Oriola: Profitability drivers in place - Evli
This is a third party research report and does not necessarily reflect our views or values
Solid growth, profitability on previous year levels
Oriola posted solid growth figures in Q2, while profitability development remained modest. Net sales growth exceeded our expectations, up 12% y/y to EUR 493.9m (EUR 473.7m/496.7m Evli/cons.). The adj. EBITDA amounted to EUR 8.1m (Evli EUR 8.7m). The Distribution-segment saw better than expected development through both volumes and margins, with the adj. EBITDA up 35%. The Wholesale-segment saw clearly accelerated growth in the quarter but profitability, contrary to our expectations, declined q/q due to growth related costs and an unfavourable product mix. The combined segment profitability was better than expected and the group level difference mostly due to increased group costs. The profitability of Kronans Apotek was a disappointment, contributing to the weaker earnings, with EPS at EUR -0.03 (EUR 0.01 Evli & cons.).
Expecting more favourable profitability development in H2
We have raised our growth expectations for H2/25 by ~4%p and slightly for 2026. Our adj. EBITDA estimates overall are largely unchanged and we expect a ~5% y/y improvement in 2025. The adj. EBITDA in H1 was on par with previous year levels, affected by both front-loaded investments and temporary OPEX increases. We anticipate improvements in the adj. EBITDA in H2 through volume growth and OPEX stabilization, with further potential through sales mix and seasonal support in Wholesale. Continued good customer retention and efficiency of newly onboarded customers should also contribute. Overall, the fundamentals for growth in relative profitability appear to be well in place through the underlying efficiency of operations. If Oriola can maintain a similar growth pace as in H1, we see good potential in accelerating the coefficient of profitability improvements.
ACCUMULATE rating with TP or EUR 1.2 (1.15)
Oriola posted solid growth figures in Q2, while profitability development remained modest. Net sales growth exceeded our expectations, up 12% y/y to EUR 493.9m (EUR 473.7m/496.7m Evli/cons.). The adj. EBITDA amounted to EUR 8.1m (Evli EUR 8.7m). The Distribution-segment saw better than expected development through both volumes and margins, with the adj. EBITDA up 35%. The Wholesale-segment saw clearly accelerated growth in the quarter but profitability, contrary to our expectations, declined q/q due to growth related costs and an unfavourable product mix. The combined segment profitability was better than expected and the group level difference mostly due to increased group costs. The profitability of Kronans Apotek was a disappointment, contributing to the weaker earnings, with EPS at EUR -0.03 (EUR 0.01 Evli & cons.).
Expecting more favourable profitability development in H2
We have raised our growth expectations for H2/25 by ~4%p and slightly for 2026. Our adj. EBITDA estimates overall are largely unchanged and we expect a ~5% y/y improvement in 2025. The adj. EBITDA in H1 was on par with previous year levels, affected by both front-loaded investments and temporary OPEX increases. We anticipate improvements in the adj. EBITDA in H2 through volume growth and OPEX stabilization, with further potential through sales mix and seasonal support in Wholesale. Continued good customer retention and efficiency of newly onboarded customers should also contribute. Overall, the fundamentals for growth in relative profitability appear to be well in place through the underlying efficiency of operations. If Oriola can maintain a similar growth pace as in H1, we see good potential in accelerating the coefficient of profitability improvements.
ACCUMULATE rating with TP or EUR 1.2 (1.15)