Oriola More cautious stance on Wholesale profitability
ANNONS
Oriola reports its Q2 results on July 18th. Performance in Q1 was fairly good but mixed. While the Distribution-segment continued to show good growth and volume driven profitability improvements the Wholesale-segment saw weaker profitability through front-loaded growth investments. We have slightly lowered our estimates for profitability in the Wholesale-segment ahead of Q2, anticipating a more gradual pick up. On group level we expect invoicing to grow by 8% y/y and a similar growth in adj. EBITDA. We estimate a slight improvement in the profitability of Kronans Apotek, which coupled with anticipated ERP and warehouse management related investments puts our net earnings estimate fairly in line with the comparison period.
Continuing to expect good growth and steady profitability
Apart from shifting our expectations for the profitability of the Wholesale-segment to gradually pick up towards Q4, our full year estimates remain intact. We expect the impact of earlier new customer onboardings to keep growth at above market levels in the Distribution-segment, and the Wholesale-segment to show a similar growth pace driven by growth investments. We expect a approx. 6% y/y increase in adj. EBITDA, mainly through volume growth in the Distribution-segment, with margin improvement expected to be limited, in line with company guidance of growth in adj. EBITDA.
ACCUMULATE with a TP of EUR 1.15
Changes made to our estimates reflect an anticipated more gradual pace of recovery in the profitability of the Wholesale segment, while long-term views remain intact. We retain our ACCUMULATE-rating and target price of EUR 1.15.
