Oriola Corporation1

ORIOLAORIOLA CORPORATION January – June 2017Eero Hautaniemi, President and CEO21 July 2017

Oriola Corporation2

April – June highlights

• Consumer Q2 result did not reach previous year level• Online sales grew by 91% in Q2

• In Services distribution of Meda started successfully, IT go-live postponed

• Norrland ramp-up still burdened Healthcare • Oriola’s and Kesko’s joint health and wellbeing store chain was

approved by the competition authorities, and the joint venture agreement was finalized on June 30

• Oriola has decided to divest its businesses in the Baltic countries

• Oriola has signed an agreement to acquire the Swedish company ICTHS Health Support AB

Oriola Corporation3

Oriola Key Figurescontinuing operations

ADJUSTED EBIT //NET SALES //INVOICING //

1-6/2017 net sales at comparable EUR/SEK rate EUR 772.9 million

1-6/2017 adjusted EBIT at comparableEUR/SEK rate EUR 24.4 million

1-6/2017 invoicing at comparable EUR/SEK rate EUR 1 675.3 million

1 579 1 566 1 578 1 589

1-6795

1-6755

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2013 2014 2015 2016 2017

EU

R m

illio

n

3 032 3 0123 211 3 364

1-61 693

1-61 642

0

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

2013 2014 2015 2016 2017

EU

R m

illio

n

36.2

57.8 59.8 59.9

1-628.1

1-624.1

0

10

20

30

40

50

60

70

80

90

2013 2014 2015 2016 2017

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Oriola Corporation4

Adjusted EBIT January – June 2017 continuing operations

ADJUSTED EBIT // ADJUSTED EBIT, WATERFALL //

14.516.5 15.3

11.013.0

0

2

4

6

8

10

12

14

16

18

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

EU

R m

illio

n

28.124.1

-3.2 -0.3 -0.50.0

Q2 2016 Consumer Services Healthcare Groupadministration

Q2 2017

EU

R m

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Oriola Corporation5

Pharmaceutical market forecast Sweden

The market is forecast to grow at a rate of 3.9% reaching SEK42.5B by 2021 (WS prices)

Source: QuintilesIMS

Oriola Corporation6

Pharmaceutical market forecast Finland

The market is forecast to grow at a rate of 1.5% reaching €2.43B by 2021 (WS prices)

Source: QuintilesIMS

Oriola Corporation7

Reporting SegmentsJanuary –June 2017

Oriola Corporation8

• Focuses on the needs of consumers in health and wellbeing related products and services

• Offers expert advice on health and wellbeing as well as an extensive and high-quality selection of products in own pharmacies

• Consistent service experience throughout all service channels, from local pharmacies to online services

Consumer Segment

4.2BEUR

Pharmacy retail market in Sweden

18%

Source: IMS Health, ATY, Apoteksförening and Oriola

50 % 50 %

Oriola Corporation9

Swedish Pharmacy market

MARKET SHARE //PHARMACIES //

Pharmacies 2010Established net 2010 - 2016

Established net 2017

Source: Apoteksförening and Oriola

323

Apoteket

Apotek Hjärtat & CURA

Apoteksgruppen

LloydsApoteket

ApoteaOthers

31%

32%

18%

9%4%

3%

3%

The share of online sales 6%H1/17 Pharmacy

market growth 3%

386

391

324

182

-2

2

0

4

0

1

0 100 200 300 400 500

4141

81

386

391

324

182

Oriola Corporation10

• Pharmacy market grew by 2.6 % in Sweden–Oriola sales in SEK increased by 0.4%

• Growth of online sales faster than market• Sales of Rx and Traded goods improving,

OTC prices under pressure• Share of OTC and traded goods of net sales

26.6 (27.1) %• Sales margin improved slightly, but the

costs from the 2016 established pharmacies and online development and marketing weakened profitability

• Planned to open 10–15 stores and webshop in Finland in 2017

Consumer January – June 2017continuing operations

ADJUSTED EBIT //

8.8 9.47.3

5.3

8.0

0

2

4

6

8

10

12

14

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

EU

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Oriola Corporation11

• Focuses on long-term customer relationships and a wide service offering

• Provides logistics services and wide range of value adding services for Pharmaceutical companies and pharmacies

• Purchase and distribution services of OTC and traded goods in Sweden

• Staffing Services for Finnish pharmacies

Services Segment

Services for healthcare actors who want to succeed in the Nordic countries

We provide high quality and ensure that products are delivered unchanged from Oriola’s warehouses to the pharmacies, hospitals and veterinaries

Source: QuintilesIMS, ATY, Apoteksförening and Oriola

31 %

2.3BEUR

FinlandWholesale

47 %

SwedenWholesale

3.9 BEUR

34 %

3 TG/OTC for pharmacies in Sweden

1 BEUR

Oriola Corporation12

• Market growth: Sweden 4.1 per cent and Finland 1.9 per cent

• IT go-live in Finland postponed to Q3• Invoicing decreased by 3.4 per cent in

comparable EUR/SEK• Distribution of Meda in Sweden started in

May 2017

• Profitability was at the previous year level

• Mölnlycke warehouse extension completed

• Oriola has signed an agreement to acquire the Swedish company ICTHS Health Support AB

Services January – June 2017continuing operations

ADJUSTED EBIT //

7.8 8.5 9.27.7 8.0

0

2

4

6

8

10

12

14

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

EU

R m

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n

Oriola Corporation13

• The Healthcare segment offers dose dispensing services in Sweden and Finland

• The segment also offers services to hospitals, healthcare centres and other healthcare operators in Sweden

• Many growing business opportunities, such as hospital pharmaceutical care, dose dispensing and home distribution of pharmaceuticals

• Finnish healthcare sector in transformation

Healthcare Segment DOSE DISPENSING SERVICES

Svensk Dos in Sweden and PharmaService in Finland are part of OriolaGroup and specialized in dose dispensing services

PharmaService

Pharmac

YA

Pharmados

Finland

50%

PharmaService

Svensk Dos

Apoteket AB

Apotekstjänst

Sweden

25%

Svensk dos

MARKET SHARE DOSE DISPENSING

Circa30 MEUR

Circa230 MEUR

Source: QuintilesIMS, ATY, Apoteksförening and Oriola

Oriola Corporation14

• Ramp up costs of Norrland dose dispensing higher than anticipated

• Result of the Healthcare Business Area will stay negative in 2017

• Amortisation cost EUR 0.9 million in H1 2017

Healthcare January – June 2017continuing operations

ADJUSTED EBIT //

-0.6 0.0 0.2 -0.5 -0.8

-2

0

2

4

6

8

2016Q2

2016Q3

2016Q4

2017Q1

2017Q2

EU

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Oriola Corporation15

Development projects

• Warehouse extension in Mölnlycke was finished in June, building of distribution center continues in Enköping

• Oriola’s and Kesko’s health and wellbeing store chain in Finland: Oriola’s share of investment 12 MEUR within next three years, estimated 3 MEUR in 2017

• The IT platform renewal continues after Finland in Sweden; investment of 11 MEUR

• Investments in 2017 estimated to be approximately 50 MEUR

Oriola Corporation16

• Revised outlook for 2017• The Adjusted EBIT of continuing

operations on constant currency basis is estimated to decrease from the 2016 level. The 2016 Adjusted EBIT from continuing operations, at comparable currencies, was EUR 59.3 million

• Structural changes: Loss from JV during chain establishment in EBIT, sale of Baltic businesses

• Consumer business areaperformance improved from Q1, butnot possible to reach 2016 full yearresult

Outlook 2017

Oriola Corporation17

Key Figures January –June 2017

Oriola Corporation18

EUR million 1-6/2017 1-6/2016

Change in working capital 13.1 -47.1Net cash flow from operating activities 36.7 -5.1

Net cash flow from investing activities -24.6 -29.2Net cash flow from financing activities *) -45.2 -2.0

Net change in cash -33.2 -36.3Cash and cash equivalents at the end of period 27.6 85.7

Cash flowincluding discontinued operations

QUARTERLY NET CASH FLOW FROM OPERATING ACTIVITIES //

*) Dividend of 25.4 MEUR (23.6 MEUR) was paid out in Q2

2616

31

-27

22 1926

-15

51

-40

-30

-20

-10

0

10

20

30

40

50

60

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illion

Oriola Corporation19

EUR million 30 Jun2017

30 Jun2016

Bank loans (syndicated & term) 61.1 69.0

Commercial papers 26.0 45.0

Advance payment from pharmacies 22.6 34.5

Other 2.3 3.6

Cash and cash equivalents 27.6 85.7

Net interest-bearing debt 84.4 66.2

Sold trade receivables 111.8 116.3

Gearing, % 43.5 35.8

Net Interest-Bearing Debtincluding discontinued operations

NET INTEREST-BEARING DEBT //

297

51

66

8272

101

84

0

20

40

60

80

100

120

Q3/2015 Q4/2015 Q1/2016 Q2/2016 Q3/2016 Q4/2016 Q1/2017 Q2/2017

EU

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Oriola Corporation20

EUR million4-6

20174-6

2016Change

%1-6

20171-6

2016Change

%1-12 2016

Net sales 387.5 407.0 -4.8 754.9 794.5 -5.0 1,588.6

Adjusted EBITDA 19.9 21.0 -5.3 37.8 40.7 -7.1 85.4

Adjusted EBIT 13.0 14.5 -10.1 24.1 28.1 -14.3 59.9

EBIT 12.7 13.7 -7.4 23.2 27.3 -14.8 57.6

Profit for the period 8.3 9.5 -12.1 15.8 19.2 -17.8 41.8

Key Figurescontinuing operations

Oriola Corporation21

EUR million 30 Jun2017

30 Jun2016

31 Dec2016

Goodwill 284.6 264.7 286.8Equity 194.1 184.9 205.2Interest-bearing debt 112.0 151.9 133.1Interest-bearing net debt 84.4 66.2 72.3Balance sheet total 917.5 934.1 925.4

Equity ratio, % 21.7 20.6 22.7Return on equity (ROE), % 17.1 21.9 21.4Return on capital employed (ROCE), % 15.2 17.6 17.8Gearing, % 43.5 35.8 35.2

Equity per share, EUR 1.07 1.02 1.13Earnings per share (EPS), EUR (cont. operations) 0.09 0.11 0.23Average number of shares, 1000 pcs 181,389 181,389 181,389

Balance Sheet and Key Ratiosincluding discontinued operations

Oriola Corporation22

Sustainability in Oriola

Responsible employer

Responsible partner

EnvironmentalResponsibility

3,000employees whereof1,600 pharmacists

Safe and reliable delivery of

pharmaceuticals

Sustainable delivery chain

FinancialResponsibility

Responsible business

operations

ROCE

15.2 %

Oriola Corporation