Oriola - Earnings turning positive
Oriola posted good Q3 results, with a key positive the faster recovery than we had expected recovery of profitability in the Wholesale segment. With good development across the board, earnings also turned positive. We raise our target price to EUR 1.3 (1.2), ACCUMULATE-rating intact.
Wholesale segment profitability recovered from weak Q2
Oriola saw good development across the board in Q3. Net sales grew 9.2% to EUR 463.3m (EUR 473.7m/465.9m Evli/cons.) and the adj. EBITDA of EUR 9.6m improved more than anticipated (Evli EUR 9.1m). The Distribution segment saw slower growth on strong comparison figures while relative profitability continued to improve as expected. The Wholesale segment again posted solid growth and margins recovered better than anticipated, back on par with previous year levels. Profitability was still burdened by the unfavourable product mix and higher opex. With Kronans Apotek also posting moderate profitability figures, Group earnings turned positive.
Continued expectations of volume and margin improvements
We have made adjustments to our 2025e estimates account for the earlier vaccine deliveries in the Distribution segment and better profitability improvement pace in the Wholesale segment. Our 2025e adj. EBITDA estimate is up slightly to EUR 35.6m, in line with the guidance of expected y/y increase in adj. EBITDA. Our estimates for 2026-2027 are largely intact, with only minor adjustments to growth and margin expectations. We expect steady performance in the Distribution segment, with continued growth from existing and new distribution agreements to also slightly aid margins through volume and opex stabilization. We also expect clear profitability contributions from the Wholesale-segment through continued growth and opex stabilizing from the front-loaded growth investments during 2025.
ACCUMULATE-rating with TP of EUR 1.3 (1.2)
Our SOTP equity value is up very slightly, with shifted emphasis on 2026e figures largely offset by downward adjustments to net debt and is now at EUR 1.61. With the SOTP increase, and leaning more into the potential in Kronans Apotek after improvements in Q3, we raise our TP to EUR 1.3 (1.2), ACCUMULATE-rating intact.