2009-02-06 11:01:37 CET
2009-02-06 11:02:25 CET
REGULATED INFORMATION
Orion - Financial Statement Release
Orion Group Financial Review of 2008
Orion Group Financial Review of 2008
Orion's net sales in 2008 were EUR 710.7 million (EUR 680.0 million
in 2007), up by 4.5% on the comparative year 2007.
* Operating profit was EUR 185.0 (192.0) million.
* Profit before taxes was EUR 184.2 (193.4) million.
* Equity ratio was 60.2% (76.2%).
* Return on capital employed (ROCE) before taxes was 38.5% (44.8%).
* Return on equity (ROE) after taxes was 32.1% (33.5%).
* Earnings per share were EUR 0.97 (1.02).
* Cash flow per share before financing was EUR 0.66 (0.92).
* Proposed dividend per share is EUR 0.95 (1.00) per share.
Orion's key figures for the review period
Q4/08 Q4/07 Change % 2008 2007 Change %
Net sales, EUR million 179.9 172.8 +4.1% 710.7 680.0 +4.5%
Operating profit (EBIT),
EUR million 32.8 38.6 -14.9% 185.0 192.0 -3.6%
% of net sales 18.3% 22.3% 26.0% 28.2%
Profit before taxes, EUR
million 32.1 39.2 -17.9% 184.2 193.4 -4.8%
% of net sales 17.9% 22.7% 25.9% 28.4%
R&D expenses, EUR million 29.4 28.7 +2.5% 103.4 98.5 +5.0%
% of net sales 16.4% 16.6% 14.5% 14.5%
Capital expenditure, EUR
million 12.8 11.3 +13.1% 56.8 35.3 +61.2%
% of net sales 7.1% 6.5% 8.0% 5.2%
Balance Sheet total, EUR
million 695.5 565.7 +22.9%
Equity ratio, % 60.2% 76.2%
Gearing, % -7.1% -20.0%
Interest-bearing
liabilities, EUR million 146.3 4.0
Non-interest-bearing
liabilities, EUR million 130.6 130.5 +0.1%
Cash and cash equivalents,
EUR million 176.1 90.4 +94.7%
ROCE, % 38.5% 44.8%
ROE after taxes, % 32.1% 33.5%
Earnings per share, EUR 0.18 0.22 -19.5% 0.97 1.02 -5.1%
Cash flow per share before
financing, EUR 0.66 0.92 -28.3%
Equity per share, EUR 2.97 3.05 -2.7%
Proposed dividend per
share, EUR 0.95 1.00
Personnel at the end of
the period 3,309 3,176 +4.2%
As of 1 January 2008, the Orion Group has changed its accounting
policy regarding disability pension liability (IAS 19 Employee
benefits). The adjusted key figures for previous periods are
presented in the table 'Adjusted key figures', which can be found in
the end of this release.
CEO Timo Lappalainen's review"The net sales of the Orion Group have shown steady growth. In the
light of the key figures for 2008, the performance was successful and
as a whole we achieved the planned goals. However, due to some
individual items, the overall result remained slightly below the
previous year's level. These items included, for example, the
substantial costs that were incurred when we had to prepare to defend
our patents in the United States, as well as provisions for future
costs that are mainly related to restructuring of our R&D operations.
Furthermore, the operating profit of the comparative year was
improved by the non-recurrent compensation relating to the
termination of the Calcimagon licensing agreement.""In the past year we entered into a number of new licensing
agreements, which expanded our product portfolio. As a result of
these and previously signed agreements, the number of product
launches more that doubled compared with the previous year. Most of
the product launches were carried out by the Specialty Products and
Animal Health divisions. Geographically, the focus was on Eastern
Europe and Finland. In the Proprietary Products business, the sales
of the Parkinson's disease drug Stalevo continued to grow. The sales
of the Easyhaler asthma product portfolio also developed favourably.""Orion's successful performance continued in Finland where our sales
grew more rapidly than the total market. Our business developed
favourably in all the main European markets.""Our strong investments in research continued in 2008. In response to
the productivity challenges faced by Orion and the entire
pharmaceutical industry, towards the end of the year we started to
develop a more flexible R&D operating model. As a result of the
decisions based on the statutory negotiations under the Act on
Co-Determination within Undertakings, we will cut 205 jobs in
Finland, mainly in early 2009. In addition, we had to cut 25 jobs in
Germany at the end of 2008 due to remarkable changes in the market
structure.""So far, the deepening financial and economic crisis has not had a
direct impact on our business. Due to the uncertainty of the
financial market, in December we took out a long-term loan of EUR 85
million to ensure our liquidity. This significantly altered the
structure of our Balance Sheet, but it had no effect on our gearing
and as a consequence decreased the equity ratio and return on
assets.""According to the outlook estimate published together with this
release, our net sales will increase slightly this year compared with
2008. We estimate our operating profit to increase slightly from
2008. The entire outlook estimate and the related preamble are found
on pages 6-7 of this report."
Events in 2008
In March, Orion's co-operation with the Swedish company Oasmia
Pharmaceutical AB was extended to veterinary medicines through a
licensing agreement concerning marketing of the Paccal® (former
Paclical® Vet) skin cancer drug for dogs. A new licensing agreement,
signed in June, extended Orion's marketing rights to cover all
European countries.
In April, Orion applied for an expanded indication for the Stalevo®
drug in the USA and Europe. The application process is based on the
FIRST-STEP study conducted by Novartis. The study showed that even in
the early stage of Parkinson's disease, Stalevo therapy results in an
improved symptomatic response compared with traditional
levodopa/carbidopa therapy.
In April, Orion entered into an in-licensing agreement with the
American company Indevus Pharmaceuticals, Inc. and acquired
European-wide marketing rights for the Vantas® (histrelin) implant
for the treatment of advanced prostate cancer.
In May, Orion acquired from the Italy-based company Recordati S.p.A
the rights to market Kentera® (oxybutynin) for the treatment of urge
incontinence and overactive bladder in the territory covering the
Nordic countries and Switzerland.
In May, Orion announced that it will discontinue the development of
the new COMT enzyme inhibitor, which was then in Clinical Phase I.
In July, Orion took out a loan of EUR 40 million from the European
Investment Bank. The loan will be repaid during seven years in
accordance with an equal repayment plan, and the interest rate is
tied to the 6-month euribor.
In September, the rights to develop and commercialise
non-intravenously administered dosage forms of dexmedetomidine in the
United States, for example, were out-licensed to the American Rëcro
Pharma company.
In September, Orion announced that the studies currently underway
with dexmedetomidine (a sedative for patients in intensive care)
administered as a long-term infusion will take longer to complete
than projected earlier, and preliminary results are expected to be
available in the summer of 2010.
In September, Orion and Pfizer signed an agreement giving Orion the
exclusive right to market an extensive portfolio of veterinary
medicines in Scandinavia.
In November, Orion initiated statutory negotiations with the
personnel representatives to restructure its pharmaceutical R&D
operating model and structure. The planned changes were estimated to
result in staff reductions of up to 300 people.
In December, GTx Inc. submitted a New Drug Application in the United
States for toremifene 80 mg. The drug is developed for the treatment
of adverse effects, such as osteoporosis, caused by treatment of
advanced prostate cancer. The active ingredient, toremifene, is
Orion's proprietary drug.
In December, Orion took out a pension loan of EUR 25 million granted
by Tapiola Mutual Pension Insurance Company. The loan will be repaid
during five years in accordance with an equal repayment plan. In
addition, Orion took out loans amounting to EUR 60 million from the
European Investment Bank. Their interest rates are tied to the
6-month euribor. The loans granted by the European Investment Bank
will be repaid in accordance with equal repayment plans, the EUR 10
million loan during seven years and the EUR 50 million loan during 12
years.
In 2008, Orion filed patent infringement lawsuits in the United
States against the Wockhardt companies and the Sun companies. These
companies seek to launch generic versions of Orion's Comtan and
Stalevo drugs in the United States.
Events after the financial year
On 15 January 2009, Orion filed a patent infringement lawsuit in the
United States against the companies belonging to the Wockhardt Group.
These companies seek to launch generic drugs in the United States
that contain the active ingredients in the same proportions as
Orion's proprietary drug Stalevo.
In early January, Orion completed the statutory negotiations
initiated in November to restructure its pharmaceutical R&D operating
model and structure. As a result of the negotiations, Orion decided
on staff reductions of about 205 people in Finland. About 175 people
will be given notice, and about 30 jobs will be reduced through
various pension and other arrangements.
On 23 January, Orion took out a fixed-rate pension loan of EUR 22.8
million from Ilmarinen Mutual Pension Insurance Company. The loan
will be repaid in accordance with an equal repayment plan during five
years.
In January, based on new safety information a restriction was added
to the European Summary of Product Characteristics for Fareston®
breast cancer drug (toremifene). The drug should not be used in
patients suffering from or with an increased risk of arrhythmia.
Teleconference in English
A teleconference for analysts and the media on the Financial
Statements will be held in English today on Friday, 6 February 2009,
starting at 2:00 p.m. EET. At the beginning of the teleconference
there will be a brief presentation in English concerning the result
of the Group.
The release and the presentation material, as well as instructions on
how to participate in the conference will be available at
www.orion.fi/investors. The on-demand recording of the teleconference
will be accessible on the homepage on Monday, 9 February 2009 at the
latest.
The phone numbers to the conference call are:
when calling from the United States +1 866 966 5335
when calling from other countries +44 (0)20 3023 4438
Orion's calendar for 2009
Registration to the AGM
begins
6 February 2009
Orion's Annual Report 2008 published
the week beginning on 2 March 2009
Latest registration date for
AGM 13
March 2009 at 4:00 pm
AGM at the Helsinki Fair Centre
23 March 2009 at 4:00 pm
Record date for dividend
payment 26 March 2009
Dividend
payment
2 April 2009
Interim report January-March 2009
27 April 2009
Interim report January-June
2009 7 August 2009
Interim report January-September 2009 26
October 2009
A separate release will be published today on the matters to be
handled at the AGM.
Orion's financial reports and related presentation material are
available on the Group's homepage at www.orion.fi/investors promptly
after the publishing. The homepage also provides a possibility to
register on Orion's mailing lists for publications and releases.
Additional information:
Timo Lappalainen, CEO, tel. +358 10 426 3692
Jari Karlson, CFO, tel. +358 10 426 2883 or mobile +358 50 966 2883
www.orion.fi/english
www.orion.fi/investors
Financial review 2008
Net sales
The Orion Group's net sales in 2008 were EUR 710.7 million (EUR 680.0
million in 2007), an increase of 4.5% on the previous year. The net
impact of foreign exchange rates on net sales in 2008 was EUR 13.8
million negative, of which the US dollar accounted for EUR -9.8
million. The rest of the impact was mainly due to the weakening of
the British pound sterling and the Swedish krona.
The Pharmaceuticals business had net sales of EUR 667.6 (639.7)
million, up by 4.4% on the previous year. Products based on in-house
R&D accounted for EUR 307.5 (292.3) million, or 46% (46%) of net
sales. Net sales from the Parkinson's disease drugs Stalevo® and
Comtess®/Comtan® totalled EUR 208.5 (200.1) million, or about
31% (31%) of the net sales of the Pharmaceuticals business.
Orion Diagnostica's net sales were EUR 45.0 (42.0) million, up by
7.1% on the previous year. The sales of the QuikRead® infection tests
continued to grow, but declined sales of the older product portfolio
slowed down overall growth.
Financial performance
The Orion Group's operating profit in 2008 was EUR 185.0 (192.0)
million, down by 3.6% on the comparative year.
The Pharmaceuticals business had an operating profit of EUR 188.5
(197.1) million, down by 4.4% on the previous year. Gross profit in
relation to sales was at the previous year's level. The gross profit
was up by EUR 18.7 million on the comparative period. Investments in
research rose slightly, as planned. The operating profit was further
depressed by the costs of EUR 6.7 million relating to the ongoing
patent infringement lawsuits in the USA, as well as a provision of
EUR 3.9 million for costs of staff reductions. The operating profit
for the comparative year was improved by the EUR 5.8 million income
relating to the expiry of the Calcimagon licensing agreement. There
were no similar non-recurring earnings items in 2008.
The Diagnostics business had an operating profit of EUR 6.1 (6.3)
million.
The Group's selling and marketing expenses were EUR 143.9 (143.4)
million, at the level of the previous year. R&D expenses amounted to
EUR 103.4 (98.5) million, up by 5.0% on the previous year and
accounting for 14.5% (14.5%) of the consolidated net sales.
Pharmaceutical R&D accounted for EUR 98.8 (94.2) million of the
total. Administrative expenses were EUR 51.5 (38.8) million. In
addition to the provision of EUR 3.9 million for costs relating to
staff reductions, administrative expenses were increased by the EUR
6.7 million costs of the patent litigations.
Because of changed accounting principles, Other operating income also
includes EUR 8.9 (6.5) million of income from currency rate hedging,
and Other operating expenses include EUR 8.7 (2.8) million of
expenses from currency rate hedging. In previous years and in the
Interim Reports for 2008 these items were reported as net amounts
included in net sales.
Group profit before taxes was EUR 184.2 (193.4) million. Earnings per
share were EUR 0.97 (1.02). Cash flow per share before financing was
EUR 0.66 (0.92). Equity per share was EUR 2.97 (3.05). The return on
capital employed before taxes (ROCE) was 38.5% (44.8%) and the return
on equity after taxes (ROE) was 32.1% (33.5%).
Balance Sheet and financial position
The Group's gearing was 7.1% negative (20.0% negative) and the equity
ratio was 60.2% (76.2%).
Liabilities in the Balance Sheet at 31 December 2008 totalled EUR
276.9 (134.5) million. At the end of 2008, interest-bearing
liabilities amounted to EUR 146.3 (4.0) million, of which EUR 109.1
million were long-term loans. Loans have been taken out to ensure the
Group's solvency in situations where a financial crisis makes it
difficult to predict the availability of short-term financing. The
increase of liabilities had a negative effect on the equity ratio.
The loans increased the Group's cash and cash equivalents at
year-end, amounting to EUR 176.1 (90.4) million. These items that
increased the Balance Sheet total were also the most important reason
for the lower ROCE.
The Group's cash and cash equivalents were invested in short-term
interest-bearing instruments issued by financially solid financial
institutions and corporations. Gearing was still on a good level, but
it weakened slightly because of increased working capital and higher
investments compared with the previous years.
Cash flows
Cash flows from operating activities totalled EUR 144.4 (154.7)
million, slightly down on the previous year. The operating profit
decreased on the comparative period. Furthermore, it included
slightly less non-cash expenses. EUR 15.0 (14.7) million were tied to
the working capital.
Cash flows from investing activities were EUR 51.8 (25.3) million
negative. Capital expenditure in 2008 was clearly higher than in
2007. In 2007, cash flows were additionally improved by higher income
from sales of fixed assets.
Cash flows from financing activities were EUR 4.8 (148.5) million
negative. Dividends remained at the previous year's level, but the
cash flows were improved by a EUR 141.1 million increase in loans. In
March 2008, EUR 4.8 million were spent on the repurchase of own
shares.
Capital expenditure
The Group's capital expenditure totalled EUR 56.8 (35.3) million. The
increase was mainly due to purchases of intangible assets amounting
to EUR 24.0 (7.6) million. The main items were the acquisitions of
marketing rights for Vantas® (histrelin), Kentera® (oxybutynin) and
Paccal® (paclitaxel, former Paclical® Vet), acquisition of new
marketing areas for the Precedex® sedative (dexmedetomidine) and
acquisition of product rights for the Favora® self-care product line.
Outlook for 2009
Net sales will grow slightly from 2008. Sales of pharmaceuticals
through Orion's own sales network will continue to increase both in
Finland and other European countries. Total in-market sales of
Orion's Parkinson's drugs will show further growth, but at a slower
rate than before. Deliveries of Parkinson's drugs to Novartis are
expected to increase slightly.
Marketing expenditure will increase moderately, mainly owing to
product launches. Research expenditure will remain at the level of
2008. Internal, fixed R&D expenses will decrease as a result of the
restructuring, but ongoing clinical studies and studies that are
about to start will increase external costs. The ongoing patent
litigations in the United States will continue. Their costs are
estimated to be slightly higher than in 2008.
Operating profit is estimated to increase slightly from 2008. The
economic crisis is not expected to have a material effect on the
result, but the crisis increases uncertainty relating to
profitability estimates.
R&D expenses will be about EUR 100 million.
Capital expenditure will be about EUR 45 million, not including
substantial company or product acquisitions.
Preamble
The reference price system that will be implemented in Finland in
April 2009 is not expected to have a material impact on Orion's
business. The new system will increase price competition in some
product categories. On the other hand, however, it will offer new
business opportunities for Orion. As a result of the change, general
market growth is expected to slow down in Finland compared with 2008.
Launches of new products will support Orion's growth in Finland. On
the other hand, the growth will be retarded by heavy price
competition affecting substitutable prescription drugs in particular,
which are important for Orion.
As expected, the growth of in-market sales of the Parkinson's drugs
Stalevo and Comtess/Comtan in 2008 was slightly more than 10%, which
is lower than in previous years. Slight further slowdown of growth is
expected in 2009. Orion's own sales, as well as deliveries to Orion's
marketing partner Novartis, are expected to develop in line with the
overall market for Parkinson's drugs. On the basis of current
information, Novartis will not continue to reduce its stock levels in
2009.
Because the registrations and launches of new products are projects
that take more than a year, the resources and other material inputs
required for them in 2009 have been planned mostly in the previous
year.
Research and development costs can be forecast fairly well. Part of
the expenses are caused by fixed internal items, such as salaries and
maintenance of the operating infrastructure, while part of them
result from long clinical trials. They are typically performed in
clinics located in several countries. The most important clinical
studies scheduled for 2009 either were already underway in 2008 or
are at an advanced stage of planning, which is why their costs can be
forecast with high accuracy.
The estimated costs of the patent litigations having started in the
United States are based on planned timetables and work estimates. The
costs resulting from the litigations will depend on a number of
factors, which are difficult to forecast.
Near-term risks and factors of uncertainty relating to the outlook
estimates
The company is not aware of any significant risk factors relating to
the earnings outlook for 2009.
The economic crisis is not expected to have a material impact on the
short-term development of the pharmaceuticals market, but increased
uncertainty makes it difficult to forecast future development. For
example, risks of payment defaults and credit losses relating to
individual countries and customers may increase slightly, and
forecasting of currency rate development will be more challenging,
particularly in Eastern Europe.
The sales of individual products and, on the other hand, Orion's
sales in individual markets may vary slightly depending on the extent
to which Orion's products are specifically affected by the
ever-tougher price competition and other competition that has
prevailed in the pharmaceutical markets in recent years. Deliveries
to Novartis are based on timetables that are jointly agreed in
advance. Nevertheless, these can change, for example, as a
consequence of decisions by Novartis concerning adjustments of stock
levels during the year. The litigations having started are not
assumed to affect the sales of the Comtan or Stalevo drugs in the
United States in 2009.
Most of the exchange rate risk is related to the US dollar.
Typically, less than 15% of Orion's sales come from North America. As
regards other important currencies, such as the British pound
sterling and the Swedish krona, the overall impact will be abated by
the fact that Orion has organisations of its own in Great Britain and
Sweden, which means that in addition to sales there will also be
costs in these currencies.
Research projects always involve factors of uncertainty that may
either increase or decrease estimated costs. The projects may
progress more slowly or faster than assumed or they may be
discontinued. Nonetheless changes that may occur in ongoing clinical
studies are reflected in costs relatively slowly, and they are not
estimated to have a material impact on the earnings in the current
year. Owing to the nature of the research process, the timetables and
costs of new studies that are being started are known well in
advance. Therefore, they typically do not lead to unexpected
essential changes in the estimated cost structure.
Financial objectives and dividend policy
The financial objectives of the Group remained unchanged:
* The moderate organic growth of the net sales within the next few
years is accelerated via product, product portfolio and company
acquisitions.
* Operating profit will be increased.
* Equity ratio is maintained at the level of 50% at least.
In dividend distribution, Orion takes into account the distributable
funds as well as the medium-long- and long-term needs of capital
expenditure and other financial needs required for the achievement of
the financial objectives.
Proposal for distribution of profit by the Board of Directors,
dividend per share EUR 0.95
The parent company's distributable funds are EUR 185,822,357.00, of
which profit for the financial year made up EUR 143,522,078.18.
The Board of Directors proposes that a dividend of EUR 0.95 per share
be paid from the parent company's distributable funds. No dividend
shall be paid for treasury shares held by the company on the record
date for dividend payment. On the day of the profit distribution
proposal, shares entitling to receive dividend totalled 140.9
million. Thus, the dividend would total EUR 133.9 million. The
Group's payout ratio for 2008 would be 97.9% (98.0%). The dividend
payment date would be 2 April 2009 and the dividend would be payable
to shareholders who are listed in the Company's shareholder register
on 26 March 2009 would.
The Board of Directors further proposes that EUR 140,000.00 shall be
donated to medical research and other purposes of public interest and
that EUR 51,796,014.60 would remain in the retained earnings account.
Shares and shareholders
On 31 December 2008, Orion Corporation had a total of 141,257,828
shares and the company's share capital was EUR 92,238,541.46.
A-shares totalled 51,440,668 and B-shares 89,817,160. At the end of
2008, altogether 324,836 B-shares were in the company's possession
(treasury shares). On 31 December 2008, the aggregate number of votes
conferred by both share classes was 1,118,305,684 excluding treasury
shares.
Both shares, A and B, provide equal rights to the company assets and
dividends.
On the basis of the Articles of Association, a shareholder can demand
the conversion of his or her A-shares to B-shares. In 2008, a total
of 1,118,020 shares were converted.
Orion's A- and B-shares are quoted on NASDAQ OMX Helsinki in the
Large Cap group under the Healthcare sector heading under the trading
codes ORNAV and ORNBV. Trading in both of the company's share classes
commenced on 3 July 2006. Information on trading in the company's
shares has been available since this date. On 31 December 2008, the
market capitalisation of the company's shares excluding treasury
shares was EUR 1,697.5 million.
Voting rights conferred by shares
Each A-share entitles its holder to twenty (20) votes at General
Meetings, whereas each B-share carries one (1) vote. However, a
shareholder cannot vote with more than 1/20 of the aggregate number
of votes from the different share classes represented at the General
Meeting. In addition, Orion Corporation and Orion Pension Fund do not
have the right to vote at Orion's General Meetings of shareholders.
Authorisations of the Board of Directors
Orion Corporation's Board of Directors has an authorisation granted
by the Annual General Meeting on 25 March 2008 to repurchase and
transfer the company's own shares (treasury shares). By the end of
2008, the Board of Directors had not exercised this authorisation
which is in force up to the close of the 2009 Annual General Meeting.
The Board of Directors does not have an authorisation to increase the
share capital or to issue bonds with warrants or convertible bonds or
stock options.
In March 2008, Orion's Board of Directors exercised the authorisation
granted by the AGM on 2 April 2007 to repurchase a total of 350,000
B-shares. The shares were acquired in public trade from NASDAQ OMX
Helsinki during 17-20 March 2008.
By the decision of the Board of Directors, altogether 25,164 B-shares
held by the company were conveyed on 20 March 2008 as a share-based
bonus for 2007 to persons employed by the company and included in the
Share-based Incentive Plan of the Orion Group. The transfer price of
the shares conveyed was EUR 14.09 per share, which was the weighted
average price of the B-share on 20 March 2008. The total transfer
price of the B-shares conveyed was EUR 354,482.75.
Shareholder structure
At the end of 2008, Orion had a total of 43,119 registered
shareholders, of whom 94.1% were private individuals. They held 48.3%
of the total share stock and 59.2% of the total votes. There were
34.7 million nominee-registered shares, representing 24.5% of all
shares and 6.1% of the votes.
Orion held 324,836 B-shares as treasury shares at the end of 2008.
The proportion of the treasury shares was 0.2% of the company's total
share stock and 0.03% of the total votes.
No new transactions exceeding the flagging limits set in the Finnish
Securities Markets Act have been brought to the attention of the
company during the financial year.
Personnel
The average number of employees in the Group during 2008 was 3,270
(3,160). At the end of 2008, the Group had a total of 3,309 (3,176)
employees, of whom 2,729 (2,678) worked in Finland and 580 (498)
outside Finland. The increase of personnel outside Finland is mainly
due to reinforcement of the sales organisation in Eastern Europe.
Salaries and other personnel expenses for the financial year totalled
EUR 170.9 (156.3) million. The figure for 2008 includes a provision
of EUR 3.9 million for staff reduction costs.
In early January 2009, Orion completed the statutory negotiations
initiated in November focusing on restructuring of Orion's
pharmaceutical R&D operating model and structure. As a result of the
negotiations, Orion decided on a staff reduction of 205 people in
Finland. About 175 people were given notice, and about 30 jobs will
be reduced through various pension and other arrangements. Notice was
given to about 105 people in Espoo, about 55 people in Turku and
about 15 people in Kuopio. The reductions will mainly take place in
the first half of 2009.
In addition to this, 25 people were reduced from the German sales
organisation at the end of 2008 because of remarkable changes in the
market structure.
Legal proceedings
Legal proceedings against the Wockhardt companies
Orion Corporation has on 13 September 2007, 8 December 2008 and 15
January 2009 filed patent infringement lawsuits in the United States
to enforce U.S. Patents No. 5,446,194; 5,135,950 and 6,500,867
against companies belonging to the Wockhardt Group that engage in
generic drug business.
The Wockhardt companies seek to market a generic version of
entacapone (200 mg tablet) in the United States with the same dosage
strength as Orion's proprietary drug Comtan. Moreover, these
companies seek to market generic tablets (12.5/200/50; 25/200/100;
37.5/200/150 and 50/200/200 mg strengths of carbidopa, entacapone and
levodopa ) in the United States. The strengths are the same as those
of Orion's proprietary drug Stalevo. The first hearing days of the
trials have been set to begin on 16 November, 2009.
Legal proceedings against the Sun companies
Orion Corporation has on 13 November 2007, 7 February 2008 and 12
November 2008 filed patent infringement lawsuits in the United States
to enforce its U.S. Patents No. 6,500,867 and 5,446,194 against
companies belonging to the Sun Group.
Sun Pharmaceutical Industries Limited seeks to market generic
versions of Orion's Stalevo drug (25/100/200 and 37.5/150/200 mg
strengths of carbidopa, levodopa and entacapone) in the United
States. Sun Pharma Global, Inc. seeks to market a generic version of
Orion's proprietary drug Comtan in the United States.
The abovementioned pharmaceuticals are marketed in the United States
by Orion's exclusive licensee, Novartis, for the treatment of
Parkinson's disease. Orion and Novartis will vigorously defend the
intellectual property rights covering Stalevo and Comtan. By virtue
of the legal proceedings, the realisation of generic competition
regarding the said pharmaceuticals is neither certain nor imminent.
Reviews of the business segments in 2008
Pharmaceuticals
Market review on human pharmaceuticals
Finland is Orion's most important single market area. According to
statistics collected by Finnish Pharmaceutical Data Ltd, Finnish
wholesales of human pharmaceuticals in 2008 totalled EUR 1,945.2
million, up by 6.5% on the previous year. Total pharmacy sales grew
by 6.9% and hospital sales by 5.5% compared with the previous year.
The wholesales of prescription drugs rose by 6.8%, while the
wholesales of self-care products grew by 4.2%.
Orion is still strongly positioned as the leading marketer of
pharmaceuticals in Finland. According to statistics collected by
Finnish Pharmaceutical Data Ltd, Orion's wholesales of human
pharmaceuticals in Finland in 2008 totalled EUR 179.6 million, up by
10.4% on the previous year. The development of Orion's sales was
clearly more vigorous than the overall market growth in the segments
of self-care products and prescription drugs. The main reason for
Orion's strong performance is the continuously renewed product
portfolio. Orion's market share was 9.2% (9.0%), and 1.5 percentage
units higher than that of the second largest marketer.
According to IMS Health pharmaceutical sales statistics, in the
12-month period ending in September 2008 the sales of Parkinson's
disease drugs in the USA totalled USD 1,286 (1,190) million, up by
8.1% on the previous 12-month period. A year earlier, the
corresponding growth rate was still about 25%. The distinct slowdown
in market growth was caused by the expiry of the patent for the
leading product, a dopamine agonist, and the consequent generic
competition. The five largest European markets for Parkinson's
disease drugs were Germany, the UK, France, Spain and Italy. Total
sales of Parkinson's drugs in these countries in the same 12-month
period totalled EUR 894 (820) million, with an average market growth
of about 9.0% on the comparative period in the previous year.
Net sales and operating profit of the Pharmaceuticals business
The net sales of the Pharmaceuticals business in 2008 amounted to EUR
667.6 (639.7) million, up by 4.4% on the previous year. Operating
profit was EUR 188.5 (197.1) million, down by 4.4% on the previous
year. The EBIT margin of the Pharmaceuticals business was 28.2%
(30.8%) of the segment's net sales.
Proprietary Products
The net sales of Proprietary Products in 2008 amounted to EUR 284.7
(270.8) million, up by 5.1% on the previous year.
The combined net sales of the Parkinson's disease drugs, Stalevo and
Comtess/Comtan, totalled EUR 208.5 (200.1) million in 2008. The net
sales were up by 4.2% on the previous year and accounted for 31%
(31%) of the Pharmaceuticals business segment's net sales. The net
sales from Stalevo and Comtan deliveries to Novartis totalled EUR
118.1 (116.2) million, up by 1.6%. The net sales generated by Stalevo
and Comtess in Orion's own sales organisation totalled EUR 90.4
(83.9) million, up by 7.7% on the previous year. Stalevo sales
through Orion's own sales network grew by 22.2%.
The total euro-denominated value of the Stalevo and Comtess/Comtan
in-market sales grew by more than 10%, despite the weakened rate of
the US dollar, the British pound sterling and the Swedish krona. The
favourable development of Comtan sales in Japan was a factor that
contributed to the growth. Deliveries from Orion to Novartis remained
at the previous year's level in 2008, even though the company's
in-market sales in local currencies were up by 15% on 2007.
Orion has patent litigations underway in the United States against
the Wockhardt companies and the Sun companies. These companies aim to
launch generic versions of Orion's Comtan and Stalevo drugs in the
United States.
In 2008, the new dosage strengths of Stalevo gave additional
flexibility to treatment of Parkinson's disease patients taking
Stalevo. In April, Stalevo 200 mg received a marketing authorisation
in the EU, and it was launched in June. Stalevo 200 mg had already
been launched in the United States in autumn 2007. Moreover, the 75
and 125 mg tablet strengths received a marketing approval in the
United States in August and were launched in October.
In April, Orion acquired European-wide marketing rights for Vantas®
(histrelin) for the treatment of advanced prostate cancer. Vantas is
an implant that releases the active ingredient, histrelin, during a
12-month period. This means that the patient no longer needs to take
injections several times a year. The product is already available in
the United States, for example. Vantas has also received marketing
authorisations in Denmark, Germany, Ireland, UK and Spain, and
product launches will begin in 2009.
In May, Orion acquired the rights to market Kentera® (oxybutynin) for
the treatment of urge incontinence and overactive bladder in the
territory covering the Nordic countries and Switzerland. Kentera is a
plaster that contains oxybutynin, which is released into blood
circulation when in use. The product was approved in the USA in 2003
and in Europe in 2004. Kentera was launched in the Nordic countries
in June and in Switzerland in October 2008.
Both, Vantas and Kentera are important new products in Orion's
Urology and Oncology product portfolio.
In December, GTx Inc. submitted a New Drug Application in the United
States for toremifene 80 mg. The drug is developed for the treatment
of adverse effects, such as osteoporosis, caused by treatment of
advanced prostate cancer. The active ingredient, toremifene, is
Orion's proprietary drug.
The Precedex® (dexmedetomidine) sedative marketed by Hospira was
particularly successful in the United States and Japan. Furthermore,
in October the FDA approved an extended indication for the Precedex
sedative for patients treated with non-invasive ventilation in
connection with surgery or other interventions.
In September, the rights to develop and commercialise
non-intravenously administered dosage forms of dexmedetomidine in the
United States, for example, were out-licensed to the American company
Rëcro Pharma. In Europe, Orion has the rights to all dosage forms and
indications of dexmedetomidine. Hospira has the rights to
intravenously administered dexmedetomidine in the United States, for
example.
Specialty Products
The net sales of the Specialty Products business division in 2008
totalled EUR 254.0 (241.5) million, up by 5.2% on the previous year.
The product range comprises generic, or off-patent, prescription
medicines and self-care products. The total development was hampered
by the termination of the license agreement for the Calcimagon
osteoporosis drug in late 2007. As a consequence of the termination,
the annual net sales of the German sales organisation were reduced by
approximately EUR 12 million.
In the segments of Orion's self-care products and generic medicines,
the sales in Finland have grown much more rapidly than the market as
a whole. The favourable development was promoted by the continuously
renewed prescription and self-care product portfolios. Among Orion's
prescription drugs, the fastest growth in Finland was seen in the
sales of the anti-psychotic drug Ketipinor® (quetiapine), which was
launched in late 2007. The launching of larger self-care packages of
Burana® (ibuprofen), a pain killer, in spring has further boosted the
sales of the product. In May, Orion purchased, among others, the
product rights for the Favora self-care product line.
Net sales of Orion's human pharmaceuticals in Eastern Europe in 2008
amounted to EUR 38.0 (28.9) million, up by 32% on the previous year.
Specialty Products accounted for the majority of the sales in the
region. The growth was fastest in Russia, Ukraine and Poland and it
was based on numerous product launches, which doubled in 2008
compared with the previous year. Particularly successful among the
new products were the anti-psychotic drug Ketipinor® (quetiapine) and
the entire psychiatric product portfolio. In addition, Orion's older
product portfolio is growing successfully in the Eastern European
markets.
The net sales of Easyhaler® medicines, used for the treatment of
asthma and Chronic Obstructive Pulmonary Disease (COPD), totalled EUR
22.2 (17.3) million, up by 28.3% on the previous year. The
reimbursement decisions on Budesonide Easyhaler and Formoterol
Easyhaler in early 2008 enabled full product launches in Turkey.
Sales also developed favourably in Poland.
Orion has discontinued the process to expand the marketing area of
Salbutamol Easyhaler® (salbutamol inhalation powder 100 and 200
µg/dose) in Europe. The marketing of Salbutamol Easyhaler continues
in several European countries under national marketing
authorisations.
Animal Health
The Animal Health division's net sales in 2008 amounted to EUR 67.2
(66.8) million. Thanks to launches of numerous drugs and other
therapeutic products as well as the contribution of the product
portfolio received from Pfizer, the division's net sales remained
unchanged compared with 2007, despite increasing generic competition.
The division also focused on research and development more intensely
than before.
EUR 24.6 (27.5) million, or about 37% (41%) of the division's net
sales derived from the animal sedatives Dexdomitor®
(dexmedetomidine), Domitor® (medetomidine), Domosedan® (detomidine)
and Antisedan® (atipamezole), with sales dreasing by 10.5% on the
previous year. The sales of animal sedatives have been slackened
particularly by generic competition in Europe, due to expiry of
patents, and by the weak US dollar. The sales of the latest member in
the product family, Dexdomitor, have developed favourably.
The Finnish veterinary medicines market grew by almost 8% in 2008.
The growth rate of Orion's net sales was slightly higher than the
overall market growth rate.
In spring, Orion's marketing rights for Paccal® (paclitaxel, former
Paclical® Vet) were expanded to cover all of Europe, as Orion entered
into a new agreement with the Swedish company Oasmia Pharmaceutical
AB. Paccal® is a skin cancer drug for dogs that is being developed
for the treatment of mastocytoma.
In September, Orion and Pfizer signed a contract giving Orion the
exclusive right to market an extensive portfolio of veterinary
medicines in Scandinavia.
Fermion
Fermion manufactures active pharmaceutical ingredients (APIs). Its
net sales in 2008 amounted to EUR 36.1 (38.1) million, down by 5.2%
on the previous year. The weak US dollar rate has influenced Fermion
more negatively than the other business divisions in the Group. Price
competition in generic active ingredients has also hampered the
development of sales. The impact of intra-Group transactions, that
is, deliveries of active ingredients for Orion's own use, has been
eliminated from the net sales. These deliveries remained strong
throughout 2008.
The ten best-selling pharmaceutical products
The net sales of the top ten pharmaceuticals in 2008 amounted to EUR
340.1 (320.9) million, up by 6.0% on the previous year. Their
proportion of the total net sales of pharmaceuticals was about 51%
(50%). The net sales of Stalevo were up by 11.2% on the comparative
year, amounting to 21% (20%) of the total net sales in the
Pharmaceuticals business segment. Deliveries of Stalevo to Novartis
increased by 3.0%, while deliveries of Comtan decreased by nearly one
per cent. The fastest growth rates were achieved with the Easyhaler
franchise, the breast cancer drug Fareston® (toremifene), the
painkiller Burana®, the anticoagulant Marevan® (warfarin) and the
heart failure drug Simdax® (levosimendan).
Products from in-house research
Net sales of products from in-house research in 2008 amounted to EUR
307.5 (292.3) million, up by 5.2% on the previous year. These
products made up about 46% (46%) of the net sales generated by the
Pharmaceuticals business.
Research and development
The Group's R&D expenses totalled EUR 103.4 (98.5) million, of which
the Pharmaceuticals business made up EUR 98.8 (94.2) million. The R&D
expenses were 14.5% (14.5%) of the Group net sales.
The focus of the R&D operations continues to be on early research,
and partnerships are usually established for the Clinical Phase III
at the latest, especially when the aim is to obtain marketing
authorisations in countries outside Europe. Orion's pharmaceutical
R&D focuses on three core therapy areas: the central nervous system,
critical care and oncology. In addition to in-house activities, Orion
engages in several research collaboration partnerships with other
pharmaceutical companies and numerous academic communities. The
licensing agreements with these partners provide Orion with rights
for further development and marketing of the candidate compounds
possibly resulting from the research efforts.
The renewed operating model for pharmaceutical R&D enables more
flexible operation and cost structures, necessary for Orion to ensure
its future operating conditions and competitiveness. The company is
increasingly focusing on early stage R&D co-operation with
universities and other pharmaceutical companies. It will also seek to
share costs of the clinical stages with other players in the field.
This way, Orion can ensure an increasing number of new research
projects and reinforce its strategic capacity to continue operating
as a company that provides new drugs and engages in pharmaceutical
R&D.
Orion is applying for an expanded indication for the Stalevo drug in
the USA and Europe, for the treatment of early-stage Parkinson's
disease. The process is based on the results from the FIRST-STEP
study, conducted by Orion's marketing partner Novartis in eight
countries in North America and Europe.
The FIRST-STEP study is complemented by the STRIDE-PD study,
conducted by Orion together with Novartis. This study is to determine
whether Stalevo can delay the onset of involuntary movements, that
is, dyskinesias, in Parkinson's patients. The study has been carried
out in 14 countries in 747 Parkinson patients. Results are expected
during the first quarter of 2009.
Orion is collaborating with Novartis to develop Stalevo for Japanese
market.
Clinical Phase III studies are under way with dexmedetomidine in
patients in intensive care as an infusion administered for over 24
hours. The programme aims to have the product registered in the EU.
The efficacy and safety of dexmedetomidine is compared with midazolam
in the MIDEX study and with propofol in the PRODEX-study. Both
studies are planned to involve 500 patients. Preliminary results from
the programme, initiated in 2007, are expected in summer 2010.
Dexmedetomidine is already available, for example, in the USA and
Japan as a sedative for patients in intensive care, administrable as
an infusion for a maximum of 24 hours.
The LEVET programme is studying the efficacy of orally administered
levosimendan in the treatment of heart diseases in dogs, with the aim
of obtaining marketing authorisations in the USA and the EU.
For the Easyhaler product family, a new formulation is being
developed combining budesonide as an anti-inflammatory agent and
formoterol as a long-acting bronchodilator.
An alpha 2c receptor antagonist is being studied in Clinical Phase I.
The preclinical profile of this compound fits for the treatment of
the symptoms of schizophrenia, for example. Other possible
indications include Alzheimer's disease.
The potential use of levosimendan for the treatment of stroke in
humans is being investigated by Orion in preliminary Phase I clinical
studies.
Orion has several projects in early research phase investigating
selective androgen receptor modulators (SARM), prostate cancer,
neuropathic pain, Parkinson's disease and other possible indications
within intensive care, among others.
Diagnostics
Net sales generated by Orion's Diagnostics business in 2008 amounted
to EUR 45.0 (42.0) million, up by 7.1% on the previous year. A
substantial increase was seen in the sales through Orion's own sales
network that covers Scandinavia, as well as in exports to the Czech
Republic and China.
Operating profit was EUR 6.1 (6.3) million, down by 2.8% on the
previous year. Despite the good development in sales, the operating
profit declined because of planned investments in marketing and
product development.
The QuikRead® tests maintained their position as the main products.
Their reagent and equipment sales continued to grow vigorously. The
tests are used, for example, in detecting infection on the basis of
the CRP concentration in a blood sample. During the spring, the
launch of the newest member in the product family, the QuikRead®
Strep A test, began also in the Nordic countries. The new test is
used to detect streptococcus A, the causative agent of bacterial
tonsillitis, from the pharyngeal sample. The increasing selection of
QuikRead products in doctors' offices and clinical laboratories
creates a solid basis for future demand for reagents.
The sales of dip slide tests remained unchanged compared with 2007.
The Hygicult® On test was included in Orion's hygiene product
portfolio in late 2007, and its launch continued in 2008. The test
was developed for microbial determinations and monitoring of
cleaning, particularly in industrial kitchens and food and cosmetics
industries.
Espoo, 6 February 2009
Board of Directors of Orion Corporation
Orion Corporation
Timo Lappalainen Jari Karlson
President and CEO CFO
Tables
CONSOLIDATED INCOME STATEMENT
EUR million Q4/08 Q4/07 Change % 2008 2007 Change %
Net sales 179.9 172.8 +4.1% 710.7 680.0 +4.5%
Cost of goods sold -61.7 -58.9 +4.7% -230.0 -219.3 +4.9%
Gross profit 118.2 113.9 +3.8% 480.8 460.7 +4.4%
Other operating income 5.8 8.8 -33.9% 12.1 15.5 -21.6%
Selling and marketing
expenses -39.2 -41.9 -6.4% -143.9 -143.4 +0.3%
R&D expenses -29.4 -28.7 +2.5% -103.4 -98.5 +5.0%
Administrative expenses -18.9 -12.1 +55.9% -51.5 -38.8 +32.9%
Other operating expenses -3.7 -1.3 +172.9% -9.1 -3.5 +160.5%
Operating profit 32.8 38.6 -14.9% 185.0 192.0 -3.6%
Financial income 3.7 1.4 +168.1% 7.6 3.9 +94.0%
Financial expenses -4.4 -0.8 +436.1% -8.5 -2.5 +242.7%
Profit before taxes 32.1 39.2 -17.9% 184.2 193.4 -4.8%
Income tax expense -7.5 -8.4 -11.3% -47.8 -49.5 -3.4%
Profit for the period 24.7 30.7 -19.7% 136.3 143.9 -5.3%
of which attributable to:
Parent company
shareholders 24.7 30.8 -19.7% 136.3 143.9 -5.3%
Minority interests 0.0 0.0 -48.9% 0.0 0.0 #DIV/0!
Earnings per share, € 1) 0.18 0.22 -19.5% 0.97 1.02 -5.1%
Depreciation and
amortisation 8.4 7.8 +7.3% 31.6 31.6
Personnel expenses 50.8 45.5 +11.8% 170.9 156.3 +9.4%
1) The figure has been calculated from the profit attributable to the
parent company shareholders. The company has no items that could
dilute the earnings per share.
CONSOLIDATED BALANCE SHEET
Assets
EUR million Dec/08 Dec/07 Change %
Property, plant and equipment 192.4 186.6 +3.1%
Goodwill 13.5 13.5
Intangible rights 37.5 21.1 +78.0%
Other intangible assets 2.9 1.9 +51.8%
Investments in associates 0.1 0.1 -18.6%
Available-for-sale investments 0.9 0.9
Pension asset 29.3 26.8 +9.3%
Deferred tax assets 4.2 3.9 +10.1%
Other non-current assets 1.5 2.1 -28.0%
Non-current assets total 282.3 256.8 +9.9%
Inventories 131.7 121.1 +8.7%
Trade receivables 83.1 82.9 +0.3%
Other receivables 22.3 14.4 +54.7%
Cash and cash equivalents 176.1 90.4 +94.7%
Current assets total 413.1 308.9 +33.8%
Assets total 695.5 565.7 +22.9%
Equity and liabilities
EUR million Dec/08 Dec/07 Change %
Share capital 92.2 92.2
Share premium 17.8 17.8
Expendable fund 23.0 23.0
Other reserves -0.9 0.5 -284.0%
Retained earnings 286.3 297.6 -3.8%
Equity of the parent company shareholders 418.5 431.1 -2.9%
Minority interests 0.0 0.0 +2.1%
Equity total 418.6 431.2 -2.9%
Deferred tax liabilities 42.0 41.9 +0.3%
Pension liability 0.8 1.0 -22.8%
Provisions 0.4 0.2 +86.5%
Interest-bearing non-current liabilities 109.9 1.2
Other non-current liabilities 0.9 0.2 +375.1%
Non-current liabilities total 153.9 44.4 +246.4%
Trade payables 30.2 34.3 -12.1%
Current tax liabilities 2.4 3.4 -29.0%
Other current liabilities 54.0 49.5 +9.1%
Provisions 0.0 0.0 -100.0%
Interest-bearing current liabilities 36.4 2.9
Current liabilities total 123.0 90.1 +36.5%
Liabilities total 276,9 134.5 +105.8%
Equity and liabilities total 695.5 565.7 +22.9%
.
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
a. Share capital
b. Share premium
c. Expendable fund
d. Other reserves
e. Translation
differences
f. Retained
earnings
g. Total
h. Minority
interest
i. Equity total
EUR million a. b. c. d. e. f. g. h. i.
Equity on 31 Dec
2006 92.2 17.8 23.0 0.5 -3.4 313.3 443.5 0.0 443.5
Change in
accounting policy -14.6 -14.6 -14.6
Equity on 31 Dec
2006 92.2 17.8 23.0 0.5 -3.4 298.7 428.8 0.0 428.8
Available-for-sale
investments and
cash flow hedges 0.0 0.0 0.0
Translation
differences -0.7 -0.7 -0.7
Net unrealised
gains
recognised directly
in equity 0.0 -0.7 -0.7 -0.7
Change in
accounting policy -1.5 -1.5 -1.5
Profit for the
period 145.4 145.4 145.4
Recognised income
and expenses total 0.0 -0.7 143.9 143.2 143.2
Dividend -141.3 -141.3 -141.3
Share-based
incentive plan 0.4 0.4 0.4
Other changes -0.0 -0.1 -0.1 0.0 -0.1
Equity on 31 Dec
2007
before change in
accounting policy 92.2 17.8 23.0 0.5 -4.1 317.9 447.3 0.0 447.3
Change in
accounting policy -16.2 -16.2 -16.2
Equity on 31 Dec
2007 92.2 17.8 23.0 0.5 -4.1 301.7 431.1 0.0 431.2
Cash flow hedges
profits and losses
recognised in
equity -1.4 -1.4 -1.4
Translation
differences -2.8 -2.8 -2.8
Taxes relating to
items
recognised in
equity 0.4 0.4 0.4
Net unrealised
gains
recognised directly
in equity -1.0 -2.8 -3.9 -3.9
Profit for the
period 136.3 136.3 136.3
Recognised income
and expenses total -1.0 -2.8 136.3 132.5 132.5
Dividend -140.9 -140.9 -140.9
Repurchase of
own shares -4.8 -4.8 -4.8
Share-based
Incentive plan 0.6 0.6 0.6
Other changes -0.3 0.4 0.1 0.0 0.1
Equity on 31 Dec
2008 92.2 17.8 23.0 -0.9 -6.9 293.3 418.5 0.0 418.6
CONSOLIDATED CASH FLOW STATEMENT
EUR million 2008 2007
Operating profit 185.0 192.0
Adjustments 28.7 31.2
Change in working capital -15.0 -14.7
Interest paid -7.0 -2.1
Interest received 7.5 3.8
Income taxes paid -54.9 -55.5
Total net cash from operating activities 144.4 154.7
Investments in property, plant, equipment -30.8 -26.9
Investments in intangible assets -23.0 -7.7
Sales of property, plant and equipment
and available-for-sale investments 1.5 3.0
Sales of intangible assets 0.5 6.3
Total net cash used in investing activities -51.8 -25.3
Withdrawals of short-term loans 121.7 46.1
Repayments of short-term loans -105.1 -46.9
Withdrawals of long-term loans 125.0
Repayments of long-term loans -0.5 -6.4
Repurchase of own shares -4.8
Dividends paid and other distribution of profits -141.1 -141.3
Total net cash used in financing activities -4.8 -148.5
Net change in cash and cash equivalents 87.7 -19.1
Cash and cash equivalents at the beginning of the
period 90.4 110.0
Foreign exchange differences -2.1 -0.5
Net change in cash and cash equivalents 87.7 -19.1
Cash and cash equivalents at the end of the period 176.1 90.4
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 2008 2007
Carrying amount at the beginning of the period 186.6 187.1
Additions 32.8 27.7
Disposals -1.8 -3.2
Depreciation -25.1 -25.0
Carrying amount at the end of the period 192.4 186.6
CHANGES IN OTHER INTANGIBLE ASSETS
EUR million 2008 2007
Carrying amount at the beginning of the period 23.0 21.9
Additions 24.0 7.6
Disposals -0.0 -0.0
Depreciation -6.6 -6.6
Carrying amount at the end of the period 40.4 23.0
COMMITMENTS AND CONTINGENCIES
EUR million Dec/08 Dec/07
Contingent for own liabilities
Mortgages on land and buildings 19.0 25.5
of which those to Orion Pension Fund 9.0 9.0
Guarantees 1.0 1.4
Other liabilities
Leasing liabilities (excl. finance lease contracts) 4.0 4.5
Other liabilities 0.3 0.3
DERIVATIVES
EUR million Dec/08 Dec/07
Currency forward contracts
Fair value 2.0 0.3
Nominal value 64.6 66.7
Electricity forward contracts
Fair value -1.4 0.0
Nominal value 5.7 0.6
RELATED PARTY TRANSACTIONS
EUR million 2008 2007
Management's employment benefits 3.1 2.9
Review of the business segments
KEY FIGURES FOR PHARMACEUTICALS BUSINESS
Q4/08 Q4/07 Change % 2008 2007 Change %
Net sales, EUR million 169.6 162.7 +4.3% 667.6 639.7 +4.4%
Operating profit, EUR
million 35.3 41.7 -15.2% 188.5 197.1 -4.4%
% of net sales 20.8% 25.6% 28.2% 30.8%
R&D expenses, EUR million 28.0 27.2 +3.1% 98.8 94.2 +4.9%
% of net sales 16.5% 16.7% 14.8% 14.7%
Capital expenditure, EUR
million 11.7 10.5 +11.9% 53.3 32.5 +63.9%
% of net sales 6.9% 6.4% 8.0% 5.1%
Sales revenue from
proprietary products, EUR
million 77.5 72.1 +7.4% 307.5 292.3 +5.2%
Personnel at the end of the
period 2,995 2,864 +4.6%
NET SALES OF ORION'S TOP 10 PHARMACEUTICAL PRODUCTS
EUR million Q4/08 Q4/07 Change % 2008 2007 Change %
Stalevo® (Parkinson's
disease) 35.0 32.3 +8.4% 141.0 126.9 +11.2%
Comtess® / Comtan®
(Parkinson's disease) 17.7 15.2 +16.3% 67.4 73.3 -8.0%
Domitor®, Dexdomitor®,
Domosedan® and Antisedan®
(animal sedatives) 5.4 5.5 -1.1% 24.6 27.5 -10.5%
Easyhaler® product family
(asthma) 5.9 5.2 +14.5% 22.2 17.3 +28.3%
Burana® (inflammatory pain) 5.3 4.0 +33.0% 19.4 15.6 +24.6%
Simdax® (heart failure) 4.4 4.9 -10.5% 17.3 15.1 +15.0%
Divina® product range
(menopausal symptoms) 3.5 4.3 -18.4% 14.7 15.9 -7.0%
Enanton® (prostate cancer) 3.1 3.2 -5.6% 12.7 12.9 -1.3%
Fareston® (breast cancer) 3.0 2.1 +43.6% 10.5 8.2 +27.7%
Marevan® (anticoagulant) 2.9 2.4 +21.9% 10.1 8.3 +21.4%
Total 86.2 79.1 +9.0% 340.1 320.9 +6.0%
Share of pharmaceutical net
sales, % 51% 49% 51% 50%
KEY FIGURES FOR DIAGNOSTICS BUSINESS
Q4/08 Q4/07 Change % 2008 2007 Change %
Net sales, EUR million 10.7 10.5 +1.9% 45.0 42.0 +7.1%
Operating profit, EUR
million 0.2 0.1 +242.5% 6.1 6.3 -2.8%
% of net sales 1.7% 0.5% 13.6% 15.0%
Capital expenditure, EUR
million 1.0 1.0 +3.3% 2.8 1.6 +78.9%
% of net sales 9.6% 9.4% 6.2% 3.7%
Personnel at the end of the
period 287 283 +1.6%
Performance by segment
NET SALES BY BUSINESS SEGMENT
EUR million Q4/08 Q4/07 Change % 2008 2007 Change %
Pharmaceuticals 169.6 162.7 +4.3% 667.6 639.7 +4.4%
Proprietary Products 70.9 67.3 +5.4% 284.7 270.8 +5.1%
Specialty Products 66.6 63.2 +5.5% 254.0 241.5 +5.2%
Animal Health 16.5 15.3 +7.4% 67.2 66.8 +0.5%
Fermion 9.9 11.4 -13.3% 36.1 38.1 -5.2%
Other 5.8 5.5 +4.7% 25.6 22.5 +13.9%
Diagnostics 10.7 10.5 +1.9% 45.0 42.0 +7.1%
Group items -0.5 -0.4 +10.5% -1.9 -1.7 +8.6%
Group total 179.9 172.8 +4.1% 710.7 680.0 +4.5%
OPERATING PROFIT BY BUSINESS SEGMENT
EUR million Q4/08 Q4/07 Change % 2008 2007 Change %
Pharmaceuticals 35.3 41.7 -15.2% 188.5 197.1 -4.4%
Diagnostics 0.2 0.1 +242.5% 6.1 6.3 -2.8%
Group items -2.7 -3.1 -14.4% -9.6 -11.4 -16.3%
Group total 32.8 38.6 -14.9% 185.0 192.0 -3.6%
NET SALES BY ANNUAL QUARTERS
EUR million Q4/08 Q3/08 Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06
Pharmaceuticals 169.6 161.0 168.5 168.5 162.7 153.4 156.4 167.2 152.1
Diagnostics 10.7 9.5 12.6 12.2 10.5 9.4 10.3 11.8 10.4
Group items -0.5 -0.4 -0.5 -0.5 -0.4 -0.3 -0.5 -0.5 -0.4
Group total 179.9 170.1 180.5 180.2 172.8 162.5 166.3 178.5 162.2
OPERATING PROFIT BY ANNUAL QUARTERS
EUR million Q4/08 Q3/08 Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06
Pharmaceuticals 35.3 44.3 45.7 63.1 41.7 50.1 45.1 60.2 38.8
Diagnostics 0.2 1.0 2.5 2.3 0.1 1.2 1.8 3.2 0.6
Group items -2.7 -1.8 -3.1 -2.1 -3.1 -2.2 -3.2 -2.9 -3.5
Group total 32.8 43.6 45.2 63.4 38.6 49.1 43.7 60.6 35.8
GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS
EUR million Q4/08 Q3/08 Q2/08 Q1/08 Q4/07 Q3/07 Q2/07 Q1/07 Q4/06
Finland 55.2 52.8 53.5 55.7 53.7 48.6 48.6 50.1 49.0
Scandinavia 23.7 23.3 26.1 28.1 24.3 23.8 25.3 24.1 23.4
Other Europe 62.0 56.2 61.4 64.4 57.5 56.0 57.5 63.7 58.4
North America 19.2 21.7 18.5 14.4 15.4 19.1 19.8 23.5 22.0
Other markets 19.8 16.1 21.1 17.6 21.9 15.0 15.1 17.1 9.4
Group total 179.9 170.1 180.5 180.2 172.8 162.5 166.3 178.5 162.2
Information on Orion Corporation's shares
Basic information on 31 DECEMBER 2008
A-share B-share Total
ISIN code FI0009014369 FI0009014377 -
Trading code on NASDAQ OMX
Helsinki ORNAV ORNBV -
Reuters code ORNAV.HE ORNBV.HE -
Bloomberg code ORNAV.FH ORNBV.FH -
Share capital, EUR million 33.6 58.6 92.2
Counter book value of the
share, EUR 0.65 0.65 -
Total number of shares 51,440,668 89,817,160 141,257,828
% of total share stock 36% 64% 100%
Number of treasury shares - 324,836 324,836
Total number of shares
excluding treasury shares 51,440,668 89,492,324 140,932,992
Minimum number of shares - - 1
Maximum number of shares 500,000,000 1,000,000,000 1,000,000,000
Votes per share 20 1 -
Number of votes excluding
treasury shares 1,028,813,360 89,492,324 1,118,305,684
% of total votes 92% 8% 100%
Total number of
shareholders 14,363 34,891 43,119
TRADING DURING 1 JAN-31 DEC 2008
A-share B-share Total
Number of shares traded 2,508,220 73,719,186 76,227,406
% of the total number of shares 4.8% 82.6% 54.1%
Closing quotation on 2 Jan 2008, EUR 16.00 16.08
Lowest quotation, EUR
(A: 27 Oct 2008, B: 10 Oct 2008) 10.50 10.30
Average quotation, EUR 12.98 12.85
Highest quotation, EUR
(A: 2 Jan 2008, B: 4 Jan 2008) 16.40 16.44
Closing quotation on 31 Dec 2008, EUR 12.00 12.07
Market capitalisation of the share
stock on 31 Dec 2008 excluding
treasury shares, EUR million 617.3 1,080.2 1,697.5
PERFORMANCE PER SHARE
Q4/08 Q4/07 Change % 2008 2007 Change %
Earnings per share,
EUR 0.18 0.22 -19.5 % 0.97 1.02 -5.1%
Cash flow per share
before financing,
EUR 0.66 0.92 -28.3%
Equity per share, € 2.97 3.05 -2.7%
Proposal for
dividend per share,
€ 0.95 1,00
Proposed payout
ratio, € 97.9% 98.0%
Total proposed
dividend, € million 133.9 141.3
Effective dividend yield according to proposal, %
A-share 7.9% 6.2%
B-share 7.9% 6.2%
Price/Earnings ratio (P/E), %
A-share 12.37 15.78
B-share 12.44 15.72
Average number of
shares excluding
treasury shares,
1,000 shares 140,933 141,258 140,003 141,258
Appendices
Orion Group structure
Orion Corporation is the parent company of the Orion Group. The Group
consists of two business segments and five business divisions:
* Pharmaceuticals
o Proprietary Products (patented prescription products for
humans)
o Specialty Products (off-patent, generic prescription
products and self-medication products for humans)
o Animal Health (veterinary products for pets and production
animals)
o Fermion (active pharmaceutical ingredients, APIs)
* Diagnostics
o Orion Diagnostica (diagnostic tests).
Accounting policies
The Orion Group Financial Statements have been prepared in accordance
with the International Financial Reporting Standards (IFRS), applying
IAS and IFRS standards in force on 31 December 2008.
The following standards and interpretations or updates that came into
force in 2008 and have significance for the Group were applied in the
financial year. The application of these standards and applications
had no effect on the consolidated financial statements:
* IAS 39 (Amendment) and IFRS 7 (Amendment) - Reclassification of
financial assets
* IFRIC 14, IAS 19 - The Limit on a Defined Benefit Asset, Minimum
Funding Requirements and their Interaction
Change in accounting policy of the defined-benefit pension obligation
As of 1 January 2008 the Orion Group has changed its accounting
policy regarding disability pension liability (IAS 19 Employee
benefits). The adjusted key figures for previous periods are
presented in the table 'Adjusted key figures', which can be found in
the end of this release.
Change in accounting policy for recognition of fair value of foreign
currency derivatives
As of 1 January 2008, the Orion Group has recognised the change in
the fair value of foreign currency derivatives hedging trade
receivables in other operating income and expenses, while previously
these changes were included in exchange gains and losses from sales.
The comparative information for 2007 has been adjusted in accordance
with the new accounting policy. The change in the foreign currency
derivative accounting policy has not had a material effect on
Consolidated Financial Statements or key ratios.
The policies and calculation methods applied during the period are
available on Orion's homepage at www.orion.fi/english/investors.
The figures in this report are audited.
Those in the parentheses are for the comparative period of the
previous year. The per-share ratios have been adjusted. All the
figures have been rounded, which is why the total sums of individual
figures may differ from the total sums shown.
Calculation of the key figures
+-------------------------------------------------------------------+
| | | | |
| | | Profit before taxes + Interest | |
| | | and other financial expenses | |
| Return on capital | |---------------------------------| x |
| employed (ROCE), % | = | Total assets - | 100 |
| | | Non-interest-bearing | |
| | | liabilities (average during the | |
| | | period) | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Profit for the period | |
| Return on equity | = |---------------------------------| x |
| (ROE), % | | Equity total (average during | 100 |
| | | the period) | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Equity | |
| Equity ratio, % | = |---------------------------------| x |
| | | Total assets - Advances | 100 |
| | | received | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Interest-bearing liabilities - | |
| Gearing, % | = | Cash and cash equivalents | x |
| | |---------------------------------| 100 |
| | | Equity | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Profit available for the parent | |
| | | company shareholders | |
| Earnings per share | = |---------------------------------+-----|
| (EPS), EUR | | Average number of shares during | |
| | | the period, excluding treasury | |
| | | shares | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Cash flow from operating | |
| | | activities + Cash flow from | |
| Cash flow per share | | investing activities | |
| before financing, | = |---------------------------------+-----|
| EUR | | Average number of shares during | |
| | | the period, excluding treasury | |
| | | shares | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Equity of the parent company | |
| | | shareholders | |
| Equity per share, | = |---------------------------------| |
| EUR | | Number of shares at the end of | |
| | | the period, excluding treasury | |
| | | shares | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Dividend for the financial | |
| | | period | |
| Dividend per share, | = |---------------------------------+-----|
| EUR | | Number of shares at the end of | |
| | | the period, excluding treasury | |
| | | shares | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Dividend per share | x |
| Payout ratio, % | = |---------------------------------| 100 |
| | | Earnings per share | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Dividend per share | |
| Effective dividend | = |---------------------------------| x |
| yield, % | | Closing share price of the | 100 |
| | | period | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Closing share price of the | |
| Price/Earnings ratio | = | period | x |
| (P/E), % | |---------------------------------| 100 |
| | | Earnings per share | |
| | | | |
|----------------------+----+---------------------------------+-----|
| | | | |
| | | Total value in euros of shares | |
| Average price of | | traded | |
| share, EUR | = |---------------------------------+-----|
| | | Average number of shares traded | |
| | | during the period | |
| | | | |
|-------------------------------------------------------------+-----|
| | | Number of | | Closing | |
| Market capitalisation, | | shares | | share | |
| EUR million | = | at the end | x | price of | |
| | | of the | | the period | |
| | | period | | | |
+-------------------------------------------------------------------+
ADJUSTED KEY FIGURES
Q4/07 Q4/07 2007 2007
Earlier Adjusted Earlier Adjusted
reported reported
Operating profit, EUR million 39.1 38.6 194.0 192.0
Profit before taxes, EUR million 39.7 39.2 195.5 193.4
Balance Sheet total, EUR million 589.5 565.7
Equity ratio, % 75.9% 76.2%
Gearing, % -19.3% -20.0%
ROCE (before taxes), % 43.8% 44.8%
ROE (after taxes), % 32.7% 33.5%
Earnings per share, EUR 0.26 0.22 1.03 1.02
Equity per share, EUR 3.17 3.05
Publisher:
Orion Corporation
www.orion.fi/english
Orion is an innovative European, R&D-based, pharmaceutical and
diagnostic company with a special emphasis on developing medicinal
treatments and diagnostic tests for global markets. Orion develops,
manufactures and markets human and veterinary pharmaceuticals, active
pharmaceutical ingredients as well as diagnostic tests. Orion's
pharmaceutical R&D focuses on three core therapy areas: the central
nervous system, critical care and oncology.
The Group's net sales in 2008 amounted to EUR 710.7 million and the
company invested EUR 103.4 million in research and development. At
the end of 2008, the Group had a total of 3,309 employees, of whom
2,729 worked in Finland. Orion's shares are listed on the NASDAQ OMX
Helsinki.
© 2024 Nasdaq, Inc. All Rights Reserved |