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Edited Transcript of OKDBV.HE earnings conference call or presentation 25-Oct-19 7:00am GMT

Q3 2019 Oriola Oyj Earnings Presentation

Helsinki Nov 4, 2019 (Thomson StreetEvents) -- Edited Transcript of Oriola Oyj earnings conference call or presentation Friday, October 25, 2019 at 7:00:00am GMT

TEXT version of Transcript

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Corporate Participants

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* Robert Wilhelm Andersson

Oriola Oyj - President & CEO

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Conference Call Participants

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* Iiris Theman

Carnegie Investment Bank AB, Research Division - Financial Analyst

* Olli Eloranta

Danske Bank Markets Equity Research - Analyst

* Petri Kajaani

Inderes Oy - Analyst

* Sami Sarkamies

Nordea Markets, Research Division - Senior Analyst of TMT

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Presentation

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [1]

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So good morning, ladies and gentlemen, and welcome to the Oriola Quarter 3 or, as it says here, Interim Report January-September 2019 Presentation Session. However, as usual, we will focus on quarter 3 in our discussions. And this is a live webcast, so I would ask you to hold your questions to the end of the session. We will have a Q&A at the end. This way also the participants online will be able to ask questions and get answers.

But without further ado, I'll run into the highlights of the quarter. For you who follow us, you are familiar with we have said quite a few quarters in a row that the sales invoicing and net sales development has been a sort of positive factor, I would say. This is -- this quarter was no -- made no difference to that. But this quarter, we also saw that EBIT developed probably a little bit more positively than in the previous ones.

We still experience strong competition from online in the Pharmacy business in Sweden, and we have challenges with the cost levels in our Swedish operations. I'll talk more -- talk a bit more about that in a few minutes. And also, I think it's important to remember when you are looking at our quarter 3 results and you compare it to our quarter 3 a year ago that the quarter 3 last year included a EUR 9 million contribution to costs incurred from the IT system project in Finland.

I already sort of alluded to this, but the ramp-up of the distribution center in Enköping in Sweden has progressed slower than planned during the summer. I'll comment more on that in a few minutes.

We -- during the quarter -- during quarter 3, we signed, I would say, 2 significant, and several smaller, but 2 significant distribution agreements: one with Orion, our long-time partner in Finland; and one with MSD, a new customer in Sweden. MSD is our customer in Finland already, but now we have MSD in Finland and Sweden. And MSD started up in October in Enköping for Sweden. Our strategic programs Customer Experience and 20by20 are progressing according to plan, and I'll comment a little bit more about that as well.

If we then go to the sort of the most important numbers. I already mentioned good development of invoicing and net sales. Invoicing grew by 8.7% in reported and 10.4% in constant currency. Net sales grew by 16% in reported and 18.1% in constant currency, numbers that we can be very pleased with. I would say as usual, the challenge we -- challenges we have and the focus we are sort of -- the area we are focusing on is the adjusted EBIT, the reported profitability, where we are still not on the level we would hope to be. But I would say that we are starting to see a trend shift.

And if you look at this picture, which opens up the development a bit more, again, the comparable number for last year without the EUR 9 million contribution was EUR 8.5 million, so EUR 8.5 million versus EUR 9.8 million and then 3 quarters in a row now of, I would say, reasonably good development. You also have to remember, however, looking at Consumer, for last year quarter 3 in Consumer, we had Hehku included, which cost us EUR 1.2 million. So the picture maybe is looking a little bit too good from that perspective if you don't factor in the Hehku effect.

On the other hand also when you look at Pharma and Retail, Pharma included EUR 7.2 million of the EUR 9 million, which means that Pharma, in that sense, in comparable terms did EUR 5.2 million better in spite of the Enköping challenges we have. Retail last year included EUR 1.8 million of the EUR 9 million. And in Retail, we are still seeing fairly sizable challenges, and I'll come back to that. On group items, we've had been able to save -- cut down costs and save in extraordinary costs.

A few words about the operating environment we are working in. We've talked extensively about the development of online in the Swedish pharmacy market. Now you can see that during quarter 3, during the summer season, summer months, the development has been -- I would say, looks like it's almost the strongest in any quarter. We've seen very strong campaigning from the market leader, Apotea. And we've had some challenges in keep -- frankly, in keeping up with that development.

If you look then at the market share picture, it is pretty stable. Oriola keeping -- Kronans Apotek keeping 17%, same as last year; Apoteket, same as last year; Hjärtat, same as last year, 31%; Apotea, however, up from 4% a year ago to 6%. And this is really sort of -- this is this curve in the sort of in numbers. And then the others, not much change, Lloyds, Apoteksgruppen. And then this difference in others, there is actually a small change in the way the market shares are reported. One of the consequences of the online trend is also that the traded goods share of the total market is going up and the RX share consequently going down.

During quarter 3, we had actually a surprisingly high number of new pharmacies opened. Year-to-date, the net increase is 8 in number of pharmacies in Sweden. So there's about 1,400 pharmacies. The net increase this year is 8. But in quarter 3, there was 7 out of these 8 were opened. Up until the end of June, we had only, what, plus 1 net increase. It's mainly Apoteksgruppen, to some extent Hjärtat, that has opened. I would, however, say the expectation is that the number of pharmacies -- physical brick-and-mortar pharmacies will go down starting about more or less now. And again, the driver for that, the consequence, sort of the causal effect is the online growth.

Then over to wholesale and pharma. Wholesale market, the pharmaceutical market grew quite nicely, again, in both Finland and Sweden: 5.3% Finland versus 4.6% in quarter 2 and 8% in Sweden versus 10.6% in quarter 2. Our market share development has been steady and positive. We were at 46% now versus 43% a year ago and -- in Finland. And in Sweden, at 43% now versus 41% a year ago. Again, I want to remind you that the quarterly market share for wholesale, you should not read too much into that because it depends on how you sort of -- on your principals' campaigning and principals' product offering. It's not so much related to what we do. Obviously, it relates to who we have as principals and how well those principals are doing in the market. But it's obviously a sign of -- a kind of a sign of also how much our principals trust in us and how much we are able to sign up good contracts.

Then a few words about the retail market. We've talked about the retail market mainly in the context of dose dispensing market shares as well as our TG/OTC supply -- wholesale supply, I would say, to the pharmacy market in Sweden; and then thirdly, in terms of our staffing services here in Finland. Market share in dose dispensing has developed very positively. The reason -- main reason, again, for the Swedish development is the Stockholms läns landsting deal that we took over from 25th of February, if I remember correctly. And that has been now ramping nicely, I think, to cover some, if I remember correctly, some 35,000 patients and now that, that 35,000 is already 39,000 patient. This is a growing business. We now have over 116,000 patient -- dose patients in Sweden and Finland combined. In Finland, the market share is fairly stable. It's actually up from quarter 2 but a little bit down from quarter 3 last year.

And then this TG/OTC product supply for pharmacies in Sweden, we are supplying about 26% of the EUR 1.1 billion market -- total market. Staffing services, we offered and were employed to support 240 pharmacies during quarter 3, which is up from 225 in quarter 2. Obviously, the summer season is a high season for staffing services, together then with the year-end, Christmas, New Year's season.

Our strategic initiatives, I said already that they are progressing according to plan. Just as a reminder, the 20by20 Excellence is our ambition to save EUR 20 million in costs by 2020 versus 2018, which again means that going into year 2021, our cost base will be EUR 20 million less than at the end of 2018. The latest sort of significant, should I say, effort or sign of the progress here is the negotiations that we closed at the end of September, where we realized annualized savings of EUR 4.5 million, which will, to the vast majority, affect 2020 numbers. On Customer Experience, we have worked systematically to improve -- develop and improve the customer experience, and we've seen quite encouraging results.

Now I'm talking quite a lot about the challenges we have in the Swedish pharmacy market because of pressure coming from online taking over the traded goods where we have the best margins. Now obviously, what we want to do, and I've said it many times before also, we want to build an omnichannel experience, an omnichannel kind of customer experience. And what we can do to counter the online -- the certain preference for online is obviously to offer more in offline or in brick-and-mortar. And this is the last sort of -- the latest initiative that we have put in place now during this year in a handful of pharmacies so far. And by the end of the year, the plan is to have 8 pharmacies with drop-in clinics.

I was visiting one of these pharmacies yesterday in Stockholm, and it's quite nice. It may have been -- at least it looked exactly like this. So basically, it's in collaboration with our partner, Doktor.se, offering medical advice. It's simple -- there's blodtrycksmätning. That's blood pressure measurement. It's vaccination, medication assessment and you can -- it's a drop-in. You don't need to book time. You walk in. And it was interesting to see there were elderly people in the pharmacy yesterday, as quite often not, and they very clearly sort of walked up into these and read and okay and the pharmacist in the pharmacy was guiding them and explaining about this. I saw a very clear interest in this service, and the initial experiences have been good.

I promised a few more words about Enköping. When we met in July at the quarter 2 reporting, I told you that we have been forced to slow down the ramp-up and actually put the sort of the ramp on hold and just make sure that we cope with the challenges we had at that moment. The history for this was that when we went into the summer season with the summer campaigning and the summer assortment, it was much more difficult to sort of reset the systems than we had experienced because we haven't done that before. Well, we haven't experienced it before, and it was clear that we had gaps in our understanding of how to run the robotic -- the robots and the sort of the robot-based automated system.

So we ran into all kinds of troubles. We had -- our service levels were very low, and what added insult to injury was obviously the summer season with people on holiday and so on. So a lot of people have worked really hard during the summer months, taking work weeks instead of holiday weeks to sort this out. I'm pleased to say that now we are -- as of, I would say, end of September, I believe we have a much firmer ground, more stable ground to sort of to jump from or to sort of step from and -- than we've had before. We have learned. We have utilized a crisis to the maximum and made sure that we have put better processes, better -- train people on how to utilize the system, et cetera, so that it is -- we are in better shape. However, what it meant is that between June and September, we halted the ramp-up. We did not put more new assortment, new products onto the automated system. And hence, we are delayed in our ramp-up and implementation of the sort of complete Enköping solution.

And that -- the consequence of that, obviously, is that we are continuing to run -- we are running now the traded goods and OTC products much more efficiently at the moment, but we have not yet put all the pharma products onto the new system. And there will be a delay, and we will be forced to run with 2 processes in parallel for quite some time.

I think this is familiar to all of you. We have 3 business areas: Consumer, Pharma and Retail. If it isn't, you can read about it in the handout. But if I'm then commenting a little bit more in detail on each of these and starting with Consumer.

The market -- the pharmacy market grew by 4.5% in quarter 3, and the year-to-date growth is 4.4%. We grew a little bit faster -- a little bit more than the market in quarter 3, so we had a reasonably good quarter in spite of this time not being able to grow at the market rate in online. I think you -- those who have been in these sessions before know that we have been quite a lot emphasizing the online growth, and we have been growing faster than the market. We have grown faster than the market year-to-date. The first 9 months, our online growth is 41% versus market growth, 37%. However, in quarter 3, among other reasons, because of our Enköping supply capability, we were not able to keep up that market growth, so we grew a bit slower than the market. And I think we talked about this. The share of OTC and traded goods in our portfolio is down in relative terms because online is sucking up the traded goods and OTC products and the increase in the competition. And our challenge is that RX is a much less profitable offer.

So obviously, what we're doing is we are looking at our costs. We have -- we announced that we are closing 9, I mean, 9 pharmacies. We open and close a handful of pharmacies every year, if not every quarter. But what we're saying now, we are actually closing -- we are reducing the number of pharmacies. We will not go back to 327. We will have fewer pharmacies going forward. So we have looked at the least profitable ones or the ones where the potential is the least, and we have closed them. That will have maybe some effect on our market share, but it should have a positive effect on our bottom line. We're not talking about -- we're talking about tens of percentages in market share. But it should make us -- give us possibilities to maybe reallocate some of the money that we have. And as I said, we are also then investing some of our money into these drop-in clinics to make the sort of -- to increase the attraction of visiting a pharmacy.

And maybe, yes, if you look at then the quarterly numbers, again, I -- as I mentioned, included in the last year's number, there was EUR 1.2 million negative for Hehku. So it is not -- we are not at par with last year, to be brutally honest. But if we are looking then at the last 3 or 4 quarters, we seem to be going now in the right direction. Quarter 3, however, is a good quarter from a seasonality point of view. Quarter 4 normally is weaker.

If we then look at Pharma. I'd love to see these kind of growth numbers for all our businesses, but for Pharma, it's been definitely a strong quarter. Again, I would say, it is driven to a large extent by the volumes. We saw the volumes growth being 5% to 10% by market, but also by high -- by expensive medicines, and then we have gained some market share.

And also what you have to understand is, in particular, when it comes to the net sales number growth, net sales grew much faster than invoicing. There is some change in the contracts compared to last year. So some companies that have been consignment stock have now become sort of -- what's the sort of term? Well, real customers, if you say -- put it that way. So we take title to their stock, and we sell it.

We have seen a very positive development now since, I would say, end of quarter 1 in Mankkaa in Finland in our distribution center. The quality -- the efficiency has been increasing not quarter-by-quarter, but actually month-by-month, you can see it happening. And this gives us a lot of pleasure. And it is actually, to some extent, compensating for our challenges in Enköping, which are now very much impacting still the Pharma results but even more, the Retail results, and I will come back to that. But I think that it's a sign of a somewhat healthy development that during times of -- yes, it has felt sometimes like extreme difficulties in Enköping, we can still develop bottom line positively.

For Retail, the challenge has been even higher. And just to explain to you, I talked about -- I explained to you that the pharma -- the medicines have not yet been put on the automated robots in Enköping. We cannot afford to sort of fail with the medicine distribution. If you want to test something, you do it with the non-med products, and that's what we've done. The consequence is that when the automated system hasn't worked as we wanted to, Retail has been the one really sort of suffering from this.

And I think we can still be, in a way, somewhat pleased with the development. If you look at the last 3, 4 quarters, I believe you can see a trend line there. Last year, I said, included EUR 1.8 million from the IT compensation. And during the year -- start -- beginning of the year, we communicated that we have done quite some restructuring of the portfolio, which has had a negative impact on our bottom line. Health care had a record quarter and is driving the growth, which also was then -- the growth was good at the level of 14% to 17%.

We sort of talked about these numbers already. The top line growth, 10.4% in terms of invoicing in constant currency and 18% in terms of net sales, strong numbers. We talked about the profitability. And I want to maybe reiterate, don't get carried away with the -- and extrapolate the -- draw a line here now and say now we go from 3.9 to 6.4 to 9.12 to 13. There is a seasonality. There is a strong seasonality. Quarter 4 is normally weaker than quarter 3., but I think we can also conclude that we are moving in a better direction now.

Earnings per share and -- well, profit for the period and earnings per share are obviously very much a function of the adjusted EBIT. But also, we booked now in quarter 3 a EUR 5.3 million restructuring provision for the negotiations, the [YT] or the, what do you call them, collaboration negotiations in Finland and Sweden and then for the closure of the least profitable pharmacies. So that's affecting -- if you add the EUR 5.3 million, you come to more -- almost EUR 8 million, EUR 8 million in terms of profit for the period. And then obviously, the EPS is a direct -- is following directly on that number. The EUR 12.2 million a year ago included the EUR 9 million. And the EUR 8 million -- minus EUR 8.5 million here included EUR 12.3 million, if I remember correctly, for Hehku -- no, 12-point-something million for Hehku.

Cash flow. We have expressed mild frustration, I think, in the past that our cash flow is very volatile. And that volatility, as you can see, is continuing. We had a very good quarter 4. We had some money that really should have been in quarter 1, [we comment that] most coming in earlier in quarter 4, meaning that quarter 1 was a bit weaker than it should have been, and then quarter 2 was a little bit better than it should have been. Now we at least have a sort of year-on-year positive development.

Also, if you look at the cash generated from operating activities, EUR 57 million is EUR 4 million more than a year ago -- no, EUR 3 million more than a year ago. Investing activities is mainly the -- well, it's the IT system and Enköping and other IT systems. And then financing includes the dividend paid during quarter 3. I'm looking at Helena. She's nodding, yes. Quarter 2 -- yes, this is year-to-date, sorry. But cash position after 9 months is the same as at year-end.

And then a few sort of stats on -- stats relating to the balance sheet. We can see that the interest-bearing debt has now gone down quite nicely during the year. And the jump here in quarter 1 is related to IFRS 16, which added, what was it, EUR 90 million, if I remember, to sort of the comparable number here. The EUR 133 million compared to a year ago, you should deduct -- from EUR 133 million, you should deduct EUR 83 million to have a comparable number, which means that we are significantly below. In apples-to-apples terms, I would say there's more cash generated.

And also, one of the good things, nice things, which maybe should be highlighted here is that whereas at the end of December, our advance payment from pharmacies were still reasonably low, and this is kind of a proof point for our customer excellence -- Customer Experience work. Our customers are trusting us more now. They are paying us more in advance. This is a good indicator of that.

The leasing liabilities, yes, it's one of the reason -- they are down is one of the reason for the debt to be developing positively. And on gearing, gearing, we are very comfortably in line with our guidance and targets.

In June, just before midsummer, if I remember correctly, we came out with a profit warning. We were saying previously that we believe we will exceed 2018 level. Because of the market development -- the pharmacy market development in Sweden, because of our Enköping challenges, we were forced to revise that estimate down. We now say and we reiterate that on a constant currency basis, we estimate to have a lower profitability than -- adjusted EBIT than last year.

So then just wrapping it up. Strong invoicing and net sales continued. We haven't been really concerned about the sales. It's been developing positively. However, now we feel that the business performance is moving in the right direction. There are not just 1 or 2 signs, but I think there are several. I still want to maybe make the disclaimer, Q4 typically in this industry is weaker.

And then our programs -- strategic programs are progressing well both on the Customer Experience as well as on 2020 costs and operational excellence. We are doing well. And we believe that signing up big, new customers like MSD, again, for Sweden is a sign that -- of trust and confidence from our customers and partners. And we have reported 2 of these large deals or contracts, Orion and MSD. We are signing up many more, renewing and signing new on a constant basis.

So with this, I want to thank you for your attention, and we can move over to the Q&A part.

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Questions and Answers

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Olli Eloranta, Danske Bank Markets Equity Research - Analyst [1]

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Yes, Olli Eloranta from Danske Bank. Could you specify how many weeks or months are you behind your original schedule in Enköping?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [2]

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Well, okay. When you say original, I would -- if I put it this way, I said that we lost something like 4, 5 months during the summer now versus what we were planning at the end of quarter 1. Then if you go back to how much from the original plan, which was approved like 2 years ago, we are -- that original plan was based on SAP being rolled out in Mankkaa in Finland being copied to Enköping, the robotic -- robots being built on that. Now we know that SAP didn't go like in the movies. We couldn't build the robots on SAP. We had to change plan and build it on a different technology platform. So if you go back to we are almost 2 years, I think, if you -- sort of the really original plan, I think we are 2 years behind-ish, I wasn't here when that plan was made.

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Olli Eloranta, Danske Bank Markets Equity Research - Analyst [3]

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Okay. Yes. So when do you think you will reach the efficiencies you're targeting for in Enköping?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [4]

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So I would say that -- I have been saying before that I believe that by the end of this year. Now due to the summer season and the extent -- the sort of the situation there, I would say quarter 2 is where I believe we can -- we will see now that -- and I have -- my confidence level, I would say, is higher now than it was when we met last time.

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Olli Eloranta, Danske Bank Markets Equity Research - Analyst [5]

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Okay. And then about the online pharmacy business, is it still so that you are not making any money in the items you sell in, in the online business? And do you have any like road map for improving the profitability in the online business?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [6]

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Yes, so our online operation as a whole is not profitable at the moment. It is still requiring scale. Also, the challenges we've had in Enköping has made it very difficult for us to really build the logistics part. The logistics is the biggest kind of cost item in many ways or one of the absolutely biggest cost items, and we haven't been able to focus on the efficient logistics part of the online business. That's where we will be able to make significant improvements now that we get stability in Enköping.

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Sami Sarkamies, Nordea Markets, Research Division - Senior Analyst of TMT [7]

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Sami Sarkamies, Nordea Markets. I would continue on the Consumer segment. It seems that the stronger sales growth you had in the third quarter was the key to higher profitability. Was this a good quarter? Or do you think you've been able to turn the top line trends at Consumer?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [8]

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So I think we are -- our ambition is to grow at the rate of market overall. We are not basically accepting any market share loss. We believe market share is very relevant in the Consumer business. So that's clearly our ambition. We want to grow at market rate. And I don't see any reason to deviate from that. Our ambition also has been to grow faster than the market in the online segment. And here, we have succeeded pretty well for the last 2 years except now in quarter 3. And so that's the sort of the view -- our view of the ambition here.

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Sami Sarkamies, Nordea Markets, Research Division - Senior Analyst of TMT [9]

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Okay. And then moving on to Pharma segment, could you disclose the amount of extra costs you had in the third quarter that you will sort of get rid of when you have completed the migration to new warehouse?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [10]

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I would sort of give a straight answer and say, no, I cannot disclose the extra costs. I can give you -- and I think we have said in the past also that we are talking about millions on a quarterly basis. So millions of euros on a quarterly basis.

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Sami Sarkamies, Nordea Markets, Research Division - Senior Analyst of TMT [11]

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Okay. And then finally, on the Retail segment, you've been able to achieve nice growth over the last few quarters. At which point do you expect the more meaningful profit contribution?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [12]

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Yes, one very important milestone was achieved actually on the 1st of October in our health care business, i.e., the dose dispensing, which is a very significant part of the Retail and where I see growth and profitability potential. We renewed our ERP for that business on -- and started -- and kicked off the new system on October 1, i.e., 3, 4 weeks ago. Many of our process inefficiencies and challenges have been related to a poor systems architecture. The business has grown very rapidly actually in terms of numbers of patients, but we've been doing it with sort of subscale processes, a lot of handheld -- handholding and consequent cost and I would say also in a way, risks in the way we operate. Now we've had a good, knock on wood, a good ramp-up with 4 weeks of experience now. And this will definitely bring us a significant step-up in the efficiency.

For the product part of Retail, there is pressure. We are sort of experiencing quite a lot of pressure in terms of sort of compensation from our -- of our services. That's normal. But there's been a pressure coming from the fact that we are -- we haven't been able to live up to our supply promises in Enköping. So we have reserved for some claims in the last quarters. And once we get operations running, we will see that, that will -- the situation will improve.

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Petri Kajaani, Inderes Oy - Analyst [13]

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It's Petri Kajaani from Inderes. You mentioned that you did a new agreement with your biggest Finnish principal, Orion, this summer. What I understood is that, that deal is not exactly the same that it used to be, but a chunk of it was dropped out. Could you tell what was the size of the chunk that was dropped out of the deal? And does it have any financial implications for you?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [14]

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Yes, so what Orion did this time -- previously, they have already always negotiated sort of the full portfolio. Now this time, they split the portfolio into 6 pieces, and they offered each of these 6 pieces open for negotiation, which obviously was a somewhat of a shock for us, being used for 70 years or 71 years to be the sort of sole partner with -- for Orion. Now out of those 6 -- and Orion had made the decision basically, they want to have 2 suppliers. So we knew we will lose one of those categories in any case, or one segment.

Our choice was to lose the non-med. That's where we had least value, i.e., the -- well, the non-med, the -- wait, the sort of the stuff -- either the sort of the lotions and the creams or the material, so to speak. It's a bulky business. They take quite a lot of space. It's not a high-margin business. And I would say I'm actually quite happy that our dependency on -- of Orion has decreased or will decrease. Now we are able -- we have space to bring in new principals, and we have a list of very focused negotiations ongoing to fill that space. Did that answer the question or...

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Petri Kajaani, Inderes Oy - Analyst [15]

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Yes, sort of. Do you think you came up from these negotiations as a winner or a loser? Was this a win or a loss for you?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [16]

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Well, I mean, let's put it this way, that losing Orion completely would have been a loss. It was a tough negotiation. I think the sign of a good negotiation is that it has been tough, and both parties are a little bit disappointed. And I think this fulfilled that criterion.

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Petri Kajaani, Inderes Oy - Analyst [17]

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Okay. And the second question is considering your presentation here, you have been pushing down quite a few times our expectations for Q4. Is it going down the toilet? Or why are you doing that?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [18]

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No. No. I think I've said -- I said, Petri, that we seem to be moving in the right direction. So I mean that is a clear message. I'm maybe worried that some people wrote a conclusion that now you can take your sort of ruler and draw a straight line. There is a strong seasonality which you have to factor in when you think about this. We are moving in the right direction, but there is a strong seasonality.

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Petri Kajaani, Inderes Oy - Analyst [19]

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And now would you say that you are still going to beat last year's Q4 numbers? Is that a fair assumption?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [20]

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I don't comment on quarter -- individual quarters. Yes, Iiris, at the front.

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Iiris Theman, Carnegie Investment Bank AB, Research Division - Financial Analyst [21]

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Yes, Iiris Theman from Carnegie. Just wanted to confirm that how much the MSA deal will add to your sales...

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [22]

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MSD.

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Iiris Theman, Carnegie Investment Bank AB, Research Division - Financial Analyst [23]

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Yes.

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [24]

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MSD, I don't have -- we -- I would -- I can put it this way. MSD's market share in Sweden is about 4% of the total Swedish market, which means -- makes them one of the big players. I will not comment on the exact numbers. But I can say that they've become 1 of our top 5 customers from a sales margin perspective.

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Iiris Theman, Carnegie Investment Bank AB, Research Division - Financial Analyst [25]

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Okay. And regarding savings, did those contribute already Q3? Or are we going to see more in Q4?

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Robert Wilhelm Andersson, Oriola Oyj - President & CEO [26]

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We have some savings. Some of the 20by20 savings are starting to kick in. We will see a bit more in quarter 4. I think the majority still are sort of realized in the second half of next year. And as we've said, by the end of next year, we will have the EUR 20 million. I'm pretty confident about the number 20, we will reach that target. But it will come more towards the end. One of the reasons is that the -- there's a significant chunk which is related to Enköping, as you know. And now we see a delay there.

Any questions online? No questions online. The presentation and the discussion and the questions here physically have been exhaustive and clear. If that is the case, any last? No? Okay. Thank you very much. See you in a few months again.