Oriola-KD Corporation stock exchange release 7 February 2008 at 8.30am This financial statement bulletin presents the figures of the Oriola-KD Group (hereinafter Oriola-KD) for January-December 2007, which have been prepared in accordance with the recognition and valuation principles of the IFRS standards and have been audited. Comparable January - December 2006 figures are unaudited pro forma figures. Key figures 1 January - 31 December 2007 * Invoicing in the period was EUR 2,524.5 million (1-12/2006: EUR 2,340.1 million) and net sales were EUR 1,377.3 million (1-12/2006: EUR 1,334.7 million). * Operating profit excluding one-off items was EUR 29.1 million (1-12/2006: EUR 22.6 million). * Operating profit including one-off items was EUR 29.1 million (1-12/2006: EUR 17.4 million). * Return on capital employed was 14.2 percent (1-12/2006 8.6 percent). * Earnings per share were EUR 0.16 (1-12/2006: EUR 0.10). * The Board proposes to the AGM that a dividend of EUR 0.08 per share be paid for 2007 (EUR 0.06 per share). President and CEO Eero Hautaniemi: "Oriola-KD intensely developed its core business and pruned non-profitable businesses in 2007. Our cost efficiency programme was implemented in full and our operating profit saw clear improvement from the previous year in keeping with our target. Our dental trade business was merged with Lifco Dental AB and our goal is to make the new company the leading northern European dental trade wholesaler. In addition, we continued our active examination of growth ventures and our preparations for the possible deregulation of the Swedish pharmacy market. We are poised to capitalise on the opportunities presented by critical changes in the market and to finance potential growth ventures." Invoicing and net sales Oriola-KD's invoicing in 2007 was EUR 2,524.5 million (EUR 2,340.1 million) and net sales were EUR 1,377.3 million (EUR 1,334.7 million). Fourth-quarter invoicing came to EUR 640.0 million (EUR 603.0 million) and net sales to EUR 331.6 million (EUR 343.7 million). Financial performance Oriola-KD's operating profit excluding one-off items was EUR 29.1 million (EUR 22.6 million) and profit after financial income and expenses excluding one-off items was EUR 31.0 million (EUR 23.6 million) in the review period. Fourth-quarter operating profit excluding one-off items was EUR 7.0 million (EUR 5.5 million). Oriola-KD's operating profit including one-off items in the review period was EUR 29.1 million (EUR 17.4 million). Fourth-quarter operating profit including one-off items was EUR 7.0 million (EUR 5.3 million). Profit after financial income and expenses and including one-off items came to EUR 31.0 million (EUR 18.4 million) and net profit to EUR 23.7 million (EUR 14.0 million) in the year under review. One-off expenses in the period under review amounted to EUR 0.0 million (EUR 5.2 million). Fourth-quarter profit after financial income and expenses and including one-off items was EUR 7.4 million (EUR 5.7 million). Oriola-KD had net financing income of EUR 1.9 million (EUR 1.0 million) in the period under review. Taxes amounted to EUR 7.3 million (EUR 4.4 million). Taxes corresponding to the result for the period under review are accounted as taxes. Earnings per share were EUR 0.16 (EUR 0.10). Return on capital employed was 14.2 percent (8.6 percent) and return on equity 12.0 percent (7.4 percent). Balance sheet, financing and cash flow Oriola-KD's total assets at 31 December 2007 stood at EUR 645.4 million (EUR 611.2 million). Interest-bearing net debt amounted to EUR -90.0 million (EUR -80.6 million) and the gearing ratio was -44.2 percent (-42.0 percent). Cash assets at the end of December 2007 stood at EUR 131.0 million (EUR 112.9 million). Interest-bearing debt consisted mainly of pharmacies' advance payments in Finland and stood at EUR 41.0 million at 31 December 2007 (EUR 32.3 million). Oriola-KD has credit facilities of EUR 25 million with banks and a commercial paper programme of EUR 100 million, which remained untapped at the end of the period under review. The Group has no significant business transactions with related parties except for pension expenses arising from defined benefit plans with the Oriola Pension Foundation. Cash flow from operations in 2007 was EUR 39.0 million (EUR 52.7 million), of which changes in working capital accounted for EUR 6.8 million (EUR 25.9 million). Cash flow from investments was EUR -19.1 million (EUR -10.2 million). Cash flow after investments in the period was EUR 19.8 million (EUR 42.5 million). Cash flow from financing includes the EUR 8.5 million in dividends paid on 23 March 2007 to shareholders in Oriola-KD Corporation and the dividend of EUR 0.4 million paid to Kronans Droghandel AB's minority shareholders. Oriola-KD's equity ratio stood at 33.7 percent (33.1 percent). Investments Investments in the period under review amounted to EUR 32.1 million (EUR 16.6 million) and include an investment of EUR 26.2 million in new dental trade wholesaler Lifco Dental International AB, which sum breaks down into a cash payment of EUR 15.8 million and the transferred business. Maintenance and PPE investments, the Medith business acquisition in Pharmaceutical Trade and other minor investments came to a total of EUR 5.9 million in 2007. Personnel At the end of the period under review, Oriola-KD had a payroll of 1302 employees (1495), 54 percent of whom worked in Finland (57 percent), 28 percent in Sweden (26 percent) and a total of 18 percent in the Baltic countries and Denmark (17 percent). The cost efficiency programme and the dental trade merger resulted in a downsizing of personnel in 2007. Management At 31 December 2007, the management team of the Oriola-KD Group consisted of: Eero Hautaniemi President and CEO Claes von Bonsdorff CIO Birgitta Gunneflo Vice President, Pharmaceutical Distribution, Sweden Henry Haarla General Counsel Pellervo Hämäläinen Vice President, Corporate Communications and IR Anne Kariniemi Vice President, Logistics and Sourcing Matti Lievonen Vice President, Pharmaceutical Distribution, Finland Jukka Niemi Vice President, Pharmacy and Retail Marketing Teija Silver Vice President, Human Resources Ilari Vaalavirta Vice President, Healthcare Trade Kimmo Virtanen CFO Anne Kariniemi joined Oriola-KD Corporation as Vice President, Sourcing and Logistics in January 2007. Matti Lievonen was appointed Deputy Managing Director of Oriola-KD Corporation's subsidiary Oriola Oy in February 2007. Senja Tynkkynen, Vice President of Oriola-KD Group's Dental Trade business and member of the Group's management team, resigned from the company in June 2007. Business segments Oriola-KD has two business segments: the Pharmaceutical Trade business segment and the Healthcare and Dental Trade business segment. The Healthcare and Dental Trade business segment will be renamed the Healthcare Trade business segment at the beginning of the 2008 financial year but the share of profits from the associated company in dental trade will continue to be recognised for the segment. Pharmaceutical Trade business segment The Pharmaceutical Trade business segment's invoicing in January-December 2007 was EUR 2253.4 million (EUR 2,064.7 million) and net sales were EUR 1,135.8 million (EUR 1,098.7 million). Operating profit excluding one-off items was EUR 17.4 million (EUR 15.6 million). Damage to batches of pharmaceuticals occurring in Sweden, settlement of a claim relating to a Norwegian business transfer of Kronans Droghandel AB in 2002 and the costs arising from strategic investments at Kronans Droghandel AB relating to the potential deregulation of the Swedish pharmacy market eroded profits in 2007 by a combined total of two million euro, of which more than one million euro was recognised in the fourth quarter. Fourth-quarter invoicing came to EUR 571.4 million (EUR 527.7 million) and net sales to EUR 270.7 million (EUR 278.6 million). Fourth-quarter operating profit excluding one-off items was EUR 2.7 million (EUR 4.1 million). In Finland, the pharmaceutical market grew by 7.2 percent (-0.4 percent). Commensurate growth in the Finnish pharmaceutical market, excluding a single large batch of vaccines in the late part of the year, came to 5.4 percent. In Sweden, the pharmaceutical market grew by 6.8 percent (4.5 percent) (source: IMS Health). Oriola-KD's market share in pharmaceutical distribution in Finland was 43.7 percent (39.8 percent) in December 2007 and 45.9 percent (41.4 percent) in January-December 2007. Oriola-KD's market share in pharmaceutical distribution in Sweden was 40.3 percent (41.4 percent) in December 2007 and 42.0 percent (43.2 percent) in January-December 2007 (source: ATY and IMS Health). The streamlining measures implemented in 2006 allowed us to achieve in full our goal of EUR 5 million in cost savings in 2007. These savings enhanced the profitability of the Pharmaceutical Trade business segment in particular in 2007. Kronans Droghandel AB closed down an unprofitable packaging line at Mölnlycke in Sweden in the second quarter of the year. The number of employees within the Pharmaceutical Trade business segment at year-end 2007 was 856 (925). New distribution agreements Oriola-KD took over the distribution of Schering-Plough and Roche pharmaceuticals in Finland at the beginning of 2007. Schering-Plough's share of the Finnish pharmaceutical market is two percent and Roche's four percent (source: IMS Health). In Sweden, Oriola-KD started distributing Meda pharmaceuticals as of 1 January 2007 and assumed responsibility for all Pfizer distribution at the end of May 2007, having before that distributed half of Pfizer's pharmaceutical brands in Sweden. Meda has a one percent share of the Swedish pharmaceutical market while Pfizer holds nine percent of the market (source: IMS Health). Negotiations with principals in the year under review resulted in Oriola-KD agreeing to assume responsibility for the distribution of McNeil products in Sweden and of Wyeth products in Finland at the beginning of 2008. McNeil holds two percent of the market in Sweden and Wyeth two percent of the Finnish market (source: IMS Health). In the Pharmacy and Retail Marketing business, Oriola-KD and the Finnish Valio Ltd signed a cooperation agreement in August for Oriola to assume responsibility for the manufacture, distribution, sales and marketing of Valio Gefilus capsules. The cooperation agreement concerns the Finnish, Baltic and Swedish markets. Transferring distribution agreements The pharmaceutical principals transferring from Oriola-KD in the period under review hold a total combined share of some two percent of the pharmaceutical market in Finland and some three percent in Sweden. Transferring pharmaceutical principals were Amgen and Leo Pharma in Finland and Schering Nordiska and Amgen in Sweden. Negotiations initiated by Oriola-KD in Q2 with unprofitable, mainly small and medium-sized pharmaceutical principals on renewing distribution agreements in Finland and Sweden were completed by the end of the year. The new contracts are estimated to contribute to improved profitability starting in 2008. According to the situation at year-end 2007, Oriola-KD's share of the pharmaceutical distribution market in 2008 is estimated at some 45 percent in Finland and approximately 42 percent in Sweden. Healthcare and Dental Trade business segment The Healthcare and Dental Trade business segment's invoicing in January-December 2007 was EUR 271.2 million (EUR 275.4 million) and net sales were EUR 241.5 million (EUR 236.0 million). Operating profit excluding one-off items was EUR 14.9 million (EUR 10.4 million). Fourth-quarter invoicing came to EUR 68.6 million (EUR 75.3 million) and net sales to EUR 60.8 million (EUR 65.2 million). Fourth-quarter operating profit excluding one-off items was EUR 4.8 million (EUR 3.1 million). Significant changes in principals occurred in the Healthcare Trade business segment. Ties with Teleflex Medical were strengthened in Denmark, Sweden and Finland by including in the product range the Hudson anaesthesia products earlier acquired by the company. The part of Medith Oy's business acquired in early 2007 developed as planned and strengthened market standing in Finland. The product range will be augmented with Carl Zeiss Meditec's opthalmic surgery products in early 2008. A letter of intent was signed in September on the sale in spring 2008 of the marketing business of Zimmer orthopaedic products, marketed in Finland by Oriola-KD, to a Finnish sales company established by Zimmer. An agreement was also reached, as part of a wider international arrangement, on transferring the sale of Sysmex haematology products in Finland and the Baltics to Roche Diagnostics at the beginning of 2008. During Q2, Kronans Droghandel AB sold its home distribution business in the Swedish province of Skåne to Schenker Dedicated Service AB. The dental businesses in Sweden and Denmark were merged under an agreement concluded between Oriola-KD Corporation and Lifco AB on 7 June 2007. The merger of the businesses in Finland took place on 1 October 2007 and in the Baltics on 2 January 2008. Approval from the competition authorities was obtained in the third quarter. Subsequent to the merger and the cash contribution paid on 1 October 2007, Oriola-KD holds a 30 percent share of the merged dental business while the remaining 70 percent are held by Lifco. Dental trade invoicing in 2007 came to EUR 36.5 million (EUR 45.0 million), net sales to EUR 35.6 million (EUR 44.0 million) and operating profit excluding one-off items to EUR 2.2 million (EUR1.4 million). The operating profit in dental trade includes a EUR 1.0 million share of associated company's profit, i.e. 30 percent of the fourth-quarter net profit of associated company Lifco Dental International AB. The merger in the Dental Trade segment resulted in roughly 120 employees transferring to the new joint venture under their current terms and conditions of employment. The Healthcare and Dental Trade business segment had a payroll of 446 (570) employees at the end of the period under review. Board of Directors According to the company's corporate governance principles, the Chairman of the Board is elected by the General Meeting of Shareholders. The Vice Chairman is elected by the Board. The Board appoints the President and CEO of Oriola-KD and decides on the terms and conditions of his/her employment. The President and CEO has a six-month period of notice and is entitled to severance pay equal to 12 months' salary. The Annual General Meeting of Oriola-KD held on 13 March 2007 confirmed that the Board of Directors of Oriola-KD shall comprise seven members. Elected to seats on the Board of Directors for the current term of office were Pauli Kulvik, M.Sc. (Eng.) , MBA; Outi Raitasuo, attorney-at-law; Antti Remes, Honorary Counsellor; Olli Riikkala, M.Sc. (Eng.) , MBA; Jaakko Uotila, president and CEO; and Mika Vidgrén, pharmacist. Harry Brade, M.Sc. (Eng.), MBA, was elected to the Board as a new member. Olli Riikkala was elected as Chairman of the Board. Ernst & Young Oy was elected as Oriola-KD Corporation's auditor for the current term of office and it has designated Rabbe Nevalainen, Authorised Public Accountant, as principal auditor. APA Anu Ojala was elected deputy auditor. On 13 March 2007, Oriola-KD Corporation's Board of Directors elected from amongst their number Antti Remes as vice chairman and the following to the Audit and Compensation Committees: Audit Committee: Antti Remes, Chairman Harry Brade Outi Raitasuo Mika Vidgrén Compensation Committee: Olli Riikkala (Chairman) Pauli Kulvik Jaakko Uotila On 24 October 2007, the Board of Oriola-KD Corporation elected the following to serve on the company's Nomination Committee: Into Ylppö, Chairman Timo Maasilta Risto Murto Olli Riikkala Under the Rules of Procedure of the Nomination Committee adopted by the Board, the Committee is a body which has been established by the Board and tasked with preparing and presenting to the Board a recommendation for a proposal to be put before the Annual General Meeting of Shareholders concerning the composition and remuneration of the Board. The Board has assessed the independence of its members and determined all members to be independent both of the company and of its majority shareholders. Related parties Related parties in the Oriola-KD Group are deemed to comprise parent company Oriola-KD Corporation, subsidiaries and associated companies, the members of the Board and the President and CEO of Oriola-KD Corporation, other members of the management team of the Oriola-KD Group, the immediate family of the aforementioned persons, the companies controlled by the aforementioned persons, and the Oriola Pension Foundation. The Group has no significant business transactions with related parties except for pension expenses arising from defined benefit plans with the Oriola Pension Foundation. The notes to the financial statements of Oriola-KD Corporation provide additional information on intra-Group liabilities and guarantees given on behalf of Group companies. Oriola-KD Corporation has given no significant guarantees on behalf of Group companies. Oriola-KD Corporation share Trading volume of Oriola-KD Corporation's Class A and B shares in January-December 2007: Class A Class B Trading volume, million 12.1 71.6 Trading volume, EUR million 40.2 231.8 High, EUR 3.70 3.68 Low, EUR 2.64 2.57 Close at 31 Dec 2007, EUR 3.00 3.00 The traded volume of Oriola-KD Corporation shares in the review period equalled 59.2 percent of total outstanding shares. The traded volume of Class A shares in the period under review amounted to 23.1 percent of average outstanding stock and that of Class B shares to 80.5 percent. Oriola-KD Corporation had a market capitalisation of EUR 423.8 million at 31 December 2007. Under Article 3 of the Articles of Association, a shareholder may demand conversion of Class A shares into Class B shares. During 2007, a total of 5,049,235 Class A shares were converted into Class B shares. At the end of the year under review, the company had 51,245,405 Class A shares and 90,012,423 Class B shares. On 17 October 2007, the American Deccan Value Advisors L.P. informed Oriola-KD Corporation in accordance with Chapter 2, section 9 of the Finnish Securities Market Act that due to share transactions made on 17 October 2007, the holdings of the companies administered by Deccan Value Advisors L.P. had fallen below one twentieth (1/20) of the share capital of Oriola-KD Corporation. The Annual General Meeting of 13 March 2007 authorised the Board to decide on a directed acquisition of treasury shares and a bonus issue to the company. The number of Class B shares thus acquired or issued shall not exceed 1,450,000. The authorisation to acquire remains in force for a period not to exceed eighteen (18) months from the decision taken by the Annual General Meeting. On the same occasion, the AGM authorised the Board to allocate 650,000 B shares to a share incentive scheme for top management in the Oriola-KD Group and to sell no more than 800,000 B shares in public trading organised by OMX Nordic Exchange Helsinki. Companies in the Oriola-KD Group held no parent company shares at the end of the review period. In November 2006, the Board of Oriola-KD Corporation decided on a new share incentive scheme for key employees in the Oriola-KD Group. Some twelve key employees are eligible for the scheme. The scheme encourages sustained effort on the part of key employees by strengthening their commitment to the operation and development of the company. Any bonuses are determined on the basis of the development of Oriola-KD's operating profit and return on capital employed (ROCE) in 2007-2009. Bonuses are payable in 2008-2010 in the form of stock, cash or a combination of the two. Except for certain special circumstances, the bonus shares may not be transferred for a period of one year from payment of the bonus. The number of Class B shares included in the scheme may not exceed 650,000. The incentive scheme comprises three earning periods of one year. The Board decides on the target group of the earning period and the bonuses of the key employees in the target group at the beginning of each earning period. Proposal for distribution of dividend The parent company of Oriola-KD is Oriola-KD Corporation, which according to the balance sheet of 31 December 2007 held distributable assets of EUR 63.1 million (EUR 59.7 million). The Board proposes to the AGM that a dividend of EUR 0.08 per share be paid for 2007 (EUR 0.06 per share). General Meeting of Shareholders The Annual General Meeting of Shareholders of Oriola-KD Corporation will be held on 17 March 2008 starting at 5pm at Helsinki Fair Centre. It will address the matters mentioned in Article 10 of the Articles of Association as well as any proposals by the Board of Directors. The Board will decide on a later date on the notice of the meeting and the proposals to be included therein. The notice of the meeting will be published in newspaper Helsingin Sanomat on or about 24 February 2008. Publication of Annual Report Oriola-KD Corporation will publish its Annual Report for 2007 in the week of 3 March 2008. Environment Oriola-KD supports sustainable development in all its activities and attends to environmental concerns by conforming to an environmental system consistent with its operations and aiming to minimise adverse environmental impacts. Transportation and the logistics management of large flows of goods are an essential part of operations at Oriola-KD. The efficiency and economy of distribution are based on a scheduled route network according to which goods deliveries are timed in a bid to minimise total travel. Deliveries are optimised with information systems developed for this purpose. Deliveries to established customers are packed in recyclable plastic boxes that can be used hundreds of times. Large volumes of goods are delivered in recyclable packaging or on pallets or rolls. Waste prevention, reuse, sorting and recycling are essential principles of waste management. Pharmaceutical and other hazardous waste is sorted and delivered to a hazardous waste treatment plant for disposal with the methods required by medical and environmental authorities. Risks The Board of Directors of Oriola-KD has approved the company's risk management policy in which the operational model, principles, responsibilities and reporting in risk management have been determined. The Group's risk management seeks to identify, measure and manage risks that may threaten the operations of the company and the achievement of goals set for them. Roles and responsibilities relating to risk management have been determined in the Group. Oriola-KD's risks are classified as strategic, operative and financial. Risk management is a key element of the strategic process, operative planning and daily decision-making at Oriola-KD. Oriola-KD has identified the following most significant strategic and operative risks in its business: * changes in bargaining position vis-à-vis suppliers and customers * impacts on business concepts of potential changes in the structure of the Swedish market * maintenance of cost-effectiveness and flexibility in costs * provision of competitive products and services in expanding and consolidating markets * expansion-related risks in new markets and businesses * commitment of key employees The major financial risks for Oriola-KD involve currency exchange rates, interest rates, liquidity and credit. During the period under review, there were no material changes in the risks and uncertainty factors faced by Oriola-KD in the near future. Events after the period under review The dental trade businesses of Oriola-KD in Estonia, Latvia and Lithuania were merged with and into Lifco Dental on 2 January 2008. A government-appointed advisor recommended on 8 January 2008 that the Swedish pharmacy market be deregulated by the year 2009. The decision on deregulation is proposed for 2008. Oriola-KD is preparing for possible changes in the pharmacy market. The Nomination Committee of Oriola-KD Corporation gave its recommendation to the Board of Directors for the proposal to the Annual General Meeting on 17 March 2008 concerning the composition of the Board of Directors as follows: * The number of Board members would be seven * As Board members would be re-elected Mr. Harry Brade, Mr. Pauli Kulvik, Ms. Outi Raitasuo, Mr. Antti Remes, Mr. Olli Riikkala, Mr. Jaakko Uotila and Mr. Mika Vidgrén * Mr. Olli Riikkala would be re-elected as Chairman of the Board Following remunerations are recommended to be paid to the Board of Directors: * Chairman: annual fee EUR 44,000, fee for each meeting EUR 800, telephone as a fringe benefit * Vice Chairman: annual fee EUR 27,500, fee for each meeting EUR 400 * Other members of the Board: annual fee EUR 22,000, fee for each meeting EUR 400 * The annual fees to be paid in cash no later than 1 April, 2008 * Fees for meetings would be paid respectively also to members of the Corporate or Board Committees * Travel expenses would be paid in accordance with the travel policy of the company Future outlook Oriola-KD's outlook for 2008 is based on external market forecasts, agreements with principals, cumulative orders and management's estimates. Long term fundamentals and growth prospects are deemed favourable in the healthcare market. Oriola-KD estimates that the pharmaceutical market in Finland and Sweden will grow by about 3-5 percent annually over the next few years, which is in line with the longer-term average growth rate of these markets. Oriola-KD estimates that growth in the market for healthcare equipment and supplies will outpace that of the pharmaceutical market in Finland and in Sweden. Oriola-KD's invoicing in 2008 is projected as higher than the previous year's comparable invoicing, mainly due to the growth of the pharmaceutical market. Invoicing in the Healthcare and Dental Trade business segment is projected as lower than in the previous year due to the merger of Dental business with and into Lifco Dental and the sale of the home distribution business in Sweden. Operating profit in the Pharmaceutical Trade business segment is anticipated to see positive development in 2008. Oriola-KD invests in growth initiatives and to the potential deregulation of the Swedish pharmaceutical market, which may cause additional costs in 2008. The merger in the dental business is estimated to improve comparable operating profit for 2008. Operating profit for 2008 in the healthcare trade business is expected to fall from the previous year due to the reported changes in principals in Finland. Oriola-KD's operating profit excluding one-off items for 2008 is expected to exceed the previous year's comparable operating profit. Tables Income Statement, 1.1.- Pro forma 1.10.- Pro forma 1.7.- EUR million 31.12.2007 1.1.-31.12.2006 31.12.2007 1.10.-31.12.2006 31.12.2006 Net sales 1377.3 1334.7 331.6 343.7 662.7 Cost of goods sold -1232.0 -1195.4 -294.6 -306.7 -592.0 Gross profit 145.2 139.2 37.0 37.0 70.7 Other operating income 2.3 4.0 0.8 2.7 3.2 Selling and distribution expenses -104.5 -105.5 -27.5 -28.2 -51.3 Administrative expenses -14.9 -20.3 -4.2 -6.1 -10.4 Profit from associated company 1.0 0.0 1.0 0.0 0.0 Operating profit 29.1 17.4 7.0 5.3 12.2 Financial income and expenses 1.9 1.0 0.4 0.3 0.5 Profit before taxes 31.0 18.4 7.4 5.7 12.7 Tax expense*) -7.3 -4.4 -1.5 -1.1 -2.8 Profit for the period 23.7 14.0 5.9 4.6 9.9 of which available for: Parent company shareholders 23.3 13.6 5.9 4.5 9.6 Minority interest 0.4 0.5 0.0 0.1 0.4 Earnings per share: - Basic, EUR 0.16 0.10 0.04 0.03 0.07 *) The tax expense for the period 2007 has been calculated as the proportional share of the total estimated taxes for the financial year. The tax expense for 2006 Pro forma are based on published figures for Orion Corporation's Wholesale and Distribution Division extracted from financial data for Orion Corporation. Income statement excluding one-off items, 1.1.- Pro forma 1.10.- Pro forma 1.7.- EUR million 31.12.2007 1.1.-31.12.2006 31.12.2007 1.10.-31.12.2006 31.12.2006 Net Sales 1377.3 1334.7 331.6 343.7 662.7 Cost of goods sold -1232.0 -1193.8 -294.6 -306.7 -592.0 Gross profit 145.2 140.8 37.0 37.0 70.7 Other operating income 2.3 1.9 0.8 0.6 1.1 Selling and distribution expenses -104.5 -102.3 -27.5 -26.6 -49.7 Administrative expenses -14.9 -17.9 -4.2 -5.5 -9.3 Profit from associated company 1.0 0.0 1.0 0.0 0.0 Operating profit 29.1 22.6 7.0 5.5 12.8 Financial income and expenses 1.9 1.0 0.4 0.3 0.5 Profit before taxes 31.0 23.6 7.4 5.9 13.3 Balance sheet, EUR million 31.12.2007 31.12.2006 Non-current assets Property, plant and equipment 56.3 63.3 Goodwill 33.9 34.7 Other intangible assets 4.5 7.5 Investments in associates and available-for-sale investments 27.1 0.0 Other non-current receivables 10.6 10.0 Deferred tax assets 0.2 0.0 Non-current assets total 132.5 115.6 Current assets Inventories 180.9 181.0 Trade and other receivables 201.0 201.8 Cash and cash equivalents 131.0 112.9 Current assets total 512.9 495.6 ASSETS TOTAL 645.4 611.2 Balance sheet, EUR million 31.12.2007 31.12.2006 Non-current liabilities Share capital 36.2 36.2 Other funds 30.1 30.1 Retained earnings 129.2 116.9 Net assets of the parent company shareholders 195.5 183.2 Minority interest 8.1 8.5 Net assets total 203.6 191.8 Non-current liabilities Deferred tax liabilities 8.7 9.7 Pension liability 4.4 4.1 Provisions 0.0 0.0 Interest-bearing non-current liabilities 0.3 0.5 Other non-current liabilities 0.4 0.4 Current liabilities total 13.8 14.8 Current liabilities Trade payables and other current liabilities 387.4 370.9 Provisions 0.0 1.9 Interest-bearing current liabilities 40.7 31.8 Current liabilities total 428.1 404.6 EQUITY AND LIABILITIES TOTAL 645.4 611.2 Changes in shareholder's equity: Equity of the parent Share Other Translation Retained company Minority EUR million capital funds differences earnings shareholders interest Total Shareholder's equity 1.1.2007 36.2 30.1 0.0 116.9 183.3 8.5 191.8 Translation differences -2.5 -2.5 -0.4 -2.9 Dividend Paid -8.5 -8.5 -0.4 -8.9 Hedge on net investment in foreign subsidiary Change in minority interest Other changes -0.4 -0.4 -0.4 Share based payments 0.4 0.4 0.4 Taxes related to items booked into equity Items booked into equity Profit for the period 23.3 23.3 0.4 23.7 Shareholder's equity 31.12.2007 36.2 30.1 -2.5 131.7 195.5 8.1 203.6 Cash flow statement, 1.1.- Pro forma 1.1.- EUR million 31.12.2007 31.12.2006 Operating profit 29.1 17.4 Depreciation 10.4 11.7 Change in working capital 6.8 25.9 Cash flow from financial items and taxes -5.5 -6.3 Other adjustments -1.9 3.9 Cash flow from operating activities 39.0 52.7 Cash flow from investing activities -19.1 -10.2 Cash flow from financing activities -0.7 35.1 Net change in cash and cash equivalents 19.1 77.6 Cash and cash equivalents at beginning of period 112.9 35.0 Foreign exchange difference -1.0 0.4 Net change in cash and cash equivalents 19.1 77.6 Cash and cash equivalents at end of period 131.0 112.9 Change in property, plant and equipment Pro forma 1.1.- 1.1.- milj.EUR 31.12.2007 31.12.2006 Carrying amount at the beginning of the period 63.3 70.2 Additions 5.1 7.3 Disposals -3.5 -7.6 Depreciation -7.3 -8.0 Translation differencies -1.4 1.3 Carrying amount at the end of the period 56.3 63.3 Key figures 1.1.- Pro forma and rations 31.12.2007 31.12.2006 31.12.2006 Equity ratio, % 33.7% 33.1% 33.1% Equity per share, EUR 1.38 1.30 1.30 Return on capital employed (ROCE), % 14.2% 8.6% 12.1% Return on equity, % 12.0% 7.4% 10.3% Net interest bearing debt, Me -90.0 Me -80.6 Me -80.6 Me Gearing, % -44.2% -42.0% -42.0% Earnings per share, EUR 0.16 0.10 0.07 Average number of share, tpcs *) 141 258 141 258 141 258 *) In the calculation for the share related key figures of 2006, number of shares at the end of period has been used. In the calculation for the share related key figures for the period 1.1-30.6.2006 average number of shares for the period has been used. Forward contracts and contingent liabilities 31.12.2007 Positive Negative Nominal values EUR million fair value fair value of contracts Hedging of a net investment in an independent foreign unit 0.0 Other forward and currency swap contracts -0.0 53.0 31.12.2006 Positive Negative Nominal values EUR million fair value fair value of contracts Hedging of a net investment in an independent foreign unit -0.3 26.5 Other forward and currency swap contracts 0.0 0.0 4.6 Pro forma EUR million 31.12.2007 31.12.2006 31.12.2006 Contingent for own liabilities Guarantees given 3.1 4.8 4.8 Real-estate mortgages given 2.0 1.0 1.0 Mortgages on company assets 21.9 22.9 22.9 Other guarantees and liabilities 1.9 2.5 2.5 Total 28.9 31.2 31.2 Contingent for liabilities of other parties Guarantees given on behalf of external parties 0.0 0.0 0.0 Leasing-liabilities (operating liabilities) 0.3 0.6 0.6 Rent contingent 5.0 6.5 6.5 Invoicing by Pro forma business segment, 1.1.- 1.1.- 1.7.- EUR million 31.12.2007 31.12.2006 31.12.2006 Pharmaceutical Trade business segment 2253.4 2064.7 1027.7 Healthcare Trade 234.7 230.4 115.5 Dental Trade 36.5 45.0 22.8 Group Total 2524.5 2340.1 1166.0 Oriola-KD has two business segments: the Pharmaceutical Trade business segment and the Healthcare and Dental Trade business segment. The Healthcare and Dental Trade business segment will be renamed the Healthcare Trade business segment at the beginning of the 2008 financial year but the share of profits from the associated company in dental trade will continue to be recognised for the segment Pro forma Net sales by business 1.1.- 1.1.- 1.7.- segment, EUR million 31.12.2007 31.12.2006 31.12.2006 Pharmaceutical Trade business segment 1135.8 1098.7 543.5 Healthcare Trade 205.9 192.0 97.0 Dental Trade 35.6 44.0 22.2 Group Total 1377.3 1334.7 662.7 Operating profit by Pro forma business segment, 1.1.- 1.1.- 1.7.- EUR million 31.12.2007 31.12.2006 31.12.2006 Pharmaceutical Trade business segment 17.4 13.0 8.6 Healthcare Trade 12.6 7.2 5.4 Dental Trade 2.2 1.0 0.7 Group items -3.2 -3.8 -2.6 Group total 29.1 17.4 12.2 Average number of personnel 1 432 1 548 1 556 Number of personnel at the end of the period 1 302 1 495 1 495 Operating profit by business segment Pro forma excluding one-off items, 1.1.- 1.1.- 1.7.- EUR million 31.12.2007 31.12.2006 31.12.2006 Pharmaceutical Trade business segment 17.4 15.6 9.0 Healthcare Trade 12.6 9.0 5.6 Dental Trade 2.2 1.4 0.7 Group items -3.2 -3.4 -2.6 Group total 29.1 22.6 12.8 Invoicing by business segment, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/ EUR million 2007 2007 2007 2007 2006 2006 2006 2006 Pharmaceutical Trade business segment 571.4 543.0 575.9 563.2 527.7 500.0 529.0 508.1 Healthcare Trade 67.3 52.1 56.7 58.6 62.7 52.8 55.5 59.4 Dental Trade 1.3 10.2 11.8 13.2 12.6 10.2 10.2 11.9 Group Total 640.0 605.2 644.4 634.9 603.0 563.0 594.7 579.4 Net sales by business segment, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/ EUR million 2007 2007 2007 2007 2006 2006 2006 2006 Pharmaceutical Trade business segment 270.7 278.3 295.5 291.3 278.6 264.9 280.2 275.0 Healthcare Trade 59.5 45.6 49.2 51.7 52.8 44.2 45.6 49.4 Dental Trade 1.3 9.9 11.5 12.9 12.3 9.9 10.0 11.7 Group Total 331.6 333.8 356.1 355.8 343.7 319.0 335.8 336.1 Operating profit by business segment, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/ EUR million 2007 2007 2007 2007 2006 2006 2006 2006 Pharmaceutical Trade business segment 2.7 5.0 4.6 5.1 4.0 4.5 1.8 2.7 Healthcare Trade 3.9 3.4 2.8 2.6 2.8 2.6 1.1 0.7 Dental Trade 1.0 0.1 0.2 1.1 0.1 0.7 -0.2 0.5 Group items -0.5 -0.5 -1.2 -1.0 -1.6 -0.9 -0.6 -0.6 Group total 7.0 8.0 6.3 7.8 5.3 6.8 2.1 3.3 Operating profit by business segment excluding one-off items, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/ EUR million 2007 2007 2007 2007 2006 2006 2006 2006 Pharmaceutical Trade business segment 2.7 5.0 4.6 5.1 4.1 4.9 3.9 2.7 Healthcare Trade 3.9 3.4 2.8 2.6 3.0 2.6 1.2 2.1 Dental Trade 1.0 0.1 0.2 1.1 0.1 0.7 0.0 0.7 Group items -0.5 -0.5 -1.2 -1.0 -1.7 -0.9 -0.6 -0.2 Group total 7.0 8.0 6.3 7.8 5.5 7.2 4.6 5.3 Pro forma Net sales by market, 1.1.- 1.1.- 1.7.- EUR million 31.12.2007 31.12.2006 31.12.2006 Finland 570.1 538.6 270.7 Other Nordic countries 756.5 751.4 369.6 Other Europe 49.2 43.2 21.6 Other countries 1.4 1.5 0.8 Total 1377.3 1334.7 662.7 Net sales by market, 10-12/ 7-9/ 4-6/ 1-3/ 10-12/ 7-9/ 4-6/ 1-3/ EUR million 2007 2007 2007 2007 2006 2006 2006 2006 Finland 143.4 135.3 143.4 148.1 139.5 130.7 133.5 134.9 Other Nordic countries 174.9 187.1 199.6 195.0 191.8 178.3 191.7 189.5 Other Europe 12.8 11.3 12.5 12.6 12.3 9.3 10.1 11.6 Other countries 0.5 0.1 0.7 0.2 0.2 0.7 0.5 0.1 Total 331.6 333.8 356.1 355.8 343.7 319.0 335.8 336.2 Espoo, 6 February 2008 Board of Directors of Oriola-KD Corporation Oriola-KD Corporation Eero Hautaniemi President and CEO Kimmo Virtanen CFO Further information: Eero Hautaniemi President and CEO Tel. +358 (0)10 429 2109 Email: eero.hautaniemi@oriola-kd.com Kimmo Virtanen CFO Tel. +358 (0)10 429 2069 Email: kimmo.virtanen@oriola-kd.com Pellervo Hämäläinen Vice President, Communications and IR Tel. +358 (0)10 429 2497 Email: pellervo.hamalainen@oriola-kd.com Distribution: OMX Nordic Exchange Helsinki Oy Main media Released by: Oriola-KD Corporation Corporate Communications Orionintie 5 FI-02200 Espoo, Finland www.oriola-kd.com
Oriola-KD Corporation's financial statements for 1 January - 31 December 2007
| Source: Oriola-KD Oyj