Oriola - Expect continued growth momentum

Continuing on growth momentum from 2024
Oriola reports its Q1 results on April 29th. Oriola saw good development in both net sales and invoicing during 2024 and the latter half of the year in particular. The 2024 net sales growth of 12.4% was greatly aided by a customer transferring to Oriola’s inventory in Q3 but invoicing growth was still at a good level, at 5.1%. We expect the customer inventory change and new customer onboarding to contribute to continued good growth figures in Q1, with our net sales estimate at EUR 413m (+10% y/y). Oriola completed the divestment of Svensk dos AB on April 1st, for a sales price of approx. EUR 9.5m, and the very limited net sales impact will no longer be included in Group net sales from Q2 onwards. In terms of relative profitability, we expect Oriola to continue on similar levels as the comparison period, with our adj. EBIT-% estimate at 1.2% (1.3%). We expect net earnings to remain negative in Q1 through the joint venture but turn positive from Q2 onwards assuming no further impairments.

2025: Expect good growth and steady margins
For the remainder of the year, we expect growth to slow down from the stronger comparison figures but remain above market growth levels. With the on-going significant ERP and warehouse management investment, we remain cautious on margins and expect adjusted figures to remain at previous year levels. Margin improvement could arise from a more favourable sales mix through costlier, low volume pharmaceuticals and growth in the wholesale business. Oriola only provides a guidance for adj. EBITDA, which is expected to grow from 2024 (EUR 33.3m), with our estimate at EUR 35.7m.

ACCUMULATE with a target price of EUR 1.1
We have not made any changes to our estimates since initiating coverage on April 7th and retain our ACCUMULATE-rating and target price of EUR 1.1. Further upside potential in the near-term would be brought by reduced market uncertainty, and through profitability potential in the long-term.