Hello InderesTV listeners and viewers. Oriola reported their Q1 this morning and we have the CEO Catarina Gabrielsson here for the interview. Hi Catarina.

Hi Rauli.

Let's start with some announcements you made actually already ahead of the results. So you changed the reporting structure and revenue recognition quite a bit, impacting your numbers now starting from Q1. So can you explain what were the main changes and why were those? But those don't

We are changing to get more transparency in our numbers. And we will come back also to that later on when we have the capital markets day. But it's to make more transparency, to get it easier to understand what we are doing and also to be able to see how do we earn our money.

Mm.

And that's also why we both changed the revenue recognition, like you said, but also the segments. So if you look at the segments, it's also very much about where do we earn the money and how do we earn the money.

Mm.

And the segment that is then the services segment, that is where we then get the service fee from

Mm-hmm.

what we do, and the product-serving segment is where we then buy and sell products as you normally can see in a retail company in a way, or like another product company.

Yeah, yeah. And on a group level, what were the main changes of this?

On group level, of course, that is that we are then taking down the invoicing and

Mm.

and then changing the revenue recognition for that one. So before, in the invoicing we had all the pharmaceutical invoicing in our figures, and now we're taking that part away. So you can see it's smaller invoicing, but still more what we can really affect.

Yeah. Yeah, yeah. That's quite a big change. It's on your net

a big net it's

net sales

it's a big

figure

change,

as such, but yeah. And mm.

and it of course it's affecting like equity and so on.

Mm. Hmm.

But if you look at the result parts, the EBITDA is still the same.

Exactly.

I think

Exactly. Yeah. Uh that I think that makes makes sense.

I think it makes sense to better understand us, because otherwise we have a lot of high figures and some parts that we do are hidden in the figures.

Mm-hmm. Mm-hmm. Yeah. And on the segment level they are Yeah, kind of following this logic I guess there were some changes also compared to your old

There were

segmentation.

some changes, yes. And if you look at the big volumes, like the distribution volumes, that is a segment where we have the service fee from the pharmaceutical companies who are paying us.

Yep.

But also to some extent, when it comes to parallel import for example, that has earlier been in the product segment.

Mm-hmm.

But it's a transaction based model.

Mm.

And it's quite big volumes. And then it's logical to have it there.

So yeah.

And the same with advisory services.

Yeah. Alright. Let's jump then to Q1. Can you kind of summarise the highlights from Q1?

The Q1 overall, I would say, is, I'm happy with the Q1. We are delivering according to our plan and our expectations. And especially the distribution segment has been performing well. We can see that vaccines are going well. We can see that veterinarians are doing well. Parallel import that I mentioned just before is also growing. And so on. Also in the supply chain area we can see it's stable in both countries.

Hmm.

So overall I will say it's an okay quarter.

Yeah, okay. In the services segment and the new segments you actually show declining

Yes.

earnings so can you explain a little

It's a product mix, and advisory services have been performing slower than expected, and also compared to last year.

Mm-hmm.

And then we have the mix in the parallel imports. It's going down from the old, whatever it was called, segment, we had the wholesale segment as it was called,

Mm.

to another services segment. And there's lower margin on parallel import.

Mm-hmm.

And when you're then growing that part, it's of course affecting the percentage. But it's good still in the euro numbers.

Mm-hmm.

Mm-hmm.

Yeah, on the advisory side, was there something kind of particular in the comparison or some timing

There is there

or

there is a slowness now when it comes to decision-making from pharmaceutical companies due to the geopolitical situation and also the most favored nations politics that is then done from USA. We can see a slowness. I'm not afraid of it, so it will just be a little bit longer period. So it will come.

Yeah, yeah. Okay.

Yeah. And

Okay, what about then your JV Kronans, the result that at least was quite weak again, can you

It was weak and we are not satisfied with that. And there is, of course now that the integration is finalized, there is still some rest, of course, like always when you finalize something that should be done. There is a programme now that has started to correct these parts, a lot of basic stuff, but it's both checking what's the cost and then how can we Okay, we're done. Can we get a bigger revenue?

Hmm.

Huh? Okay.

Uh then of course there has been a w in the during Q1 the uh Iran war started and energy prices went up, so have you seen some impacts from that or what are you expecting going forward and how how can you address

It

those

it's a good question. I think all companies most likely need to address this and for us it's of course in the same level as as for other companies. We are of course using quite much uh fuel uh in our distribution. Uh during quarter one we haven't seen so much

Hmm.

um And most likely it will come now during the the second quarter and so on.

Mm.

Our aim is to push this towards the customers. So our aim is not to keep something, or at least not possible in Oriola, and I think we will succeed with that.

Yeah, okay, that's clear. Then on your guidance you maintained quite a positive guidance for the full year,

Mm.

the positive guidance for the for the full year, but uh like you mentioned a bit like the the consumer consumer sentiment of course has had some weakness, so how how do you see the market? the market outlook in general maybe compared to what you had in February.

Yeah, but it has weakened a little bit like you said. But at the same time we are in the pharmaceutical business where we see less volatility. And that's a quite stable business. We can also see that the ageing population is still there and so on and so forth. And if you look at that, we are in a stable business area compared to some others and

Yeah.

so I'm not worried about that.

Yeah. So shouldn't be any. Maybe it should be either on either on the costs or sort demand up for for

If

Otuna.

there is not more geopolitical cards

Yeah.

happening of course that's that's them might might be the main uncertainties but uh for what we can see from ourselves I'm not worried.

That's clear, okay. Uh then you also announced today the the new financial targets so then you go through them shortly.

The financial targets, of course, we have then the net sales growth and efficiency parts. So it's only two financial targets in that. I think the net sales growth is quite clear what that is, and the other part is for this is of course the efficiency

Hmm.

is cost per net sales, that is to be able to also show a little bit more the effects that we then do on the profitability level.

Okay.

So I know that we will open up also that one a little bit more in the capital markets day, so it's about the profitability, that's

D

how how uh do we get the money. To flow down from the net sales to the bottom line.

Exactly, yeah. But do you have any target year or kind of time frame for the target?

The period is until 2029, so of course that's also how it is. But it's also so when we made this kind of financial targets, if we see that we are going towards our goals, then of course you can always change them earlier.

Yeah, of course. Okay.

Okay. And then we also change the dividend policy.

Yes.

Yeah.

Yeah. Yeah. Yeah. What was the change in that?

Uh I will say the main change is that we are then excluding Kronans Apotek. from the dividend parts in this one. So the two thirds that we had is basically on what we then affect ourselves.

Yep. Hmm. Oh, Okay. good. Yep. Good. Uh when w we will hear more about the targets and the strategy in a few weeks and

Yes.

the CMD, right.

Absolutely.

Yes, very good. Thank you,

Thank you.

Katarina.