Oriola - Awaiting news on strategy review
Oriola’s Q4 was overall rather good, with double-digit growth exceeding expectations while profitability in Wholesale remained soft. For now, all eyes are on news from the strategy review and Capital Markets Day in May.
Solid growth and fairly good profitability in Q4
Oriola reported rather good Q4 results. Growth in invoicing and net sales remained in the double-digits, with the net sales of EUR 502m above expectations (EUR 479.9m/482m Evli/cons.). Profitability in the Wholesale-segment continued on the softer side and the Group adj. EBITDA of EUR 9.9m fell slightly short of our EUR 10.3m estimate. The sales margin increased by 2% to EUR 43.3m. EPS was clearly negative due to the impairment in and weak profitability of Kronans Apotek, at EUR -0.10 (Evli -EUR 0.07. Oriola expects the adjusted EBITDA in 2026 to increase from the previous year.
Expecting continued good core business progress
We have made only minor downward tweaks to our coming year profitability estimates and slightly raised growth expectations. We expect growth of 7.7% in 2026 and adj. EBITDA to improve to EUR 41.1m, assuming near flat margin development in Distribution and slight margin improvement in Wholesale. The operative performance is somewhat overshadowed by plans relating to the strategic review. Dividends were cut to EUR 0.03 per share (2024: EUR 0.07), although authorization for an additional distribution of up to EUR 0.04 is sought, which we assume will depend upon actions to strengthen the balance sheet and potential initiation of buybacks.
ACCUMULATE with a TP of EUR 1.15 (1.25)
Following revisions to our estimates and reduced support from dividend yields, we lower our target price to EUR 1.15 (1.25) but retain our ACCUMULATE-rating. The potential is still solid, with our implied SOTP equity value at EUR 1.67, but with the upcoming strategic actions we remain cautious. Actions to strengthen the equity ratio at this point appear rather apparent. Some form of exit from the JV also remains quite likely, as it despite the strategic rationale is affecting views on valuation.