"During 2011, operations focused on the growth of the retail business and improving efficiency in the wholesale business."

CEO review




In 2011 we continued to develop our businesses following the change in the Group’s structure.  These major changes place Oriola-KD in a unique position in the pharmaceutical retail and wholesale markets in Northern Europe and Russia.


Net sales in 2011 grew 11 by per cent and exceeded the 2 billion euros mark for the first time, reaching 2.1 billion euros.


Profitability in 2011 was not satisfactory, and performance during the first part of the year in particular was weak due to the low profitability of the Swedish retail business and Russian businesses. Operating profit excluding one-off items and impairment was EUR 13 million. The operating loss including impairment charges  was EUR 20 million.


  • Retail profitability in Sweden and Russia improved clearly in the latter part of the year as a result of measures launched in summer 2011.
  • Despite measures taken to improve efficiency and the strong growth in regional sales, the profitability of the Russian wholesale business did not achieve a satisfactory level due to fierce competition.
  • Business performance in Finland and the Baltics was steady and profitability was good.


Our balance sheet is strong and allows us to develop the business and utilise growth opportunities. The equity ratio was 24 per cent and the gearing ratio was 6 per cent.


We made good progress in a number of important projects during 2011


  • The important ISO 9001quality certification was granted to our wholesaling operations in Finland.
  • We boosted efficiency in our Swedish wholesale operations by centralising pharmacy distribution at a single distribution centre
  • In our Swedish retail business we introduced a new information system at all our Kronans Droghandel pharmacies.
  • In Russia we increased the regional sales of the wholesale business outside of Moscow by about 50 per cent and integrated the support functions of the Stary Lekar and 03 Apteka pharmacy chains.
  • We also introduced new e-services for customers in our different businesses.




2012 we will focus in improving profitability.


  • In the pharmacy business in Sweden and Russia, we will continue to develop our pharmacy portfolio and improve the competitiveness of individual pharmacies.  
  • In the wholesale business in Russia the focus will be on efficiency and operational reliability and increasing regional sales.  
  • In the wholesale business in Sweden we will develop the services we provide to pharmaceutical companies and focus on logistics services provided to pharmacy chains.  


Strategy and targets


We will concentrate on the pharmaceutical retail and wholesale businesses in Finland, Sweden and Russia in line with our strategy, and our growth will be supported by the general growth of the pharmaceutical market, especially in Russia.  Our target is to outperform the market growth and achieve a return on equity of over 15 per cent. The average gearing ratio should be 40–60 per cent.


Our goal is to provide an efficient and high-quality service to our customers – pharmaceutical companies, pharmacies and pharmacy customers – and thus increase the company’s value over the long term.