Oriola Oyj (ORIOLA) Earnings Call Transcript & Summary

Good morning. Nice to see people in the audience, and good morning also to all who are online. Welcome to Oriola's Investor Day 2022 here at Sanomatalo's Eliel Studio. My name is Mikael Wegmüller. I'm Vice President of Communications and Sustainability, and I will be acting as the host for this session and also moderating the Q&A. Let's have one safety instruction before we start, and that is in case of evacuation, which I hope we don't need to do, there are 2 doors on the left side and one there. So if something, you know where to go. Then the second note is the disclaimer presentation. Anything communicated by our speakers and also verbal forward-looking statements are under the disclaimer. The presentation itself has already been uploaded on our website, and the webcast will be uploaded right after the session itself and available for everybody. Let's have a look at the program. So we'll be starting with Katarina Gabrielson, Oriola's CEO, talking about the transformation and the way forward; then continuing with Petri Boman, who will talk about Supply Chain as a Service. He is the Chief Supply Chain Officer. Then brief introduction of Timo Leinonen, our new CFO. Then we'll head out for a short break, 15, 20 minutes and continue with data-driven commercial model, Hannes Hasselrot, Chief Commercial Officer; and then take and conclude the key takeaways. We will have Q&As in between the speakers, but then the final Q&A at the end. And as you know, online, you can start posting questions already during the presentation. I would say that, that's more or less for my intro, and I give the word to Katarina Gabrielson. The stage is yours.

Thank you, Mikael. And I agree absolutely with what Mikael said here. I have had some of these webcasts during -- 3 of them, I think, since quarter 2. And it has been like very much one-way communication. So I really hope we can have a little bit more like questions or so during this meeting. I'm Katarina Gabrielson, I'm the CEO of Oriola, and I've been that since spring time. And I have a quite extensive number of years in the company. I've been here for 10 years working both in Finland and Sweden but with different positions. And I will then try to guide you through now this presentation. If we look for what Oriola really is doing, you can say that we have a long tradition in the pharmaceutical sector. And we have like a well-established name and are well known in the Nordics. Our main goal is really to secure the distribution and availability, and that is really the core of our company and that's also what you have seen, what we have been doing during the year. We enhance the safe use of medicine and health care products, and it's really, really important for us that all the patients and all our customers in the end get the right amount of products in the right time when we deliver it. If someone would ask me what Oriola really is, it's like an elevator pit -- or what we're doing in a nutshell, you can say that we are serving the customers for more than 100 years. We have like a long track record in both countries, a little bit longer in Sweden than we have in Finland. We also then securing the availability of pharmaceuticals in both countries. We have a quite extensive market share in both countries. This long tradition is then setting a foundation for the knowledge that we have, and we are experts in the pharmaceutical sector. And we've also done is working with our purpose, and that is Health for life. Our customer sees us as a trusted partner, and we are enhancing the sustainability in our value chain. You can say that, yes, you're distributing a lot of things, but it's really, really important for us to have like environmental thinking in all -- in everything we are doing. We're seeing ourselves as a forerunner in providing advisory services to pharmaceutical companies. Normally, we call that as Expert Services, and you will hear about Expert Services more during this presentation. And this is one of the areas that we are working together with the core of our business. What we can see here is then, like I said before, we have a strong position in the health and well-being markets. So we are working both on the pharmaceutical side but also with other things. And we are -- having done a strong position in both Sweden and Finland. We are working through the local markets, but we're also working in the management team, especially but also in other areas across borders. That's really important for us because by working cross borders, but also being local, we can take an advantage of what's happening faster in the markets. We have a wide offering of high-quality Expert Services, like I said here before. And that also is providing us with insights that can help us to support our customers in the end, and Hannes will tell more about this later on. We are working on a highly regulated markets. And the thing here is that this both pros and cons, of course, because, of course, we need to adopt the regulation that we have but we also have done higher entering barriers to the markets in these cases. And we are also working then as a professional supply chain and warehouse management, and that's where Petri Boman will tell a little bit more about later on. The good thing to remember here is, in fact, that also the European Commission have now done a proposal or a directive, it's called, for the resilience of critical entities. And this part of the market has then now been taken into this recognition of a full service health -- that full service healthcare providers should be as deemed as critical infrastructure. That means that when we come to, like, for example, energy shortages and other things, we will be like higher up in this parties who will then have the energy and not so much energy shortages, for example. If you look at then what we have done during this year. We have gone during 2022 with short-term initiatives, and we will go more towards a long-term transformation process. And I will take you through what best we have done and what we will do. During last year, we started with the turnaround, and the reason was very much a low profitability that we had. And we have done a complexity in the structure and also in operations that lacked focused. And during this year, we have worked very heavily with that one. Our short-term focus on the turnaround activities that we have done is really about achieving cost savings, and you will see later on that we have achieved this one. We have also announced a new operating model then, like I said here before, working like on a high-level, cross-border but on a local level, local. And we also have completed a combination of Euroapotheca's Apoteksgruppen and our Kronans Apotek to the new Kronans Apotek. During now what we are doing, we can say that we are focusing now on the core of what we should do during this year, and we are harvesting successfully on the actions that we have done and we will continue to deliver on our strategic agenda for 2022. And what we are looking at here is then in a way like the deliverables that we have done during '22. If we look for the simplifying operating model, we announced the renewal of our operating model in the mid-September. It was active from 3rd of October. And it has impacted on the composition of the management team with this cross market that I already talked about. We are also then combining the knowledge and expertise to become more agile and more efficient. And this is to capture the full value of the core of our operations and also the wholesaling and distribution of pharmaceutical but as well also the expert services to our pharmaceutical companies. We will continue now to provide a wide portfolio of health and well-being products and also dose dispensing to the markets. So we have like this 3 -- or 4 maybe these areas to work on. We will also look in down during the year on the rigorous cost management. And in the end of 2021, last year, we completed the cooperation negotiations in both Finland and Sweden. And that's something that you can see in the money that we have already saved. We have executed also the plan to optimize and restructure the organization to reduce the complexity and improve our profitability, and this is then also very much about mitigating our general cost increases. I'm normally saying like this. If we haven't started this program, we will have been in a quite bad situation right now. So I'm really, really happy that we have done this during the year and also, in fact, implemented a mindset of cost control in the organization because now -- if you should start the journey now, it would have been like much worse for us. What we can see in the business structure, we have done 2 tactical changes during the year. During the first quarter, we announced the planned combined Kronans Apotek and Euroapotheca, but we also then announced the merger -- divestments, it's called, not the merger -- it's the divestment of Farenta, the staffing business that we had before. And we have also improved the relationship -- the customer relationship management. It's about continuous improvement of the delivery accuracy and supply chain planning and it's also about developing our com services. And we have worked very much on the digital platform. So we have a new digital services tools for customer, and that is serving now more than 10,000 business-to-business customers and their end users. And we have, in fact, details here to show that we have worked very much and succeeded with the performances that we can see. I will not go through all of these ones. But one that I think we also brought up during the quarter 3 is in fact, the savings. We had a savings target of EUR 7 million during this year, and we have achieved that one. So I'm really, really proud and really thankful for the full organization to help with this. We are also growing at the market growth. We are a stable partner, in this case, a stable company. We are growing in market growth. We are not above it but we are on where we should be. The adjusted EBIT has also increased from the 2021 level. So we have increased in quarter 3 from EUR 8.3 million to EUR 16.8 million. And then, of course, this is also affecting the net working capital in a positive way. And we will come a little bit more to the financials later on. The rest ones is not -- is also, of course, important, but I will not go through the whole list here. One thing that we then did during the year is then the combination of the pharmacy businesses into a new company. And this is much more about a reminder of what we have done, but you can say that it is now from 3rd of October, a new company. The name of the company is Kronans Apotek. And that will be the brand that this chain is then using. It will be the third largest chain -- or it is the third largest chain in Sweden, but more strong than it was before. And you can also say then, okay, how is this then affecting our like financials, and you can see some parts of it here. I will also add here that if you look at the distributable funds that we have in the company, in the end of 2021, we had EUR 265 million in the distributable fund. During '22, now we have distributed a dividend of EUR 7 million, and that leaves us now with EUR 258 million as distributable funds. So it means like -- that we are a stable company even after this closure here. The confirmation then. You can say that what we do now is to go from a turnaround to a transformation phase, and that's a little bit more long-term active. And we will continue to work on the turnaround things that we have done with these short-term initiatives to drive the profitability. The focus has been very much on delivering the action plan that we have set during this year and also to work with efficiency across the businesses. The transformation that we then have now gone into will then continue during 2023, and that will focus on driving profitable growth and also further improve our commercial and supply chain excellence. And you can say that during the next year, our focuses would be mainly the parts that we can see on the right side here in the picture. If you go for profitable growth, it's very much about finding new customers, it's about productivity improvements and all these areas that you can find in here. Then we will have the commercial policies and also work more in an efficient way in the commercial model set up. So we will renew that, and Hannes will most likely come back to that also later today. And also the -- what we'll come back to is the operating model evolution. We will look at data-driven businesses and also take more fact-based decision in the -- when we are doing these kind of things. The governance and culture renewal is very much about like infra security -- information security, it's about monitoring capabilities and also security of digital services and so on and the environmental parts we have there. Operational site improvements, projects, we'll come back with Petri in his presentation. But it's a lot about working with efficiency improvements, technology renewals and also safety and quality improvements, so very basic parts, you can say. And then we have the mitigation, of course, of the inflation. We are not immune of inflation. I think I have said that in all presentations I've had during the year, but we're still not immune. There is no vaccine for that one, and this is something that we really need to do. And of course, we need to do the general efficiency improvements and also price increases to really be able to mitigate this. If we take the key priorities and group them together, it will be done in 3 different areas. So you can say that the main topic here is like in 3 areas: it's profitable growth, it's efficiency and then it's culture. And we'll go through each one of them a little bit deeper here. If you look for like profitable growth, yes, of course, it's about getting new customers. But it's about like having a proactive service and joint business opportunities with the customers. They want to buy the things we should sell and want to sell, and that's something we should work within our like capabilities for the commercial sector. We are knowing a lot about both sides of the customer scale, so both the pharma companies and also the pharmacies is something that we know about and also the veterinarians, et cetera. And we should use this to look at the full service. You can say it's about the life cycle and also adding value-added services, not only the distributing part. And then, of course, we need also to look at the streamlined portfolio because if we do everything, we will not be efficient and we can't do it in a good way. And we need to go more into data-driven business and also take data-driven decisions and work on our digital platforms, even if we have now started with some digital customer service tools, et cetera, it's more to come. If we then go into the efficiency part, and highlighting some example of that. It's a lot about like the stability and the performance in the delivery that we do every day. Our customers are really, really expecting that they get the medicines every day because, otherwise, in the end, there is a patient who is not feeling well or might even be worse in these aspects. We will also work a lot with strategic sourcing and also optimizing the indirect buying processes. You can say that this is a way where we also mitigate our cost pressure from the outside. -- and also improving inventory rotation. Of course, going very much to both like how we do cost savings, but also the net working capital parts in these cases. Then going to the culture part. Yes, we have a new organization. And when you have a new organization, you always need to look at how you implement it. We have not made a revolution in the organization model. It's more like an evolution. And it's important that we are like taking care of that and that all our people feel secure and that also that they have an accountability that we really like, know what we're doing in the organization. So we will take a lot of trainings. There will be trainings, both for the top management and also on the commercial side, for example, to like implement this one and gets like more to the culture where we want to be. Then going to some financials. We are jumping a little bit back here -- or back and forth. But if you look for our invoicing and net sales, you can say that invoicing for us, for Oriola, it's more like showing the volume that we are like distributing and the net sales is a little bit more like what we really do. It's like we have a lot of consignment stock in our business, and therefore like we are quite often looking at net sales when we are looking at our figures, but invoicing is also important. We can see a small seasonality visible in our sales and to the invoicing figures. And you can see it quite much here. It's like in quarter 2 and quarter 4, we normally have like the strongest -- tend to be the strongest quarters for invoicing and net sales. And we can also say that especially now when the Swedish krona is quite weak, that's also affecting the net sales. And if we look at the growth that we have, it's in line with the market, but what we have here then is like -- I think at least I know there's one more for here from Sweden, and we know that it's very expensive now to sometimes visiting Finland since the krona is as it is. Looking at EBIT. This is also old figures for you. We have a clear improvement in the financial performance, and I'm really, really happy to see this. This was one of the main topics then that we had with the turnaround actions. And this is then driven by the initiatives and the market growth that we have. And you can see that quarter-on-quarter, we have like then beat last year's quarter. So I know that all of you want me to say something about quarter 4, but I will not do that. Let's go with that one in February later on. But we will continue to do what we can to deliver in the best way. Then if we look for the cash flow. We have a strong cash flow in the year-to-date figures. It has further strengthened our balance sheet, and when including both continuing and discontinuing operations we can really see this. The net debt has declined and was EUR 36 million at the end of quarter 3, and for the year of '22, this figure includes then the only continuing operations. Including the discontinued operations, the net debt at the end of quarter 3 was EUR 69 million, and that's also down if you look at year-over-year. The decline in the net debt was driven then by improved cash flow and also the results. And compared to the previous year, it's quite, as I say, it's a good way of improving. We can also say here that in the comparison period, the consumer lease liabilities were included in the net debt, so it's like not apples-to-apples to some extent, but it still shows where we are going. And you can also say here that the operating activities that we have is very much done something that is like bringing us to a positive net debt or better net debt. Looking at the long-term financial targets. This is mainly for the continuing operations. The Roche is still with discontinued operations. The reason why it's there is that it's hard to then open the books and do these kind of things. So the Roche will be without the discontinued operations after the quarter 4. But in 3 of these 4 areas, we have reached our long-term financial targets, and I think that's really good. And I also want to highlight here the dividend policy because we are like a company that has maybe a track record of not being like paying that much dividend. But we have a policy that it is about increasing the annual dividend of at least 50% of earnings per share. And the management team, of course, is like, we don't have a policy just for fun, let's say it like that. So we will do what we can to deliver on the policy. Then going to markets and trends. If we look in Sweden and Finland, the combined wholesale markets in Sweden and Finland for pharmaceuticals has reached about EUR 8 billion. So it's quite a big market. And we can see that the growth rate is around 6%, and we are on that level in Oriola. So we are like -- we are not losing market shares. We are not taking that much either, but we are where we should be. The market growth is impacted, as you can see here, by COVID. Especially you can see it down -- it's a little bit flatter in 2020 and 2021. But we've also now looked when we go into inflation periods and so on, and we can see that it's not that much affecting like our business. It's quite a stable business in that aspect. I know Hannes will come back on this to some extent later. So in that aspect, a stable position. And we will also come back later on in Hannes' presentation about market trends and drivers because we see that the markets are growing, and this is driven by these trends. There is aging populations and it's also increased interest in well-being in all over the markets in both countries. There is also increased volume in the generics medicines, and also the regulations is safeguarding the availability. It's like -- I think some of you have read in the media now that there is a shortage of pharmaceuticals to some extent. But what we can do is that we deliver the things we have in the warehouse every day and try to get that out to the customers. We can also see that the rise of the online pharmacies or online pharma is increasing, and also that there has been more pet owners especially during the COVID times. And those veterinarians is an important customer group, especially in Finland but also for Sweden, and it's a growing group that we are like. Not touching so much in this presentation but still an important one. And of course, what I said many times, we are not immune to inflation and cost inflation. We have seen it especially in 2 areas, that's electricity prices and also, of course, diesel prices, fuel prices. We haven't seen it so much in labor cost yet. Let's see what's happening now in the next year when it comes to union negotiations and so on. Time will tell, but we need them to mitigate this inflation and we have already been touching that before. Then I mentioned before is sustainability. And sustainability is something that is really, really important for us. It's like something that we not only try to say, it's something that we really want to live also. And it's the core of our business, and we are committed according to the UN Sustainable Development Goals. And we're mainly working down with 4 goals. It's the Goal 3, and that's about ensuring healthy lives and promote well-being for all at all ages. And it's about Goal 8, that is then about promote sustained, inclusive and sustainable economic growth. And it's about like productive employment and decent work for all. So it's very much about how do we -- are as like an employer. Goal 12, it's about sustainable consumption and production patterns. How do we work in our warehouses, et cetera. And then Goal 13, to take urgent actions to combat climate changes and its impacts. This is the ones that we see is like most close to our businesses. And we have also have done long-term sustainability goals, and I think this has already been communicated. But it's about society, about our people, and it's about planet. And we have like then that we should be carbon-neutral by 2030, we should have a sustainable employee journey and also improving people's health. So that's very much what we work with in the long-term sustainable parts. And we also have sustainability-linked targets in our revolving credit facility. So that's important to remember that. We are also then having achieved here good ratings. And this is then 4 different like external parties, third-party agencies that has then recognized this and have performed ratings on us. So I'm really happy about that. Then the people. People are the neighbors for us. If we don't have good people in a good organization, it will be really, really hard to achieve the next steps that we are. We can see it already in the turnaround, but also, of course, now for the transformation, it will be more and more important. And the people and the culture we have in the company will enable the success that we should have. We have started a cultural change during the past 12 months, and that has been building down on leadership, on transparency, on communications and cooperation and teamwork. But it's also really important with us for psychological safety. Another part that we are like really also working with was, in fact, something that you were noticing in the beginning of this presentation for Mikael here, where are like the escape routes if something happening. So we can say like really being a responsible employee is important, and that people are safe when they come to us. We work very much done with modern people services. We are working, like you heard before, with the organization. It's important that we have leaders and that they lead and also then capable people that is supported by the leaders and the team. And one way of then also doing the change is, of course, the management team. And the Oriola management team has been changing quite much during the last years, I can even say. I've been in the company for quite a while. I've been in the management team for some years now. There is also Petter Sandström, who is sitting here in the room, who is then also, of course, like one of the, should I say, old stable ones, maybe? He's nodding. He has been even longer than me in the company, and that is like then also one part of the stability that we have. Then we have Hannes Hasselrot, I think, he's like you will see later on here on stage. He is, in fact, new in Oriola, in Oriola core, if you say it like that, but has been in the company for more than 3 years. So he's also known the company. And then we have Elina Niemelä who is also here in the room who has been here like a year. Then we have some new persons and you will then later meet the team here. He will present himself on stage. The good news with this one is that, in fact, he will be the CFO already from tomorrow. So from 1st of December, he will be -- we will have a new CFO in Oriola. So I'm really, really happy to be able to tell that today, and it will absolutely help me a lot. And then we have like Mikael Nurmi, who will start somewhere in the beginning or like the first half of next year, doing the CDO role. And after that, in fact, there is like a full team. And I'm certainly hoping that this team now will stay here and be stable. And sorry, Petri. Sorry, Petri. Also Petri Boman. He's almost old here now because he has been here since October. And so that's most likely why I forgot you, sorry. And he will also be on stage later on. But you can say everyone in the team is like -- even if we are a new team, we are like starting to feel that we have worked quite much together, and all these people has a lot of competence in their background and so on. So I'm satisfied, and I think this will be a good journey for Oriola. The key takeaways of this presentation then that I have had now before we go to some questions, is that we are the preferred partner in securing the availability of pharmaceuticals in the countries where we are acting. Sustainability is really, really important for us. It's something -- we are not just saying it. We really try to live it every day. And we have also delivered a strategic agenda in 2021 and 2022. We have like figures showing that. The transformation continues -- or like the turnaround will go into a transformation. And the 3 key priorities is then profitable growth, efficiency and culture. And then we group the things under them. And also what I want to say here is that we operate in a stable and growing market, and like this now being then part of the infrastructure part is really important for us. So that was my last picture here. So Mikael, please?

Thank you. We are off to a good start. Let's see. Do we have any questions in the audience. We have a microphone, so if somebody wants to add something just wave your hand. There is one.

Rauli Juva from Inderes. Just on your business structure, you didn't really talk about that. So is the current structure and the businesses you now have basically the one that you are planning to go forward? Or how are you thinking about the potential divestments or expansions?

There is no decisions about any divestments at this point. You can say that we are like really focusing on the core, like I said here before. When it comes to investments, it's less like prioritized during the transformation period now. So we are very much focusing on the things that we are doing and really do them well. .

And then on the financial targets, you kept them as they are. So I presume you think they are relevant going forward as well.

Yes, I know that they have been there for quite a while. I'm very well aware of that. But yes, we will keep them now because it's relevant for the transformation where we are. And of course, at one point, that might be changed, but that's also a discussion that we need to take with the Board.

Okay. And how should we view the return on capital targets since your kind of P&L and balance sheet structure changes quite a bit with the JV? So should that be interpreted for the core operations only or for the reported figures? Or what figure?

I think I needed some guidance before I answer that one. So we'll come back to that.

Any other questions? Yes, please go ahead.

Joni Sandvall from Nordea. Maybe a question related to cultural journey now that you have been doing. So could you give us some description at what part are you now? And as you said, the management team, there has been quite much rotation. So when do you think that you have the culture in place in the company?

I'm not saying it completely in place, I'm saying something that we are working with. You can say management team is new. And of course, like if I see the management team, it's a relevant background for us to also drive this further. You could also see in one of the performance keys here that we have quite high turnover. I think it is 18% or something like that. And of course, in the situation where we have been it's, in a way, good. Of course, it needs to stabilize for the future. But that's also a sign that we are changing and some people is less comfortable with change than other ones. And we need to be more agile in the future and be more responsive to what's happening, and that's the culture we are building. Everything is not finalized. Absolutely not. If I said that, it's like lying. And this culture is also something that you always need to build. It's a long journey. And it's also something that you -- it's easier to destroy than to build. So I think that's also important to remember in this case. But working very much like leaders, being leaders, being like we said here also, like someone who is like responsible for decisions and so on, getting people understanding their role, all these kind of basic things have started and will continue. And also, it's important to have fun at work.

Yes. Second question, related. You said that investments have been -- have not been so in the center now during the transportation. But I'm just thinking about the digital capabilities, do this need additional investments to be implemented?

Yes. We are always looking at like how do we change, and digital part is absolutely something we can be better in. That's also one of the reasons why we now hire a CDO, of course, and not a CIO in these cases. So yes, we need to look at our like infrastructure and so on. But -- it's like now the [Nordic] system that we did in this -- as I said, that is going down to 10,000 users, the customer service parts and so on. These kind of things need to be better, and we need to also invest to be more digital-driven and have that part.

Okay. Thanks. Good. Then we'll take some questions from online, which I have here. A little bit of continuing on the structure. But can you shed some more light on the country-based reorganization? And what benefits does it bring in terms of efficiency?

Efficiency-wise, you can say that -- we can take Petri's area since I forgot him before. It's like if we find a way of working with production in one of the sites, we shouldn't like develop the same kind of parts in another site. Then it's better to learn from what we do in one site and then implement it in another one. That's one part of the -- like the investments -- or like not investments, developments -- or efficiency that's what we are looking into. And I think this is important because if we have like boxes that is working only for one site, you're not using it in the other country. And we can see that -- we have seen that happen before. So this is in a way like doing the right thing once.

Good. One more question and then I'll let you off the stage. Market share or market growth or our growth, you're saying that we are growing at the pace of market, not more, not less. Why are we not being more ambitious to grow faster.

But I also said that we, in the future, should have profitable growth. And that might mean, of course, that we are changing. But you can also say that we are 2 players, mainly 2 players in the market, and we really want to have profitable growth. And that's really important for us. And if you are 2 players and if you are too aggressive, I think all of you understand what will happen.

Good. Thank you. Then we'll continue with Supply Chain as a Service, and please welcome Petri Boman. Stage is yours.

Thank you, Mike. Good morning, everybody. So my name is Petri Boman, I'm the Chief Supply Chain Officer. And as Katarina was saying that I'm already old in Oriola being in this role for 2 months. So it has been an exciting time. So what I'm going to talk about today is a Supply Chain as a Service, and that is the key takeaway after the presentation because that is the thing what we actually do in Oriola. What I'm going to take you through is, first, to give you a glimpse that where our facilities are and what type of roles they play in the supply chain network. And on the left-hand side of it, if we start from the Sweden side of it, we basically have 3 different facilities in there. We have Mölnlycke, which is in the South, that's a central warehouse; and then we have in Enköping, which is closer to Stockholm, there we have our distribution center; and close to Enköping, then we also have the dose business, which is in Uppsala. On those boxes, you can get some kind of idea what type of number of transactions that are happening every day or every week with the inbound and outbound trucks going in and going out. And the percentage, what you see on the geographical map, they are indicating that where the main volumes are. So on the Sweden side of it, you can see that actually about 78% of the volumes are from Middle Sweden towards the South, and the remaining is up North. What is out of those in total of 100% is expert, what we do from Sweden as well. One thing what I'm going to talk about also is the vaccine distribution. There's one case what I want to take you through, and that is related to Mölnlycke. And that's why it's saying that vaccines, it's influenza vaccines. If moving to Finland side on the right-hand side of it on the map, we have the facility warehouse or central warehouse and distribution center. That's in Espoo, it's one location. And then we have the dose in Helsinki. And dose Finland, Sweden, they are similar type of production as well. And in Finland map, if you look at the below [indiscernible] in terms of the roughly around the central part of Finland, you have majority of the volumes in South. And that's why also the locations of the facilities are pretty much aligned with where the majority of the volumes are. At the end of the day, this is pretty much a distribution business. So hence, the supply chain as in a service. If I then move on to give you a bit more insight that what is happening in different countries and especially on the GDP, what we're good at, so a good distribution practice in the Pharmacy business. It is heavily regulated like Katarina was saying, and that is the core competence that we have in this game and when we're selling the supply chain as in a service. So we're obviously audited several times in the year. We have regulations to follow so that we are eligible of transporting the medicines and that chain is basically starting all the way from the left-hand side going all the way to the right-hand side of it. And in Sweden, for instance, we have the central warehouse where we get most of the goods from the pharma suppliers. And then from the central warehouse, we do some of the distribution already like the vaccines, what I gave an example about. But majority of the volumes are then going into the distribution center, which is then distributing and maybe repackaging some of the bigger packages, depending where the needs are. And we obviously have partners as well who will take the deliveries to the final destination, whether that's a hospital, nursing home or pharmacy, et cetera. And this chain needs to also be at temperature control, and that's one thing what I'm going to come back with on the vaccine side of it as well. So we can't have any gaps on these chains. Similar type of setup in Finland, if you look at from the left-hand side of it, and remembering that we have in Espoo, we have a location for the central warehouse and distribution center. So we get all the goods in Espoo, and from that, we then distribute it throughout the Finland. And we also have the partners who have terminals, like in a further up in the North that we take the goods with the bigger trucks, and then we split it on the smaller trucks in order to distribute it to the final destinations. And also, we have a buffer stocks, location changes depending on the time and the needs what we have. And same thing in here, GDP, good distribution practice. Whole chain continuously monitored, continuously audited to fulfill the requirements what we need on a pharmacy. The partner side of it, because we also are relying on partners especially on the transportation, that they are also GDP-audited and they need to have -- or they need to fulfill the requirements in there as well, and not just on the trucks itself, but also the drivers. We have a continuous monitoring that where the goods are moving because as you can imagine that we have a different kind of medicines you can have actually a drugs going there. You can actually have the strong medicines as well. So we need to know that where the loads are going and what type of temperature they are in. And there are limits that what needs to be kept throughout the whole chain all the way from the producer, all the way to the pharmacy where you might actually visit when you go and take a description out from the pharmacy. And with those partners, of course, we developed this further. We develop it on the emissions side of it as well, but also on the performance side of it, continuous work because the world is also changing around us. Then about the transactions. Katarina was talking about the invoicing. And that is the true figure if you think about the transactions, that how much transactions are happening within the company and what is actually the volume coming in and going out. So if you take Oriola in the center, on the left-hand side of the picture, we have the pharmaceutical companies. And they are providing us the goods, what they produce or make or distribute. And we are then invoicing them for the service, what they have purchased from us. So we invoice them for the service, what we do for them. So we don't actually buy the goods by ourselves. Then we go on the right-hand side of the picture, we have pharmacy as an example. There, pharmacy is issuing a purchase order to us, and we are then delivering against that purchase order. And that is to put it simply, that is the business model that we have in terms of the transactions. So we sell the service and hence, the supply chain as in a service is describing quite well that what we do. Then of course, we have value-added services on top of that, and Hannes is talking more about those in a couple of minutes. But this is the bulk in how it works. So that's why the invoicing level is the true measure of the business, if you like, and what is happening within the company. There's a couple of examples that what are those services, not just that -- yes, it's supply chain as in a service. But if you look at the pictures and the columns, hopefully, it gives a bit more insight that what type of services we are selling to pharmacy producers and what we are then invoicing them about. And we have them just in the basic warehousing operations going all the way to the picking, packing, also returns, claims, stock counting. As you can imagine, there are a lot of different things. What you can then do for them. I mean, there could be a relabeling, for instance. There could be products which are expiring or recalls. All those are kind of services where we have service models, and we do them if we've been agreeing to do that with the pharmacy manufacturers. And that's what is then setting also our internal operations, that we need to have a fairly good and strict control that what people are doing and what kind of services we have so that we are doing them efficiently. But also providing the stability on it, reliability. So then going into -- from that example in the one concrete case, And this case is now from Sweden, and it's about influenza vaccine. What we have been doing several years in Sweden, we are the main distributor of influenza vaccines and its operation, what happens once in a year. It is a high-paced operation. It's only a window of about 5 to 6 weeks within which you need to receive all the vaccines from the producers, pack them, store them and they are cold-chain operation and then distribute them in different locations within Sweden, roughly about 2,500 different locations throughout Sweden. And we have a time limits within which we can transport them. We pack them obviously on the boxes, which are withstanding cold at a certain time so that they can take the transportation. We also -- with the longer routes, we have also the transportation equipment so that they are actually cold-controlled as well, so they produce the cold as well. And during that time, there is 15 or so dedicated people, what we need to basically put in place, to get this operation running. And that's been practiced several years, and it is in a fairly efficient way at the moment. But that happens once in a year, as an example. Then what is then -- what we are doing then for the future? And Katarina was lightly touching this on her presentation as well, that we've been building up the capabilities on supply chain, obviously, over the several tens of years. There's lot of improvements, a lot of things been happening and they are in a great shape. But so far, we've been building them slightly in a different way in different countries and with the different speed, if you like. So at the time now, we are taking that we are building kind of a new platform where we can then maybe accelerate the developments on this area further, now trying to find the synergies between the countries so that we are in the same level and we utilize the people across the different sites instead of that there's somebody at Mölnlycke trying to figure out how to develop this one in further, whether it's a digitalization thing or whether it's just about the one -- how to execute the process, but utilize the expertise from different sites. Not highly rocket science as such, but that's something which is kind of untapped potential of what we have within the company as it's not been utilized that often. It is also meaning that more empowerment for the people across the countries, that we can put the teams together as well and let them basically mandate to develop and implement new ways of working, that how they see that what is the best way of doing. And those people of you who have backgrounds, have been hearing about the supply chains and logistics, it's a fairly simple game. Efficiency is the number one thing, what you're looking at, because that will bring you the quality, that will bring you also the agility. But anyway, on the most part, it will bring you basically the stability of the process as well. If you make it too complicated, all those 3 tend to suffer in one way or the other. So we need this space as well also to further improve on the automization and also on the digitalization tools because we need to get -- if they're talking about digitalization, something what our customers are utilizing, we need to have that fully and firmly integrated so that whatever orders are coming there, it is going straight to the right place in the supply chain instead of that there's somebody manually touching it. But like I said at the beginning, if there's one thing you remember from this presentation, it is the supply chain as in a service. That's pretty much the key what we are doing. A couple of examples that -- what those services might be. And the third point is that with this transformation, what we are going through and also the turnaround, we are looking at the base from which we can then accelerate the development on this side of it as well, which has obviously a direct impact the P&L side of it but also the customer satisfaction as well. Okay. Thank you.

Thank you, Petri, compact presentation. So any questions from the audience? Yes. Can we have the microphone here?

Yes. Rauli Juva from Inderes. One question just on the scope of the changes. Basically, you -- of course, kind of efficient supply chain is pretty much what you are doing as a business. But what's the magnitude of this change or changes you're talking about? Is it a significant internal change or process? Or is it more like just streamlining further the processes?

I would say it's a combination of both. I mean, the culture part, what Katarina was mentioning, is maybe mentally the biggest, to have people actually working across different sites even within one country apart -- regardless of different country completely. Processes side of it, there's a small improvement, but there's also new -- we are looking at the new way of how to basically do the efficiency or efficient way of -- in the warehousing, that internal logistics. So that may be a slightly bigger one as in a change because it's also not just the physical way of moving the goods within the warehouse, but it's also coming back to the metal side of it. So I would say that it's a combination. But I'm not saying that we have maybe some minor investments there as well, which are more towards the efficiency improvement side of it, but nothing mega big ones at the moment.

Yes. That would have been my follow-up question. So no major investments related to this.

Yes. Thank you.

Next?

Joni from Nordea. Just one question actually related to what are the main competitive advantages of Oriola? And I'm thinking from a supply chain perspective, when a pharma company is choosing to which company they are operating with in these markets, there is basically 2 players. So which are the main decision-making choices that the companies are doing when they are choosing Oriola as a partner?

Yes. I would say, as I see it, reliability, number one, reliable partner. We can deliver what they are asking and what we are promising. Second one is the quality. We keep the quality also. So it comes in a reliability in many sense on the quality side of it, but also on the distribution efficiency side of it.

Okay. And maybe actually one additional question about the Finnish buffer stocks. So is this your own warehouse? Or are you outsourcing this part?

It's outsourced. It's a rented one.

Good. Then we have some questions from the web. Which country is more efficient in terms of the supply chain, Sweden or Finland?

I would say, at the moment, they are pretty much in equal stand.

That was a diplomatic answer.

Yes.

Okay. Let's -- one more for you. Would it make sense for you to expand your logistics operation into adjacent or even completely new markets and start distributing a wider range of consumer goods?

Okay. If looking at what we have today, that we are working in the pharmacy business, so we have the GDP as in our core guidance within the supply chain and our customer base at the moment, hospitals, pharmacies, et cetera, so I would say that whatever those current customers are currently needing, that may be the area where we could be thinking of some other things to distribute as an add-on for the medicals because we are anyway working with those pharmacies and hospitals, and they will need the medicines as well. So we have a kind of a license to approach them, if you like. .

Good. Thank you. That's all for the questions.

Okay. Thank you.

Then we'll take our new CFO to make short introduction on himself.

Thank you. Okay. Hi, everyone. As it states on the slide, so my name is Timo Leinonen, and I'm incoming CFO. And as Katarina said already earlier, so I'm starting tomorrow. So it's kind of better for me and hopefully better for the company as well so we can start a little early, a month before. But a little bit about myself and then about the philosophy, and basically, people have been asking me lately that why Oriola and what I can bring there. So hopefully, I can answer at least those questions. And then a little bit of disclaimer. So when we are talking about Oriola, so of course, I cannot yet comment the numbers and stuff because I'm not working for the company, so please don't ask them from me. So my background about 20 years from the beginning of this century, I have been working for the listed companies since ups and downs in Finnish and also in different branches so environment. Started with the ICT when there were kind of Internet bubble and then go into the Nokia subcontracting and so on, being on health care in Ixonos, Terveystalo and then latest listed company was Lassila & Tikanoja. Last 4 years, I have been working for the private equity company and the companies there is also, so basically in personnel, higher business and so on. But broad experience about different businesses and so on and listed companies as well. So I think one thing to think is that what I have learned about businesses during those times. So there is actually 2 sites in normally business where I'm focusing, when being in the CFO position and so. Of course, there's reporting and everything that kind of things, but they are kind of a little bit -- when helping businesses and so on. First of all, strategic accounting or strategic finance. So when we are going to do in some stage new strategy, or we are thinking our business like 2, or 3 or 5 years forward. So basically, trying to think that what we are doing now, what we want to do in the future, how we are going to kind of make money from that one and what kind of investment, what kind of investment allocations we should make in the future to make us kind of more attractive for the owners and also make a profit for the owners. And that's kind of thinking what you have to constantly do, but basically especially when you are having strategic processes, so you are having those targets. And I think the key thing there is that how you are allocating your investments for the future, what are the [horses] you are trying for. Okay. But that's one side. And then the other side, when we are coming more in the kind of current business is that what is your business logic, how you are running your business. Basically, when you are coming to your business model, where the money is coming from and where it is going and so on. And it's not just the supply chain, for example, what Petri was telling now. But who are your customers, how you are making value added to your customers, how you benefit from that one, how you are as efficient and possible, again, to make profit for your owners and kind of value added for the company as well. And I think that's simple like that. So basically, when you are kind of modeling those in your head. So basically, then we have actually some kind of processes and things to follow and go forward as planned and so on. And then, of course, if we are talking about investor relations and how we are going to change that business model and strategic finances to the investor kind of story, so that's one thing what we have to do. And then of course, when coming to the discussions with you analysts and everyone, so how we can tell you what really is our business model and how we are doing things. And so I think that -- or at least with my 20 years of experience, so if we are just talking about numbers, you know the numbers, that's kind of common language everyone understands, but how to go behind those numbers a little bit get insight of how we are doing things. And I hope in the future that will help Oriola as well, but we'll see. Nothing else from me. Thank you. .

Thank you, Timo.

Yes.

I think we will now head for a break. It's 4 parts, 5 parts. So 15 minutes for everybody there online also. We'll start at 11:20 sharp. And for everybody here, restrooms are behind that door to my right. Thank you. . [Break]

Welcome back to Oriola's Investor Day 2022. We will continue with the program now after a short break. And next, we will have Hannes Hasselrot, the Chief Commercial Officer, talking about data-driven commercial model. Hannes, please?

Thank you, thank you. Yes, data-driven commercial model. And in this section, we will focus on how we can build on our turnaround, accelerate our transformation and harvest in our stable markets. As you said, my name is Hannes Hasselrot. I've been in the company for about 2 months, but really it's more than 3 years. I've been in the consumer business then Kronans Apotek late this year as the Managing Director, leading their digital transformation and turnaround for them. So me and Petri here started on the same day, and now the full focus is on the new operating model and the transformation of Oriola. As you've heard from Katarina, Oriola has been serving the customers in this area, pharmaceutical, life cycle for a long time. The company's heritage and has a great foundation in our knowledge and expertise in the pharmaceutical sector. And we focus on our purpose, which is Health for life. So simply put, we support the pharmaceutical life cycle. And Oriola's near-term focus now is then the successful implementation of its ongoing transformation, and we are focusing on creating a more agile and profitable Oriola. So again, we will try then to effectively build on our turnaround, accelerate our transformation and harvest in our stable markets. So we looked at some of these megatrends, Katarina mentioned them earlier this morning. I was going to focus more -- on 3 of them more specifically and how they can serve as a growth factor for us. Let's start with aging population. Being here in Finland, I think everybody in this room is very aware that the Finnish population is aging. Around 2000, the Finnish population, the share of number of people above the age of 65 was 15%. That has grown from 15% to around 22% now 2022. It's projected to reach around the levels of 30%. This, of course, becomes important for us, and we need to then have a response for this. We have services like dose dispensing and home care services and medical advice, but we also then have an entire different market in the future, which we are catering to. There's a big trend of digitalization, and we talked about this for a long time, I believe, that has accelerated during the pandemic. If we look at Sweden as an example, the share and the penetration of digital sales in our industry has gone from around 10% to 20% during 2020. This means that our response needs to be quite quick in how we deliver to these new players in markets like Sweden, delivering in bulk or other types of services. But it's also affecting on how we work. We've talked about culture and how we work with digital tools as a team cross-country. I think there was probably hardly nobody before the pandemic that knew the word Teams or you're on mute. If we focus mere on the growth in specialty pharmaceuticals, one of the main key topics has been precision and personalization so also in this industry. So growth of specialty pharmaceuticals is something that we see as one of the main growth factors for pharmaceutical companies. We cater for and have research services and advanced logistics services, cold chain distribution, we talked about vaccine earlier, Petri here, which means that we can cater for that particular growth, which is also something that we already have, and we can harvest upon. So those are 3 of the megatrends that we talked about earlier. And as you heard from Petri, that was my takeaway, that Oriola is a service company. Oriola is very much a full service company, and I would add on the point of our USP being that we are reliable and we have a lot of quality. It's also that we are full service, meaning that we are leading in some of these aspects where we cater to, both customers downstream in terms of pharmacies or veterinarians where we are market leading in Finland; but we are also focusing then upstream to our pharmaceutical companies. We have now a new operating model, which me and Petri is very much a testament of, which enhances our [ glocal ] mindset, meaning we can think globally and act locally, and Katarina mentioned that quite in her section, meaning that we can use global benchmarking and ways of working cross-country. We don't have to reinvent the wheel. And then we can act locally, and that's something that we will focus even more in going forward. We work with a lot of partners. We work with a lot of partners with leading global pharmaceutical companies for sustainable and profitable growth. These are important to us, and we, of course, provide distribution -- advanced distribution services to these players. We have a full spectrum of expertise from then all GXP, GDP, in particular, which Petri talked about. But also, we can also work with other players in our markets, maybe smaller players that doesn't have that local footprint, and we can sell and we do expert services for them to be more agile and for our local knowledge. Here, we see the main market players in the 2 main markets that we've been focusing on today, which is Finland and Sweden. We are a strong #2. We are a value creator and we have the USP that we've just discussed. We have differences in these markets, but there's lots of similarities as well, which we intend to harvest upon in our new operating model. And if we focus then more on the similarities and differences between these 2 markets. If we look then at the similarities first. I think you see here in the picture that there's a big similarity between Sweden and Finland, that we have a single channel system, which means that pharmacy, if we take that as an example, can only work with one pharmaceutical distributor at a time. That's a similarity and then also becomes a good practice for us because it's also regulated, and our GDP knowledge and skills are highly valuable. But there are also differences. And you can say that in general, Sweden is a little bit more deregulated. And we have expertise in both these countries, which increases our overall readiness from then a knowledge-sharing perspective. So let's take one example of the differences. In pharmacy, chain operations is allowed in Sweden. And having been the Managing Director for one of them, I know that very well. In Finland, it's not allowed. But there are then significant differences we can then find learnings from being experts then in both markets. Being a little bit more forward-looking, we are implementing a new commercial excellence model fit for future. And there's 3 Ps, purpose, personalization and precision, that we're focusing on, and we're trying to tie this together again with this cross market and new operating model. Starting with purpose from the left. We are working and focusing on a new improved segmentation model with new accepted attributions, meaning -- what does that mean? Well, it means that we're really viewing our offering and our service offerings to maximize our optimal mix. That's something that you usually also do in a consumer business, and you can do also in a B2B business, meaning you find the essential financial purpose for each segment and channel and way of distribution. Number two is personalization. We in this model attempt to improve our customer centricity and unify our customer experience. Part of this comes from training and commercial upskill in general, part of this comes from our new operative model where there's a much clearer focus on execution, conversion in the commercial side and much clearer ownership and focus of efficiency and finding a lean operating model in the supply chain, in Petri's. However, personalization is a trend where that's been around for a long time, and personalization done wrong can often cause more complexity and more cost because you need to do everything for everybody. However, personalization done right increases lifetime value and secures retention. And again, coming back to our new operative model, having a clearer ownership of the customer-facing interaction keep us more light with lower central cost base. Precision, finally. I think this is our backbone in Oriola, precision. This is what we work with. We are highly focused on our GDP expertise. We can further harvest on that expertise but also our data. In Oriola, we have a significant amount of data that we need to utilize better. And that's something that we will do in our focus going forward, where we can be more predictive in our steering. Myself and Petri have, during these 2 months, worked closely together to focus on how we can do the right thing at the right time at the same speed. And we do that via our annual clocks and new steerings but also during -- of these new operating models. And with this data driven decision-making that we are implementing, we are also then improving our clear ownership. So let's move forward. We have also more of a specific case, and because Petri has spoken so much about distribution in general, but also specifically the case of vaccination in Sweden where we are also market leading, I'm going to focus more on the ancillary services and things like we can do on top to create more value, both for us and for our shareholders but also for our customers. We have a lot of cases where we offer services like customer life cycle management. These are services include mandatory life cycle management tasks required by law, but they could be then medical information or scientific and medical review of promotional materials. There's a multitude of areas where we can actually monetize on our expertise via our Expert Services. So key takeaways from me. What we focus on is that we create value via our data-driven services. We have a lot of data, we can harvest more upon them We offer unified customer experience through the entire health care value chain. We partner with leading global pharmaceutical companies for sustainable growth, but we can also be a perfect partner for a smaller pharmaceutical company or other player that doesn't have the same local presence or local knowledge. And we are experts then in 2 unique markets from a regulatory perspective and our future is more focused then on our commercial excellence model, which involves then the 3 Ps: purpose, personalization and precision. And if we do this well, then we can build on our turnaround, accelerate our transformation and also be a perfect partner for the future. Mika?

Thank you, Hannes. So anybody from the audience wanting to go for some questions? Okay.

Joni Sandvall from Nordea. Maybe coming back on the commercial excellence model. I'm just thinking, could you give us some practical example what it could mean when you are saying that you are streamlining your offering and optimizing the mix also? Any practical example of this.

I think it's, of course, a business-as-usual perspective that we continuously need to work with. I think we are focusing on tailor-making more of an easy-to-understand offering for our customers, both upstream and downstream, what are they actually buying and how do we package it so we understand it's full service. I don't want to give any too practical examples because that's also then explaining too much of the secret sauce which brings us the profitability in the future. But it's more focusing and making sure that we cater to a cluster segment more clearly in the future?

Yes. Thanks. Second question relating to aging population and more closely the dose dispensing. What kind of market opportunities there is -- as we know that there is lack of nurses, for example. And this is, of course, easing the pain there. So what kind of market opportunities there is? And do you need to make additional investments on the dose dispensing?

Well, there's, of course, a constant improvement focus in terms of investment, but that's reflected in our estimates and the guidance that we've been giving. There are challenges in the multitude of these areas in terms of finding the right resources, nurses. However, based on our perspective and our figures today, we don't see the threat thereof. So there are opportunities catering to these elderly new public.

All right. Let's take one question from online. In the single channel distribution, did Apoteksgruppen use Oriola, are they main competitor in Sweden? And is it possible to change?

I have to look at you if I'm allowed to answer that, then yes. Yes. They are using us, yes.

Short and simple. Thank you. No more questions at this point. So thank you.

Thank you.

And then we'll continue with closing remarks from Katarina.

Thank you. And let's see if we can get that. Yes. I told some of you in the break here that it was, in fact, so that we had the last CMD or Investor Day in Oriola in 2015. That was also one of the reasons why we thought it was quite important, in fact, that we had this session today. We will now continue to work on the strategy and all the things that is like going. So from our side, we will not promise when we will have the next one because I know that there might be a question later on. But we will come back and, as soon as we are ready, to tell more about where are we going. But now, like in the near-term future, we will like focus on what I said here before, the profitable growth and the efficiency. And this is also one of the really, like, key takeaways that I really want you to have here. We have like a dedicated people and we have like building the culture to really like start to deliver on this one. And like you heard here, both Petri and Hannes, like saying here that both like digital capabilities, data-driven business and commercial excellence in combination with the supply chain and supply chain services is really important. And I'm fully committed to that, and I know that the team is fully committed to that. And I'm quite sure that me and Timo have a possibility to next year then staying in the quarterly reports and really show more -- like maybe not so much on figures, but maybe then more like, how should we say, with content than we have done before. Because as someone has said, not in this forum, in fact, but in other forums, that the figures is also in the reports. And not but not least, sustainability. It's really important for us to have like a sustainable environment, but also sustainability amongst our people. And of course, it's sustainable business. But if there is only one point that you should remember, then profitable growth and efficiency. Then I think, Mikael, there is some -- maybe some more questions.

Yes. We'll be opening for closing Q&A. So either to Katarina or then to Petri or Hannes. And we can start from the audience here.

So on the market structure, you -- I got 2 points from the presentation. You said that you are specialties -- like specialists on the single channel distribution, and then you are committed to long-term ownership of the stake in the Swedish pharmacy chain. Well, are you agnostic or are you a proponent for change? Or are you -- is it a strategic threat for you that if there is a change in this, we will have, again, election in Finland and always, every fourth year, there's a discussion of pharmacy structure might change. So what is it? Is it something that you want the current status to continue because it's good for you and you have created a niche for that? Or do you wish for some of this to change? Or are you completely agnostic?

That's a hard one, and it's all speculative also. But you can say it like this, we are like, as it is now, as I said, a stable market. You never know what will happen in an election. There might be changes, there might not be changes. Everyone knows that we have been like -- have different kind of joint ventures also in Finland, like in the past. We are not...

I remember that in Finland.

Yes. There is a lot of pharmacists, I know that. And they are our customers, and we should remember that they are our customers and we are delivering to them in the same way as we are like then also having pharma companies as customers. So at this point, we are not in a business-to-consumer business. We are like in a business-to-business, business. That's where we are going, and that's where we are like focusing at this point. There is nothing else in our like strategic targets at this point.

So I take that you are agnostic to change.

It depends on how you see it, but that's a little bit the answer we will have here. We are not planning at this point to like go into a pharmacy business. That's not -- we are not in the consumer business.

Let's -- second question from the audience.

Just kind of all this is pretty understandable and clear that you want profitable growth and efficiencies, as would most of the companies. But can you give any kind of quantitative context to it given you don't have any earnings or margin targets? You didn't present any figures basically where this should lead. So just -- and I'm not expecting you to give it now either. But just in verbal terms, should we expect kind of a step change in profitability from the efficiency improvements? Or is it more a gradual path to profitable growth? How should we understand in there?

I think you should see it more like verbally like the path. You will not see like a jump. There is too many like environmental parts around us also for that one. We will continue the path we have like started with the turnaround and go into the transformation. Like we said here before, we are following this market growth. And I think for me, it's important to have like profitable growth because that's also telling quite much into the company to our people that it's important to be profitable.

Other questions from the audience? If not, we have a couple of questions. One a bit related to the question we had just. In terms of margins, what is the long-term potential for the continuing business? Should we expect 1.5% EBIT?

That's a good question.

Please note clear guidance, but...

Yes, exactly. We have a guidance and we don't like really maybe go into that one. But of course, our job is always to try to get as much profitable -- profitability left. So I will not comment exactly on that 1.5%, no.

There is a question about the pharmacy business of Kronans Apotek Group's EBIT margin, but I can already say that we are not commenting that. So I'm not going to read that question. That's out of our scope nowadays. Then there is one question here. What are the biggest risks related to your transformation?

Overall, I would say that, that's, as I see it is, in fact, an environmental part -- or not an environmental part, but what's happening around us. It's like what will happen with the fuel prices, what will happen with electricity prices and inflation parts. That is the risk. And I think that's also like one most likely generic answer that you will have for most of the companies that you are likely listening to during the last -- like the coming year and maybe years. You don't know how long it will be. but that's how I see it. The things that we can handle, we will handle them as good as we can. But of course, what's happening on the outside. .

I think here's a question for Hannes. So please, if you can share the stage here. It's about the regulated business and price increases, that what is our potential in margin improvement from price increases point of view?

Of course, I think most people in this room understand that we have a reimbursement system in both countries. And here, we don't have the regulatory flexibility. However, there are parts of our business where we are much more free, in Expert Services and other trading goods, meaning OTC, over-the-counter, or other health-related products. So there is also way of steering. And that comes back to the purpose, which we got a question for earlier, what is our optimum mix affecting our profitability from a top line perspective.

Good. I have no further questions online. Anything in the audience at this stage. If not, I think we can start to conclude the Investor Day for 2022. Next time, we are up in February 16 with the financial statements. And you will receive an SMS message today. Please want to give feedback, a simple rating on numbers and then we at least know how we did. Thank you for participating and attending. Have a nice continuation on the day. Thank you.

Thank you.

Thank you.