Oriola Oyj

Good morning everyone and a warm welcome to Aureola's full year results audio cast. I am Tua Stenius-Örnjön from Aureola's Investor Relations. With me today I have our CEO Katarina Gabrielsson and CFO Mats Danielsson. We have now moved to Audiocast, but the setup will be the same as before. After the presentation, we open up for your questions. And as a kind reminder, in the Q&A, we will first focus on questions relating to Oriola's business and financial performance. Like always, you can start posting questions to us already during the presentation through the chat. And finally, please note that we are recording this audio cast and the recording will be available on our website later today. And before handing over to Katariina, here is our customary disclaimer that we all should be aware of. And now, without further ado, Katariina, please go ahead.

Thank you, Tuva. Also welcome on my behalf. The agenda is fairly as it normally is so we will start now to look at what the 2025 years highlights. During 2025 we delivered a steady progress and the second half was particularly strong and that of course is also good for the future. We can see that we have worked a lot with our customers during the year, and that has resulted in a higher customer satisfaction. While doing this, we have strengthened the partnerships. We are also onboarding new customers that we have already talked about during the 2025. And we have also worked more across the markets with our portfolios. And also worked more with the value-adding services, so not only moving products. And value-adding service is for example when we have excess stock, and that means that we are then having extra stock for our pharmaceutical companies in our warehouses, but get paid for that. We can see that we have a stronger supply chain also. So in combination with the customer focus, we have increased, have higher higher efficiency sorry efficiency in our all our warehouses across all sites this has of course given an effect in the costs and efficiency and that means that we have like had a possibility to have a higher touch filling ratio and in combination with higher volumes for example in the vaccine side this is of course giving a positive effect in oreola This means that the net sales increased by 14%. We have also higher sales margin and we have improved the adjusted EBITDA that was growing to 35.1 million euros. That is then exceeding the previous year's level. The ERP project we have commented quite much during the year and we have now done the first deployments in Sweden that's completed in the end of the last year. We are now continuing with planning the second part of the ERP project that is also then planned to go live in Sweden. In the joint venture company Kronan Apotek, we have completed the integration. There has also been a start of a lot of new activities. For example, network adjustments. We are looking at private label parts, how we should work with that for the future. Kronas has also defined its long-term commercial strategy. There is still some way to go to the market level, like we talked about before, that we are expecting Kronas to be at, but we are on the way and we'll continue on that pace. Then looking at our operating environment, like last time we talked about this, there is no major changes in operating environments. We can see that the value of the pharmaceutical distribution market is continuing to grow in both countries. It's a little bit higher in Sweden and more modest in Finland, but it's still growing. And also the customer satisfaction is on the lower levels that we've also touched upon earlier during 2025. If we then go to our segments, and let's start again with the distribution segments, that is then how we distribute, how we then take pharmaceuticals and distribute them from the pharmaceutical companies as a customer to the pharmacies and hospitals, etc. In this segment, the net sales was growing with 11%. We can see that the growth came from both existing portfolio, but also new customers that we also touched upon earlier in 2025. We have an increase in the value adding services that I touched earlier in this presentation, and we can also really see that the vaccines has been growing a lot, especially in Sweden with 20%. In Finland, the dose dispensing business has performed very well, and this has also given efficiency initiatives that we have then talked about here earlier, who is then also good for the distribution segments. All in all, digested EBITDA increased to 8.8 million euros compared to 8.1 million euros last year. Like I said in the beginning of this presentation, we have worked a lot on the customer centricity and customer relationship. We have had all time high in Net Promoter Score, which is the way that we are then measuring our satisfaction with the customers. And how we have done it is very much to be in closer dialogue with our customers. And we have also really shown that we are an active partner to our customers. We are doing this when we're trying to understand the whole value chain. And you will hear a little bit more about that when we come to the C&D later this spring, how we do this. So we are trying then to integrate the service offering that we do and also the strong market support. one thing that we really do is to try to reduce the complexity to our customer. Because we believe that if we have a profitable and successful customer, then we will also be successful in there. And when we go down to the wholesale segment, that is when the pharmacist is buying things from us, but also as well, pharmaceutical companies buying services from us. We are also working in the customer side on this one. So in the same ways we do in the distribution segment, we are doing it in the wholesale segment. Work in close connection together with the customers, try to get them to be successful, because then we will also be successful. And this has also in this segment given higher MPS results than promoters score results. So also on this side, we are on a higher level than we have been in a lot of years. We have developed the capabilities to service also in this one cross market. And also we can see that we have, for example, started to deliver full pallets delivery in Sweden to the e-com players, which is important for them when they should deliver to their customers. In advisory, we have worked a lot with the digital parts. We have mentioned that before also during the year. For example, in the AI part, where we have AI driven tools to enhance services, including commercial data and also medical information. In the wholesale segment the net sales has been growing with 26% and the growth was driven then by the wholesale business in Sweden as well as in Finland. In Sweden it's a lot about the parallel import as it has been also earlier in 2025 and especially in the weight loss medicines. In Finland the strong sales was particularly coming from the veterinarians and special licensed medicines. In advisory, like I said here before, data services and so on. All in all, the adjusted EBITDA was 2.8 million euros, a little bit better than last year, and still there is some things to be done with this segment to get the profitability to the level where we want it to be. In the beginning of this year we also announced that we are then going to have a state-of-the-art distribution center in Järvenpää. And that's a modernization of the Finnish operation that we today have in Manka. We are doing this based on the market requirements that we see and also to be able to continue our growth for the future and improve our profitability. This distribution center is highly automated logistics center that supports the growth ambitions that we have and also helps us to reach our financial targets for the future. It will also strengthen our competitiveness long term. It's financed through lease arrangements and that means that we will have efficient use of capital and also a low upfront costs in this project. distribution center strengthens our logistic capabilities in response to the growth of pharmaceutical markets we're also looking at the products that our customers is then you know like having their in their pipeline and also of course e-commerce expansion etc And this means that you see here in the slide that the pallet storages, for example, is on the ambient side growing with 30%. And also the cold storage capacity is growing with 80% compared to today. And if I could take the cold storage, for example, as an example, it's so that if we look at the product mix that we get from the pharmaceutical side, this is the area that is growing most. So this is a response to that, what happens on the market. The pallet storage will be over 20,000 pallets and the pallet storage will be safeguarded by oxygen reduction system, which eliminates the risk of ignition. And this will constitute the largest low oxygen fire prevention system in Finland. So it's really like a modern automation center that we then build. The Järvenpäs Center is also supporting our sustainability ambition and will strengthen our position as part of Finland's critical healthcare infrastructure and will ensure reliable pharmaceutical distribution for society. The building is planned to be constructed to bring excellent level standards, utilize some geothermal energy, solar panels, and also sustainable materials. It will be 50% more energy efficient and reduce our scope one and two carbon dioxide emission in Finland. So it's not only for the efficiency, it's also for the environmental part that we are doing this. With this said, I will leave now the word to Mats to go through the financial review.

Thank you, Katariina. We will start from the top line and look at invoicing and net sales. If you look at this year, the growth, or 2025, the growth from invoicing and net sales have been driven both by the distribution and wholesale segment. If you look on the left hand on the picture, we see the quarter four, 2024 and 2025. we had actually a fairly good end of last of 2024 also so we made really good numbers we had some vat changes in finland and regular other regulatory regulatory changes that impacted the 24 numbers and we managed even though we managed now to grow 13 the the invoicing and 14% the net sales. So we are very happy with this achievement. If we look at the full year numbers, we grew 11% on invoicing and 13% on net sales. Then if you look at move into the sales margin, looking back at the whole year 2025, we have had a steady growth in all quarters, growing the sales margin, which is really important to us. Year to date, we have an improvement of 7 million euro. This is coming both from the distribution and the wholesale segment. Then we move into EBITDA. And if we look at quarter four, both segments were improving, growing from 9.4 to 9.9 million. We have had more adjusting items this year compared to last year. That's mainly the ERP project that is driving the cost. So we have a lower reported EBITDA compared to last year. declining from 7 to 5.8 million. If we look at the full year, mainly distribution driven improvement from 33.4 to 35.1. Here we can also see that the reported EBITDA is lower due to the ERP project cost. It's 9.6 million this year and 5.9 last year. So a heavy burden from the project. now in in in 25. then if we move into the segments uh the distribution segment had had a good year steady 11 growth in in invoicing uh both in the in the quarter and year to date uh and like katarina said this this growth is coming both from existing and new customers uh we have had a lot of value-added services, we have had higher vaccine volumes in Sweden, and in general, a good market growth, especially in Sweden. And if you look at the adjusted EBITDA, we can see that there was an increase from 8.1 to 8.8 million in the fourth quarter, and if you look at the year-to-date numbers, It's a five million euro growth in EVTA supported by both growth and then an increased sales margin. The wholesale segment had an especially a good traction in port to four both in finland and sweden growing in excess by 26 percent in sweden it was the parallel import with and and mainly the weight loss medicines in finland we had a good development in veterinarians and special licensed medicines Also, the year-to-day growth was good with the 9% increase. If we look at the adjusted EBITDA, this was actually the first quarter for the year where we improved the EBITDA in the wholesale segment from 2.7 million to 2.8. However, the full year is a bit lower. It's 2.2 million lower than last year. uh if we then look at the net profit uh there there's three main factors affecting the the lower net profit it's it's the erp cost project cost it's the the the svensk boost impairment that we had earlier in in the year and then the impairment related to Krunasaputek and the result from Krunasaputek in quarter four and if you look at the waterfall we can see that there's the EBITDA unadjusted is lower than last year we can see also that the depreciation amortization and impairments we see a higher number of 17.7 million including the 5.7 from the dues and then we see that Kronan's share of results in joint ventures, which is minus 22.8 million. That leads us to a net profit of minus 27.2 million. Then we look at the cash flow. We have had a good cash flow compared to last year. The EBITDA, of course, as said earlier, was lower due to to the reasoning earlier ERP cost the big part here affecting then we have the change in working capital we have a negative working capital so with the growth we should be able to increase the cash flow through the working capital and that we can see here also now that we are improving from compared to last year And we have a free cash flow of 58.4 million compared to 43.4 million last year, full year. If you look at the net debt, we have had a good cash flow and debt is minus 82 million. We have a cash and cash equivalents of 152 million compared to 113.5 on that side. Then if we look at the financial position, we have as the gearing percentage, of course, due to the good cash flow is minus 81. Then we see the equity ratio going down to 10.8% and that's due to the fact that we have the mainly due to the fact that we have now in the quarter Kroonans and earlier this year we have had a lot of costs with the ERP affecting the net result. Then if we move into Kroonans Apotheek, of course for us a disappointing result, but there are Also good things, KRUNAS have completed the integration. They are now working in one system, having one company, and that's, of course, a good start for 2026. We can see on the left side in the quarter the EBIT, including the impairment, the result is minus 39.3 million, on the same level as last year, and the year-to-date EBIT is minus 45. If we look at the adjusted EBIT, which is adjusted with the integration cost only, showing minus 6.4 million compared to minus 5.1. So this is not comparable to the adjustments that we do in the group of Oriola. So there's kind of a bit of a different definition definition on what is adjusted here in this number. The underlying business is doing better than the adjusted EBIT. The outlook We repeat what we said last year that we expect the adjusted EBITDA to increase from 2025. This is based on the growth journey. It's dependent on the efficiency initiatives that we have taken and will give result already this year. And then in general, the strategy execution that is underway. Then as we communicated in the beginning of January, we will go through, review our long-term plan, our financial targets and capital allocation framework, plus our dividend policy and communicate all those later. We have a capital markets day planned for in May. So we hope you to save the 12th of May in your calendars to be able to attend this event.

Then we are coming to the Board's dividend proposal. Of course, the AGM is coming up, and the Board of the Director has an opportunity to propose a dividend for the AGM. This year, the proposal will be €3 to be paid for 2025. The record date will be 27 March, and the payment date 15 April 2026. Then there is also an authorization or proposal to authorize the board to pay up to 4 euro cents during November 2026. So that's the proposal for the AGM to take a decision on. If we then go to the key takeaways for the full year 2025, I'm really, really happy to see that we have a steady progress that is in line with our expectations, especially the second half was particularly strong, as I said also in the beginning of this presentation. We can see that we have strong customer focus. We have improved the customer satisfaction in all our areas and has really high net promoter score. And we have also improved operational efficiency, and that's done in all our sites, which is then also really good for the future. So I would say that this is three really strong key highlights. And with that, we go down to the questions.

Great. Thank you. Thank you, Katariina and Mats, for your presentations. And as a reminder, please use the chat to send in your questions. And as usually, we will first take the questions that are relating to Oriola, and after that, the questions relating to Kronan's Apotheke. There's already a number of questions here, and I will start with the first one. This is relating to the long-term plan that Mats was talking about. Could you please explain the press release on January 7th? What does strengthening and then maintaining reasonable equity level to ensure financial resilience mean? When will Oriola pursue buybacks and divestments?

We can say that there's many questions in one question, but if you look at the strengthening and maintaining a reasonable equity level, we see that we have a quite large balance sheet. We also know that we do not bear all the full risk of our inventories. So even though the balance sheet is large, we know that there's a kind of, we have a bit of a different view on the risk in the balance sheet. We also have a fairly stable underlying business that we foresee for the next or the coming five to ten years. So we look at that when we look at the equity ratio and we have a really good cash flow, which is helping us to be on the safe side on this. Then we have the buybacks and divestments well the buybacks we have informed as we have said we have no buybacks ongoing where that's part of the package or the toolbox that we have and we have not in have not reported on any divestments so far

Thank you. So then we move on to a question about the ERP project. So how much of the ERP project in percentage about is now in use and how much it will be in use by the end of 2026? Has the new ERP had so far any positive impact on P&L?

I can say like this, we're not talking about percentages here, but there is a small part in Sweden. But it's also an important part, because for us it's important to get SAP, that is the ERP system, into Sweden to be able then to start to use it, because there's a different logic behind that system compared to what we do today. The part that we do is also touching the logistic areas, so not only like services or financing and so on. And what exactly we will do during 2026 is still in the planning phase to some extent. So we will come back to this when we have a possibility and no more.

Thank you. Then moving on to the land area in Espoo. So the balance value of the land area in Espoo is 0.1 million euros. So how many square meters is the land?

The total land area here is six and a half hectares. So that's the total land plot.

Good. And following on that one is that Oriola has filed application to have the land area in Espoo rezoned to allow also residential building. What is the current situation of the application, I would assume?

We have nothing new to report on that. We have filed and the process will most probably be quite long, but we have filed for the rezoning. That is what we can say.

Okay. Good. Then we continue with the question to Mats about the equity ratio. So what is the importance of equity ratio to Oriola?

Well, I would say that for any company, the equity ratio is really important that you have sufficient equity in your balance sheet. But as I said, we have a slightly lower lower equity ratio and especially now we have a lower equity ratio due to the fact that we have had a lot of one-off costs related to how we handle the ERP project. We do not have that in our balance sheet. It's booked as a cost which has affected the equity. However, we see also for the future that we will not bear a cost that high cost after we have finalized the project. And then we have had, especially the Kronos impairments have been burdening. But I said with the same explanation as earlier that we are forecasting the years ahead and we see that there will be a correction of the equity ratio when we have gone through this transformation that we are now doing.

Let's continue. There's a couple more questions relating to the equity ratio. In the risks and uncertainty factors, referring to the chapter in the report, low equity ratio is not mentioned. Does this mean there are no risks related to low equity ratio?

Of course, there is always a risk with your if you have no equity, you have a risk. But we see also that that, of course, is something that we need to to be have a close look at all the time and that we do. Then on the other hand, we have a really good cash flow, which means that we are not we have sufficient funding from the cash flow and we have a net debt that is negative so that we see as a very positive thing.

Okay, and then another follow-up question. Can you please comment on the equity level and what strengthening equity meant in the 7th January news?

In the 7th January news, I think that we are looking at this with a longer view than just one or two years, and we see that there's a big possibility to also strengthen the equity during the coming years. We are doing major changes that will impact the profitability, but we also have assets and the moncast move will have some impact on the equity and equity ratio.

Thank you. And then a short question to Mats again. So are the sold receivables debt or not?

Well, the sold receivables are a bit handling in a bit of a different way. So not always seen as debt in all calculation. If you look at our covenants, for example, they are not included and so on.

Okay, so then let's continue with the question relating to sales margin. So sales margin grew by mere 2% year on year, which looks low as Q4 had very strong net sales growth in both segments. What explains this inconsistency?

I would say that the quarter is quite a short period of time that we need to look a bit on more than just a quarter. A month is very short. A quarter is quite short in this business. So it's more related to the growth, the pace and how we are doing. So there's no specific explanation why the sales margin was. They were of course a bit dependent on which kind of volumes do we have in each quarter and what is the value or the margin on those.

The product mix, we can say.

The product mix, yes.

Okay. So then there's, let's continue to the next question. So there's quite a few questions here. So sorry if it's a little bit slow this time, but anyway, let's continue. So do you see that you could continue on a track of double digit growth on group level during this year?

I can say like this, of course, we have like the guidance now that we should improve on the profitability level. And that means, of course, that we need also to grow, as I see it, then if it's we're going to be double digit to what it's going to be, that's not exactly what we guide on. But But, of course, we are pushing our business to always grow as much as possible.

Okay, thank you. So then you have noted that the growth in the wholesale segment has been driven by lower margin products and profitability has thus been affected by the sales mix along with growth investments. What has the growth looked like for your brands during 2025? What factors should we consider in terms of margin development expectations in the segment during this year?

If it's our own brands that we are talking about here, it's a little bit hard to say because we have a lot of brands, but if we focus on the brands that we have ourselves in Aureola, we can say that especially in the end of the year, we could see a positive signs in this one. Like we said before in the wholesale segment, the assortment part of that one, that we have our own brands in has been like growing slower than we have anticipated in our strategy because we have done also made some investments but in the end of 2025 we can see that we had more listings we had also then more sales both in the pharmacy but especially in the grocery and retail area and this is of course good for the future during the year we have also done changes in our like or upgrading it's called, in the products as well as in how they look for the consumer. So for the future I would say that this is a good platform to build upon.

Okay, so you mentioned during the presentation that the vaccine volume growth was strong in Sweden, so what was driving this growth?

That's of course a customer demand. It's like, of course, it's like in the autumn we have the influenza season. We also have had other vaccine parts. For us, it's more that we sell a service to deliver the vaccines that is then demanded from the customers. So overall, there has been more patients taking the vaccines in Sweden. That's the main part.

Okay, good. then um there's a question relating to to the strategic review again so could you at this point comment on what level of equity ratio you would consider uh a comfortable level well like said we are looking a bit more long term on this question because it's still it's still a long-term issue if if there if the kind of the equity level so so there is no

a specific number on that.

OK, good. Thanks. Then we'll see if there's any other questions before we go to those that relate to the outlook. So about the ERP, so the costs related to the ERP, is the 2025 level a reasonable estimate for 2026 as well?

Yeah, I mean, there's a There's a certain amount of work and money you can spend on an ERP project. And I think we are kind of on the upper side of that. So I would on a high level, it's close to these levels. Yes.

OK, so let's continue on the ERP and new distribution center in Finland. So how will the ERP change and new logistics center ramp up be timed in Finland? Will you change the ERP to the old center before the move?

There is no absolute decision on this. This is something we also work upon in the same time as we, of course, plan for Sweden. What we're looking for here is, of course, since we're infrastructure critical also, it's really important to do it so that it's safe for the patients and for the whole Finland and also, of course, have an opportunity to have as efficient implementation as possible. So that's the part. The plan is, of course, if we can avoid it, to not take the old system to the new distribution center.

Yes. All right. Thank you. So then still jumping back to the strategic review and the capital allocation. So when can you comment on share buybacks and what initiatives are for shareholder value creation now?

Shareback is, of course, an instrument and much touched, like both what I said also about the dividend and so on. It's a part of the total package that the board can then do to distribute the funds to the shareholders. And that's one part. And like we said in January, that's one of the tools that we are investigating on how to do for the future. And we will come back to this also later this week.

Yeah. And following up, there is 271 million in value on the balance sheet, 70 million net cash, 187 million in the JV, 14 million in doctor.se. How will this value become available?

well if we if we look at the different different parts here we i mean we have we know that we have a quite some cash at certain points in both time we have a high volatility in our balance sheet in our cash we have as i said we have a fairly large balance sheet with the working capital and the payments are, in a way, irregular. So we have dips and ups upside on the cash position. Then we have the JV. The JV, of course, is also a customer to us. The JV is going through a transformation, profitability improvement. That is kind of in focus on the JV. And then we have Dr.

dot sc part that that is in our balance sheet but we have no further comments or directly on that right now good thank you so now there are a couple of questions relating to to the outlook or 2026 so let's start with them so looking at the market outlook now compared with a year ago is the outlook now more positive or negative Has there been any large changes in demand in any areas?

What we can see, of course, if you look for, like I said before, in the distribution area and parallel imports, when it comes to weight loss medicines, there is, of course, a lot of new customers in that area or patients in that area. So I will say that looking at the areas that is increasing most, that's one of them. And I think you can see that also from other medias around us. And that's growing. That's an area that grows heavily. Otherwise, the market is growing. It's still so that we are supported by the strategy themes that we have with aging populations and the other areas around us. And also more increased focus on health and well-being. So that is supporting us. There is also more focus of course in the surroundings about availability in the medicines and we can see that in both Sweden and Finland the stock levels is increasing that is also done positive from our side. So all in all I will say that distribution area is looking like maybe more positive in that aspect with more volumes than we had a year ago not dramatically more positive but a little bit more positive in the wholesale area we also touched before that the uncertainty in the environment is still the customer confidence is not on the best let's say it like that and if we look at the areas where we have it the products we can see that customers is normally buying cheaper products when there is uncertainty in the wholesale areas combined and that is something we also had a year ago and we can see that this realizing but of course it's hard to see how the customer confidence will continue to go during this year but we are betting that we should then the things we're doing in the wholesale area should give a result and also then be something that is positive for them.

Great. Thank you. So then there are a couple of more questions relating to the outlook, and I will ask them, and if you have something to add, just add then. So can you provide qualitative comments on expectations for 2026? I think you commented this one already. What are the key drivers or headwinds, and do you expect growing adjusted EBITDA in both divisions or segments?

The short answer is yes. Otherwise we would have another discussion on the segments on a business level.

Good, thank you. And is there any drivers for acceleration of the earnings growth in 2026-25? I think you touched upon that. Is there anything you want to add?

Not yet. I think maybe we should say something about advisory because I didn't touch that one. And of course advisory is also an area where we really should see growth. And we can see that the customers, like we touched upon especially last quarter, is increasingly positive to the services that we do. So that is also a good one to remember.

All right. And then a follow-up question relating to the wholesale segment. So will the software sales mix we have seen in wholesale still weigh on profitability in 2026?

One big difference today compared to a year ago is that now we are also meeting numbers when we have already made the full year like investment process. We had like in years, I think it was 24 that we started and the investments in also more people and so on. And of course, now we are meeting these numbers. So that means that the profitability in wholesale segments should also be better. And of course, the listings and other things that I touched before is also a positive one. One thing on the outlook that we didn't touch here is also, of course, that we are more efficient right now in the sites that we have than we were a year ago.

Okay, so that was all the questions relating to Oreola. So if you have any more questions, please send them through the chat. But now we will take questions relating to the joint venture Kronan Sabotec. So accounting of JV is kept in Swedish crowns and therefore the equity of JV is in Swedish crowns. The exchange rate of Swedish crown is about 7% better in euros at the end of last year compared with 2024. In valuation of JV, this would mean about positive 50 million euros. Where is this positive figure shown in closing of Oriola?

Yes, I mean, we consolidate the JV as a one line consolidation, and there we take our fair share of the net result. The value in our balance sheet is coming from the start or the acquisition of an asset, and that will not change regarding any currency changes. So it's two different numbers.

Okay, thank you. And then about the adjusting items of JV, so it included 1.3 million euros one of costs related to integration of the two companies. Adjusted EBIT was also impacted by some other reported one of items. Do these other one-off items include in reported adjusted items the 1.3 million euros or not? If not, how much were these other one-off items?

Maybe we were a bit unclear with this one, but I commented already that there are additional one-off costs that are not included in the adjusted numbers. I don't have the exact, that depends of course a bit of how you what is an adjusting item and when that has not been considered in Kruunan. So cannot comment really on that.

Okay. And then OREOLA expects Kruunan Saputec to reach profitability level representing industry benchmark by 2027. Does this mean OREOLA expects that EBIT of Kruunan Saputec will be 2026 on this level.

What we said also earlier is that of course there's still a journey to reach the market level and there is like I said that we are expecting more on Kronos but we're not commenting exactly here when it will be ready but there should be progress on Kronos during this year.

Thank you. And then, Oreola PLC has not made any impairment on the valuation of shares of JV. What were the key factors Oreola PLC used in its impairment test resulting in no impairment where needed to book to the valuation of JV shares?

Yeah, the JV has made their impairment. We have all those calculations and our auditors and the JV auditors have a close contact. In Oriola, we made a test where we used exactly the same numbers as used in Krunans. We have, however, some different principles on how we have done the impairment on all the shares that we have. And there we have a slightly different discount rate, which is the main part that deviates from the Kroonans calculation. So therefore, we did not have a reason to restate our numbers in the same way as Kroonans did.

Okay, good. So then the next one. So the JV profitability continues to be pushed further into the future compared with your target of reaching industry level profitability by 2027. Given the weak equity ratio, what concrete actions are you taking to improve JV profitability? Or at what level do you consider the equity ratio to be a covenant or operational risk?

If I first start, maybe Mats can take the equity part. Like I said before, there is a lot of different kind of projects or initiatives ongoing in Kronos Apotek. And it's everything from commercial areas to cost saving parts and also really looking at pharmaceutical network structure. where we need to have the profitable pharmacies and also really challenge where was previous Apotex Group of pharmacies and where is now Kronans pharmacies. That work is ongoing and I'm expecting that we will see a result in this one coming. But also, of course, when it comes to private label, when it comes to pricing, all these basic retail areas that you have, a lot of this is still untouched and therefore I see that there is a huge potential in that in Kronans Apotex Group.

Yeah, on the kind of governance and the operational risk, I see that, I mean, the effect of the bad result in Kruunans, of course, have an impact on our equity in Oriola. That is mainly affecting the equity level and our ability to pay out dividends. And it's more related to that than a covenant or operation.

Okay, thank you. And then next one relating to Kronan's integration. So as Kronan's integration is now done, should we expect a more clean result in 2026 and the figures representing bettered operative performance?

There is most likely still some cleaning to be done but like we said here earlier is that the integration is now done and that means that we have a more solid platform in Kronos Apotek to go for the future and that's really important. So I guess the next question will then be how much is done to expect from the impairments part? Honestly, I don't know right now, but I'm expecting that it should not be in the levels that it has been, but we don't know right now.

Good, thank you. We have a couple of questions still in the chat. There's a delay always, so please send in your last questions, if you have any, and then we take the next one. Can you comment on the clearly negative adjusted profitability of Krona and Sapotec? Can we expect positive figures this year, now that the integration has completed? You partly commented on that, but do you want to comment on the negative results?

Well, I rather maybe rather not comment on that. I think that Katariina already commented on the result that there will be the integration has been has been executed and there will be probably one of course, but not on the same level that it has been last year.

Alright, good. So then the last question is going back to Oriola. So regarding the distribution and strategic review. Given your good cash flows, would there be any reason to expect a lower total distribution in the short term, even if the composition through dividend or buybacks may change? I assume that this refers to the distribution of profits. Regarding the distribution and strategic review, given your good cash flows, would there be any reason to expect a lower total distribution in the short term, even if the composition through dividend or buybacks may change?

I will say that of course it's a decision for the board of directors to take since they are like the one who takes the discussion about dividend and the combination which share buybacks and so on. So I don't think we should comment that in this forum. Sorry about the confusion because I thought it was distribution and segments.

No worries. Good. So I think this is all we have in the chat at the moment. So thank you everyone for joining us today. Our next event is the Annual General Meeting on the 25th of March. But I also like to take the opportunity to wish you all welcome to join our Capital Markets Day on the 12th of May. And in the meantime, if you have any questions, please don't hesitate to reach out to us. Thank you and have a good day.

Thank you.