Oriola - Favourable growth development
Oriola’s Q1 surprised positively on growth, while profitability development was two-fold due to Wholesale. We expect continued faster growth during 2025, while remaining fairly cautious on profitability development.
Growth exceeded expectations, some profitability hiccups
Oriola posted solid organic growth figures in Q1, clearly exceeding our expectations, with net sales growing 19% y/y (8% organic) to EUR 447.5m (Evli EUR 412.7m). Growth was aided by new customer onboarding while retaining existing ones. Profitability development was mixed, but group adj. EBITDA of EUR 7.5m was roughly in line with our EUR 7.9m estimate. The profitability of the Wholesale-segment showed a clear decline due to higher OPEX and a less favourable sales mix, with adj. EBITDA down 34% to EUR 2.4m (Evli EUR 3.8m). The Group level impact was offset by growth driven, above expected profitability development in the Distribution-segment and lower than estimated Group costs. EPS came in below expectations, at EUR -0.03 (Evli -0.00) due to a EUR 5.7m impairment loss.
Growth on good track, Wholesale profitability slight concern
Our Group adj. EBITDA estimate for 2025 is largely intact after segment-level revisions, expecting an 8% y/y improvement of EUR 36.1m, while our net sales estimate is up 4.5% to EUR 1,851m. We have revised our expectations for the Distribution-segment upwards through better organic growth expectations and subsequent improved adj. EBITDA, with y/y margin development still expected to be more or less flat. We anticipate improved profitability in the Wholesale-segment during the remainder of the year, as Q1 challenges appear to have been partly temporary and growth investment driven. With the weaker Q1 we nonetheless see a 0.6%p adj. EBITDA margin decline. Consumer confidence in our view remains a concern, as a potential continued unfavourable sales mix through customer purchasing patterns and slower sales development along with higher OPEX could offset profitability improvements in the Distribution-segment, if profitability continues on Q1 levels.
ACCUMULATE with a target price of EUR 1.15 (1.10)
Our equity value estimate through our SOTP-approach is up 5% to EUR 1.54 per share, mainly through change in net debt and increase in the book value of the Doktor.se ownership and adjust our TP to EUR 1.15, remaining on the cautionary side due to market and JV related risks.