. In 2021, Oriola served the customers in three business
areas: Consumer, Pharma and Retail. In addition, Group-level Op-
erations function served all business areas and included logistics
operations and operational sourcing. From the beginning of 2022,
Oriola has acted according to the restructured operating model.
The country-based business areas Oriola Finland and Oriola Swe-
den serve customers more locally and the Swedish pharmacy op-
erations continue as its own business area Oriola Consumer. Oriola
employs approximately 4,100 people in Finland and Sweden.
Oriola serves the health and wellbeing market with a modern and
customer-focused assortment and services, and connects all ac-
tors within the eld, from pharmaceutical companies to pharma-
cies and consumers. Oriola promotes wellbeing by ensuring that
pharmaceuticals as well as health and wellbeing products are
delivered in a safe and customer-friendly manner. Oriola’s wide
range of services help pharmaceutical companies, pharmacies
and other operators in the healthcare sector to succeed and pro-
motes a healthier life for people. Oriola does not have product
manufacturing of its own.
In 2021, health and wellbeing continued as a global topic with the
COVID-19 pandemic. Oriola’s key task is to secure pharmaceutical
warehousing and distribution in the company’s operating coun-
tries, and advice in its own pharmacy chain in Sweden. During the
pandemic, Oriola has responded to changing needs of societies
and healthcare by introducing new services or adapting to new de-
mand, for example distributed the COVID-19 vaccines in Finland.
The vaccine distribution requires high-quality cold chain expertise.
Oriola has invested in cold chain development during the recent
years in both its operating markets and increased its freezer capac-
ity for the COVID-19 vaccines. Oriola has also brought protective
equipment and other pandemic-related products and services to
the market, including COVID-19 antibody testing.
Quality management and compliance with pharmaceutical sec-
tor regulations are the foundation for the company’s operations.
Report of the Board of Directors
Oriola Financial review 2021
1818
Oriola’s business is regulated by numerous international and na-
tional pharmaceutical sector laws and regulations.
Oriola creates value for dierent stakeholders, from societal operators
to patients, suppliers, consumers and owners. More detailed value
creation framework with inputs, outputs and impacts is described in
Oriola’s value creation model available on the company’s website.
Purpose, values and Code of Conduct
Oriola’s purpose “Health for life” steers the company’s activities and
provides it with a meaning. According to its vision, Oriola promotes
the healthier tomorrow. Oriola’s values – “we are open”, “we take re-
sponsibility”, “we work together” and “we take initiative” – guide the
company’s way of operating.
The Oriola Group Code of Conduct guides management and per-
sonnel. The Code of Conduct presents Oriola’s way of working,
which is based on law and good corporate governance, openness,
fairness and condentiality. The Code of Conduct contains the
company’s commitment to anti-bribery and anti-corruption, com-
pliance with all competition laws, and engage collaboration and
dialogue with stakeholders. Oriola promotes equality. For exam-
ple, the recruitment of new employees is based on their expertise
and skills, regardless of cultural background, age, gender or reli-
gion. The company also requires all employees to commit to con-
dentiality obligations and avoiding conicts of interest. Oriola has
a condential whistleblowing channel for reporting actions that
are suspected to be in violation of the Code of Conduct. The com-
pany’s Board of Directors monitors compliance with the Code of
Conduct. Code of Conduct training is part of onboarding process
for all employees.
ESG risk management
Oriola assesses ESG risks (environment, social and governance) as
part of the group risk management process. The most signicant
sustainability risks are identied and assessed as a part of the annu-
al risk management process facilitated by Oriola’s risk management
team. The risk management team monitors the level of risks and en-
sures that the risks are mitigated appropriately by Oriola’s business
areas and shared functions.
Transition risks related to climate change, such as changes in fossil
fuel pricing or stricter environmental regulation causing increased
operational expenses, are identied in the process. Risks are closely
monitored and mitigated by open discussion with customers and
partners as well as with decision makers. Oriola has also followed
closely the increasing demand of consumers for ethical, transparent
and environmentally sustainable products and services. Risk 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.
Oriola responds to these challenges and sees business opportuni-
ties in systematic development of environmental work in collabora-
tion with customers, partners and decision-makers. Oriola follows
the development of environmental legislation. Commitment to re-
duce CO2 emissions is one of the selection criteria for Oriola’s trans-
port partners. For example, in Sweden the share of renewable fuels
in Oriola’s transport is approximately 40%. Oriola evaluates prod-
uct sustainability in its assortment decisions and develops its own
products to meet the increasing demands of consumers.
Environmental responsibility
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 consistent way of working for the en-
tire company. In 2021, the scope of ISO 14 001 certied units ex-
tended as the Finnish headquarter and production site at Mankkaa
and Juvanmalmi warehouse received the certication. The Swedish
functions, Oriola Sweden AB and Svensk dos AB have been certied
already at an earlier stage. Environmental management based on the
standard aims at continual improvement of company’s environmen-
tal performance and enhances sustainable growth. Oriola’s Environ-
mental Policy outlines the commitment to reduce the environmental
impacts of the company’s operations and steers decision-making.
In 2021, Oriola committed to achieve carbon-neutrality in own op-
erations by 2025. The target means reducing to zero carbon emis-
sions 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 nd low-
emissions options for refrigerants used in the cold storage. The tar-
get is part of the Oriola’s long-term sustainability goal to become a
carbon-neutral company by 2030.
Oriola’s carbon footprint has been calculated in accordance with
the Greenhouse Gas Protocol accounting principles and covers the
entire company.
Environmental responsibility: targets and results
Oriola’s intermediate targets for environmental responsibility are,
that by the end of 2022 company uses only renewable electricity
and carbon-neutral heat and at least 85% of all non-pharmaceutical
waste is recycled.
In 2021, Oriola continued changing to renewable electricity. In the Kro-
nans Apotek pharmacies where Oriola cannot negotiate direct elec-
tricity contract, Oriola purchased guarantees of origin to match the
consumption. As a result, 100% of the electricity in Oriola Group comes
from renewable sources. 95% of Oriola’s total energy consumption
comes from renewable or carbon-neutral sources (92%/2020).
Oriola’s operations aim at reducing waste, using materials eective-
ly and ensuring that the recycling rate is as high as possible. 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 distri-
bution centres. Development of recycling is one of the key initiatives of
Oriola’s environmental work and possibilities to sort waste have been
systematically improved in the recent years. In 2021, the company
enhanced, for example, collection of plastic packages and cardboard
boxes in its dose dispensing units in Finland and Sweden. In addition,
Oriola improved collection of re-usable wooden pallets at the Swedish
distribution centre to minimise waste and promote circular economy.
Oriola’s recycling rate increased to 79% (74% in 2020).
Report of the Board of Directors
Oriola Financial review 2021
1919
Transport is Oriola’s largest source of indirect emissions, as suppliers
are responsible for the entire transport network. Close cooperation
with transport partners makes it possible to reduce emissions by opti-
mising routes, using capacity eciently and expanding the use of al-
ternative fuels, among other things. For example, in Sweden the share
of renewable fuels in Oriola goods transport is approximately 40%. The
emissions can also be impacted at distribution centres, for example, by
improving the lling rate of transport boxes, which reduces the num-
ber of boxes delivered to customers. The company monitors transport
emissions by requiring transport partners to report the emissions on
regular basis. Transport emissions account for over 40% of Oriola’s total
CO
2
emissions.
Social responsibility
Ensuring pharmaceutical safety and the availability of pharmaceu-
ticals is the highest priority in Oriola’s operations and the most soci-
etally signicant task for Oriola. Pharmaceuticals must be delivered
safely and on-time irrespective of external conditions. Oriola’s oper-
ations are designed to ensure that pharmaceuticals with marketing
authorisation are continuously available and that they are handled
in a manner compliant with the pharmaceutical sector’s regulatory
requirements.
Oriola’s long-term sustainability goal is to improve people’s health.
To achieve this goal, the company has set the intermediate targets
of developing new health-promoting services, ensuring high-qual-
ity pharmaceutical deliveries in its operating countries, promot-
ing of the safe and correct usage of medicines, and extending the
range of sustainable products to cover 20% of the private label as-
sortment in Sweden by 2022.
In addition to new COVID-19 related services such as antigen tests
(more than 100,000/2021) and vaccinations (112,000/2021) Swe-
den, Oriola has introduced new health-promoting services to
Finnish pharmacies during 2021. The company has for example
launched Health service solution providing pharmacies an oppor-
tunity to oer preventive healthcare services to their customers.
During the pandemic, the seamless availability of pharmaceuti-
cals, including COVID-19 vaccines, and their high-quality transport
have become a central matter to the society. Oriola delivers phar-
maceuticals within 24 hours of ordering to all pharmacies and hos-
pital pharmacies, as well as other healthcare units in Sweden and
Finland. The pandemic has not aected pharmaceutical deliveries.
In 2021 Oriola developed an indicator to follow pharmaceutical de-
livery quality and accuracy measuring the ability to deliver ordered
pharmaceuticals to pharmacies, hospitals and veterinarians. During
the year the indicator was dened and applied for Finland, and it
was 99.8%.
In 2021, Oriola dened a new intermediate target to ensure safe
medicine usage in its own pharmacies. The target is that when
customers collect their prescribed medicines, in 70% cases phar-
macies check by using a national electronic support system that
medicine is compatible with, for example, customers’ other medi-
cation. As a result, the safety check was made in 68% of the cases
in 2021.
Oriola has dened the sustainability criteria for private label prod-
ucts and implemented it in Sweden. In 2021 18% (18% in 2020) of
the range was sustainably classied, for example, products that
have received the Nordic Swan Ecolabel or another eco-label.
Personnel responsibility
Oriola is committed to the United Nations Sustainable Devel-
opment Goals (SDGs). Company has identied Goal no 8 as one
where Oriola’s contribution is the most signicant: Promote sus-
tained, inclusive and sustainable economic growth, full and pro-
ductive employment and decent work for all.
Oriola employs approximately 4,100 professionals in numerous
positions in pharmacies, distribution centres and various expert
roles. Employees are the company’s most important asset: their
expertise and know-how are a prerequisite for an excellent cus-
tomer experience, responsible business and for meeting the strict
quality requirements of the pharmaceutical industry. Investing in
personnel development and wellbeing also builds Oriola’s com-
petitiveness in a rapidly changing market. We want to oer our
employees the most diverse career paths in the industry and an
equal and fair workplace.
In 2021, the COVID-19 pandemic continued to aect Oriola's personnel
in many ways. Oce personnel have largely been working remotely,
while the pharmacy and production sta have continued their work
protected by comprehensive health safety guidelines, to meet custom-
er needs. Depending on the pandemic situation, Oriola has introduced
protective equipment as well as practices that minimise sta encoun-
ters. Oriola’s precautionary measures and work have always been guid-
ed by the company’s objective to ensure patient safety without com-
promising the health and safety of its personnel.
Oriola’s long-term sustainability goal is best-in-class employee en-
gagement. The company has set the intermediate targets for an
employee engagement index of at least 80 and employee turno-
ver of maximum 12% by the end of 2022. In the reporting year the
employee engagement survey was postponed to be conducted in
2022 due to the changes in operating model and organisation. Be-
cause of this, employee engagement index 2021 is not available (78
in 2020). Employee turnover was 14.4% (10.2% in 2020).
Leading change is one of the key areas for leadership development,
as Oriola’s business environment, company structure, culture and
ways of working are undergoing a transformation - which has been
further accelerated by the pandemic. As part of the restructuring
process in 2021 Oriola provided change management training for
all managers and leadership development continues to be an im-
portant focus area in 2022.
All Oriola’s employees are subject to annual performance and de-
velopment discussions, which set personal goals to guide the work
and on the other hand, map out each person’s own development
goals and measures.
Governance
Oriola operates on a regulated market. The company’s quality man-
agement is based on laws and regulatory requirements applicable
in the pharmaceutical sector, as well as Oriola’s common manage-
ment system, which provides a framework for common operating
and governance practices. Pharmaceutical distribution and whole-
sale are regulated by Good Distribution Practice (GDP) of the Euro-
pean Medicines Agency (EMA). In Finland, compliance with the GDP
Report of the Board of Directors
Oriola Financial review 2021
2020
is monitored by the Finnish Medicines Agency FIMEA and in Swe-
den by the Medical Product Agency (MPA). GDP denes the com-
mon 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 regula-
tory control, such as food and cosmetics regulation.
Tax footprint
Oriola supports a transparent company culture and publishes its tax
footprint, which consists of income taxes and other taxes, as well as cor-
responding charges related to business operations. Oriola pays taxes to
Sweden and to Finland in accordance with local legislation. Oriola does
not have subsidiaries in countries seen as tax havens. Oriola’s tax foot-
print can be found on the company’s website www.oriola.com.
Supply chain management
The company’s procurement policy denes 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 suppli-
ers’ sustainability performance in environmental and social issues as
part of company’s regular supplier assessment process.
Oriola promotes adherence with ethical principles among its busi-
ness partners and suppliers by requiring suppliers and other business
partners to commit to Oriola Business Partner Code of Conduct. Busi-
ness Partner Code of Conduct covers principles related to anti-brib-
ery, anti-corruption and discrimination, respecting labour and hu-
man rights, and promotion of occupational safety and health.
In 2021, Oriola continued the alignment of procurement practices
and the implementation of Business Partner Code of Conduct with
direct and indirect product suppliers. The company has conducted
a geographical risk assessment of direct non-pharmaceutical prod-
ucts and suppliers. The main part of Oriola’s direct non-pharmaceu-
tical product purchases come from Europe. By the end of 2021, 209
out of 346 identied direct product suppliers have been bench-
marked against Oriola’s supplier practices included in the Oriola
Business Partner Code of Conduct (232/360 by the end of 2020).
Espoo, 17 February 2022
Oriola Corporation
Board of Directors
Report of the Board of Directors
Oriola Financial review 2021
2121
Information on shares
Shares and shareholders
Shareholders by type of owner, 31 December 2021
Shareholders % of shareholders % of shares
A shares B shares Total A shares B shares Total A shares B shares Total
Individuals 12,382 25,340 33,344 97.0 95.9 96.2 46.7 38.0 40.6
Corporations and partnerships 241 693 867 1.9 2.6 2.5 31.2 27.8 28.8
Banks and insurance companies 14 33 34 0.1 0.1 0.1 1.5 6.7 5.2
Public entities 7 16 20 0.1 0.1 0.1 14.8 7.1 9.4
Non-prot institutions 59 195 230 0.5 0.7 0.7 4.6 2.0 2.8
Foreign shareholders 66 146 182 0.5 0.6 0.5 0.3 0.3 0.3
Total 12,769 26,423 34,677 100.0 100.0 100.0 99.0 82.0 87.1
Nominee registrations 1.0 18.0 12.9
Shareholders by number of shares held, 31 December 2021
Shareholders % of shareholders
Number of shares A shares B shares Total A shares B shares Total
1–100 2,706 3,569 5,387 21.2 13.5 15.5
101–1,000 6,354 13,861 17,688 49.8 52.5 51.0
1,001–10,000 3,300 8,162 10,321 25.8 30.9 29.8
10,001–100,000 367 762 1,176 2.9 2.9 3.4
over 100,001 42 69 105 0.3 0.3 0.3
Total 12,769 26,423 34,677 100.0 100.0 100.0
Of which nominee registered 8 11 11
Shares % of shares
Number of shares A shares B shares Total A shares B shares Total
1-100 127,426 191,710 319,136 0.2 0.2 0.2
101-1,000 2,734,278 6,298,147 9,032,425 5.1 4.9 5.0
1,001-10,000 9,385,966 23,441,836 32,827,802 17.5 18.4 18.1
10,001-100,000 9,533,802 18,076,184 27,609,986 17.7 14.2 15.2
over 100,001 31,966,841 79,730,023 111,696,864 59.5 62.4 61.5
Total 53,748,313 127,737,900 181,486,213 100.0 100.0 100.0
Of which nominee registered 522,285 22,957,920 23,480,205 1.0 18.0 12.9
Total number of shares 53,748,313 127,737,900 181,486,213 100.0 100.0 100.0
Information on shares
Oriola Financial review 2021
2222
Share-related key gures
2021 2020 2019 2018 2017
Earnings per share
2
EUR 0.06 0.06 0.04 0.06 0.14
Earnings per share, continuing operations
2
EUR 0.06 0.06 0.04 0.06 0.14
Equity per share
2
EUR 1.20 0.94 0.87 0.98 1.08
Total dividends EUR million 7.3
1
5.4 16.3 16.3 16.3
Dividend per share EUR 0.04
1
0.03 0.09 0.09 0.09
Payout ratio
2
% 63.9
1
48.2 203.5 151.7 63.9
Dividend yield A % 2.02
1
1.51 4.46 4.57 3.00
Dividend yield B % 2.00
1
1.58 4.44 4.55 3.21
P/E ratio, continuing operations
2
A 31.72 31.97 45.67 33.20 21.58
P/E ratio, continuing operations
2
B 32.04 30.55 45.78 33.37 20.14
Share price on 31 Dec A EUR 1.99 1.99 2.02 1.97 3.00
Share price on 31 Dec B EUR 2.01 1.90 2.03 1.98 2.80
Average share price A EUR 2.04 2.01 2.10 2.82 3.79
Average share price B EUR 1.94 1.93 2.11 2.72 3.66
Lowest share price A EUR 1.78 1.62 1.86 1.92 2.96
Lowest share price B EUR 1.73 1.52 1.86 1.94 2.77
Highest share price A EUR 2.37 2.25 2.56 3.38 4.53
Highest share price B EUR 2.20 2.27 2.53 3.17 4.43
Market capitalisation EUR million 362.8 349.9 367.2 358.8 519.2
Trading volume
A shares pc 8,115,284 3,320,057 3,758,001 3,067,789 2,703,394
% of average number of A shares % 15.1 6.1 6.8 5.5 4.9
B shares pc 50,733,906 48,554,934 24,054,806 40,993,419 41,746,627
% of average number of B shares % 39.7 38.2 19.1 32.5 33.2
% of average number of all shares % 32.4 28.6 15.3 24.3 24.5
Number of shares 31 Dec A pcs 53,748,313 53,748,313 55,434,273 55,434,273 55,434,273
Number of shares 31 Dec B pcs 127,737,900 127,737,900 126,051,940 126,051,940 126,051,940
Total number of shares 31 Dec pcs 181,486,213 181,486,213 181,486,213 181,486,213 181,486,213
Total number of A shares, annual average pcs 53,748,313 54,390,973 55,434,273 55,434,273 55,434,825
Total number of B shares, annual average pcs 127,737,900 127,095,240 126,051,940 126,051,940 126,051,388
Total number of shares, annual average pcs 181,486,213 181,486,213 181,486,213 181,486,213 181,486,213
1
Proposal by the Board of Directors.
2
The gures in 2017-2018 have been restated due to an error related to previous periods. The restatement had an impact on inventories, deferred tax assets and retained earnings in the consolidated statement of nancial position and on material purchases and income taxes
in the consolidated statement of comprehensive income. More information on correction of the error is presented in the notes to the Financial statements 2019.
Information on shares
Oriola Financial review 2021
2323
Calculation of share related key gures
Earnings per share (EPS), EUR
=
Prot attributable to shareholders of the parent company
Average number of shares during the period excluding treasury shares
Equity per share, EUR
=
Equity attributable to shareholders of the parent company
Number of shares at the end of the period excluding treasury shares
Dividend per share, EUR
=
Dividends paid for the nancial period
Number of shares at the end of the period excluding treasury shares
Payout ratio, %
=
Dividend per share
x 100
Earnings per share
Eective dividend yield, %
=
Dividend per share
x 100
Closing price on the last trading day of the nancial period
Price/Earnings ratio (P/E)
=
Closing price on the last trading day of the nancial period
Earnings per share
Average price of share, EUR
=
Trading volume, EUR
Average number of shares traded during the nancial period
Market capitalisation, EUR
= Number of shares at the end of the nancial period x closing price on the last trading day of the nancial period
Information on shares
Oriola Financial review 2021
2424
Largest shareholders, 31 December 2021
By number of shares held A shares B shares Total shares % of total shares Votes % of total votes
1. Mariatorp Oy 6,600,000 17,875,000 24,475,000 13.49 149,875,000 12.46
2. Wipunen Varainhallinta Oy 2,600,000 6,400,000 9,000,000 4.96 58,400,000 4.86
3. Varma Mutual Pension Insurance Company 4,320,600 3,273,000 7,593,600 4.18 89,685,000 7.46
4. Ilmarinen Mutual Pension Insurance Company 3,606,414 2,299,018 5,905,432 3.25 74,427,298 6.19
5. Fennia Life Insurance Company Limited 555,000 3,675,039 4,230,039 2.33 14,775,039 1.23
6. Maa- ja Vesitekniikan Tuki ry 2,041,832 0 2,041,832 1.13 40,836,640 3.40
7. The Social Insurance Institution of Finland, KELA 0 1,991,481 1,991,481 1.10 1,991,481 0.17
8. Tukinvest Oy 1,983,526 0 1,983,526 1.09 39,670,520 3.30
9. Medical Investment Trust Oy 181,000 1,626,540 1,807,540 1.00 5,246,540 0.44
10. Ylppö Jukka 1,496,562 286,992 1,783,554 0.98 30,218,232 2.51
11. Greenzap Oy 1,600,000 0 1,600,000 0.88 32,000,000 2.66
12. Mandatum Life Insurance Company Limited 29,485 1,527,618 1,557,103 0.86 2,117,318 0.18
13. Ehrnrooth Helene 0 1,254,333 1,254,333 0.69 1,254,333 0.10
14. Kaleva Mutual Insurance Company 0 1,200,000 1,200,000 0.66 1,200,000 0.10
15. Drumbo Oy 0 1,000,000 1,000,000 0.55 1,000,000 0.08
16. Herlin Olli 200,000 800,000 1,000,000 0.55 4,800,000 0.40
17. Paloniemi Jari 0 1,000,000 1,000,000 0.55 1,000,000 0.08
18. Säästöpankki Kotimaa Mutual Fund 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 26,723,910 45,515,240 72,239,150 39.80 579,993,440 48.22
Nominee registred 522,285 22,957,920 23,480,205 12.94 33,403,620 2.78
Oriola Corporation 63,650 74,551 138,201 0.08 1,347,551 0.11
Other 26,438,468 59,190,189 85,628,657 47.18 587,959,549 48.89
All shareholders total 53,748,313 127,737,900 181,486,213 100.00 1,202,704,160 100.00
Information on shares
Oriola Financial review 2021
2525
Financial indicators and performance measures
Financial indicators 2017-2021
Consolidated income statement
1
2021 2020 2019
5
2018 restated
4
2017 restated
4
Net sales EUR million 1,882.4 1,800.8 1,721.3 1,552.2 1,527.7
Adjusted EBIT EUR million 26.3 21.0 20.5 34.4 39.0
% of net sales % 1.4 1.2 1.2 2.2 2.6
EBIT EUR million 20.5 20.4 15.3 19.5 36.9
% of net sales % 1.1 1.1 0.9 1.3 2.4
Financial income and expenses EUR million -5.8 -6.0 -5.2 -3.0 -3.9
% of net sales % -0.3 -0.3 -0.3 -0.2 -0.3
Prot before taxes EUR million 14.7 14.3 10.1 16.6 32.9
% of net sales % 0.8 0.8 0.6 1.1 2.2
Prot for the period EUR million 11.3 11.3 8.0 10.8 25.2
% of net sales % 0.6 0.6 0.5 0.7 1.7
Consolidated balance sheet EUR million 2021 2020 2019
5
2018 restated
4
2017 restated
4
Non-current assets 539.3 537.3 509.9 440.0 446.6
Goodwill 273.5 278.7 270.5 274.3 282.7
Current assets 553.9 628.3 520.7 484.2 474.2
Inventories 229.2 250.1 234.2 209.6 205.7
Equity attributable to the parent company shareholders 216.8 169.6 157.2 177.9 196.1
Liabilities total 876.4 996.0 873.4 746.2 724.7
Interest-bearing liabilities 209.9 295.3 190.3 129.4 127.2
Non-interest-bearing liabilities 666.5 700.8 683.1 616.8 597.5
Total assets 1,093.2 1,165.6 1,030.6 924.2 920.8
Financial indicators and performance measures
Oriola Financial review 2021
2626
Key gures 2021 2020 2019
5
2018 restated
4
2017 restated
4
Equity ratio % 20.1 14.8 15.5 19.5 21.7
Equity per share EUR 1.20 0.94 0.87 0.98 1.08
Return on capital employed (ROCE)
2
% 4.6 5.0 4.1 6.2 11.4
Return on equity
2
% 5.9 6.9 4.9 5.8 12.8
Net interest-bearing debt EUR million 100.8 127.1 119.6 63.6 110.2
Gearing % 46.5 75.0 76.1 35.8 56.2
Earnings per share from continuing operations EUR 0.06 0.06 0.04 0.06 0.14
Earnings per share incl. discontinued operations EUR 0.06 0.06 0.04 0.06 0.14
Average number of shares
3
pcs 181,341,203 181,388,782 181,394,589 181,360,503 181,328,408
Average number of personnel from continuing operations, full time equivalents pers. 2,760 2,687 2,800 2,699 2,686
Gross capital expenditure incl. discontinued operations EUR million 22.8 32.8 21.8 39.6 46.2
Adjusted EBIT
1
EUR million
Net sales
EUR million
1
The gures in 2017-2018 have been restated due to an error related to previous
periods. The restatement had an impact on inventories, deferred tax assets and
retained earnings in the consolidated statement of nancial position and on material
purchases and income taxes in the consolidated statement of comprehensive income.
More information on correction of the error is presented in the notes to the Financial
statements 2019.
.
Refer to section Alternative performance measures, for denitions of key gures.
1
Continuing operations.
2
The comparative gures 2017 include discontinued operations.
3
Company-owned treasury shares are not included.
4
The gures in 2017-2018 have been restated due to an error related to previous periods. The restatement had an impact on inventories, deferred tax assets and retained earnings in the consolidated statement of nancial position and on material purchases
and income taxes in the consolidated statement of comprehensive income. More information on correction of the error is presented in the notes to the Financial statements 2019.
5
The Group applied IFRS 16 Leases with the date of initial application of 1 January 2019. The standard has a signicant impact on the Group's non-current assets, interest-bearing liabilities and key gures.
2017 2018 2019 2020 2021
40
30
20
10
0
39
34
20
21
26
2017 2018 2019 2020 2021
1,800
1,600
1,200
800
400
0
1,528
1,552
1,721
1,801
1,882
Financial indicators and performance measures
Oriola Financial review 2021
2727
Alternative performance measures
In order to reect the underlying business performance and to en-
hance comparability between nancial periods Oriola discloses
certain performance measures of historical performance, nancial
position and cash ows, as permitted in “Alternative performance
measures” guidance issued by the European Securities and Mar-
kets Authority (ESMA). These measures should not be considered
as a substitute for measures of performance in accordance with the
IFRS. These alternative performance measures are described in the
following tables:
Reconciliation of alternative performance measures to IFRS
Invoicing
EUR million 2021 2020
Net sales 1,882.4 1,800.8
+ Acquisition cost of consignment stock 2,054.9 1,945.9
+ Cash discounts 22.0 18.1
+ Exchange rate dierences on sales -0.2 0.1
Invoicing 3,959.1 3,764.9
Adjusted EBIT
EUR million 2021 2020
EBIT 20.5 20.4
- Adjusting items included in EBIT 5.9 0.6
Adjusted EBIT 26.3 21.0
Calculation of alternative performance measures
Alternative,performance,measures,on,a,constant,currency,basis
EUR,million 2021 2020
Invoicing 3,959.1 3,764.9
Translation,dierence -90.8 -26.3
Invoicing,calculated,on,a,constant,curre
ncy,basis 3,868.3 3,738.6
Net,sales
1,882.4 1,800.8
Translation,dierence -46.6 -13.7
Net,sales,calculated,on,a,constant,curre
ncy,basis 1,835.9 1,787.1
Adjusted,EBIT 26.3 21.0
Translation,dierence -0.7 -0.2
Adjusted,EBIT,calculated,on,a,constant,c
urrency,basis 25.6 20.8
Alternative performance measure Denitions
Reason for use of the alternative performance
measure
Invoicing =
Net sales + acquisition cost of consignment stock + cash discounts +
exchange rate dierences on sales
Invoicing describes the volume of the business.
EBIT =
Net sales less material purchases and exchange dierences on sales
and purchases, less employee benet expenses and other operating
expenses, less depreciation, amortisation and impairment plus other
operating income plus share of results in joint venture
EBIT shows result generated by the business.
Adjusted EBIT = EBIT excluding adjusting items Oriola discloses adjusted EBIT in order to reect
the underlying business performance and to en-
hance comparability between nancial periods.
Adjusting items
Adjusting items include gains or losses from the sale or discontinua-
tion of business operations or assets, gains or losses from restructur-
ing 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.
Adjusting items are specied in note 4.1. Segment reporting.
Invoicing calculated on a constant
currency basis
Invoicing calculated with the average exchange rate
of the corresponding period of the comparative year.
Invoicing, net sales, and adjusted EBIT on a
constant currency basis describe the develop-
ment of the business without changes due to
uctuating foreign exchange rates and thus
enhance the comparability between nancial
periods.
Net sales calculated on a constant
currency basis
Net sales calculated with the average exchange rate
of the corresponding period of the comparative year.
Adjusted EBIT calculated on a
constant currency basis
Adjusted EBIT calculated with the average exchange rate of the cor-
responding period of the comparative year.
Net debt = Interest-bearing liabilities – cash and cash equivalents
Net debt is an indicator to measure the total
external debt nancing of the company.
Investments =
Capitalised investments in property, plant and equipment and in
intangible assets including goodwill arising from business combina-
tions, as well as investments in associates and joint ventures.
Investments provide additional information of
the cash ow need of the business operations.
Investments by business area are presented in
note 4.1. Segment reporting.
Return on capital employed
(ROCE), % =
=
EBIT
x 100
Return on capital employed measures how
eciently the Group generates prots from its
capital employed.
Total assets – Non-interest-bearing liabilities (average between the
beginning and the end of the year)
Return on equity (ROE), % =
Prot for the period
x 100
Return on equity measures the Group's prot-
ability by showing how much prot is gener-
ated with the funds invested to the Group by
the shareholders.
Equity total (average between the beginning and the end of the
year)
Gearing, % =
Net debt
x 100
Gearing provides information of the Group's
nancial risk level and the level on the Group's
indebtedness.
Equity total
Equity ratio, % =
Equity total
x 100
Equity ratio provides information on the
Group's nancial risk level and the level of the
Group's capital used in operations.
Total assets – Advances received
Financial indicators and performance measures
Oriola Financial review 2021
Financial Statements 2021
Oriola Financial review 2021
29
Consolidated statement of comprehensive income (IFRS)
EUR million Note 2021 2020
Net sales 4.2. 1, 8 82 . 4 1,800.8
Other operating income 4.2. 11 .1 9.5
Materials and supplies 4.3. -1, 4 9 8 . 2 -1,438.7
Employee benefit expenses 4.4. -18 5 . 3 -172.3
Other operating expenses 4.3. -14 4 . 6 -137.2
Depreciation, amortisation and impairments 6.1./6.2. -4 4.9 -41.6
EBIT 20.5 20.4
Financial income and expenses 8.1. -5. 8 -6.0
Profit before taxes 14 . 7 14.3
Income taxes 9.1. -3 .4 -3.1
Profit for the period 11 . 3 11.3
Other comprehensive income
Items which may be reclassified subsequently to profit or loss:
Translation differences recognised in comprehensive income during the reporting period -5.4 9.8
Cash flow hedge 8.3. 0.9 -0.2
Income tax relating to other comprehensive income 9.1. -0.2 0.0
-4.6 9.6
Items which will not be reclassified to profit or loss:
Financial assets recognised at fair value through other comprehensive income 8.2. 44 .8 8.0
Actuarial gains/losses on defined benefit plans 4.4. 1. 3 -0.4
Income tax relating to other comprehensive income 9.1. -0.3 0.0
Total comprehensive income for the period 52 .6 28.6
Profit attributable to
Parent company shareholders 11 . 3 11.3
Total comprehensive income attributable to
Parent company shareholders 52.6 28.6
Earnings per share attributable to parent company shareholders, EUR:
Basic 8.5. 0 .06 0.06
Diluted 8.5. 0 .06 0.06
29
Financial statements 2021
Oriola Financial review 2021
30
Consolidated statement of nancial position (IFRS)
EUR million Note 31 Dec 2021 31 Dec 2020
ASSETS
Non-current assets
Property. plant and equipment 6.1. 155 . 9 162.2
Goodwill 6.2. 273 .5 278.7
Other intangible assets 6.2. 71. 0 69.8
Other non-current assets 6.3. 34 .9 22.3
Deferred tax assets 9.2. 3.9 4.4
Non-current assets total 539. 3 537.3
Current assets
Inventories 5.2. 22 9.2 250.1
Trade receivables 5.1. 19 4 . 7 188.6
Income tax receivables 5.1. 2.7 3.4
Other receivables 5.1. 18. 2 18.1
Cash and cash equivalents 8.2. 10 9 .1 168.2
Current assets total 553. 9 628.3
ASSETS TOTAL 1, 09 3. 2 1,165.6
EUR million Note 31 Dec 2021 31 Dec 2020
EQUITY AND LIABILITIES
Equity
Share capital 36. 2 36.2
Fair value reserve 26. 5 7.7
Contingency fund 19. 4 19.4
Invested unrestricted equity reserve 74 . 8 74.8
Other reserves 0 .1 0.1
Translation differences -28 . 5 -23.1
Retained earnings 88.3 54.5
Equity attributable to the parent company shareholders 8.4. 216 . 8 169.6
Non-current liabilities
Deferred tax liabilities 9.2. 11 . 8 13.9
Pension obligations 4.4. 18 . 0 18.9
Interest-bearing liabilities 8.2. 12 3 . 5 127.8
Other non-current liabilities 5.3. 0.5 0.9
Non-current liabilities total 153 . 8 161.6
Current liabilities
Trade payables 5.3. 591. 7 620.3
Provisions 5.4. - 0.8
Interest-bearing liabilities 8.2. 86.4 167.4
Income tax payables 5.3. 1. 4 -
Other current liabilities 5.3. 4 3 .1 45.9
Current liabilities total 722. 6 834.5
EQUITY AND LIABILITIES TOTAL 1,0 93. 2 1,165.6
30
Financial statements 2021
Oriola Financial review 2021
31
Consolidated statement of cash ows (IFRS)
EUR million Note 2021 2020
Net cash flow from operating activities
Profit for the period 11 . 3 11.3
Adjustments
Depreciation and amortisation 6.1./6.2. 4 3 .1 41.2
Impairment 6.1./6.2. 1. 8 0.5
Financial income and expenses 8.1. 5.8 6.0
Income taxes 9.1. 3.4 3.1
Change in pension asset and pension obligation 0. 8 0.7
Other adjustments -0.7 -2.0
Change in working capital
Change in current receivables increase (-)/ decrease (+) -10 . 7 9.1
Change in inventories increase (-)/ decrease (+) 17. 3 -8.6
Change in non-interest-bearing current liabilities
increase (+)/ decrease (-) -2 3. 7 3.6
-1 7.1 4.0
Interest paid and other financial expenses -5. 3 -3.1
Interest received and other financial income 0. 2 0.4
Income taxes paid -3. 3 -3.6
Net cash flow from operating activities 40. 0 58.3
Net cash flow from investing activities
Investments in property, plant and equipment and intangible assets 6.1./6.2. -2 3 .4 -27.1
Proceeds from sales of property, plant and equipment
and intangible assets 6.1./6.2. 0. 2 0.3
Investments in other shares and shareholdings 6.3. -0.0 -4.8
Proceeds from other shares and shareholdings 6.3. 32. 8 0.2
Net cash flow from investing activities 9.6 -31.4
EUR million Note 2021 2020
Net cash flow from financing activities
Proceeds from long-term loans - 30.0
Repayments of long-term loans -2 . 0 -1.1
Proceeds from short-term loans - 40.0
Repayments of short-term loans -50.0 -10.0
Change in other current financing
1
-29 . 8 47.4
Amortisations of lease liabilities -21. 2 -19.6
Purchasing of own shares -0 .1 -0.1
Dividends paid -5.4 -16.3
Net cash flow from financing activities -10 8 . 5 70.4
Net change in cash and cash equivalents -59. 0 97.3
Cash and cash equivalents at the beginning of the period 1 68.2 70.8
Translation differences -0.0 0.1
Net change in cash and cash equivalents -59. 0 97.3
Cash and cash equivalents at the end of the period 8.2. 10 9 .1 168.2
1
Includes cash ows from commercial papers.
31
Financial statements 2021
Oriola Financial review 2021
32
Consolidated statement of changes in equity (IFRS)
EUR million Note Share capital Funds
Translation
differences
Retained
earnings Equity total
Equity 1 January 2020 36.2 94.2 -32.9 59.7 157.2
Comprehensive income for the period
Net profit for the period - - - 11.3 11.3
Other comprehensive income:
Financial assets recognised at fair value through other comprehensive income:
Change in fair value - 8.0 - - 8.0
Financial assets recognised at fair value through other
comprehensive income total 8.2. - 8.0 - - 8.0
Cash flow hedge 8.3. - -0.2 - - -0.2
Actuarial gains and losses 4.4. - - - -0.4 -0.4
Income tax relating to other comprehensive income 9.1. - 0.0 - 0.0 0.1
Translation difference - - 9.8 - 9.8
Comprehensive income for the period, total - 7.8 9.8 10.9 28.6
Transactions with owners
Dividend distribution 8.5. - - - -16.3 -16.3
Share-based incentive 4.4. - - - 0.2 0.2
Purchase of own shares - - - -0.1 -0.1
Transactions with owners, total - - - -16.2 -16.2
Equity 31 December 2020 36.2 102.0 -23.1 54.5 169.6
Comprehensive income for the period
Net profit for the period - - - 11 . 3 11 . 3
Other comprehensive income:
Financial assets recognised at fair value through other
comprehensive income:
Change in fair value - 2 3 .1 - - 2 3 .1
Profit from sales of assets - - - 21. 7 21. 7
Accumulative change in fair value of disposed assets - -5 .1 - 5 .1 -
Financial assets recognised at fair value through other
comprehensive income total 8.2. - 18 . 0 - 26. 8 4 4. 8
Cash flow hedge 8.3. - 0.9 - - 0.9
Actuarial gains and losses 4.4. - - - 1. 3 1. 3
Income tax relating to other comprehensive income 9.1. - -0 .2 - -0.3 -0. 5
Translation difference - - -5.4 - -5.4
Comprehensive income for the period, total - 18 . 8 -5. 4 39. 2 52. 6
Transactions with owners
Dividend distribution 8.5. - - - -5.4 -5.4
Share-based incentive 4.4. - - - 0 .1 0 .1
Purchase of own shares - - - - 0 .1 - 0 .1
Transactions with owners, total - - - -5.4 -5. 4
Equity 31 December 2021 36. 2 12 0 . 7 -2 8 . 5 88 .3 216 . 8
32
Financial statements 2021
Oriola Financial review 2021
33
Notes to the consolidated nancial
statements
1. Basic information on the company
in Espoo , Finland. Oriola and its subsidiaries together form the con-
solidated Oriola Group. The consolidated nancial statements were
approved for publication by the Board of Directors of Oriola Corpo-
ration on 17 February 2022. In accordance with Finland’s Limited Li-
ability Companies Act, the shareholders have the right to approve
or reject the nancial statements at the General Meeting held after
their publication. The General Meeting may also decide to make
amendments to the nancial statements. The company’s business
ID is 1999215-0. Copies of the consolidated nancial statements of
the Oriola Group are available from the head oce of Oriola Corpo-
ration at the following address: Orionintie 5, FI-02200 Espoo ,
Finland (investor[email protected]).
2. Basis of presentation
fair value through other comprehensive income, deriva-
tives and share-based payments. The Group has applied
the standards and interpretations published by the Inter-
national Accounting Standards Board (IASB) that are man-
datory as of 1 January 2021. These standards did not have
a signicant impact on the Group in the current reporting
period and they are not expected to have a material im-
pact on the Group in the current or future reporting peri-
ods and on foreseeable future transactions.
3. Use of estimates and judgement
Item Uncertainty Note
Dened benets Discount factor 4.4.
Impairment testing
Projection parameters /
Estimate 6.2.
Lease liabilities Lease term / Estimate 7.1.
The preparation of consolidated nancial statements in ac-
cordance 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 nancial statements as well as on
the income and expenses reported for the nancial year. The
estimates are based on the management’s best knowledge
about the facts and as such actual results may dier from the
estimates and assumptions used. Estimates have been used in
determining the number of items reported in the consolidated
nancial statements, such as possible impairment of goodwill
and other assets, determination of pension assets and pension
obligations related to dened benet pension plans, economic
lives of tangible and intangible assets, lease liabilities, provi-
sions and income taxes. The application of accounting princi-
ples also requires judgement.
The consolidated nancial statements are prepared in ac-
cordance 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 2021.
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 proce-
dures provided for in EU regulation (EC) No. 1606/2002.
The consolidated nancial statements are presented for
the 12-month period 1 January – 31 December 2021.
The nancial statements are presented in EUR million
and they have been prepared under the historical cost
convention, except for nancial assets recognised at fair
value through prot or loss, nancial assets recognised at
Since the rst quarter of 2020, the COVID-19 pandemic has im-
pacted signicantly Oriola’s operating environment as the restric-
tions set by the authorities and consumer caution impacted the
consumer behaviour. The measures caused by the pandemic have
led to the decrease of healthcare services as well as aected the
demand for pharmaceuticals and health and wellbeing products.
This has inevitably also had an impact on Oriola’s business.
As the pandemic continues, Oriola’s business environment stays
volatile, which still can have a signicant impact on Oriola’s net
sales and protability. Severity and duration of the pandemic, how-
ever, remain unclear in Oriola’s operating environment. The impacts
of the pandemic on the valuation of Oriola’s assets are closely moni-
tored. Based on the assessments, COVID-19 pandemic is currently
not expected to have such long-term impacts on Oriola’s nan-
cial performance, that would require adjustments to the carrying
amounts of the assets.
Key estimates and judgement which are material to the reported
results and nancial position are presented in the following notes:
33
Financial statements 2021
Oriola Financial review 2021
34
In order to reect the underlying business performance and to en-
hance comparability between nancial periods Oriola discloses Ad-
justed 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. The reporting segments’
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 discontinua-
tion of business operations or assets, gains or losses from restruc-
turing 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 or agreements where Oriola delivers the products from con-
signment stock. Oriola reports invoicing of both type of agree-
ments as it describes the volume of the business.
4. Operating result
4.1. Segment reporting
Oriola’s operating and reporting segments consist of busi-
ness areas and are reported as in internal reporting provided
to the Chief Executive Ocer, the chief operating decision
maker responsible for allocating resources and assessing
performance of the business areas.
The assets and liabilities of reporting segments include
items directly attributable to a segment and items which
can be allocated to segments. Group items include nan-
cial items as well as items related to corporate functions.
Intra-segment pricing is determined on an arm’s length
basis.
The geographical areas of Oriola are Finland, Sweden and other
countries. Net sales are divided by the countries in which the cus-
tomers are located. Assets and investments are divided according
to the country in which they are located.
Invoicing
EUR million
Adjusted EBIT
EUR million
2020 Consumer Pharma Retail Group items 2021
2017 2018 2019 2020 2021
4,000
3,000
2,000
1,000
0
3,336
3,518
3,733
3,765
3,959
21
26
-1
-0
9
-3
30
20
10
0
34
Financial statements 2021
Oriola Financial review 2021
35
Reporting segments
EUR million
2021 Note Consumer Pharma Retail Group items Total
External invoicing 839.5 2,801.6 318.0 - 3,959.1
Internal invoicing -0.1 248.4 189.7 -438.0 -
Invoicing 839.4 3,050.0 507.7 -438.0 3,959.1
Sales to external customers 817.5 747.9 317.0 - 1,882.4
Sales to other segments -0.1 248.4 189.7 -438.0 -
Net sales 4.2. 817.5 996.3 506.7 -438.0 1,882.4
EBIT 9.8 11.9 9.3 -10.6 20.5
Adjusted EBIT 11.4 12.4 11.3 -8.8 26.3
Assets 426.6 378.1 120.4 168.1 1,093.2
Liabilities 120.3 557.3 63.1 135.7 876.4
Investments 6.1./6.2. 13.5 5.3 3.8 0.2 22.8
Depreciation, amortisation and impairments 6.1./6.2. 28.3 9.9 6.3 0.4 44.9
Average number of personnel, full time equivalents 1,683 452 547 78 2,760
2020
External invoicing 798.1 2,662.8 304.0 - 3,764.9
Internal invoicing 0.1 243.2 182.7 -426.0 -
Invoicing 798.2 2,906.0 486.7 -426.0 3,764.9
Sales to external customers 780.6 718.0 302.2 - 1,800.8
Sales to other segments 0.1 243.2 182.7 -426.0 -
Net sales 4.2. 780.7 961.2 484.9 -426.0 1,800.8
EBIT 15.3 12.4 0.9 -8.2 20.4
Adjusted EBIT 14.4 12.8 2.0 -8.2 21.0
Assets 442.3 374.1 132.5 216.7 1,165.6
Liabilities 123.4 586.6 67.0 219.1 996.0
Investments 6.1./6.2. 13.0 9.1 4.9 5.9 32.8
Depreciation, amortisation and impairments 6.1./6.2. 26.7 8.4 6.5 0.1 41.6
Average number of personnel, full time equivalents 1,596 451 562 77 2,687
Refer to section Alternative performance measures for denitions of key gures and reconciliation to measures presented in the consolidat-
ed income statement and balance sheet prepared in accordance with IFRS.
Adjusting items
Adjusting items included in EBIT
EUR million 2021 2020
Restructuring costs -3.4 0.8
Impairments and write-downs -1.6 -
Costs and impairment charges relating to
onerous contract - -1.2
Other -0.8 -0.2
Total -5.9 -0.6
Adjusting items in 2021 consist mainly of organisational restructur-
ing costs, impairment of goodwill related to closing of the service
centre in Retail business in Sweden, impairment charges related
to the closing of pharmacies in Consumer business in Sweden and
write-down of inventories related to the discontinued product cat-
egory in Retail business.
Adjusting items in 2020 consist mainly of changes in restructuring
provisions and costs relating to an onerous contract in Retail busi-
ness area.
Geographical information
EUR million
2021 Sweden Finland
Other
countries Total
Sales to external customers 1,331.4 431.1 119.9 1,882.4
Assets 744.8 348.4 - 1,093.2
Investments 19.3 3.5 - 22.8
Average number of person-
nel, full time equivalents 2,184 576 - 2,760
2020
Sales to external customers 1,275.6 404.7 120.5 1,800.8
Assets 784.6 381.1 - 1,165.7
Investments 21.9 10.9 - 32.8
Average number of person-
nel, full time equivalents 2,084 603 - 2,687
35
Financial statements 2021
Oriola Financial review 2021
36
• Stang: The Group oers stang services to
pharmacies and pharmaceutical companies. The
performance obligation is the delivery of the stang
services. The transaction price is the hourly based price
according to work performed. The revenue is recognised
over the period during which the service is performed.
• 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.
Net sales by currency
2021 2020
Million SEK EUR SEK EUR
Sweden 14,641.3 1,443.0 14,549.8 1,387.7
Finland 439.4 413.1
Total 1,882.4 1,800.8
Disaggregation of revenue
In the following table, the Group's external revenue is disaggregat-
ed by the Group's major revenue streams and reconciled with the
Group's reportable segments.
EUR million
2021 Consumer Pharma Retail Total
Wholesale - 684.0 164.4 848.5
Retail sale 817.5 - - 817.5
Services - 63.9 152.5 216.4
Total 817.5 747.9 317.0 1,882.4
2020 Consumer Pharma Retail Total
Wholesale - 658.0 166.3 824.3
Retail sale 780.6 - - 780.6
Services - 60.0 135.9 195.9
Total 780.6 718.0 302.2 1,800.8
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 indi-
rect taxes, discounts and currency translation dierences re-
sulting from sales in foreign currencies. Revenue is measured
based on the consideration specied in a contract with a
customer and excludes amounts collected on behalf of third
parties. The Group recognises revenue when it transfers con-
trol over a product or service to a customer.
Oriola’s agreements with pharmaceutical companies are ei-
ther wholesale agreements where Oriola buys the prod-
ucts into own stock or agreements where Oriola delivers the
products from consignment stock. Oriola reports invoicing
of both type of agreements as it describes the volume of the
business. The denition of invoicing is described in section
Alternative performance measures. Invoicing by business
area is presented in note 4.1. Segment reporting.
The Group’s revenues derive from the following revenue
streams: Wholesale, retail sale, sale of logistics services, dose
dispensing, stang and sale of other services. In the following
section the principal activities of the dierent revenue streams
are described as well as the nature of performance obligations.
Wholesale: The Group sells pharmaceutical products and
traded goods 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.
Retail sale: The Group has retail pharmacies that sell phar-
maceuticals and healthcare products to private customers.
The performance obligation is sale of goods. The perfor-
mance obligation is satised when the products are sold to
customers in pharmacies. The Group has a customer loyalty
bonus discount programme related to the non-prescription
retail sale in Sweden. In the customer loyalty programme,
the customers earn customer loyalty points based on their
purchases of non-prescription products. The points are con-
verted to digital vouchers, which the customers can use to
pay for their purchases. The points provide a material right to
customers that they would not receive without entering into
a contract. Therefore, the promise to provide digital vouchers
to the customer is a separate performance obligation. The
points expire in one year from purchase if not converted to
digital vouchers. The digital vouchers expire in two months,
if not used before that. The net sales are adjusted with cus-
tomer loyalty points earned by the customers. A contract lia-
bility is recognised for the points customers in the customer
loyalty programme have earned based on their purchases
and for the outstanding digital vouchers. The contract liabil-
ity is recognised until the points are redeemed or expire.
Services: The Group oers a variety of services to the cus-
tomers. These services can be divided to the following rev-
enue streams: Sale of logistics services, dose dispensing,
stang 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 on a net basis as a
fee or commission.
• Dose dispensing: The Group oers 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.
36
Financial statements 2021
Oriola Financial review 2021
37
Contract balances
The Group has recognised the following liabilities related to con-
tracts with customers:
EUR million 31 Dec 2021 31 Dec 2020
Contract liabilities
(included in other current liabilities)
- Customer loyalty programme 1.7 2.0
- Advances received related to other services 0.0 0.0
Total 1.7 2.1
The amount of EUR 2.1 million recognised in contract liabilities at
the beginning of the period has been recognised as revenue for the
period ended 31 December 2021.
No revenue was recognised in the reporting period from perfor-
mance obligations satised (or partially satised) in previous periods.
No information is provided about remaining performance obliga-
tions at the end of the reporting period that have an original ex-
pected duration of one year or less.
Other operating income
EUR million 2021 2020
Gains on sales of tangible
and intangible assets 0.1 0.1
Rental income 0.4 0.2
Service charges -0.0 0.1
Marketing contribution 9.1 8.4
Other operating income 1.5 0.7
Total 11.1 9.5
Other operating income consists mainly of marketing contribution
in retail campaigns.
4.3. Operating expenses
Operating expenses include material purchases, employee benet
expenses and other operating expenses as presented on the face
of the statement of comprehensive income. Employee benet ex-
penses are specied in note 4.4. Employee benets.
Materials and supplies
Materials and supplies include materials, procurement and
other costs related to manufacturing and procurement.
Materials and supplies
EUR million 2021 2020
Purchases during the period 1,481.1 1,447.1
Change in inventories 17.3 -8.6
Products for own use -0.1 -0.1
Foreign exchange dierences -0.1 0.4
Total 1,498.2 1,438.7
2021
Million SEK EUR
Sweden 11,464.5 1,129.9
Finland 368.3
Total 1,498.2
Other operating expenses
EUR million 2021 2020
Freights and other variable costs 41.3 39.3
Marketing 11.0 12.4
Information management 18.6 19.7
Premises 10.9 10.1
External services 38.9 32.6
Other operating expenses 23.9 23.1
Total 144.6 137.2
Audit fees
EUR million 2021 2020
To member rms of KPMG network
Audit related services 0.3 0.2
Tax and other non-audit services - 0.1
Total 0.3 0.3
The member rms of KPMG network have provided non-audit ser-
vices to entities of Oriola Group in total EUR - (58.7) thousand during
the nancial year 2021.
2020
Million SEK EUR
Sweden 11,508.1 1,097.6
Finland 341.1
Total 1,438.7
Materials and supplies by currency
37
Financial statements 2021
Oriola Financial review 2021
38
Consumer Pharma Retail Group administration
Employees by business area
1
1
At year-end, full time equivalents
Sweden Finland
Employees by country
1
1
At year-end, full time equivalents
In 2020, Oriola received in Sweden government compensations
for socials costs, sick leaves and short-term lay-os totalling EUR
1.5 million to cover the negative impacts of the COVID-19 pan-
demic. The compensations have been reported as a reduction of
personnel expenses in the consolidated statement of compre-
hensive income. In 2021, government compensations were not
received.
4.4. Employee benets
The Group’s employee benets include wages, salaries
and bonuses paid to employees, pension benets, other
long-term employee benets and share-based payments.
Pension benets: The Group’s pension arrangements are
in compliance with each country’s local regulations and
practices. The pension arrangements of the Group compa-
nies comprise both dened contribution plans and dened
benet plans. The payments to the dened contribution
plans are recognised as expenses in the statement of com-
prehensive income in the period in which they incur. Under
a dened benet 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 dened benets have
been calculated using the projected unit credit method.
Pension expenses are recognised as expenses by distribut-
ing them over the estimated period of service of the per-
sonnel concerned. The amount of the pension obligation is
the present value of the estimated future pensions payable.
Other long-term employee benets consist of a long-
service benet scheme operated by the Group. The long-
service benet scheme is presented as other non-current
liabilities in the statement of nancial position.
Share-based payments: Share incentive plans are meas-
ured at fair value at the grant date, and are recognised as
expenses within 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 reduced by
the estimated dividends. The fair value of the cash part is
measured at each balance sheet date until the end of the
Employee benet expenses
EUR million 2021 2020
Wages, salaries and bonuses 135.6 126.7
Share-based payments 0.2 0.3
Pension costs
Dened contribution plans 13.3 11.4
Dened benet plans 0.8 0.7
Other personnel expenses 35.4 33.1
Total 185.3 172.3
vesting period based on the share price at the end of the
reporting period. Both the equity-settled component and
the unpaid cash-settled part are credited to retained earn-
ings.
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.
1,621
448
583
78
2020
1,598
436
538
72
2021
2,138
592
2020
2,072
573
2021
38
Financial statements 2021
Oriola Financial review 2021
39
Change in dened benet obligation and plan assets:
EUR million
Present
value of
funded
obligation
Fair value
of plan as-
sets Total
1 Jan 2020 19.5 -2.4 17.1
Current service cost 0.8 - 0.8
Interest cost or income 0.2 -0.0 0.2
20.6 -2.4 18.1
Remeasurements
Actuarial gains (-) and losses (+)
arising from changes in nancial
assumptions 1.3 -0.1 1.2
Experience prots (-) or losses (+) -0.8 - -0.8
21.0 -2.5 18.5
Dierences in foreign exchange rates 0.7 - 0.7
Contributions
Plan participants - -0.0 -0.0
Expenses arising from the plans
Benets paid -0.5 0.2 -0.3
31 Dec 2020 21.3 -2.3 18.9
Current service cost 0.9 - 0.9
Interest cost or income 0.2 -0.0 0.2
22.3 -.2.3 20.0
Remeasurements
Actuarial gains (-) and losses (+)
arising from changes in nancial
assumptions -0.4 0.2 -0.2
Experience prots (-) or losses (+) -1.1 - -1.1
20.8 -2.1 18.7
Dierences in foreign exchange rates -0.4 - -0.4
Contributions
Plan participants - -0.0 -0.0
Expenses arising from the plans
Benets paid -0.4 0.2 -0.3
31 Dec 2021 20.0 -2.0 18.0
Signicant actuarial assumptions 31 Dec: 2021 2020
Discount rate (%) 0.70-1.60 0.20-0.95
Salary increases (%) 2.30-3.75 1.20-3.25
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 dened benet obligation to changes in the most sig-
nicant assumptions:
Assumption
Change in
assumption as
percentage point
Eect of change
in assumption %
Decrease in discount rate -0.5 increase by 11.6
Increase in discount rate +0.5 reduce by 10.1
Increase in salaries +0.5 increase by 3.6
Increase in benets +0.5 increase by 11.3
The table presents a sensitivity analysis for the most signicant ac-
tuarial assumptions, showing the eect of any change in actuarial
assumptions on the dened benet pension obligation.
The eects of the above sensitivity analysis have been calculated so
that when the eect of the change in the assumption is calculated all
other assumptions are expected to remain unchanged. This is unlike-
ly to happen and in some assumptions changes may correlate with
each other. The sensitivity of the dened benet obligation has been
calculated using the same method as in the calculation of the pen-
sion obligation to be entered in the statement of nancial position
(the current value of the dened benet obligation at the end of the
reporting period using the projected unit credit method).
The most signicant risks arising from dened benet pension plans:
Life expectancy: Most of the plan obligations are connected with
generating life-long benets for employees and for this reason a
higher life expectancy will mean more obligations under the plan.
Ination risk: Some of the Group’s pension obligations are linked to
ination, and higher ination will lead to higher liabilities.
Changes in bond yields: A decrease in bond yields will increase plan
liabilities, although this will be partially oset by an increase in the
value of the plans’ assets.
Net dened benet liability in the statement of nancial position
is dened as follows:
EUR million 2021 2020
Present value of funded obligations 20.0 21.3
Fair value of plan assets -2.0 -2.3
Decit/surplus 18.0 18.9
Net liability(+) / assets (-) in the statement
of nancial position 18.0 18.9
Post-employment benets
The Oriola Group has dened benet pension plans in Finland and
Sweden.
In Finland, the dened benets plans consist of a voluntary insur-
ance plan, which is a nal average pay pension plan concerning ad-
ditional pensions. The benets are insured with OP Life Assurance.
In Sweden, some of the oce employees are covered by the de-
ned benet plan ITP 2 and others by the dened contribution plan
ITP 1. The employees have a dened contribution plan according
to local legislation. In ITP 2, the company can recognise the old age
pension liabilities in its statement of nancial position or, alterna-
tively, pay the pension expenses to the pension insurance company
Alecta. Oriola Sweden AB has recognised its ITP 2 old age pension
liabilities in full in its statement of nancial position. Oriola Swe-
den AB’s old age pension benets other than ITP 2 are insured with
Alecta. All Kronans Apotek AB’s pension benets are based on de-
ned contribution and insured with Alecta.
Employer contributions to post-employment benefit plans are
expected to be EUR 0.4 million during 2022 financial year. The
weighted average duration of the defined benefit obligation is
21.6 years.
All plan assets of the Group relate to the Finnish voluntary insur-
ance plan and are held by the insurance company. They are part of
the insurance company’s investment assets and are considered to
be unquoted.
39
Financial statements 2021
Oriola Financial review 2021
40
performance period 2019-2021 correspond to the value of an ap-
proximate maximum total of 1,700,000 Oriola Corporation Class B
shares including also the proportion to be paid in cash. The potential
reward will be paid partly in Oriola Corporation Class B shares and
partly in cash in spring 2022 after the end of the performance period.
The potential reward from the performance period 2020–2022 will
be based on the Group's earnings per share (EPS) and Group’s total
shareholder return (TSR). The rewards to be paid on the basis of the
performance period 2020-2022 correspond to the value of an ap-
proximate maximum total of 1,820,000 Oriola Corporation Class B
shares including also the proportion to be paid in cash. The potential
reward will be paid partly in Oriola Corporation Class B shares and
partly in cash in spring 2023 after the end of the performance period.
The potential reward from the performance period 2021–2023 will
also be based on the Group's earnings per share (EPS) and Group’s
total shareholder return (TSR). The rewards to be paid on the basis
of the performance period 2021-2023 correspond to the value of an
approximate maximum total of 2,700,000 Oriola Corporation Class B
shares including also the proportion to be paid in cash. The potential
reward will be paid partly in Oriola Corporation Class B shares and
partly in cash in spring 2024 after the end of the performance period.
The cash proportion is intended to cover taxes and tax-related costs
arising from the reward to a key person.
Expenses recognised for the incentive plan were EUR 0.2 (0.2) million
in 2021.
One-o incentive plan 2019 - 2020
On 14 December 2018 The Board of Directors of Oriola Corporation
resolved to establish a two-year one-o incentive plan 2019-2020
directed to the Group’s key personnel to enable the prolonging of
the long-term incentive plan performance period to three years
and with that change better answer to the requirements of the in-
vestors and corporate governance and to be more aligned with the
market practice. The one-o long-term incentive plan had a two-
year performance period 2019–2020. The Board of Directors of the
Company resolved on the plan's performance criteria and on the
required performance level for each criterion at the beginning of a
performance period. Approximately 30 key persons, including the
members of the Oriola Management Team, belonged to the target
group of the plan. The prerequisite for participation in the plan and
for receipt of reward on the basis of the plan was that a key person
has enrolled in the key personnel share savings plan and makes the
monthly saving from his or her xed gross monthly salary, in ac-
cordance with the rules of the key personnel share savings plan in
force.
The potential reward from the performance period 2019-2020 was
based on the Group's earnings per share (EPS) and separately dened
two-year strategic projects. The performance criteria for the plan was
not met, and thus there was no payment based on the plan.
There were no expenses recognised for the incentive plan in 2021
(EUR -0.1 million in 2020).
Share savings plan
Oriola Corporation has had since 2013 a key personnel share sav-
ings plan in force. The Board of Directors of Oriola Corporation always
decides on the launch of a new savings period in the plan sepa-
rately. According to the rules of the share savings plan in force, the
maximum monthly saving is 8.3% and the minimum is 2% of each
participant's xed monthly gross salary. The accumulated savings
will be used for purchasing Oriola Corporation class B shares for the
participants at the market price quarterly. In return, each participant
will receive two free class B matching shares for every three acquired
savings shares if the participant holds the acquired shares from the
savings period until the end of the designated holding period and if
his or her employment with a company has not been terminated on
bad leaver terms. The matching shares are paid partly in Oriola’s class
B shares and partly in cash. The cash proportion is intended to cover
taxes and tax-related costs arising from the reward to a key person.
Approximately 50 key employees participated in the Oriola Corpora-
tion key personnel share savings plan for the savings period 1 Janu-
ary – 31 December 2018. The matching shares transferred to eligible
participants in February 2020 corresponded to the value of 78,295
Oriola Class B shares, including the proportion paid in cash.
Approximately 55 key employees participated in the share savings
plan for the savings period 1 January – 31 December 2019. The hold-
Use of estimates: The discounted value of the pension obli-
gation 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 assump-
tions used. The interest rate used is determined at the date of
measurement by reference to the maturity of corporate bonds
issued by nancially sound companies that is similar to that of
the pension obligation. Other key assumptions impacting pen-
sion liabilities are based on the circumstances valid at the time.
Share-based payments
Executive incentive plan 2019 - 2023
On 14 December 2018 The Board of Directors of Oriola Corporation
resolved to establish a new share-based long-term incentive plan
2019–2023 directed to the Group’s key personnel. The long-term
incentive plan arrangement has three three-year performance peri-
ods 2019–2021, 2020–2022 and 2021–2023. The Board of Directors
of the Company will resolve on the plan's performance criteria and
on the required performance level for each criterion at the begin-
ning of a performance period. Approximately 30 key persons, in-
cluding the members of the Oriola Management Team, belong to
the target group of the plan. The prerequisite for participation in
the plan and for receipt of reward on the basis of the plan is that
the key person has enrolled in the key personnel share savings plan
and makes the monthly saving from his or her xed gross month-
ly salary, in accordance with the rules of the key personnel share
savings plan in force during the rst year of the three-year perfor-
mance period. A member of the Oriola Management Team must
hold 50% of the net shares given on the basis of the long-term in-
centive plans, until his or her shareholding in the Company in total
equals the value of his or her gross annual salary. Such number of
shares must be held as long as the key person holds a position as a
Oriola Management Team member.
The potential reward from the performance period 2019–2021 will
be based on the Group's earnings per share (EPS) and Group’s total
shareholder return (TSR). The rewards to be paid on the basis of the
40
Financial statements 2021
Oriola Financial review 2021
41
Key management benets
EUR thousand 2021 2020
Robert Andersson until 1 February 2021
Basic salary 495.1 649.7
Bonuses - 127.3
Termination expenses
1
618.0 -
Pension expenses (statutory) 82.7 117.2
Total 1,195.8 894.1
EUR thousand 2021 2020
Juko Hakala 1 Feb - 8 Aug 2021 (interim)
Basic salary 246.1 -
Pension expenses (statutory) 41.1 -
Total 287.2 -
EUR thousand 2021 2020
Elisa Markula from 9 August 2021
Basic salary 208.6 -
Pension expenses (statutory) 34.8 -
Total 243.4 -
Employee benets to President and CEO
EUR thousand 2021 2020
Basic salary 1,679.3 1,556.7
Bonuses 148.8 223.0
Termination expenses
1
44.6 86.2
Pension expenses (statutory) 176.9 281.0
Pension expenses (voluntary) 49.4 57.3
Total 2,099.0 2,204.3
1
Termination expenses include the severance pay equal to 6 months' salary.
1
Termination expenses include the salary for the notice period and the severance pay
equal to 12 months' salary based on the service agreement.
The total benets 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. Three Oriola Manage-
ment Team members participate in a voluntary dened contribution
plan.
Salaries and benets of the members of the Board of Directors
EUR thousand 2021 2020
Panu Routila, Chairman
1
86.0 85.0
Eva Nilsson Bågenholm, Vice Chairman 57.5 60.0
Juko Hakala 38.5 47.0
Anja Korhonen 49.5 52.0
Harri Pärssinen 40.5 43.0
Lena Ridström 41.5 43.0
Mariette Kristenson
2
3.0 44.5
Anssi Vanjoki, Chairman
3
- 2.0
Total 316.5 376.5
Of the Board of Directors' annual fee, 60% is paid in cash and 40% in
the Company's class B shares. For the apportionment paid in shares,
an expense of EUR 0.1 (0.1) million was recognised in 2021.
Employee benets to other members of the Oriola Management Team
1
from 17 March 2020
2
until 16 March 2021
3
until 17 March 2020
ing period ended on the publication date of the Oriola’s Financial
Statements Release 1 January – 31 December 2020. The matching
shares transferred to eligible participants in March 2021 correspond-
ed to the value of 70,590 Oriola Class B shares, including the portion
paid in cash.
Approximately 59 key employees participated in the share savings
plan for the savings period 1 January – 31 December 2020. The hold-
ing period ended on the publication date of the Oriola’s Financial
Statements Release 1 January – 31 December 2021. The matching
shares will be transferred to eligible participants in 2022.
Approximately 60 key employees participated in the share savings
plan for the savings period 1 January – 31 December 2021. The hold-
ing period will end on the publication date of the Oriola’s Financial
Statements Release 1 January – 31 December 2022. The matching
shares will be transferred to eligible participants in 2023.
The expenses recognised for the share savings plans were EUR 0.1
(0.2) million in 2021.
41
Financial statements 2021
Oriola Financial review 2021
42
Ageing and impairment of trade receivables at the closing date
2021 2020
EUR million Gross Impairment Gross Impairment
Not past due 185.6 -0.0 181.6 -0.0
Past due 1 - 30 days 7.6 -0.0 6.8 -0.0
Past due 31 - 180 days 1.6 -0.1 0.4 -0.0
Past due more
than 180 days 0.0 -0.1 -0.1 0.0
Total 194.9 -0.2 188.7 -0.1
The inventories as of 31 December 2021 included pharmaceuticals
and health related products. In 2021, a write-o from inventories to-
talling EUR 0.3 million was recognised related to the discontinued
product category. In 2020, a write-o from inventories totalling EUR
0.1 million was recognised related to an onerous contract in Retail
business area. The write-os are included in adjusting items in 2021
and in 2020.
EUR million 2021 2020
Raw materials and consumables 0.1 0.1
Work in progress 0.6 0.7
Finished goods 228.5 249.4
Total 229.2 250.1
5.2. Inventories
Inventories are presented in the consolidated statement
of nancial position at the lower of cost and net realisa-
ble 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 inven-
tory obsolescence.
As a part of managing liquidity risk Oriola has open-ended frame
agreements in Sweden that allows the company to sell trade receiva-
bles relating to Swedish retail and wholesale businesses to the nan-
cial institutions on non-recourse basis. Sold and from the statement of
nancial position derecognised non-recourse trade receivables were
EUR 183.1 (179.6) million on the balance sheet date. No signicant
changes are anticipated in the scope of the agreements to sell trade re-
ceivables in 2022.
The credit risk in Finland is reduced by interest-bearing advance pay-
ments from pharmacies. These interest-bearing advance payments
are presented as current interest-bearing liabilities in the statement of
nancial position. On the balance sheet date, the amount of prepay-
ments was EUR 16.0 (17.0) million. Additional information on the inter-
est-bearing advance payments can be found in note 8.2. Financial as-
sets 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. Finan-
cial risk management.
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 their antici-
pated realisable value, which is the original invoice amount
less than estimated valuation allowance for the impairment
of these receivables. A valuation allowance for impair-
ment of trade receivables is recognised when there is ob-
jective evidence that the Group will not be able to collect
all amounts due according to the original terms of the re-
ceivables. Signicant nancial diculties of the debtor, the
probability of the debtor's bankruptcy, failure to pay and
signicant delay of payments are considered to be justied
reasons for the impairment of trade receivables. The Group
applies the simplied approach to providing for expected
credit losses, which permits the use of the lifetime expect-
ed loss provision for all trade receivables. Impairments are
recognised as an expense in the consolidated statement of
comprehensive income. The part of the trade receivables,
which is held for sale, is classied to measurement category
fair value through prot and loss. Sold non-recourse trade
receivables' credit risk and contractual rights are trans-
ferred from the Group on the selling date and related ex-
penses are recognised as nancial expenses. Additional
information on sales arrangement for trade receivables can
be found in note 8.3 Financial risk management.
EUR million 2021 2020
Trade receivables 194.7 188.6
Income tax receivables 2.7 3.4
Prepaid expenses and accrued income 2.7 2.0
VAT receivables 11.9 12.7
Rental prepayments -0.1 0.1
Prepayments 1.6 1.8
Other receivables 2.1 1.4
Total 215.6 210.0
The book value of trade receivables corresponds to the maximum
amount of credit risk relating to them at the balance sheet date.
Use of estimates: The Group assesses the value of inventories
regularly for any indication of obsolescence. A corresponding
write-o from inventories is recognised when needed. This as-
sessment requires the management to use judgement when
estimating the sales prices of products and inventory turnover.
Changes in these estimates may cause impairment of invento-
ries in future reporting periods.
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Oriola Financial review 2021
43
5.3. Trade payables and other liabilities
EUR million 2021 2020
Trade payables 591.7 620.3
Income tax payables 1.4 -
Accrued liabilities 32.1 36.7
Derivatives designated as hedges 0.1 -
Derivatives measured at fair value
through prot and loss 0.2 0.1
VAT liabilities 4.2 5.6
Other current liabilities 6.6 3.6
Total 636.2 666.3
Material items included in accrued liabilities
EUR million 2021 2020
Accrued wages, salaries
and social security payments 20.9 24.3
Other accrued liabilities 11.2 12.4
Total 32.1 36.7
Other non-current liabilities
EUR million 2021 2020
Derivatives - 0.4
Other non-current liabilities
1
0.5 0.5
Total 0.5 0.9
1
Other non-current liabilities include long-service benet liability.
EUR million
2021
Restructuring
provisions
Other
provisions Total
Carrying amount
1 Jan 2021 0.3 0.5 0.8
Increases - 0.9 0.9
Used -0.2 -1.4 -1.6
Reversed -0.1 - -0.1
Foreign exchange
rate dierences -0.0 -0.0 -0.0
Carrying amount
31 Dec 2021 - - -
2020
Carrying amount
1 Jan 2020 2.8 - 2.8
Increases 0.5 0.5 1.0
Used -1.8 -0.0 -1.9
Reversed -1.2 - -1.2
Foreign exchange
rate dierences 0.1 - 0.1
Carrying amount
31 Dec 2020 0.3 0.5 0.8
5.4. Provisions
A provision is recognised in the consolidated statement
of nancial position when the Group has a present legal
or contractual obligation as a result of a past event and it
is probable that an outow of resources embodying eco-
nomic benets will be required to settle the obligation and
a reliable estimate can be made of the amount of the obli-
gation.
A restructuring provision is recognised when the Group has
a detailed, formal restructuring plan, has started the imple-
mentation of the plan or has informed those aected by
the plan. No provision related to costs for continuing op-
erations is recognised.
At the end of 2021 the Group did not have any provisions in the
consolidated statement of nancial position (EUR 0.8 million in
2020).
Restructuring provisions in 2020 are related to co-operation nego-
tiations in 2019 aiming to improve operational eciency and con-
tinue re-organising operations in Finland and in Sweden as well as
to changes in the Oriola Management Team.
Other provisions in 2020 are related to an onerous contract in Retail
business area.
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Financial statements 2021
Oriola Financial review 2021
44
EUR million
2021
Land and
water
Buildings and
constructions
Machinery and
equipment
Right-of-use
assets
1
Other
tangible
assets
2
Advance payments
and construction
in progress
3
Total
Historical cost 1 Jan 2021 1.9 59.2 101.3 245.5 42.1 8.5 458.4
Increases - 0.6 3.1 20.1 1.5 5.2 30.5
Decreases - - -2.2 -19.3 -0.0 -0.5 -22.0
Reclassications - 0.8 2.1 - 0.2 -3.3 -0.2
Foreign exchange rate dierences -0.0 -0.4 -1.8 -5.0 -0.9 -0.1 -8.2
Historical cost 31 Dec 2021 1.9 60.1 102.4 241.3 43.0 9.8 458.5
Accumulated depreciation 1 Jan 2021 - -39.6 -67.6 -164.2 -24.9 - -296.3
Accumulated depreciation related to decreases
and reclassications - - 2.1 19.2 0.0 0.4 21.7
Depreciation for the nancial year - -1.9 -6.9 -20.3 -3.4 - -32.5
Impairments - - -0.1 -0.0 -0.3 -0.4 -0.9
Foreign exchange rate dierences - 0.2 1.2 3.5 0.6 0.0 5.4
Accumulated depreciation 31 Dec 2021 - -41.3 -71.2 -162.0 -28.1 - -302.5
Carrying amount 1 Jan 2021 1.9 19.6 33.7 81.2 17.2 8.5 162.2
Carrying amount 31 Dec 2021 1.9 18.8 31.2 79.4 14.9 9.8 155.9
2020
Historical cost 1 Jan 2020 1.9 58.0 95.2 222.0 36.3 2.3 415.7
Increases - 0.0 2.2 14.9 3.8 9.7 30.6
Decreases - - -1.9 -0.2 - -0.0 -2.1
Reclassications - 0.4 2.6 - 0.5 -3.5 -0.1
Foreign exchange rate dierences 0.0 0.8 3.2 8.8 1.5 0.1 14.3
Historical cost 31 Dec 2020 1.9 59.2 101.3 245.5 42.1 8.5 458.4
Accumulated depreciation 1 Jan 2020 - -37.4 -60.2 -139.3 -20.4 - -257.4
Accumulated depreciation related to decreases
and reclassications - - 1.6 0.2 0.1 - 1.9
Depreciation for the nancial year - -1.8 -6.7 -18.8 -3.7 - -31.0
Impairments - - - - 0.1 - 0.1
Foreign exchange rate dierences - -0.3 -2.2 -6.2 -1.0 - -9.8
Accumulated depreciation 31 Dec 2020 - -39.6 -67.6 -164.2 -24.9 - -296.3
Carrying amount 1 Jan 2020 1.9 20.6 35.0 82.7 15.9 2.3 158.3
Carrying amount 31 Dec 2020 1.9 19.6 33.7 81.2 17.2 8.5 162.2
1
For more details about the right-of-use assets please refer to section 7. Leases.
2
The most signicant share of other tangible assets is made up by refurbishment expenditures for rented premises.
3
The most signicant part of advance payments and construction in progress is related to renewal of warehouse premises.
Property, plant and equipment
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 de-
preciation and impairment losses. The assets are depreci-
ated over their estimated useful life using the straight-line
method. The useful life of assets is reviewed at least annual-
ly, 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 pe-
riod. Improvement investments are capitalised providing
they are expected to generate future economic benets.
Gains and losses resulting from the disposal of tangible as-
sets are recognised as other operating income or expense
in the statement of comprehensive income.
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Financial statements 2021
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45
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-control-
ling 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 meas-
ured at historical cost less depreciation and impairment losses.
Other intangible assets include sales licences, trademarks, pat-
ents, software licences and product and marketing rights. As-
sets with nite useful life are depreciated 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 prod-
ucts 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 ex-
penses as incurred. Conguration and customisation costs in a
cloud service contract, which do not meet the denition of an
intangible asset, and which are distinct from the actual cloud
service, are recognised as expense when the service is received.
Conguration and customisation costs which are not distinct
from the actual cloud services, are recognised as advance pay-
ments in the statement of nancial 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
EUR million
2021 Goodwill Intangible rights
Other
intangible assets
1
Advance payments and
construction in progress
2
Total
Historical cost 1 Jan 2021 278.7 109.6 32.5 17.4 438.2
Increases - 1.7 0.5 10.2 12.4
Decreases - - -0.6 -0.0 -0.7
Impairments -0.9 - - - -0.9
Reclassications - 2.2 3.2 -5.2 0.2
Foreign exchange rate dierences -4.4 -2.1 - -0.2 -6.7
Historical cost 31 Dec 2021 273.5 111.3 35.5 22.3 442.6
Accumulated amortisation 1 Jan 2021 - -77.2 -12.4 - -89.7
Accumulated amortisation related
to decreases and reclassications - -0.0 0.6 - 0.6
Amortisation for the nancial year - -6.8 -3.8 - -10.6
Foreign exchange rate dierences - 1.5 - - 1.5
Accumulated amortisation 31 Dec 2021 - -82.5 -15.6 - -98.1
Carrying amount 1 Jan 2021 278.7 32.3 20.1 17.4 348.5
Carrying amount 31 Dec 2021 273.5 28.8 19.9 22.3 344.5
2020
Historical cost 1 Jan 2020 270.5 103.8 29.9 9.8 414.0
Increases - 1.4 0.3 10.6 12.3
Decreases - -0.4 - - -0.4
Reclassications - 0.9 2.2 -3.1 0.1
Foreign exchange rate dierences 8.2 3.9 - 0.1 12.2
Historical cost 31 Dec 2020 278.7 109.6 32.5 17.4 438.2
Accumulated amortisation 1 Jan 2020 - -67.0 -9.5 - -76.6
Accumulated amortisation related
to decreases and reclassications - 0.4 - - 0.4
Amortisation for the nancial year - -7.3 -2.9 - -10.1
Impairments - -0.6 - - -0.6
Foreign exchange rate dierences - -2.8 - - -2.8
Accumulated amortisation 31 Dec 2020 - -77.2 -12.4 - -89.7
Carrying amount 1 Jan 2020 270.5 36.7 20.4 9.8 337.5
Carrying amount 31 Dec 2020 278.7 32.3 20.1 17.4 348.5
Goodwill and other intangible assets
1
Other intangible assets include signicant expenses for installation and specialist work related to the implementation of computer software.
2
Advance payments and construction in progress include mainly costs related to software.
45
Financial statements 2021
Oriola Financial review 2021
46
The recoverable amount of the cash-generating units in impairment
testing was based on value-in-use calculations. Value-in-use has
been determined based on discounted cash ows (DCF-model). The
cash ow 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 protability of the Group businesses. The for-
eign exchange rates used in converting the calculations into euros
are those prevailing at the time of testing.
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 ows expected to be derived from the asset.
The impairment loss is recognised in the statement of
comprehensive income if the carrying amount of the as-
set 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 re-
versal of impairment loss cannot exceed the asset’s carry-
ing 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 com-
prehensive income under Depreciation, amortisation and
impairments. Goodwill impairment losses are not reversed.
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 man-
agement’s assessments of the long-term growth. In estimating the ter-
minal growth rate, both country-specic and business sector growth
forecasts available from external information sources as well as the
characteristic features of each operating segment and cash generat-
ing unit are considered. Terminal growth rate for cash generating units
was 2.0% from the year 2024. 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 specic risks in each of the Group's
operating segment. When dening the discount rates, Oriola has ac-
quired the necessary information from an external information source.
Result of goodwill impairment testing
In the second quarter of 2021, an impairment of goodwill totalling
EUR 0.9 million was recognised relating to the closing of the service
centre in Swedish Retail business. 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 2021.
Sensitivity analysis for the following projection parameters have
been performed: discount rate, EBIT percentage, terminal growth
percentage, and net sales growth percentage. For Consumer busi-
ness area the recoverable amount would equal the carrying amount
if pre-tax discount rate increased 1.2 percentage points (increased
1.7 percentage points), or if EBIT percentage decreased 0.5 percent-
age points (decreased 0.7 percentage points), or if terminal growth
percentage decreased 1.4 percentage points (decreased 2.0 percent-
age points), or if sales growth percentage decreased 2.0 percent-
age points (decreased 2.9 percentage points). For Pharma and Retail
business areas, management believes that any reasonably pos-
sible change in the projection parameters would not cause carry-
ing amount of the cash-generating units to exceed its recoverable
amount.
Goodwill and projection parameters applied
2021 Consumer Pharma Retail
Goodwill 210.3 33.0 30.2
Pre-tax discount rate % 7.2 6.7 7.3
Terminal growth 2.0 2.0 2.0
2020 Consumer Pharma Retail
Goodwill 214.6 33.0 31.1
Pre-tax discount rate % 7.0 7.2 7.3
Terminal growth 2.0 2.0 2.0
Use of estimates: The Group’s assets with an indenite use-
ful life are subject to annual impairment testing and any in-
dication of impairment of assets is assessed using informa-
tion from external sources on market development as well as
information from internal sources on business performance
and estimates. When analysing these sources and informa-
tion and making conclusions, estimates are used. The re-
coverable values used in impairment testing are discounted
future cash ows 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 dier-
ence is recognised as an impairment charge. The prepara-
tion of such calculations requires the use of estimates. Dur-
ing 2020, the management has followed closely the impacts
of the COVID-19 pandemic on the Group’s business perfor-
mance and estimates. At the moment the pandemic is not
expected to have signicant long-term impacts on Oriola’s
business performance.
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47
6.3. Other non-current assets
EUR million
2021
Other shares
and share-
holdings
Other
non-current
assets Total
Carrying amount 1 Jan 2021 22.2 0.1 22.3
Increases 0.0 0.6 0.6
Decreases -11.1 - -11.1
Changes in fair value 23.1 - 23.1
Foreign exchange rate dierences -0.0 -0.0 -0.0
Carrying amount 31 Dec 2021 34.2 0.7 34.9
2020
Carrying amount
1 Jan 2020 9.4 0.3 9.7
Increases 4.8 - 4.8
Decreases -0.0 -0.2 -0.2
Changes in fair value 8.0 - 8.0
Foreign exchange rate dierences 0.0 0.0 0.0
Carrying amount
31 Dec 2020 22.2 0.1 22.3
Use of estimates: 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.
Other shares and shareholdings
In 2018 Oriola Corporation invested EUR 9.4 million in the Swedish
online medical centre Doktor.se. In 2020, Oriola made an additional
investment totalling EUR 4.8 million in Doktor.se and recognised an
increase of EUR 8.0 million to the value of the investment. The in-
crease was based on realised transactions and the present value of
discounted cash ows.
In June 2021, Oriola sold approximately 50% of its shareholding in
Doktor.se for EUR 33.9 million. The prot from the sale of shares EUR
21.7 was recognised in retained earnings. In taxation, the sales prof-
it has been treated as tax exempt sale of xed asset shares. In addi-
tion, Oriola recognised an increase of EUR 23.1 million to the value
of the remaining investment based on realised transactions. Oriola's
ownership in Doktor.se has enabled a tight strategic cooperation
in the Swedish market. The accelerating international growth pro-
gramme of Doktor.se is a natural moment for Oriola to decrease its
ownership and that way contribute to other types of investors be-
ing able to invest in Doktor.se.
Oriola’s ownership at the end of the reporting period was approxi-
mately 6% of the total number of shares in Doktor.se. Doktor.se of-
fers personal digital healthcare services to its customers. Doktor.se
has a comprehensive organisation with specialist nurses, doctors
and psychologists.
The investment in Doktor.se is accounted for as a nancial
asset. Oriola classies the shares of Doktor.se as the invest-
ment in Doktor.se is seen as strategic investment, which
supports Oriola’s business operations. The shares are pre-
sented in the consolidated statement of nancial position
as part of other non-current assets. Possible changes in fair
value of the investment are recognised in other compre-
hensive income and they shall not subsequently be trans-
ferred to prot and loss. Possible dividends are recognised
as dividend income in the prot and loss.
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Financial statements 2021
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48
the right to control the use of an identied asset for a peri-
od of time in exchange for consideration. In order to assess
whether a contract conveys the right to control the use of
an identied asset, it is assessed whether:
• The contract involves the use of an identied asset
• Oriola has the right to obtain substantially all of the
economic benets 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 commence-
ment date. The lease payments included in the measure-
ment of the lease liability include the following:
• Fixed payments, including in-substance xed 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 external factors such as e.g. sales volume in pharmacies.
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 de-
termined, the incremental borrowing rate. The incremen-
tal 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 environ-
ment. At Oriola, the incremental borrowing rates are dened
for the lease terms of 1, 3, 5 and 10 years. The components
of the incremental borrowing rate are:
• Risk free rate which reect the dierent 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 specic 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 signicantly inuenced 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
7. Leases
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 pharma-
cies, oce premises and warehouse premises. Also leases
for parking space as well as machinery and equipment of
buildings is included the real estate class. The Group has a
signicant portfolio of lease contracts for pharmacy prem-
ises in Sweden. 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 benets and forklifts,
which are used in warehouses. The lease period for the
company cars is usually 3 years and for forklifts 3-5 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 coee machines.
At inception of a contract it is assessed whether a contract
contains a lease. A contract contains a lease if it conveys
48
Financial statements 2021
Oriola Financial review 2021
49
• 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-es-
tate leases and the exemption for low-value assets is ap-
plied 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 rec-
ognised as an expense on a straight-line basis over the
lease term. An asset is considered to be a low-value as-
set, 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 impair-
ment 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 as-
sets are determined on the same basis as those of property,
plant and equipment.
The lease liability is measured at amortised cost using the
eective 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 guar-
antee, 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 prot 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 liabili-
ties in the statement of nancial position. The lease liabilities
with the maturity of more than 12 months are presented in
the non-current interest-bearing liabilities and the lease li-
abilities 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 de-
preciation, amortisation and impairments in the statement
of comprehensive income. The interest expense on the lease
liability is presented within the nancial expenses. The lease
payments of low-value assets and short-term leases are in-
cluded in other operating expenses in the statement of com-
prehensive income.
In the statement of cash ows the cash payments for the
principal portion of the lease liability are presented within
nancing activities. The cash payments for the interest por-
tion 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 li-
abilities are presented within operating activities.
Use of estimates: In determining the lease term, management
considers all facts and circumstances that create an economic in-
centive to exercise an extension option, or not to exercise a termina-
tion option. 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). In Sweden the leasing contracts
for pharmacy premises are usually automatically renewed for the
next lease period if not terminated by Oriola. For such contracts
Oriola has to use management judgement in determining, whether
it will renew the contracts or terminate them. For those pharmacies,
which are in attractive locations, which are or are expected to be
protable and which support the Groups strategy, Oriola considers
it is reasonably certain to exercise the renewal option.
7.1. Leases in the statement of nancial position
The Group has recognised following amounts in the statement of -
nancial position relating to leases:
Right-of-use assets
EUR million 2021 2020
Real estate 77.9 79.6
IT equipment 0.1 0.3
Vehicles 1.3 1.3
Other machinery and equipment 0.0 0.0
Total 79.4 81.2
Lease liabilities
EUR million 2021 2020
Current 18.6 19.8
Non-current 60.2 61.9
Total 78.8 81.7
Additions to the right-of-use assets during year 2021 were EUR 20.1
(14.9) 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 2021 2020
Depreciation charge of right-of-use assets
Real estate -19.3 -17.8
IT equipment -0.2 -0.4
Vehicles -0.8 -0.7
Other machinery and equipment -0.0 -0.0
Total depreciation -20.3 -18.8
Interest expense (included in nancial
expenses) -1.7 -1.7
Expense relating to short-term leases
(included in other operating expenses) -0.1 -0.1
Expense relating to leases of low-value assets
(included in other operating expenses) -0.5 -0.4
Gains from changes in leases
(included in other operating income) 0.0 0.1
The total cash outow for leases in 2021 was EUR 23.4 (21.7) million.
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8.2. Financial assets and liabilities
Classication and measurement: Financial assets and li-
abilities are recognised at the fair value at the settlement
date except derivatives, which are recognised at the trade
date in the statement of nancial position. The Group’s -
nancial assets and liabilities include cash and cash equiva-
lents, loans and other nancial receivables, trade receiva-
bles, trade payables, loans and derivatives.
Financial assets and liabilities are classied into the follow-
ing measurement categories:
• Fair value through prot and loss
• Fair value through other comprehensive income
• Amortised cost
The classication of nancial assets into dierent measure-
ment categories depends on the business model for manag-
ing the nancial asset and the contractual cash ow charac-
teristics of the nancial asset. The classication of nancial
liabilities into dierent measurement categories depends on
the purpose for which the nancial liabilities were initially ac-
quired. The measurement category for nancial assets and
liabilities is determined at the acquisition date. Financial as-
sets are derecognised when the Group loses the rights to
receive the contractual cash ows on the nancial asset or
it transfers substantially all the risks and rewards of owner-
ship outside the Group. Financial liabilities are derecognised
when the obligation specied in the contract is discharged
or cancelled or expires.
Financial assets measured at fair value through prot
and loss: Money market investments, trade receivables
held for sale and derivatives which are not designated as
hedges are measured at fair value through prot 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 nancial pe-
riod 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 classied as cash and cash equiva-
lents have a maturity of less than 3 months from the acqui-
sition date. The used credit limits are included in current
interest-bearing liabilities.
Loans and other receivables are measured at amortised cost.
Receivables are classied as current nancial 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 prot and loss. Trade receiva-
bles 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. Signicant nancial diculties of
the debtor, the probability of the debtor’s bankruptcy, failure
to pay and signicant delay of payments are considered to
be justied reasons for the impairment of trade receivables.
The Group applies the simplied 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 receiva-
bles’ credit risk and contractual rights are transferred from
the Group on the selling date and related expenses are rec-
ognised as nancial 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.
EUR million 2021 2020
Financial income
Interest income on nancial assets measured at
amortised cost 0.2 0.4
Interest income on nancial assets
and liabilities recognised at fair value 0.1 0.0
Foreign exchange rate gains from nancial assets
and liabilities recognised at fair value, net 0.2 0.1
Other nancial income - 0.0
Total 0.5 0.5
Financial expenses
Interest expenses on interest rate swaps 0.3 0.2
Interest expenses on nancial liabilities
at amortised cost 2.0 2.5
Interest expenses on leases 1.7 1.7
Foreign exchange rate losses on nancial assets and
liabilities measured at amortised cost, net 0.0 0.0
Other nancial expenses 2.3 2.1
Total 6.3 6.5
Financial income and expenses, total -5.8 -6.0
8. Capital structure
8.1. Financial income and expenses
Interest income and expenses: Interest income and ex-
penses are recognised on a time-proportion basis using the
eective interest method.
The average interest rate on the interest-bearing liabilities exclud-
ing lease liabilities was 0.96% (1.09%) in 2021.
Financial income and expenses
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51
Financial assets measured at fair value through other
comprehensive income: In 2018 and 2020, Oriola Corpora-
tion invested a total of EUR 14.2 million in the Swedish online
medical centre Doktor.se. The investment is accounted for as
a nancial asset. Oriola classies the shares of Doktor.se as
fair value through other comprehensive income. The invest-
ment in Doktor.se is seen as strategic investment, which sup-
ports Oriola’s business operations. The purchase price of the
shares is recognised in the consolidated statement of nancial
position in other non-current assets. Possible changes in fair
value of the investment are recognised in other comprehen-
sive income and they shall not subsequently be transferred to
prot 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 prot and loss. In
June 2021, Oriola sold approximately 50% of its sharehold-
ing 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 nancial position at the net value
received on the date of acquisition. Transaction costs are in-
cluded in the original carrying amount of nancial liabilities.
Financial liabilities are subsequently measured at amortised
cost using the eective interest method. Interest expenses
are recognised in the statement of comprehensive income
using the eective interest method. Financial liabilities that
expire within 12 months from the balance sheet date, in-
cluding bank overdrafts in use, are recognised within current
interest-bearing liabilities, and those expiring in a period ex-
ceeding 12 months, are recognised within non-current inter-
est-bearing liabilities.
Financial liabilities measured at fair value through prot
and loss: The Group’s nancial liabilities measured at fair value
through prot and loss include derivatives which are not desig-
nated as hedges. More information on measurement of deriva-
tives can be found from note 8.3. Financial risk management.
Financial assets and liabilities by category
2021 2020
EUR million Note Fair value Book value Hierarchy Fair value Book value Hierarchy
Derivatives designated as hedges 8.3. 0.6 0.6 Level 2 - - Level 2
Financial assets recognised at fair value through
prot and loss
Derivatives measured at fair value through prot
and loss 8.3. 0.0 0.0 Level 2 0.1 0.1 Level 2
Other investments measured at fair value through
OCI 6.3. 34.2 34.2 Level 3 22.2 22.2 Level 3
Trade receivables for sale 5.1. 16.1 16.1 Level 2 15.1 15.1 Level 2
Loans and other receivables
Cash equivalents 109.1 109.1 Level 2 168.2 168.2 Level 2
Trade receivables and other receivables 5.1. 183.4 183.4 Level 2 176.9 176.9 Level 2
Financial assets, total 343.5 343.5 382.4 382.4
Derivatives designated as hedges 8.3. 0.1 0.1 Level 2 0.4 0.4 Level 2
Financial liabilities recognised at fair value
through prot and loss
Derivatives measured at fair value through prot
and loss 8.3. 0.2 0.2 Level 2 0.1 0.1 Level 2
Financial liabilities measured at amortised cost
Non-current interest-bearing liabilities 123.5 123.5 Level 2 127.8 127.8 Level 2
Current interest-bearing liabilities 86.4 86.4 Level 2 167.4 167.4 Level 2
Trade payables and other current liabilities 5.3. 630.4 630.4 Level 2 660.6 660.6 Level 2
Financial liabilities, total 840.5 840.5 956.3 956.3
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).
Reconciliation of nancial assets recognised at fair value according
to the level 3
EUR million 2021 2020
Carrying amount 1 Jan 22.2 9.4
Acquisition of shares - 4.8
Disposal of shares -11.1 -
Change in fair value 23.1 8.0
Carrying amount 31 Dec 34.2 22.2
Financial assets recognised at fair value through other comprehen-
sive income (level 3) include Oriola’s holding in the Swedish online
medical centre Doktor.se. In the second quarter of 2021 Oriola sold
approximately 50 % of its shareholding in Doktor.se and recognised
an increase of EUR 23.1 million to the value of the shares. In 2020,
an increase of EUR 8.0 million was recognised to the value of the
shares. More information on the investment in Doktor.se and its val-
uation can be found in note 6.3. Other non-current assets.
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Financial statements 2021
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52
Interest-bearing liabilities
Non-current
EUR million 2021 2020
Loans from nancial institutions 63.3 65.9
Lease liabilities 60.2 61.9
Total 123.5 127.8
Current
EUR million 2021 2020
Loans from nancial institutions 2.0 52.0
Issued commercial papers 49.8 78.6
Advances received from pharmacies 16.0 17.0
Lease liabilities 18.6 19.8
Total 86.4 167.4
Interest-bearing liabilities by currency
EUR million 2021 2020
EUR 103.9 186.3
SEK 106.0 108.9
Total 209.9 295.3
Net debt
EUR million 2021 2020
Loans from nancial institutions 63.3 65.9
Lease liabilities 60.2 61.9
Non-current interest-bearing liabilities 123.5 127.8
Loans from nancial institutions 2.0 52.0
Issued commercial papers 49.8 78.6
Advances received from pharmacies 16.0 17.0
Lease liabilities 18.6 19.8
Current interest-bearing liabilities 86.4 167.4
Interest-bearing liabilities, total 209.9 295.3
Cash and cash equivalents 109.1 168.2
Net debt 100.8 127.1
Change in net debt
2021
Loans from
nancial
institutions
Commercial
papers
Advances from
pharmacies
Lease
liabilities
Cash
and cash
equivalents Total
Carrying value, at 1 January 2021 -117.9 -78.6 -17.0 -81.7 168.2 -127.1
Change in net debt, cash:
Repayments of non-current loans 2.0 - - - - 2.0
Repayments of current loans 50.0 - - - - 50.0
Repayments of lease liabilities - - - 21.2 - 21.2
Change in other current liabilities - 28.8 1.0 - - 29.8
Change in cash and cash equivalents - - - - -59.0 -59.0
Cash ows, total 52.0 28.8 1.0 21.2 -59.0 44.0
Change in net debt, non-cash: - - - -19.9 - -19.9
Foreign exchange adjustments 0.6 - - 1.7 -0.0 2.2
Non-cash movements, total 0.6 - - -18.3 -0.0 -17.7
Carrying value, at 31 December 2021 -65.3 -49.8 -16.0 -78.8 109.1 -100.8
2020
Loans from
nancial
institutions
Commercial
papers
Advances from
pharmacies
Finance
lease liabilities
Cash
and cash
equivalents Total
Carrying value, at 1 January 2020 -57.8 -35.0 -13.2 -84.3 70.8 -119.6
Change in net debt, cash:
Proceeds from non-current loans -30.0 - - - - -30.0
Repayments of non-current loans 1.1 - - - - 1.1
Proceeds from current loans -40.0 - - - - -40.0
Repayments of current loans 10.0 - - - - 10.0
Repayments of lease liabilities - - - 19.6 - 19.6
Change in other current liabilities - -43.6 -274.8 - - -318.4
Change in cash and cash equivalents - - - - 97.3 97.3
Cash ows, total -58.9 -43.6 -274.8 19.6 97.3 -260.5
Change in net debt, non-cash:
Change in lease liabilities - - - -13.8 - -13.8
Settled against trade receivables - - 271.0 - - 271.0
Foreign exchange adjustments -1.1 - - -3.1 0.1 -4.2
Non-cash movements, total -1.1 - 271.0 -17.0 0.1 253.0
Carrying value, at 31 December 2020 -117.9 -78.6 -17.0 -81.7 168.2 -127.1
EUR million
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Financial statements 2021
Oriola Financial review 2021
53
8.3. Financial risk management
The nancial risks relating to the business operations of the Oriola
Group are managed in accordance with the treasury policy ap-
proved by the Board of Directors. Oriola's centralised Group Treas-
ury is responsible for implementing, monitoring and reporting of
the treasury policy.
Oriola’s Group Treasury’s main objectives are to maintain solid long-
term nancial position and secure daily liquidity of the Group and
to eciently manage currency and interest rate risks.
The objective of nancial risk management is to hedge against un-
favourable changes in the nancial markets and to minimise the
impact of foreign exchange, interest rate, renancing and liquidity
risks on the Group’s cash reserves, prots and shareholders’ equity.
Approved hedging instruments are set in the treasury policy.
Currency risk: The most important country-specic operating cur-
rencies 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 con-
siderably 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 -
nance-related transactions and payments made by the business
units, which are denominated in a currency other than the unit’s re-
porting 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 cur-
rency of each subsidiary, mainly in Swedish krona. In addition, Oriola
Corporation had an EUR 28.3 (28.9) million Swedish krona denomi-
nated external loan on the balance sheet date. In accordance of the
treasury policy, transaction risk arising from the items in the state-
ment of nancial position recognised in the statement of compre-
hensive income is aimed to be fully hedged with derivatives. On the
balance sheet date Swedish krona denominated open transaction
position was EUR 0.0 (0.0) million.
Translation risk: Oriola’s most signicant translation risk concerns
items in Swedish krona. Translation risks arise from capital invest-
ments 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 268.9 (256.1) million. Translation risk sensitivity: A
10% weakening/strengthening of Swedish krona would have an im-
pact of EUR -/+24.4 (-/+23.3) 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 nancial obligations. The Group’s
liquidity management is based on 12-month cash ow forecasts
and 4-week rolling cash ow forecasts drawn up on a weekly basis.
Oriola has diversied its renancing risk among several dierent
counterparties and various nancing sources.
In June 2021, Oriola signed a new unsecured revolving credit facility
agreement for a total of EUR 140 million for three years. The facility is
committed and includes an option to be extended by two years. The
new revolving credit facility replaced the existing EUR 100 million
agreement that was signed in June 2017. The margin of the revolving
credit facility is linked to Oriola’s nancial covenants and the perfor-
mance of sustainability targets. The committed long-term revolv-
ing credit facility of EUR 140.0 million and short-term uncommitted
credit account limits of EUR 34.9 (35.0) million were unused on the
balance sheet date. In addition, Oriola has a EUR 200 (200) million un-
committed commercial paper programme of which EUR 49.8 (78.6)
million had been issued on the balance sheet date. During the sec-
ond quarter of 2020, Oriola Corporation prepared for the instability in
the nancing markets caused by the COVID-19 pandemic by drawing
term-loans totalling EUR 70 million. Maturity distribution of nancial
assets and liabilities is presented on page 54. Oriola’s cash and cash
equivalents at the end of 2021 totalled EUR 109.1 (168.2) million.
Oriola’s nancial agreements include nancial covenants that are
maximum net debt to EBITDA -ratio of 3.0 and maximum net debt
to equity ratio of 100%. In addition to nancial covenants, the mar-
gin 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 nancial institutions on applying
the nancial reporting standards in force at the end of 2018 to all of
the current long-term agreements. At the end of the reporting pe-
riod the nancial covenants were fullled.
Oriola’s net working capital was EUR -167.8 (-181.6) million on the
balance sheet date. Oriola’s net working capital was negative on the
balance sheet date owing to the terms of payment dened in prin-
cipal and customer agreements and to the non-recourse factoring
programmes used in the retail and wholesale businesses in Swe-
den. The Group’s principal and customer agreements are based on
established, long-term agreements, and no signicant changes are
anticipated in them during 2022.
Oriola has open-ended frame agreements in Sweden that allow
the company to sell trade receivables relating to Swedish retail and
wholesale businesses to the nancial institutions on a non-recourse
basis. Sales of trade receivables were EUR 183.1 (179.6) million in to-
tal on the balance sheet date. No signicant changes are anticipat-
ed in the scope of the agreements to sell trade receivables in 2022.
Interest rate risk: Interest rate risk arise from changes in interest
payments of oating rate loans due to changes in market interest
rates and market value changes of nancial instruments (price risk).
The objective of the interest rate risk management is to minimise
the impact of interest rate uctuations on the statement of compre-
hensive 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 109.1 (168.2) million in cash assets, EUR 209.9 (295.3) million in
interest-bearing liabilities, and EUR 183.1 (179.6) million from sales
of non-recourse trade receivables in Sweden. The interest-bearing
liabilities at the end of 2021 include lease liabilities totalling EUR
78.8 (81.7) million. On the balance sheet date, a total of EUR 70.3
(71.7) million of the interest rate risk was hedged. The average in-
terest rate on interest-bearing liabilities excluding lease liabilities
and including the sale of receivables on a non-recourse basis and
interest rate hedges, was 0.96% (1.09%), and the interest rate du-
ration was 10 (8) months. One of the interest rate hedges will ma-
ture during the third quarter of 2022, the other ones are long-term
contracts. Oriola applies hedge accounting for interest rate swaps
hedging cash ows relating to selling of non-recourse trade receiv-
ables.
53
Financial statements 2021
Oriola Financial review 2021
54
Based on the gross debt on the balance sheet date and assum-
ing that the trade receivables sales programmes will continue as
normal in Sweden, the eect of a one percentage point increase
in market interest rates on the Group’s annual earnings after taxes
would be EUR -2.1 (-1.2) million (including derivatives) and on eq-
uity EUR 2.1 (1.3) million (including derivatives).
Credit and counterparty risks: A credit risk arises from the pos-
sibility of a counterparty failing to meet its contractual payment
obligations or nancial 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 agree-
ment 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 aris-
ing from commercial receivables. The Finnish and Swedish whole-
sale business is based on well-established customer relationships
and contractual terms generally observed within the industry,
which signicantly reduces the credit risk associated with trade re-
ceivables. Due to the nature of the operations there are no signi-
cant 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 inter-
est-bearing liabilities in the statement of nancial position. In the
wholesale and retail business in Sweden, the credit risk is reduced
by the sale of non-recourse receivables to nancial institutions and
by the usage of credit loss insurances.
The Group applies the simplied approach to providing for expect-
ed credit losses, which permits the use of the lifetime expected loss
provision for all trade receivables. The Group uses a provision ma-
trix for loss allowance provision. The matrix is based on historical
observed default rates and incorporates forward looking informa-
tion.
Credit losses recognised in the statement of comprehensive income
for the nancial year totalled EUR -0.2 (-0.1) 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 ecient capital
structure that allows the company to manage its ongoing obliga-
tions and enables cost-eective 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 nancial targets are based on growth, protabil-
ity and key gures related to the statement of nancial position. The
Group’s long-term targets are to grow at the rate of the market, an-
nual EPS growth over 5% (without adjusting items), return on capital
employed of over 20% and adjusted gearing ratio lower than 70%.
Non-recourse trade receivables are added to the net debt for adjust-
ed gearing. In addition, Oriola’s aim is to pay out an increasing annual
dividend of at least 50% of its earnings per share. The targets have
been calculated excluding the impact of application of IFRS 16.
For a denition of key gures, please see the section Alternative per-
formance measures.
54
Financial statements 2021
Oriola Financial review 2021
55
Maturity distribution of nancial assets and liabilities
31 Dec 2021
EUR million 2022 2023 2024 2025> Total
Interest-bearing
Loans from nancial
institutions and commercial
paper loans 51.8 32.0 30.3 1.0 115.1
Lease liabilities 18.6 17.5 13.7 29.0 78.8
Advance payments received 16.0 - - - 16.0
Non-interest-bearing
Trade payables and other
current liabilities 630.4 - - - 630.4
Receivables from interest
rate swaps - - -0.1 -0.6 -0.6
Liabilities from interest
rate swaps 0.1 - 0.1
Receivables from foreign
currency derivatives -59.5 - - - -59.5
Payables on foreign currency
derivatives 59.6 - - - 59.6
Total 717.0 49.5 43.9 29.5 839.9
31 Dec 2020
EUR million 2021 2022 2023 2024> Total
Interest-bearing
Loans from nancial
institutions and commercial
paper loans 130.6 2.0 32.0 31.9 196.5
Lease liabilities 19.8 17.1 14.6 30.2 81.7
Advance payments received 17.0 - - - 17.0
Non-interest-bearing
Trade payables and other
current liabilities 660.6 - - - 660.6
Liabilities from interest
rate swaps 0.1 0.2 - 0.2 0.4
Receivables from foreign
currency derivatives -12.8 - - - -12.8
Payables on foreign currency
derivatives 12.8 - - - 12.8
Total 828.0 19.3 46.6 62.3 956.3
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. De-
rivatives are classied as held for trading and accounted for
at fair value through prot or loss unless they are desig-
nated as hedges. They are presented as current assets or li-
abilities 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 ow hedges: Interest rate swaps
The change in fair value of derivatives held for trading is
recognised either as other income or expense or as nan-
cial income or expense depending on the underlying item
being hedged.
Hedge accounting: Oriola applies hedge accounting for
the interest rate swaps hedging cash ows relating to
selling of non-recourse trade receivables. The uctuat-
ing interest rate has been converted into xed rate using
interest rate swaps. When initiating hedge accounting,
the relationship between the hedged item and the hedg-
ing instrument is documented along with the objectives
of the Group’s risk management. The eective portion of
the changes in the fair value of interest rate swaps that are
designated and qualify as cash ow hedges is recognised
in other comprehensive income and accumulated in the
reserves in equity. The ineective portion, if any, is recog-
nised immediately in the statement of comprehensive in-
come within the nancial 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
2021
Positive fair
value
Negative fair
value
Nominal
value
Derivatives recognised
as cash ow hedges
Interest rate swaps,
in hedge accounting 0.6 0.1 70.2
Derivatives measured at fair
value through prot and loss
Foreign currency forward
and swap contracts 0.0 0.2 59.5
2020
Derivatives recognised
as cash ow hedges
Interest rate swaps,
in hedge accounting - 0.4 51.8
Interest rate swaps,
not in hedge accounting - 0.1 20.0
Derivatives measured at fair
value through prot and loss
Foreign currency forward
and swap contracts 0.1 0.1 12.8
55
Financial statements 2021
Oriola Financial review 2021
56
8.4. Equity, shares and authorisations
Share capital: Oriola Corporation’s share capital on 31 December
2021 stood at EUR 147,899,766.14. All issued shares have been paid
up in full. There were no changes in share capital in 2021.
Fair value reserve: The fair value reserve includes the change in
fair value of nancial assets measured at fair value through oth-
er comprehensive income as well as the eective portion of the
change in fair value of derivative nancial instruments that are des-
ignated as and qualify for cash ow hedges. At the balance sheet
date, the change in fair value of nancial assets measured at fair
value through other comprehensive income recognised in the fair
value reserve totalled EUR 18.0 million. The change in fair value of
derivative nancial instruments recognised in the reserve totalled
EUR 0.8 million (net of tax).
Contingency fund: The contingency fund is included in the un-
restricted 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 2021,
and the fund stood at EUR 19.4 million on 31 December 2021.
Other funds
Invested unrestricted equity reserve: Oriola Corporation ex-
ecuted 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 eq-
uity. In accordance with the decision of the Annual General Meet-
ing 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 oering in the rst quarter of
2015. The subscription period of the oering ended on 3 March 2015.
In the oering 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 oering. 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 2021, and the
fund stood at EUR 74.8 million on 31 December 2021.
Translation dierences: Translation dierences include translation
dierences 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 dierences 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 maxi-
mum of 500,000,000 shall be class A shares and a maximum of
1,000,000,000 class B shares. At the end of 2021, 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 nom-
inal 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 dierent share classes represented at the General Meet-
ing. 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 eld of business
on the stock exchange on 31 December 2021 was Health Care Distribu-
tors and the company was classied under Health Care. The ticker sym-
bol for the class A shares is OKDAV and for the class B shares OKDBV.
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 ow hedges. Interest rate risk relating to cash ow from sell-
ing of trade receivables has been hedged with interest rate swaps.
The fair value of interest rate derivatives is dened by cash ows
due to contracts. Interest rate swaps are designated as cash ow
hedges and their changes in fair value related to the eective por-
tion of the hedge are recognised in other comprehensive income
and the potential ineective part is recognised within the nancial
items in the statement of comprehensive income.
Fair values of the derivatives have been recognised in the statement
of nancial position in gross amount as the derivatives contracts are
related to credit events and cannot be netted in nancial statements.
The Group has not given nor received collateral to/from derivatives
counterparties.
Oriola has derivative positions with several banks and related trans-
actions are eected under master derivative agreements. Master
derivative agreements allow settlement on a net basis of all out-
standing 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 de-
rivative agreements, was EUR 0.6 (0.1) for Oriola and EUR 0.2 (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.
56
Financial statements 2021
Oriola Financial review 2021
57
2021 2020
B shares B shares
Board of Directors
Panu Routila, Chairman
(from 17 March 2020) 23,558 11,265
Eva Nilsson Bågenholm, Vice Chairman 33,675 26,299
Juko Hakala 32,779 26,633
Anja Korhonen 40,299 32,923
Harri Pärssinen 17,593 11,447
Lena Ridström 25,741 19,595
Mariette Kristenson (until 16 March 2021) 19,595
President and CEO
Elisa Markula (from 9 August 2021) 0
Robert Andersson (until 1 February 2021) 88,638
Oriola Management team
Katarina Gabrielson 49,633 41,158
Hannes Hasselrot (from 1 December
2021) 0
Anne Kariniemi 21,725 15,518
Tuula Lehto 16,678 10,280
Elina Niemelä (from 9 August 2021) 0
Charlotta Nyström 24,795 15,292
Fredrik Pamp (from 17 February 2020) 19,898 15,465
Sari Pohjonen (from 8 November 2021) 0
Petter Sandström 24,235 19,053
Helena Kukkonen (until 1 August 2021) 19,508
Teija Silver (until 8 August 2021) 75,098
Andres Torell (until 30 August 2021) 24,644
Management shareholdings
2021 that it will not use the authorisation and will not pay addition-
al dividend for 2020.
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 com-
pany and includes the right to derogate from the shareholders'
pre-emptive subscription right. The authorisation is in force for 18
months following the decision of the Annual General Meeting.
The Board was also authorised to decide on a share issue against pay-
ment 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 share-
holders’ pre-emptive subscription right. The authorisation is in force for
a maximum of 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 deci-
sion of the Annual General Meeting.
The Annual General Meeting authorised the Board to decide on repur-
chasing 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 18 months following the decision of the Annual General Meeting.
All decisions of the Annual General Meeting 2021 are available on
the company's website www.oriola.com.
Treasury shares: Treasury shares acquired by the com-
pany and the related costs are presented as a deduction of
equity. Gain or loss on surrender of treasury shares are rec-
ognised in equity net of tax.
The company holds a total of 138,201 treasury shares, of which
63,650 are class A shares and 74,551 are class B shares. The treas-
ury shares held by the company account for 0.08% of the com-
pany's shares and 0.11% of the votes.
Share trading and prices: In 2021, the traded volume of Oriola
Corporation shares, excluding treasury shares, corresponded to
32.4% of the total number of shares. The traded volume of class A
shares amounted to 15.1% of the average stock, and that of class
B shares, excluding treasury shares, to 39.7% of the average stock.
The average share price of Oriola Corporation’s class A shares
was EUR 2.04 and of its class B shares EUR 1.94. The market value
of all Oriola Corporation shares at 31 December 2021 was EUR
362.8 (349.9) million, of which the market value of class A shares
was EUR 106.7 million and of class B shares EUR 256.1 million.
Shareholders: On 31 December 2021 Oriola Corporation had a to-
tal of 34,677 registered shareholders. There were 23,480,205 nom-
inee-registered shares on 31 December 2021, corresponding to
12.9% of all shares and 2.8% 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 2021, no class A shares were converted into class B shares.
Management shareholdings: On 31 December 2021, the mem-
bers of the company’s Board of Directors and the President and
CEO, the members of the Oriola Management Team and the com-
panies controlled by them had a total of 330,609 shares, corre-
sponding to 0.18% of the total number of shares in the company
and 0.03% of the votes.
Authorisations: The Annual General Meeting of Oriola Corpora-
tion held on 16 March 2021 authorised the Board of Directors to
decide at its discretion on the payment of dividend up to a maxi-
mum of EUR 0.03 per share. The authorisation shall be valid until
the beginning of the next Annual General Meeting of the company.
The Board of Directors of Oriola Corporation decided on 26 October
57
Financial statements 2021
Oriola Financial review 2021
58
Share capital
Share capital A shares B shares Total
Number of shares 1 Jan 2021 pcs 53,748,313 127,737,900 181,486,213
Conversion of A shares to B shares pcs - - 0
Number of shares 31 Dec 2021 pcs 53,748,313 127,737,900 181,486,213
Treasury shares 31 Dec 2021 pcs 63,650 74,551 138,201
Votes 31 Dec 2021 pcs 1,074,966,260 127,737,900 1,202,704,160
Share capital per share class 31 Dec 2021 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 2020 pcs 55,434,273 126,051,940 181,486,213
Conversion of A shares to B shares pcs -1,685,960 1,685,960 0
Number of shares 31 Dec 2020 pcs 53,748,313 127,737,900 181,486,213
Treasury shares 31 Dec 2020 pcs 63,650 109,556 173,206
Votes 31 Dec 2020 pcs 1,074,966,260 127,737,900 1,202,704,160
Share capital per share class 31 Dec 2020 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 2021 2020
Parent company share capital 31 Dec 147.9 147.9
Elimination of the revaluation of subsidiary shares in the consolidated nancial statements -111.7 -111.7
Consolidated share capital 31 Dec 36.2 36.2
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 num-
ber of shares outstanding during the period, excluding shares
acquired by the Group and held as treasury shares. When cal-
culating diluted earnings per share, the weighted share-issue
adjusted average number of shares outstanding during the
period is adjusted by the eect of all dilutive potential shares.
Dividend and other equity distribution: Dividends or other
equity distribution includes dividends and other equity distri-
bution approved by the Annual General Meeting. Dividends
and other equity distribution proposed by the Board of Di-
rectors are not recognised in the nancial 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 nancial position for the period during which
the dividend is approved by the Annual General Meeting.
Prot for the period
EUR million 2021 2020
Prot attributable to equity owners of
the parent 11.3 11.3
Average number of outstanding shares
pcs
Basic 181,341,203 181,388,782
Diluted 181,422,563 181,463,779
Earnings per share
EUR
Basic 0.06 0.06
Diluted 0.06 0.06
Dividend policy and distribution proposal: Oriola Corporation will
seek to pay out annually as dividends a minimum 50% of the Group’s
earnings per share. The Company’s strategy and nancial position
shall be taken into consideration when determining the annual divi-
dend payout ratio. The dividend paid for 2020 was EUR 5.4 million (EUR
0.03 per share) and for 2019 EUR 16.3 million (EUR 0.09 per share). The
Board of Directors proposes to the Annual General Meeting that a divi-
dend of EUR 7.3 million, EUR 0.04 per share is paid for 2021.
Earnings per share
1
Proposal by the Board of Directors. In addition, it is proposed that the Annual General
Meeting would authorise the Board of Directors to decide at its discretion on the
payment of dividend up to a maximum of EUR 0.04 per share.
2
The gures in 2017-2018 have been restated due to an error related to previous periods.
The restatement had an impact on inventories, deferred tax assets and retained earnings
in the consolidated statement of nancial position and on material purchases and income
taxes in the consolidated statement of comprehensive income. More information on
correction of the error is presented in the notes to the Financial statements 2019.
EPS
2
and dividend
EUR
EPS, continuing operations Dividend
2017 2018 2019 2020 2021
0.16
0.12
0.08
0.04
0.00
0.09
0.09
0.9
0.14
0.06
0.06
0.06
0.03
0.04
1
0.04
58
Financial statements 2021
Oriola Financial review 2021
59
9. Income taxes
9.1. Taxes recognised in the comprehensive income
for the period
Tax expense in the consolidated statement of comprehen-
sive income consists of income taxes based on the taxable
prot for the nancial year, prior period adjustments, and
changes in deferred tax assets and liabilities. Income tax for
the taxable prot for the period is calculated based on the
eective income tax rate for each tax jurisdiction. Taxes are
recognised in prot and loss, except when they relate to
items recognised directly in equity or in other comprehen-
sive income, when the taxes are also recognised in equity
or in other comprehensive income respectively.
Income taxes
EUR million 2021 2020
Taxes for current year 5.3 3.6
Taxes for previous years -0.0 -0.0
Deferred taxes -1.9 -0.5
Total 3.4 3.1
Taxes related to other comprehensive income
EUR million
2021 Before taxes Tax eect After taxes
Cash ow hedge 0.9 0.2 0.8
Financial assets recognised
at fair value through other
comprehensive income 44.8 - 44.8
Actuarial gains and losses 1.3 0.3 1.0
Translation dierences -5.4 - -5.4
Total 41.7 0.5 41.2
2020
Cash ow hedge -0.2 -0.0 -0.2
Financial assets recognised
at fair value through other
comprehensive income 8.0 - 8.0
Actuarial gains and losses -0.4 -0.0 -0.4
Translation dierences 9.8 - 9.8
Total 17.2 -0.1 17.3
Tax rate reconciliation
EUR million 2021 2020
Prot before taxes 14.7 14.3
Corporate income taxes
calculated at Finnish tax rate 2.9 2.9
Eect of dierent tax rates
of foreign subsidiaries 0.1 0.1
Non-deductible expenses
and tax-exempt income 0.4 0.2
Adjustments recognised
for taxes of previous years -0.0 -0.0
Changes in tax rates - -0.1
Other items -0.0 0.0
Income taxes in the income statement 3.4 3.1
Eective tax rate 22.9% 21.3%
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%. In Sweden the corporate tax rate de-
creased from 21.4% in 2020 to 20.6% in 2021.
9.2. Deferred tax assets and liabilities
Deferred tax is calculated on temporary dierences be-
tween the carrying amounts and the taxable values of as-
sets and liabilities and for tax loss carry-forwards to the
extent that it is probable that these can be utilised against
future taxable prots. The largest temporary dierences are
caused by the depreciation of property, plant and equip-
ment, the dened pension benet plans and by unused
losses in taxation. The deferred taxes are determined using
tax rates and laws that have been enacted or substantial-
ly enacted by the balance sheet date and are expected to
apply when the related deferred income tax asset is real-
ised, or the deferred income tax liability is settled. Deferred
tax assets and liabilities are oset when there is a legally
enforceable right to oset current tax assets against cur-
rent tax liabilities and when the deferred taxes relate to the
same scal authority.
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60
Deferred tax assets and liabilities
2021 1 Jan
Items
recognised
in income
statement
Items
recognised in other
comprehensive
income
Translation
dierences 31 Dec
Deferred tax assets
Conrmed tax losses 0.2 -0.2 - -0.0 0.0
Inventories 0.3 0.0 - -0.0 0.3
Pension liabilities 2.4 0.1 -0.3 -0.0 2.2
Employee benets 0.2 0.1 - - 0.3
Lease agreements 1.3 -0.2 - -0.0 1.1
Other temporary dierences 0.0 0.0 - -0.0 0.1
Deferred tax assets, total 4.4 -0.1 -0.3 -0.1 3.9
Deferred tax liabilities
Depreciation dierence and other untaxed reserves 9.2 -0.7 - -0.2 8.4
Acquisitions 4.5 -1.1 - -0.1 3.3
Other temporary dierences 0.2 -0.1 - - 0.1
Deferred tax liabilities, total 13.9 -1.9 - -0.3 11.8
2020 1 Jan
Items
recognised in
income
statement
Items
recognised in other
comprehensive
income
Translation
dierences 31 Dec
Deferred tax assets
Conrmed tax losses 0.2 -0.0 - 0.0 0.2
Inventories 0.2 0.0 - 0.0 0.3
Pension liabilities 2.2 0.0 0.0 0.1 2.4
Acquisitions 0.0 -0.0 - 0.0 0.0
Employee benets 0.2 0.0 - - 0.2
Lease agreements 1.5 -0.3 - 0.1 1.3
Other temporary dierences 0.2 -0.1 - 0.0 0.0
Deferred tax assets, total 4.5 -0.3 0.0 0.2 4.4
Deferred tax liabilities
Depreciation dierence and other untaxed reserves 9.2 -0.3 - 0.3 9.2
Acquisitions 5.0 -0.7 - 0.2 4.5
Other temporary dierences 0.1 0.1 - - 0.2
Deferred tax liabilities, total 14.3 -0.9 - 0.5 13.9
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10. Group structure
Consolidation principles: The consolidated nancial state-
ments include Oriola Corporation and those directly or indi-
rectly owned subsidiaries over which Oriola Corporation ex-
ercises 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 inuence on the returns through exercising
power over the investee. Subsidiaries are consolidated from
the date the Group has gained control and divested compa-
nies 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 transac-
tions, as well as intra-group receivables, payables, dividends
and unrealised internal margins, are eliminated. The Group’s
prot for the period is attributed to the equity holders of
the parent and non-controlling interests. Identiable 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 classied under other interest-bear-
ing 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 dierence is recorded through the state-
ment of comprehensive income.
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 prots and losses is included
as part of investments in joint ventures in the consolidated
statement of nancial position. Under the equity method
the share of prots and losses of joint ventures is presented
separately in the statement of comprehensive income.
Foreign currency denominated items: The consolidated
nancial statements have been presented in euros, which is
the functional and presentation currency of the Group’s par-
ent company. The items included in the nancial statements
of the subsidiaries are valued in the currency, which best de-
scribes the nancial operating conditions of each subsidiary
"functional currency".
Transactions in foreign currencies are translated into func-
tional 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 ex-
change on the date of valuation. Gains and losses arising from
the translation are recognised in the prot or loss. Foreign ex-
change 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 nancial income and expenses.
The income statements of foreign group companies outside
the eurozone are translated into euros using the weighted av-
erage rate of exchange of the nancial year and the statements
of nancial position using the rates of exchange as at the bal-
ance sheet date. Dierences resulting from the translation of
the result for the period at a dierent rate in the statement of
comprehensive income and in the statement of nancial posi-
tion are recognised as a separate item within the consolidated
statement of comprehensive income. Translation dierences
arising from the acquisition cost elimination of foreign sub-
sidiaries 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 trans-
lation dierences are included in the calculation of gain or loss
for the sale and recognised in the prot or loss for the period.
The parent company’s receivables from foreign subsidiaries are
considered as part of the net investment if there is no plan for
the repayment and repayment cannot be reasonably anticipat-
ed in the future. Exchange dierences arising from such receiva-
bles are recognised in the consolidated nancial statements in
translation dierences within equity.
10.1. Subsidiaries
Group Parent company
Subsidiaries Domicile
Owner-
ship %
Share of
votes %
Owner-
ship %
Share of
votes %
Parent company
Oriola Finland Oy Finland 100 100 100 100
Oriola Sweden AB Sweden 100 100 100 100
Kronans Apotek
AB Sweden 100 100 100 100
Svensk dos AB Sweden 100 100 100 100
Pharmaservice Oy Finland 100 100 100 100
Farenta Oy Finland 100 100 100 100
Oriola Sweden AB Sweden 100 100 100 100
ICTHS Health
Support AB Sweden 100 100
Changes in group structure: The parent company Oriola Corporation
established a new subsidiary, Farenta Oy, in December 2021, to which
it transferred the stang services business from Oriola Finland Oy.
Farenta Oy provides personnel services for pharmacies.
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, the other members of the Oriola Management
Team of the Oriola Group (key management), the immediate fam-
ily of the aforementioned persons and companies controlled by the
aforementioned persons, the Group’s subsidiaries and joint ven-
tures. The information on remuneration of key management is pre-
sented in note 4.4. Employee benets.
The Group has transactions between the group companies in the
ordinary course of business. The Group has no signicant business
transactions with other related parties.
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62
11. Unrecognised items
11.1. Commitments and contingent liabilities
EUR million 2021 2020
Commitments for own liabilities
Guarantees on behalf of subsidiaries 7.1 7.3
Mortgages on company assets 2.0 2.1
Other guarantees and liabilities 8.0 9.9
Total 17.2 19.3
The most signicant guarantees on behalf of subsidiaries are bank
guarantees against Swedish wholesale company's trade payables. In
addition, Oriola Corporation has granted parent company guaran-
tees of EUR 0.4 (0.3) million against other subsidiaries' lease liabilities.
Oriola invests in a new e-commerce warehouse in Enköping, Swe-
den. The new warehouse will cover around 15,000 square meters.
Oriola is renting the facility and the building project started in the
autumn 2021 and the new warehouse will be ready during the sec-
ond half of 2022. The lease contract is for ten years and will add
right-of-use assets and lease liabilities with approximately EUR 7.4
million in the second half of 2022.
11.2. Future lease payments
Committed future minimum lease payments:
EUR million 2021 2020
Within one year 0.6 0.6
One to ve years 0.4 0.5
Total 0.9 1.1
Future payments consist of minimum leasing commitments relat-
ed 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 ex-
penses related to short-term leases and leases of low-value assets
are presented in note 7.2. Leases in the statement of comprehen-
sive 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 es-
timated 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 nancial position of
the Group.
11.4. Events after the balance sheet date
Oriola announced on 9 February 2022 that Oriola Corporation and
the Euroapotheca group ("Euroapotheca") have signed a frame-
work merger agreement for combining the respective pharmacy
businesses in Sweden: Oriola’s Consumer business area compris-
ing Kronans Apotek (“Kronans Apotek” or “Oriola Consumer”) and
Euroapotheca’s Apoteksgruppen into a new company (the “New
Company”).
The New Company to be established will have over 470 pharmacies
and full online pharmacy operations, over 2,300 full-time employ-
ees and an illustrative combined revenue of EUR 1,140 million as of
2020 in Sweden. The New Company is expected to be the third larg-
est player in the Swedish pharmacy market by revenue, with an es-
timated combined market share of 25 percent.
Euroapotheca is an international group of companies in the North-
ern Europe region managing pharmacy chains, online pharmacies
and wholesale companies in Estonia, Latvia, Lithuania and Sweden.
The group employs altogether nearly 4,000 people. Euroapotheca
acquired Apoteksgruppen in 2018.
Oriola and Euroapotheca will combine the respective pharmacy
businesses in Sweden into a 50 percent and 50 percent equally
owned New Company to be established. In the arrangement, Oriola
contributes its Consumer business area (Kronans Apotek) into the
New Company, for an enterprise value of approximately EUR 400
EUR million 31 Dec 2021
Assets 426,6
Liabilities 120,3
Net asset and liabilities total 306,3
million. At the closing of the arrangement, Oriola Consumer’s liabili-
ties (IFRS 16 leases and factoring liabilities) of approximately EUR
134 million will be transferred to the New Company. Additionally,
Oriola will receive a cash consideration of approximately EUR 24
million from Euroapotheca. Euroapotheca contributes its Swedish
business, Apoteksgruppen, into the New Company for an enterprise
value of approximately EUR 300 million and transfers net debt of
EUR 82 million into the New Company.
The transaction is subject to competition authorities’ approval and
is expected to close at the latest during the second half of 2022.
The transaction is expected to have a negative impact of approxi-
mately EUR 10 million on consolidated net prot of Oriola Group
including as a result of realised translation dierences and transac-
tion related costs. For the parent company, there will be a negative
impact of approximately EUR 100 million on net prot as a result
of loan receivables that are not transferred to the New Company,
decreasing the parent company’s distributable funds by an equal
amount. At the end of December 2021 Oriola Corporation’s distrib-
utable funds were EUR 265.3 million.
As a consequence of transferring EUR 134 million of Oriola Consum-
er’s liabilities to the New Company consisting mainly of IFRS 16 re-
lated leasing liabilities as well as factoring, Oriola Group’s net debts
will be decreasing.
Oriola will report the New Company as an associated company un-
der the equity method and present the share of associated compa-
ny’s result above EBIT in the consolidated nancial statements.
Net assets and liabilities of Consumer business area at the end of
December 2021 is presented below:
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63
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 2021 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 eective date. If the eective date is other than the rst day of
a nancial year, the Group will apply the standard or interpretation
from the beginning of the following nancial year.
IFRS IC nalised its agenda decision Conguration or Customisa-
tion Costs in a Cloud Computing Arrangement (IAS 38 Intangible
Assets) in April 2021. In this agenda decision IFRS IC considered,
whether applying IAS 28, an intangible asset in relation to congu-
ration or customisation of the application software is recognised,
and if an intangible asset is not recognised, are they recognised
as an expense or are they recognised as advance payments in the
consolidated statement of nancial position. The Group claried its
accounting policies applied to the implementation costs in cloud
computing arrangements. The change does not have any material
impact on Oriola’s consolidated nancial statements and no reclas-
sications were done to the consolidated nancial statements be-
cause of the agenda decision.
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64
Parent company nancial statements
Parent company income statement (FAS)
EUR thousand Note 2021 2020
Other operating income 2 17,296.1 17,244.5
Personnel expenses 3 -8,832.4 -7,964.4
Depreciation, amortisation
and impairment charges 4 -3,820.3 -2,885.1
Other operating expenses 5 -15,386.1 -14,973.3
Operating result -10,742.7 -8,578.3
Financial income and expenses 6 -58,251.3 2,075.8
Result before appropriations and taxes -68,994.0 -6,502.5
Appropriations 7 15,276.5 14,320.3
Income taxes 8 -1,065.8 -901.8
Result for the period -54,783.4 6,915.9
Parent company balance sheet (FAS)
EUR thousand Note 31 Dec 2021 31 Dec 2020
Assets
Non-current assets
Intangible assets 9
Intangible rights 434.0 539.5
Other intangible assets 19,346.4 19,640.8
Advance payments
and construction in progress 8,182.8 9,182.4
27,963.2 29,362.8
Property, plant and equipment 10
Land and water areas 77.4 77.4
Machinery and equipment 12.0 67.9
Other tangible assets 7.5 7.5
96.9 152.8
Investments 11
Holdings in group companies 569,284.9 651,786.6
Other shares 8,203.2 14,186.3
Receivables from group companies 28,291.9 28,900.9
605,779.9 694,873.7
Non-current assets, total 633,840.0 724,389.3
Current assets
Receivables 12
Long-term receivables
Other recivables 611.0 -
Short-term receivables
Trade receivables 2.5 -
Receivables from group companies 18,724.0 14,746.2
Other receivables 401.4 410.0
Accrued receivables 1,301.4 1,176.8
21,040.4 16,333.0
Cash and cash equivalents 106,562.3 165,758.4
Current assets, total 127,602.7 182,091.4
Assets total 761,442.7 906,480.7
EUR thousand Note 31 Dec 2021 31 Dec 2020
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 223,736.2 222,348.5
Result for the nancial year -54,783.4 6,915.9
413,228.9 473,540.5
Appropriations 14 1,772.7 1,595.6
Liabilities 15
Long-term liabilities
Borrowings 63,291.9 65,900.9
Accrued liabilities - 395.6
63,291.9 66,296.5
Short-term liabilities
Borrowings 2,000.0 52,000.0
Trade payables 1,121.6 1,274.7
Liabilities to group companies 226,439.0 228,726.5
Other liabilities 51,856.9 80,765.1
Accrued liabilities 1,731.8 2,281.7
283,149.2 365,048.1
Liabilities total 346,441.1 431,344.6
Equity and liabilities total 761,442.7 906,480.7
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65
Parent company cash ow statement (FAS)
EUR thousand 2021 2020
Cash ow from operating activities
Result before appropriations and taxes -68,994.0 -6,502.5
Adjustments
Depreciation, amortisation
and impairment charges
3,820.3 2,885.1
Unrealised foreign exchange
gains and losses
440.8 2,694.1
Other non-cash items
-43.4 -40.7
Financial income and expenses
57,810.5 -4,769.9
-6,965.8 -5,733.9
Change in working capital
Change in current
non-interest-bearing receivables
-1,295.1 -1,433.1
Change in non-interest-
bearing current liabilities
-84.8 -1,662.8
-8,345.7 -8,829.8
Paid and received other nancial expenses and
income 988.2 1,795.0
Interest received 1,282.9 2,995.7
Interest paid -2,114.0 -2,881.1
Income taxes paid -901.8 -2,205.6
Cash ow from operating activities -9,090.4 -9,125.8
Cash ow from investing activities
Investments in tangible and intangible assets -2,814.7 -4,555.1
Proceeds from sale of tangible and intangible
assets 41.0 48.1
Investments to holdings and shares -3,898.3 -14,518.2
Change in loan receivables 609.0 66,343.6
Proceeds from sale of other investments 33,843.7 -
Dividends received 450.0 15,000.0
Cash ow from investing activities 28,230.7 62,318.4
Cash ow from nancing activities
Purchase of own shares -88.8 -100.8
Repayments of long-term loans -2,000.0 -64,429.3
Proceeds from long-term loans - 30,000.0
Proceeds from short-term loans - 40,000.0
Repayments of short-term loans -50,000.0 -10,000.0
Change in other current nancing -35,447.5 50,698.0
Group contributions received 14,627.7 14,500.0
Dividends paid -5,427.6 -16,316.0
Notes to the parent company nancial statements (FAS)
1. Accounting principles
Oriola Corporation is the parent company of the Oriola Group, domi-
ciled in Espoo, Finland. Oriola Corporation provides administrative
services to group companies. These administrative services are cen-
tralised to the parent company. Copies of the consolidated nancial
statements of the Oriola Group are available at the head oce of
Oriola Corporation, Orionintie 5, FI-02200 Espoo, Finland (investor.
Oriola Corporation´s nancial statements are prepared in euros and
according to Generally Accepted Accounting Principles in Finland
(Finnish GAAP) and according to corporate legislation. The nancial
statements are presented in thousand euros.
When appropriate, the nancial statements of Oriola Corporation
comply with the Group’s accounting principles based on IFRS. Be-
low are described those accounting principles in which the nancial
statements of Oriola Corporation dier from the accounting princi-
ples of the consolidated nancial statements. The accounting prin-
ciples for the consolidated nancial statements are presented in the
notes to the consolidated nancial statements.
Financial assets and liabilities: Financial items classied as loans and
receivables or other nancial liabilities are carried at amortised cost.
The change in the fair value of the eective portion of interest rate
derivative agreements under hedge accounting made to hedge
cash ows is directly recognised against the fair value reserve in-
cluded in equity. Derivatives acquired to hedge balance sheet
items like bank accounts, loans and receivables denominated in
EUR thousand 2021 2020
Cash ow from nancing activities -78,336.2 44,351.8
Change in cash and cash equivalents -59,196.0 97,544.5
Cash and cash equivalents at the
beginning of period 165,758.4 68,213.9
Net change in cash and cash equivalents -59,196.0 97,544.5
Cash and cash equivalents at the end of
period 106,562.3 165,758.4
foreign currencies and derivatives made to hedge cash ows that
are not under hedge accounting are recorded in exchange gains
and losses in the nancial items.
Share-based payments: The accounting treatment of Oriola Cor-
porations share-based incentive plans is described in the account-
ing principles for the consolidated nancial 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 pe-
riod. The expenses arising from the incentive plans are recognised
in the income statement over the vesting period. In the nancial
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 Com-
pany. Supplementary pension coverage is provided by OP Life Assur-
ance Company Ltd. Pension-related payments are recognised as pen-
sion expenses on an accrual basis. No other pension liabilities arising
from pension arrangements are recognised in the balance sheet ex-
cept 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 ow
forecasts based on value-in-use calculations are prepared for the
Group’s cash-generating units. In the impairment testing of subsidi-
ary shares, the cash ows are further allocated to subsidiaries’ recov-
erable amounts. The impairment loss is recognised, if the carrying
amount of the subsidiary shares and the amount of net loan receiva-
bles from the subsidiary exceed the recoverable amount of the cor-
responding assets.
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66
2. Other operating income
EUR thousand 2021 2020
Rental income 22.4 -
Other service charges 17,248.8 17,130.2
Other operating income 24.8 114.3
Total 17,296.1 17,244.5
3. Personnel
EUR thousand 2021 2020
Personnel costs
Salaries and fees 7,424.7 6,711.4
Pension costs 1,144.9 986.3
Other personnel costs 262.8 266.6
Total 8,832.4 7,964.4
Average number of personnel 80 73
Salaries and bonuses to the Management
CEO and Members of the Board of Directors 1,884.3 1,130.2
Remuneration and pension costs for the CEO and the members of
the Board of Directors are disclosed in the consolidated nancial
statement in note 4.4. Employee benets.
4. Depreciation, amortisation and impairment charges
EUR thousand 2021 2020
Depreciation 3,820.3 2,885.1
Total 3,820.3 2,885.1
Criteria applied for the straight-line depreciation is disclosed in
notes 6.1. and 6.2. to the consolidated nancial statement. Depre-
ciation by asset class is presented in notes 9-10.
5. Other operating expenses
EUR thousand 2021 2020
Postage, telephone and banking expenses 223.0 192.9
IT expenses 8,809.0 10,344.3
Travelling and car expenses 108.8 131.2
Administrative consultancy services 4,136.5 2,655.2
Other operating expenses 2,108.8 1,649.8
Total 15,386.1 14,973.3
Other operating costs are mainly costs related to the ownership.
6. Financial income and expenses
EUR thousand 2021 2020
Income from group companies
Dividend income from group companies 450.0 15,000.0
Income from investments
Gains on sales of shares 27,860.6 -
Other interest and nancial income
Interest income from group companies 1,194.4 2,944.5
Interest income from other companies 88.5 51.2
Other nancial income 6,676.3 4,791.1
Interest and other nancial expenses
Interest expenses to group companies - -858.2
Interest expenses to other companies -1,992.2 -2,368.5
Other nancial expenses -6,128.8 -5,690.2
Impairment on investments
Impairment on investments
in non-current assets -86,400.0 -11,794.1
Total -58,251.3 2,075.8
Financial income and expenses include:
Interest income 1,282.9 2,995.7
Interest expenses -1,992.2 -3,226.7
Exchange rate gains/losses 446.3 107.9
Gains on sales of shares include Oriola Oyj's sale of shares in Doktor.
se. Impairment on investments in non-current assets include im-
pairment on subsidiary shares.
Audit costs included in
other operating costs 2021 2020
Audit fees 51.5 45.6
Other fees 9.0 17.4
Total 60.5 62.9
7. Appropriations
EUR thousand 2021 2020
Change in depreciation dierence -177.1 -307.4
Group contribution received 15,453.6 14,627.7
Total 15,276.5 14,320.3
8. Income taxes
EUR thousand 2021 2020
Income taxes for the nancial period 1,065.8 901.8
Total 1,065.8 901.8
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9. Intangible assets
EUR thousand
2021
Intangible
rights
Other
intangible
assets
Advance pay-
ments and
construction
in progress Total
Historical cost 1 Jan 966.1 26,772.4 9,182.4 36,920.9
Increases - 234.5 2,169.6 2,404.1
Reclassications - 3,169.2 -3,169.2 -
Historical cost 31 Dec 966.1 30,176.1 8,182.8 39,325.0
Accumulated amortisation 1 Jan 426.6 7,131.5 - 7,558.1
Amortisation for the nancial year 105.6 3,698.1 - 3,803.7
Accumulated amortisation 31 Dec 532.2 10,829.6 - 11,361.8
Carrying amount 31 Dec 434.0 19,346.4 8,182.8 27,963.2
2020
Historical cost 1 Jan 966.1 24,217.8 6,894.8 32,078.8
Increases - 342.9 4,499.2 4,842.1
Reclassications - 2,211.7 -2,211.7 -
Historical cost 31 Dec 966.1 26,772.4 9,182.4 36,920.9
Accumulated amortisation 1 Jan 317.4 4,390.4 - 4,707.8
Amortisation for the nancial year 109.2 2,741.1 - 2,850.3
Accumulated amortisation 31 Dec 426.6 7,131.5 - 7,558.1
Carrying amount 31 Dec 539.5 19,640.9 9,182.4 29,362.8
10. Property, plant and equipment
EUR thousand
2021
Land and
water areas
Machinery
and equipment
Other
tangible assets Total
Historical cost 1 Jan 77.4 160.4 7.5 245.2
Decreases - -92.4 - -92.4
Historical cost 31 Dec 77.4 68.0 7.5 152.9
Accumulated depreciation 1 Jan - 92.5 - 92.5
Accumulated depreciation related to decreases - -53.1 - -53.1
Depreciation for the nancial year - 16.6 - 16.6
Accumulated depreciation 31 Dec - 56.0 - 56.0
Carrying amount 31 Dec 77.4 12.0 7.5 96.9
2020
Historical cost 1 Jan 77.4 265.4 7.5 350.3
Decreases - -105.1 - -105.1
Historical cost 31 Dec 77.4 160.4 7.5 245.2
Accumulated depreciation 1 Jan - 140.3 - 140.3
Accumulated depreciation related to decreases
- -82.6 - -82.6
Depreciation for the nancial year - 34.8 - 34.8
Accumulated depreciation 31 Dec - 92.5 - 92.5
Carrying amount 31 Dec 77.4 67.9 7.5 152.8
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Oriola Financial review 2021
68
11. Investments
EUR thousand
2021
Holdings in group
companies Other shares
Receivables from
group companies Total
Historical cost 1 Jan 665,946.2 14,186.3 28,900.9 709,033.4
Increases 3,898.3 - 9,215.9 13,114.2
Decreases - -5,983.1 -9,824.9 -15,808.0
Historical cost 31 Dec 669,844.5 8,203.2 28,291.9 706,339.6
Accumulated impairments 1.1. -14,159.7 - - -14,159.7
Impairments -86,400.0 - - -86,400.0
Impairment 31 Dec -100,559.7 - - -100,559.7
Carrying amount 31 Dec 569,284.9 8,203.2 28,291.9 605,779.9
2020
Historical cost 1 Jan 656,195.8 9,418.5 95,244.5 760,858.8
Increases 9,750.4 4,767.8 153,543.7 168,061.9
Decreases - - -219,887.3 -219,887.3
Historical cost 31 Dec 665,946.2 14,186.3 28,900.9 709,033.4
Accumulated impairments 1.1. -2,365.6 - - -2,365.6
Impairments -11,794.1 - - -11,794.1
Impairment 31 Dec -14,159.7 - - -14,159.7
Carrying amount 31 Dec 651,786.6 14,186.3 28,900.9 694,873.8
During the nancial year 2021 Oriola Oyj sold approximately 50% of its shareholding in Doktor.se.
12. Receivables
EUR thousand 2021 2020
Receivables from group companies
Short-term receivables
Trade receivables 79.3 118.5
Other receivables 3,191.1 -
Accrued income and prepaid expenses 15,453.6 14,627.7
Total 18,724.0 14,746.2
Items included in accrued receivables
Arrangement fees relating to loans 438.8 222.3
Income tax receivables 365.0 529.0
Exchange rate prot on hedges 8.3 -
Compensations not received 15.1 13.8
Group contribution 15,453.6 14,627.7
Other accrued receivables 474.3 411.9
Total 16,755.0 15,804.5
13. Equity
EUR thousand 2021 2020
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
Prot/ loss from previous years 1 Jan 229,264.4 238,775.4
Dividend paid -5,439.4 -16,326.1
Share-based compensation -161.5 -173.6
Purchase of own shares
1)
-88.8 -100.8
Delivery of own shares 161.5 173.6
Prot/loss from previous years 31 Dec 223,736.2 222,348.5
Result for the period -54,783.4 6,915.9
Non-restricted equity 265,329.1 325,640.7
Total 413,228.9 473,540.5
Distributable funds 31 Dec 2021 2020
Contingency fund 19,418.7 19,418.7
Invested unrestricted equity reserve 76,957.5 76,957.5
Prot/ loss from previous years 223,736.2 222,348.5
Net prot for the period -54,783.4 6,915.9
Distributable funds 31 Dec 265,329.1 325,640.7
1
Shares purchased for the share based incentive programme.
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69
14. Appropriations
EUR thousand 2021 2020
Cumulative accelerated depreciation dierence 1,772.7 1,595.6
Total 1,772.7 1,595.6
15. Liabilities
EUR thousand 2021 2020
Liabilities to group companies
Short term liabilities
Trade payables 20.5 4.0
Other liabilities 226,418.5 228,722.5
Total 226,439.0 228,726.5
Items included in accrued liabilities
Long-term accrued liabilities
Change of fair value for interest rate swap 66.5 395.6
Short-term accrued liabilities
Items related to personnel 1,427.9 1,861.9
Interest 244.8 366.6
Other accrued liabilities 59.1 3.0
Change of fair value for interest rate swap - 50.2
Total 1,731.8 2,677.4
16. Guarantees, liability engagements and other liabilities
EUR thousand 2021 2020
Guarantees and other liabilities
Guarantees for group companies 432.6 342.7
Other liabilities and engagements 7,000.0 9,000.0
Total 7,432.6 9,342.7
Rental liabilities on real estate
Maturity within one year 33.0 33.0
Total 33.0 33.0
Rental liabilities on machinery and xtures
Maturity within one year 371.3 331.6
Maturity within 1–5 years 255.4 234.9
Total 626.6 566.5
17. Derivatives and nancial risk management
EUR thousand 2021 2020
Book values of derivative instruments
Interest rate swap agreements 70,241.8 71,753.9
Foreign currency forward and swap contracts 47,803.5 -
Total 118,045.3 71,753.9
Fair values of derivative instruments
Interest rate swap agreements 544.6 -445.9
Foreign currency forward and swap contracts -51.9 -
Total 492.7 -445.9
Oriola Corporation has interest rate swap agreements hedging the
Oriola Group's cash ows 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 in-
terest rate risks from Oriola Sweden AB's selling of trade receivables
are hedged with derivative agreements on a group level, the hedg-
ing presents an interest rate risk to Oriola Corporation.
More information on the Oriola Group's nancial 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 Fi-
nancial Statements.
Oriola Corporation established a new subsidiary, Farenta Oy, in De-
cember 2021.
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Financial statements 2021
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Signatures for the nancial statements and the report of the Board of Directors
Espoo 17 February 2022
Panu Routila Eva Nilsson Bågenholm Juko-Juho Hakala Anja Korhonen
Chairman Vice Chairman
Harri Pärssinen Lena Ridström Elisa Markula
President and CEO
Auditor’s Note
The Auditor’s report has been issued today.
Helsinki, 17 February 2022
KPMG Oy Ab
Kirsi Jantunen
Authorised Public Accountant
Proposal for the prot distribution
According to the parent company’s balance sheet as at 31 December 2021, the total distributable funds are:
Other funds, EUR 19,418,729.58
Invested unrestricted equity reserve, EUR 76,957,531.72
Retained earnings, EUR 223,736,247.97
Prot for the period, EUR -54,783,375.92
Total distributable funds, EUR 265,329,133.35
The Board of Directors proposes to the Annual General Meeting that a dividend of EUR 0.04 per share will be distributed to 181,348,012
shares, EUR 7,253,920.48 for year 2021 and EUR 258,075,212.87 will be retained in equity.
There have been no material changes in the nancial position of the company after the end of the nancial year.
The Board of Directors’ proposal for the prot
distribution and Auditor’s Note
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Oriola Financial review 2021
71
Auditor’s Report
To the Annual General Meeting of Oriola Corporation
Report on the Audit of the Financial Statements
Opinion
We have audited the nancial statements of Oriola Corporation (busi-
ness identity code 1999215-0) for the year ended December 31, 2021.
The nancial statements comprise the consolidated statement of
nancial position, statement of comprehensive income, statement
of changes in equity, statement of cash ows and notes, including
a summary of signicant accounting policies, as well as the parent
company’s balance sheet, income statement, statement of cash ows
and notes.
In our opinion
• the consolidated nancial statements give a true and fair view
of the group’s nancial position, nancial performance and cash
ows in accordance with International Financial Reporting Stand-
ards (IFRS) as adopted by the EU
• the nancial statements give a true and fair view of the parent
company’s nancial performance and nancial position in ac-
cordance with the laws and regulations governing the prepara-
tion of nancial 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.
We are independent of the parent company and of the group com-
panies in accordance with the ethical requirements that are applica-
ble in Finland and are relevant to our audit, and we have fullled 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 compa-
nies are in compliance with laws and regulations applicable in Fin-
land regarding these services, and we have not provided any pro-
hibited 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 nancial statements.
We believe that the audit evidence we have obtained is sucient
and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was inuenced by our application of materi-
ality. The materiality is determined based on our professional judge-
ment and is used to determine the nature, timing and extent of our
audit procedures and to evaluate the eect of identied misstate-
ments on the nancial statements as a whole. The level of materi-
ality we set is based on our assessment of the magnitude of mis-
statements that, individually or in aggregate, could reasonably be
expected to have inuence on the economic decisions of the users of
the nancial statements. We have also taken into account misstate-
ments and/or possible misstatements that in our opinion are material
for qualitative reasons for the users of the nancial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judg-
ment, were of most signicance in our audit of the nancial state-
ments of the current period. These matters were addressed in the
context of our audit of the nancial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate
opinion on these matters. The signicant risks of material misstate-
ment referred to in the EU Regulation No 537/2014 point (c) of Arti-
cle 10(2) are included in the description of key audit matters below.
We have also addressed the risk of management override of inter-
nal controls. This includes consideration of whether there was evi-
dence of management bias that represented a risk of material mis-
statement due to fraud.
This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.
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72
The key audit matter How the matter was addressed in the audit
Valuation of goodwill (refer to accounting principles for the consolidated nancial statements and note 6.2)
The total carrying value of goodwill amounted to EUR 274 million, representing 25% of the consolidated total assets.
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 ow model.
Determining the key assumptions used in the impairment tests requires management judgement and estimates espe-
cially relating to long term growth, protability and discount rates.
Valuation of goodwill is considered a key audit matter due to the signicant carrying values and high level of manage-
ment judgement involved.
We obtained an understanding of management’s impairment assessment process and assessed the impair-
ment 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 protability 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 ows 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 impair-
ment testing.
Revenue recognition (refer to accounting principles for the consolidated nancial 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.
In the Pharma segment 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 identied
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.
For revenue in the Pharma segment, we examined sales contracts to ensure that revenue was recognized in accord-
ance 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 compo-
nents 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 nancial statements.
Valuation of Inventories (refer to accounting principles for the consolidated nancial statements and note 5.2)
The carrying value of inventories amounted to EUR 229 million at the end of the nancial year.
Inventory management, stocktaking routines and pricing of inventories are key factors in the valuation of inventories. In
the Pharma segment Oriola has dierent 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 signicant 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 per-
formed 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.
Holdings in group companies in the parent company’s nancial statements (refer to notes 1 and 11 to the parent company’s nancial statements)
After recognizing an impairment amounting to EUR 86 million the parent company has investments in subsidiaries
amounting to EUR 569 million at December 31, 2021.
The recoverable amounts for holdings in group companies is tested as part of group impairment testing based on the
discounted cash ow model.
Due to the high level of judgment incorporated in respect of the future cash ows and the signicant 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 calcula-
tions and the technical model. We challenged the assumptions used by management in respect of forecasted growth
rates and protability 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 ows used by comparing them to the group’s budgeting process, external sources and the
understanding we gained from our audit.
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73
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 nancial statements that give a
true and fair view in accordance with International Financial Report-
ing Standards (IFRS) as adopted by the EU, and of nancial state-
ments that give a true and fair view in accordance with the laws
and regulations governing the preparation of nancial 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 prepa-
ration of nancial statements that are free from material misstate-
ment, whether due to fraud or error.
In preparing the nancial 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 us-
ing the going concern basis of accounting. The nancial 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 nancial statements as a whole are free from material misstate-
ment, 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 accord-
ance with good auditing practice will always detect a material mis-
statement when it exists. Misstatements can arise from fraud or er-
ror and are considered material if, individually or in the aggregate,
they could reasonably be expected to inuence the economic deci-
sions of users taken on the basis of the nancial statements.
As part of an audit in accordance with good auditing practice, we
exercise professional judgment and maintain professional skepti-
cism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the -
nancial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain
audit evidence that is sucient and appropriate to provide a ba-
sis for our opinion. The risk of not detecting a material misstate-
ment resulting from fraud is higher than for one resulting from
error, as fraud may involve collusion, forgery, intentional omis-
sions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the au-
dit in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an
opinion on the eectiveness 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 disclo-
sures 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 ac-
counting and based on the audit evidence obtained, wheth-
er a material uncertainty exists related to events or conditions
that may cast signicant 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 atten-
tion in our auditor’s report to the related disclosures in the nan-
cial 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, fu-
ture 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
nancial statements, including the disclosures, and whether the
nancial statements represent the underlying transactions and
events so that the nancial statements give a true and fair view.
• Obtain sucient appropriate audit evidence regarding the nan-
cial information of the entities or business activities within the
group to express an opinion on the consolidated nancial state-
ments. We are responsible for the direction, supervision and per-
formance 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 signicant audit ndings, including any signicant deciencies
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 regard-
ing 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 govern-
ance, we determine those matters that were of most signicance in
the audit of the nancial 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 disclo-
sure 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 benets of such com-
munication.
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74
Other Reporting Requirements
Information on our audit engagement
We were rst appointed as auditors by the Annual General Meeting
on March 19, 2018, and our appointment represents a total period
of uninterrupted engagement of 4 years.
Other Information
The Board of Directors and the President and CEO are responsible
for the other information. The other information comprises the re-
port of the Board of Directors and the information included in the
Annual Report, but does not include the nancial statements and
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 nancial statements does not cover the
other information.
In connection with our audit of the nancial statements, our re-
sponsibility is to read the other information identied above and,
in doing so, consider whether the other information is materially
inconsistent with the nancial statements or our knowledge ob-
tained in the audit, or otherwise appears to be materially misstated.
With respect to the report of the Board of Directors, our responsi-
bility 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 Direc-
tors is consistent with the information in the nancial statements
and the report of the Board of Directors has been prepared in ac-
cordance 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 con-
clude that there is a material misstatement of this other informa-
tion, we are required to report that fact. We have nothing to report
in this regard.
Helsinki, February 17, 2022
KPMG OY AB
Kirsi Jantunen
Authorized Public Accountant, KHT
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Auditor's Report
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75
Independent Auditor’s Reasonable Assurance Report on Oriola Corporation’s
ESEF Financial Statements
To the Board of Directors of Oriola Corporation
We have undertaken a reasonable assurance engagement on the
iXBRL marking up of the consolidated nancial statements for the
year ended 31 December, 2021, included in the Oriola Corporation’s
digital les [Oriola-2021-12-31-en.zip] prepared in accordance with
the requirements of Article 4 of EU Delegated Regulation 2018/815
(ESEF RTS).
The Responsibility of the Board of Directors and Man-
aging Director
The Board of Directors and Managing Director are responsible for
preparing the report of the Board of Directors and nancial state-
ments (ESEF nancial statements) that comply with the require-
ments of ESEF RTS. This responsibility includes:
- preparation of ESEF nancial statements in XHTML format in
accordance with Article 3 of the ESEF RTS
- marking up the consolidated nancial statements included in the
ESEF nancial statements with iXBRL tags in accordance with
Article 4 of the ESEF RTS and
- ensuring consistency between ESEF nancial statements and au-
dited nancial statements.
The Board of Directors and the Managing Director are also responsi-
ble for such internal control as they deem necessary to prepare the
ESEF nancial statements in accordance with the requirements of
the ESEF RTS.
Auditor’s Independence and Quality Control
We are independent of the company in accordance with the ethi-
cal requirements applicable in Finland, which apply to the engage-
ment we have performed, and we have fullled our other ethical
obligations in accordance with these requirements.
The auditor applies International Standard on Quality Control 1 and
accordingly maintains a comprehensive system of quality control
including documented policies and procedures regarding compli-
ance with ethical requirements, professional standards and applica-
ble legal and regulatory 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
nancial statements included in the ESEF nancial statements com-
ply 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 consolidated nancial statements included in the ESEF nan-
cial statements are, in all material respects, marked up with iXBRL
tags in accordance with Article 4 of the ESEF RTS, and
- the ESEF nancial statements and the audited nancial state-
ments 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 sucient and ap-
propriate to provide a basis for our opinion.
Opinion
In our opinion, the consolidated nancial statements included in
the ESEF nancial statements of Oriola Corporation’s identied as
[Oriola-2021-12-31-en.zip] for the year ended 31 December, 2021
are marked up, in all material respects, in compliance with the ESEF
Regulatory Technical Standard.
Our audit opinion relating to the consolidated nancial statements
of Oriola Corporation’s for the year ended 31 December, 2021 is set
out in our Auditor’s Report dated 17 February, 2022. In this report,
we do not express an audit opinion, review conclusion or any other
assurance conclusion on the consolidated nancial statements.
Helsinki 21 February, 2022
KPMG OY AB
Kirsi Jantunen
Authorized Public Accountant, KHT
This document is an English translation of the Finnish Independent Auditor’s Reasonable Assurance report. Only the Finnish version of the report is legally binding.
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Oriola Corporation
Orionintie 5
P.O. Box 8
FI-02101 Espoo, Finland
www.oriola.com