2011-04-27 11:00:02 CEST
2011-04-27 11:00:31 CEST
REGULATED INFORMATION
Orion - Interim report (Q1 and Q3)
Orion Group Interim Report January-March 2011
ORION CORPORATION / INTERIM REPORT / JANUARY-MARCH 2011/ 27 April 2011 at 12.00
p.m. EEST
Orion's net sales for January-March 2011 totalled EUR 244 million (EUR 215
million for January-March 2010), up by 14% on the comparative period last year.
Net sales excluding the non-recurring payment of EUR 7 million from Endo
Pharmaceuticals were up by 10%.
· Operating profit was EUR 93 (71) million.
· Profit before taxes was EUR 93 (71) million.
· Equity ratio was 44% (44%).
· ROCE before taxes was 72% (56%).
· ROE after taxes was 66% (54%).
· Basic earnings per share were EUR 0.49 (0.37).
· Cash flow per share before financial items was EUR 0.34 (0.22).
· Orion estimates that net sales will be slightly higher and operating profit
excluding non-recurring items higher in 2011 than in 2010.
ORION'S KEY FIGURES FOR THE REVIEW PERIOD
Q1/11 Q1/10 Change % 2010
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Net sales, EUR million 244.1 214.5 +13.8% 849.9
International operations, EUR million 185.0 157.5 +17.5% 620.7
% of net sales 75.8% 73.4% 73.0%
Operating profit, EUR million 92.9 71.0 +30.7% 254.2
% of net sales 38.0% 33.1% 29.9%
Profit before taxes, EUR million 92.7 70.8 +30.8% 252.6
% of net sales 38.0% 33.0% 29.7%
Income tax expense, EUR million 24.2 18.5 +31.1% 67.9
R&D expenses, EUR million 19.8 19.2 +3.1% 85.5
% of net sales 8.1% 9.0% 10.1%
Capital expenditure, EUR million 7.2 8.0 -10.4% 39.2
% of net sales 2.9% 3.7% 4.6%
Assets total, EUR million 812.3 771.8 +5.3% 745.8
Equity ratio, % 44.1% 43.8% 62.7%
Gearing, % -29.3% -20.9% -12.2%
Interest-bearing liabilities, EUR million 110.1 131.6 -16.3% 110.0
Non-interest-bearing liabilities, EUR million 343.9 303.6 +13.3% 168.4
Cash and money market investments, EUR million 214.9 201.8 +6.5% 167.2
ROCE (before taxes), % 72.1% 55.5% 45.0%
ROE (after taxes), % 66.3% 54.0% 40.7%
Basic earnings per share, EUR 0.49 0.37 +30.9% 1.31
Diluted earnings per share, EUR 0.49 0.37 +30.9% 1.31
Cash flow per share before financial items, EUR 0.34 0.22 +55.2% 1.26
Equity per share, EUR 2.54 2.39 +6.6% 3.32
Personnel at the end of the period 3,217 3,115 +3.3% 3,131
Average personnel during the period 3,179 3,123 +1.8% 3,137
Personnel expenses, EUR million 44.4 40.1 +10.7% 170.3
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President and CEO Timo Lappalainen's review"Strong growth in sales""Our operating profit in the first quarter of the year was clearly higher than a
year ago. The good progress was due to strong and better than expected growth in
sales, which also includes a non-recurring payment of EUR 7 million from Endo
Pharmaceuticals."Sales of our Parkinson's drugs were higher than in the comparative period. It
is especially promising for Orion's future that sales from our other product
ranges continued to grow strongly. Precedex and the Easyhaler product family
were the proprietary drugs with the fastest sales growth. Continuing investments
in developing the Scandinavian portfolio of self-care products and Eastern
European operations, and continual product launches have yielded results in
Specialty Products. The year began well for Animal Health and Orion Diagnostica,
too."Research and development expenses in the first quarter were only slightly
higher than in the comparative period because recruitment of patients has just
begun for our new clinical trials, such as the alpha 2c receptor antagonist and
androgen receptor antagonist research programmes. Research and development
expenses will increase when these trials are fully operational later in the
year."Processing of the marketing authorisation application for Orion's intensive
care sedative dexmedetomidine by the European Medicines Agency is continuing as
anticipated and in accordance with the earlier announced schedule. In March the
results from clinical trials with the product were presented for the first time
in a scientific congress."Our net sales growth in the first quarter was better than expected, and as a
result our operating profit improved more strongly than anticipated. The good
performance in the first quarter raised our expectation for the full year, so on
13 April 2011 we announced in a stock exchange release that we were upgrading
our full-year outlook for the current year. According to the new estimate, net
sales will increase slightly and operating profit excluding non-recurring items
will increase. The full outlook forecast and the basis for it can be found on
pages 6-7 of this Interim Report."
Events during the period
On 24 January Orion filed a patent infringement lawsuit in the United States to
enforce Orion's US patent covering Comtan® against Mylan Pharmaceuticals Inc.
On 28 January Orion and Endo Pharmaceuticals Inc. announced that they had signed
a novel collaboration agreement for the discovery, development and
commercialisation of assets in oncology.
On 1 March Orion transferred altogether 102,900 Orion Corporation B shares held
by the Company as a share bonus for 2010 to the key persons employed by the
Group and belonging to the Share-based Incentive Plan of the Group.
On 31 March Orion Corporation's Annual General Meeting was held at the Helsinki
Fair Centre.
Events after the period
On 13 April Orion upgraded its full-year outlook for 2011 because sales had
developed well in the first quarter.
News conference and teleconference
A news conference and teleconference on the published results will be held
today, Wednesday 27 April 2011, at 13:30 EEST in Hotel Kämp, address:
Pohjoisesplanadi 29, Helsinki. President and CEO Timo Lappalainen will give a
brief presentation in English on the financial review.
The event can be followed live as a webcast accessible via the Orion website at
www.orion.fi. After the presentation, questions can be asked by telephone in
Finnish and English.
The teleconference code is 891 283 and to participate in the teleconference,
please call:
from United States: +1 866 803 8344
from other countries: +44 (0)20 7162 0125
News conference recordings
A recording of the webcast of the event in English will be available later the
same day via a link on the Orion website. A recording of the presentation by the
President and CEO in Finnish will be available on the Orion website later on the
same day.
Financial report material
Financial reviews and related presentation material are available at
www.orion.fi/en/ promptly after publication. The website also has a form for
subscribing to Orion's releases.
Dates in Orion Calendar 2011
Interim Report January-June 2011 2 August 2011
Interim Report January-September 2011 25 October 2011
For additional information about the financial review:
Jari Karlson, CFO, tel. +358 10 426 2883
www.orion.fi/en
www.orion.fi/en/investors/
Financial review Q1/2011
Net sales
The Orion Group's net sales in the first quarter of 2011 totalled EUR 244
million (EUR 215 million in the first quarter of 2010), up by 14% on the
comparative period of the previous year. The net effect of currency exchange
rates was plus EUR 3 million.
The Pharmaceuticals business's net sales were up by 14% at EUR 231 (203)
million. The products based on in-house R&D accounted for EUR 114 (101) million,
or 49% (49%) of the Pharmaceuticals business's net sales. Net sales of Orion's
Stalevo® (carbidopa, entacapone and levodopa) and Comtess®/Comtan® (entacapone)
Parkinson's drugs were up by 12% at EUR 74 (66) million, which is 32% (32%) of
the Pharmaceuticals business's net sales. The net sales of other products in the
portfolio totalled EUR 157 (138) million, and were up by 15% on the comparative
period and up by 9% excluding the non-recurring payment of EUR 7 million from
Endo Pharmaceuticals Inc.
The Diagnostics business's net sales were EUR 14 (12) million.
Operating profit
The Orion Group's operating profit was up by 31% at EUR 93 (71) million.
The Pharmaceuticals business's operating profit was EUR 92 (71) million, up by
31% on the comparative period. The gross profit grew faster than net sales due
especially to an increase in royalties and milestone payments. The fixed costs
of the business operations were as anticipated higher than in the comparative
period.
The Diagnostics business's year has started well and the operating profit was up
by 23% at EUR 2.8 (2.2) million.
Operating expenses
The Group's sales and marketing expenses were higher, as anticipated, at EUR 52
(44) million. The increase of 19% was mainly due to additional expenditure for
enhancing the sales and developing the portfolio in many different business and
geographic areas.
R&D expenses were up by 3% at EUR 20 (19) million and accounted for 8% (9%) of
the Group's net sales. Pharmaceutical R&D expenses amounted to EUR 18 (18)
million. Research projects are reported in more detail under Pharmaceuticals in
the Business Reviews.
Administrative expenses were slightly higher at EUR 9 (8) million.
Other operating income and expenses increased profit by EUR 2 million (profit
decrease in comparative period EUR 2 million). They comprise items arising
mainly from foreign exchange hedges.
Profit before taxes
Group profit before taxes totalled EUR 93 (71) million. Basic earnings per share
were EUR 0.49 (0.37) and diluted earnings per share were EUR 0.49 (0.37). Equity
per share was EUR 2.54 (2.39). The return on capital employed before taxes
(ROCE) was 72% (56%) and the return on equity after taxes (ROE) 66% (54%).
Financial position
The Group's gearing was -29% (-21%) and the equity ratio 44% (44%).
Total liabilities at 31 March 2011 were EUR 454 (435) million. At the end of the
period, interest-bearing liabilities amounted to EUR 110 (132) million,
including EUR 88 (109) million of long-term loans. The non-interest-bearing
liabilities also include the dividends and repayments of capital paid in April
but transferred from equity already in March.
The Group had EUR 215 (202) million of cash and cash equivalents at the end of
the period, which are invested in short-term interest-bearing instruments issued
by financially solid financial institutions and corporations.
Cash flow
Cash flow from operating activities was clearly higher than in the comparative
period at EUR 58 (39) million. Operating profit was clearly higher in the first
quarter of 2011, and the additional amount tied up into working capital was the
same as in the comparative period at EUR 34 million. The increase in working
capital was due to growth in net sales, which led to the increase in trade
receivables and stocks.
Cash flow from investing activities was EUR -9 (-8) million and cash flow from
financing activities was EUR -0.2 (-0.2) million.
Capital expenditure
The Group's capital expenditure totalled EUR 7 (8) million. This comprised EUR
5 (5) million on property, plant and equipment and EUR 3 (3) million on
intangible assets.
Outlook for 2011
Net sales will be slightly higher than in 2010.
Marketing expenditure will be higher due to the increased number of product
launches. Research expenditure will be higher than in 2010.
Operating profit excluding non-recurring items will be higher than in 2010.
The Group's capital expenditure will be about EUR 45 million excluding
substantial corporate or product acquisitions.
Basis for outlook
Price competition in the Finnish market will persist in 2011. However, product
launches will continue to support Orion's position as market leader.
In-market sales of the Parkinson's drugs grew by just under 10% in 2010. The
pace of growth of sales is forecast to continue to slow in 2011. Deliveries to
Novartis have typically been greatest in the first half of the year and least in
the last quarter of the year. The generic competition commencing in April 2012
in the United States is not expected to have a material impact on Orion's sales
in 2011.
Because the registrations and launches of new products are projects that take
more than a year, the increases in resources and other inputs required in 2011
were planned mainly during the previous year.
Research and development costs can be estimated quite accurately in advance.
They are partly the Company's internal fixed cost items, such as salaries and
maintenance of the operating infrastructure, and partly external variable costs.
External costs arise from, among other things, long-term clinical trials, which
are typically performed in clinics located in several countries. The most
important clinical trials scheduled for 2011 are either ongoing from the
previous year or at an advanced stage of planning, therefore their cost level
can be estimated rather accurately.
The estimated costs of the ongoing patent litigation in the United States are
based on the planned timetables and work estimates. The costs due to the
litigation will depend on a number of factors, which are difficult to estimate
accurately.
Near-term risks and uncertainties relating to the outlook
The Company is not aware of any significant risk factors relating to the
earnings outlook for 2011.
Sales of individual products and also Orion's sales in individual markets may
vary slightly depending on the extent to which the ever-tougher price and other
competition prevailing in pharmaceutical markets in recent years will
specifically affect Orion's products. Deliveries to Novartis are based on
timetables that are jointly agreed in advance. Nevertheless, they can change,
for example as a consequence of decisions by Novartis concerning adjustments of
stock levels.
Most of the exchange rate risk relates to the US dollar. Typically, only less
than 15% of Orion's net sales come from the United States. As regards currencies
in European countries, the overall effect will be abated by the fact that Orion
has organisations of its own in most of these countries, which means that in
addition to sales income, there are also costs in these currencies.
Research projects always entail uncertainty factors 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 expected to have a material impact on 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. They therefore typically do not
lead to unexpected changes in the estimated cost structure.
Financial objectives
Orion's financial objectives are ensuring the Group's financial stability and
creating a foundation for long-term profitable growth.
The principal means of achieving these objectives are:
· improving the organic development of net sales and operating profit through
product, product portfolio and corporate acquisitions
· increasing the efficiency of operations and cost control
· maintaining a stable financial position, with the equity ratio at least 50%
Sales of Stalevo® and Comtess®/Comtan® currently account for approximately one-
third of Orion's net sales. The key patents for these Parkinson's drugs in
Orion's main markets will expire in 2012-2013, which is why their sales are
expected to decline over the next few years. Orion is continuously bringing new
products to the market to replace this drop in net sales.
The development of Orion's net sales and profitability in the next few years
will depend on how fast the sales of Parkinson's drugs will decline and, on the
other hand, how the sales of other products will increase in the future. This
creates a point of discontinuity in the Group's operations.
Dividend policy
Orion's dividend distribution takes into account the distributable funds and the
capital expenditure and other financial requirements in the medium and long term
to achieve the financial objectives.
Shares and shareholders
On 31 March 2011 Orion had a total of 141,257,828 (141,257,828) shares, of which
47,483,699 (51,140,668) were A shares and 93,774,129 (90,117,160) B shares. The
Group's share capital was EUR 92,238,541.46 (92,238,541.46). At the end of March
2011 Orion held 413,754 (214,424) B shares as treasury shares. On 31 March 2011
the aggregate number of votes conferred by the A and B shares was 1,043,034,355
(1,112,716,096) excluding treasury shares.
At the end of March 2011, Orion had 60,388 (57,454) registered shareholders
Voting rights conferred by shares
Each A share entitles its holder to twenty (20) votes at General Meetings of
Shareholders and each B share one (1) vote. However, a shareholder cannot vote
more than 1/20 of the aggregate number of votes from the different share classes
represented at the General Meetings of Shareholders. In addition, Orion and
Orion Pension Fund do not have the right to vote at Orion Corporation's General
Meetings of Shareholders.
Both share classes, A and B, confer equal rights to the Company's assets and
dividends.
Conversion of shares
The Articles of Association entitle shareholders to demand the conversion of
their A shares to B shares within the limitation on the maximum number of shares
of a class. In January-March 2011 a total of 79,866 shares were converted.
Trading in Orion's shares
Orion's A shares 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,
and information on trading in the Company's shares has been available since this
date.
On 31 March 2011 the market capitalisation of the Company's shares excluding
treasury shares was EUR 2,409 million.
Authorisations of the Board of Directors
Orion's Board of Directors was authorised by the Annual General Meeting on 24
March 2010 to decide on acquisition of shares in the Company and on a share
issue in which shares held by the Company can be conveyed. The authorisation to
acquire shares is valid for 18 months and the authorisation to issue shares for
five years from the respective decision taken by the Annual General Meeting.
On 18 May 2010 the Board of Directors of Orion Corporation decided to repurchase
shares as authorised by the Annual General Meeting. Orion acquired in total
300,000 B shares of Orion Corporation on 11-18 August 2010 in accordance with
the decision. The shares were acquired for use as part of the long-term
incentive plan for the Orion Group's key persons. Following this acquisition,
the Board of Directors is not authorised to repurchase any more of the Company's
own shares. The terms for repurchasing the Company's own shares under the
authorisation were published in a stock exchange release on 24 March 2010.
The Board of Directors is authorised to decide on conveyance of no more than
500,000 Orion Corporation B shares held by the Company. Such shares held by the
Company can be conveyed either against or without payment. Such shares held by
the Company can be conveyed by selling them in public trading on NASDAQ OMX
Helsinki; in a share issue placement to the Company's shareholders in proportion
to their holdings at the time of the conveyance regardless of whether they own A
or B shares; or in a share issue placement deviating from shareholders' pre-
emptive rights if there is a weighty financial reason, such as the development
of the capital structure of the Company, using the shares to finance possible
corporate acquisitions or other business arrangements of the Company, financing
capital expenditure or as part of the Company's incentive plan. The share issue
placement can be without payment only if there is an especially weighty
financial reason in the view of the Company and to the benefit of all its
shareholders. The amounts paid for shares in the Company conveyed shall be
recorded in a distributable equity fund. The Board of Directors shall decide on
other matters related to the conveyance of shares held by the Company. The
authorisation was exercised as described below under the heading "Share-based
Incentive Plan".
The Board of Directors is not authorised to increase the share capital or to
issue bonds with warrants or convertible bonds or stock options.
Share-based Incentive Plan
In February 2010 the Board of Directors of Orion Corporation decided on a new
share-based incentive plan for the Group key persons. The Plan includes earning
periods and the Board of Directors will annually decide on the beginning and
duration of the earning periods in 2010, 2011 and 2012. The Board of Directors
will decide on the earnings criteria and on targets to be established for them
at the beginning of each earning period. The target group of the Plan consists
of approximately 30 people. The total maximum amount of rewards to be paid on
the basis of the Plan is 500,000 Orion Corporation B shares and a cash payment
corresponding to the value of the shares.
On 1 March 2011 Orion transferred altogether 102,900 Orion Corporation B sharesheld by the Company as a share bonus for 2010 to the key persons employed by the
Group and belonging to the Share-based Incentive Plan of the Group. The transfer
was based on the authorisation by the Annual General Meeting on 24 March 2010.
The price per share of the transferred shares was EUR 16.7488, which was the
volume weighted average quotation of Orion Corporation B shares on 1 March
2011. The total transaction price of the transferred shares was therefore EUR
1,723,452.
Share ownership
At the end of March 2011 Orion had a total of 60,388 (57,454) registered
shareholders, of whom 95% (94%) were private individuals holding 53% (53%) of
the entire share stock and 65% (61%) of the total votes. There were altogether
37 (32) million nominee-registered shares, which is 26% (22%) of all shares, and
they conferred entitlement to 5% (4%) of the votes.
At the end of March 2011 Orion held 413,754 (214,424) B shares as treasury
shares, which is 0.3% (0.2%) of the Company's total share stock and 0.04%
(0.02%) of the total votes.
No new transactions exceeding the notification threshold set in the Finnish
Securities Markets Act were brought to the attention of the Company during the
review period.
Decisions by the Annual General Meeting
The Annual General Meeting of the Shareholders of Orion Corporation was held on
31 March 2011 at the Helsinki Fair Centre. The following matters were handled at
the meeting.
Adoption of the financial statements
The Annual General Meeting adopted the financial statements of the Company and
Group as per 31 December 2010.
Discharge from liability
The members of the Board of Directors and the President and CEO were discharged
from liability for the financial year 1 January to 31 December 2010.
Dividend EUR 1.20 per share
A dividend of EUR 1.20 per share was approved in accordance with the Board's
proposal. The record date for dividend distribution was 5 April 2011 and the
payment date was 12 April 2011.
Repayment of capital EUR 0.06 per share
It was decided that EUR 0.06 per share be distributed from the expendable fund
in distributable equity as repayment of capital to the shareholders. The record
date for repayment of capital was 5 April 2011 and the payment date was 12 April
2011.
Remuneration of the members of the Board of Directors
As the annual fees for the term of office of the Board of Directors, the
Chairman shall receive EUR 72,000, the Vice Chairman shall receive EUR 49,000
and the other Board members shall receive EUR 36,000 each. Furthermore, as a fee
for each meeting attended, the Chairman shall receive EUR 1,200, the Vice
Chairman shall receive EUR 900 and the other Board members shall receive EUR
600 each. The travel expenses of all Board members shall be paid in accordance
with previous practice. The aforementioned meeting fees shall also be paid to
the Chairmen and to the members of the committees established by the Board.
Of the aforementioned annual fees, 60% was to be paid in cash and 40% in Orion
Corporation B shares, which were acquired for the Board members in the period 4
April 2011 to 8 April 2011 from the stock exchange in amounts corresponding to
EUR 28,800 for the Chairman, EUR 19,600 for the Vice Chairman and EUR 14,400 for
each of the other Board members. The part of the annual fee paid in cash, which
corresponds to the approximate sum necessary for the payment of the income taxes
on the fees, was to be paid no later than 29 April 2011. The annual fees
encompass the full term of office of the Board of Directors.
Members and Chairman of the Board of Directors
The number of members in the Board of Directors was confirmed to be six. Sirpa
Jalkanen, Eero Karvonen, Matti Kavetvuo, Hannu Syrjänen, Heikki Westerlund and
Jukka Ylppö were re-elected as members of the Board of Directors for the
following term of office. Hannu Syrjänen was re-elected as the Chairman of the
Board of Directors.
Auditor and auditor's fee
Authorised Public Accountants PricewaterhouseCoopers Oy was elected as the
auditor for the following term of office. The auditor's fee shall be paid
against an invoice approved by the Company.
Share premium fund reduction
It was decided to reduce the share premium fund in Orion Corporation's balance
sheet on 31 December 2010 by EUR 17,797,958.60 by transferring all the share
premium assets into the reserve for invested unrestricted equity.
Constitution of the Board of Directors
At its constitutive meeting following the Annual General Meeting, the Board of
Directors re-elected Matti Kavetvuo as its Vice Chairman.
Personnel
The average number of employees in the Orion Group in January-March 2011 was
3,179 (3,123). At the end of March 2011 the Group had a total of 3,217 (3,115)
employees, of whom 2,515 (2,491) worked in Finland and 702 (624) outside
Finland.
Salaries and other personnel expenses in January-March 2011 totalled EUR 44 (40)
million.
Significant legal proceedings
Legal proceedings against the Sandoz companies
On 4 September 2009 Orion Corporation and Hospira, Inc. filed together a patent
infringement lawsuit in the United States against Sandoz International GmbH and
Sandoz Inc. to enforce their patents valid in the United States. Sandoz Canada
Inc. has since been added as a defendant in the lawsuit. The legal proceedings
concern Orion's US Patent No. 4,910,214 and Orion's and Hospira's commonly owned
US Patent No. 6,716,867.
Sandoz Inc. has sought authorisation to produce and market in the United States
a generic version of Orion's proprietary drug Precedex® (dexmedetomidine
hydrochloride 100 µg/ml), which is marketed in the United States by Orion's
licensee Hospira.
Orion expects the costs of the legal proceedings against the Sandoz companies to
be substantially less than the costs of the entacapone patent litigation that
had previously been pending in the United States.
Legal proceedings against Caraco Pharmaceutical Laboratories, Ltd.
On 12 November 2010 Orion Corporation and Hospira, Inc. jointly filed a patent
infringement lawsuit in the United States against Caraco Pharmaceutical
Laboratories, Ltd. to enforce Orion's and Hospira's joint patent No. 6,716,867
valid in the United States.
Caraco had submitted an application for authorisation to produce and market in
the United States a generic version of Orion's proprietary drug Precedex®
(dexmedetomidine hydrochloride 100 µg/ml), which is marketed in the United
States by Orion's licensee Hospira.
Orion expects the costs of the legal proceedings against Caraco to be
substantially less than the costs of the entacapone patent litigation that had
previously been pending in the United States. According to the schedule
confirmed by the court, the main hearing of the case will commence on 13
November 2012.
Legal proceedings against Mylan Pharmaceuticals Inc.
On 24 January 2011 Orion Corporation filed a patent infringement lawsuit in the
United States against Mylan Pharmaceuticals Inc. to enforce its US patent No.
5,446,194.
Mylan intends to market in the United States a generic version of entacapone
tablets with strength 200 mg like Orion's Comtan® proprietary drug. Comtan is
used as an adjunct to levodopa/carbidopa therapy to treat patients with
idiopathic Parkinson's disease who experience the signs and symptoms of end-of-
dose "wearing-off." Novartis is Orion's exclusive licensee for marketing the
drug Comtan in the United States.
Business Reviews
Pharmaceuticals
Review of human pharmaceuticals market
According to statistics collected by Finnish Pharmaceutical Data Ltd,Finnish
wholesale of human pharmaceuticals in January-March 2011 totalled EUR 474 (464)
million, up by 2% on the comparative period of the previous year.
Finland is the most important individual market for Orion, generating about one-
quarter of the total net sales. Orion was able to increase its sales faster than
the markets as a whole, so strengthened its position as leader in marketing
pharmaceuticals in Finland. According to statistics collected by Finnish
Pharmaceutical Data Ltd,Orion's wholesale of human pharmaceuticals in Finland in
January-March amounted to EUR 49 (47) million, up by 4% compared with the
previous year. Orion's market share was 10% (10%), which was over four
percentage points higher than the second-largest company's market share.
According to IMS Health pharmaceutical sales statistics, in the 12-month period
ending in December 2010 thetotal sales of Parkinson's drugs in the United States
were down by 7% at USD 928 million (USD 1,001 million in the previous 12-month
period). The five largest European markets for Parkinson's disease drugs were
Germany, the United Kingdom, France, Spain and Italy. In these countries, the
combined sales of Parkinson's drugs in the 12-month period ending in December
totalled EUR 1,017 (907) million, and the average market growth was 12%.
The most important individual therapy area for Orion is still the treatment of
Parkinson's disease. Orion's Parkinson's drugs account for just under one-third
of the Group's net sales. Sales of Orion's Parkinson's drugs continued to grow
well and clearly faster than the market as a whole in the United States and in
Japan. According to IMS Health pharmaceutical sales statistics, in the 12-month
period ending December 2010,sales of Orion's Parkinson's drugs were up by 3% at
USD 181 (175) million in the United States, up by 6% at a total of EUR 158 (149)
million in the five largest markets in Europe, and up by 43% at EUR 47 (33)
million in Japan. The market share of Orion's Parkinson's drugs was 20% in the
United States, on average 16% in the five largest European markets and 10% in
Japan.
According to IMS Health pharmaceutical sales statistics,sales of Orion's
Precedex® intensive care sedative (dexmedetomidine) were up by 59% at USD 160
million in the 12-month period ending December 2010 (USD 101 million in the
previous 12-month period). About four-fifths of the sales amounting to USD 132
(85) million were in the United States, where Precedex® sales grew by 55%.
Net sales and operating profit of the Pharmaceuticals business
Net sales of the Pharmaceuticals business in January-March 2011 were EUR 231
(203) million, up by 14% on the comparative review period of the previous year.
The operating profit of the Pharmaceuticals business was up by 31% at EUR 92
(71) million. The operating profit of the Pharmaceuticals business including a
non-recurring payment of EUR 7 million from Endo Pharmaceuticals was 40% (35%)
of the segment's net sales.
Net sales of Orion's top ten pharmaceuticals in January-March 2011 were up by
13% at EUR 127 (112) million. They accounted for 55% (55%) of the total net
sales of the Pharmaceuticals business. Among these best-sellers, the clearly
fastest-growing product was the intensive care sedative Precedex®.
Net sales of the products based on own in-house R&D were up by 14% at EUR 114
(101) million in January-March 2011. These products accounted for about 49%
(49%) of the net sales of the Pharmaceuticals business.
Proprietary Products
The product portfolio of Proprietary Products consists of patented prescription
products in three therapy areas: central nervous system diseases, oncology and
critical care, and Easyhaler® pulmonary drugs.
Net sales of Proprietary Products in January-March 2011 were up by 21% at EUR
113 (94) million.
Orion's drugs for treatment of Parkinson's disease are Stalevo® (active
ingredients carbidopa, levodopa, entacapone) and Comtess®/Comtan® (entacapone),
and their net sales in January-March 2011 totalled EUR 74 (66) million. The net
sales of Parkinson's drugs were up by 12% and accounted for 32% (32%) of the
total net sales of the Pharmaceuticals business. Net sales from deliveries of
Stalevo® and Comtan® to Novartis were up by 18% at a total of EUR 49 (42)
million. Deliveries of Stalevo® to Novartis increased by 27%, and deliveries of
Comtan® by 7%. Total net sales generated by Stalevo® and Comtess® in Orion's own
sales organisation totalled EUR 24 (24) million. Sales through Orion's own sales
organisation totalled EUR 20 (20) million for Stalevo® and EUR 4 (5) million for
Comtess®.
The US Food and Drug Administration (FDA) has an ongoing safety review of
Stalevo, which began in spring 2009. Orion is assisting the FDA in undertaking
the safety review, but does not have precise information on when the safety
review will be completed.
Net sales of Simdax®, a drug for acute decompensated heart failure, totalled EUR
11 (10) million in January-March 2011.
Net sales of the Easyhaler® product family for treatment of asthma and chronic
obstructive pulmonary disease were up by 18% in January-March 2011 at EUR 9 (7)
million. Sales of Easyhaler products through Orion's own sales organisation in
Europe continued to grow strongly in the first quarter of the year. Sales
through partners also grew, especially in Germany, which is one of the largest
markets for the product family.
Net sales of the Precedex® intensive care sedative (active ingredient
dexmedetomidine) were up by 52% in January-March 2011 at EUR 8 (5) million. In-
market sales grew strongly in all markets. In the United States and markets
outside Europe the sedative is sold by Orion's partner Hospira. US markets
account for about four-fifths of net sales of Precedex.
Specialty Products
Net sales of the Specialty Products business division's off-patent, i.e.
generic, prescription drugs and self-care products in January-March 2011 were up
by 10% at EUR 80 (73) million. Net sales of the business division in markets
outside Finland were up by 20% compared with the corresponding period in the
previous year. Growth was especially strong in Scandinavia, which Orion aims to
make its domestic market. There was also growth in Russia and Eastern Europe.
The number of generic prescription drug and self-care product launches remained
high in the first quarter of the year.
Net sales Orion's human pharmaceuticals in Finland were up by 4% at EUR 54 (52)
million in January-March 2011. Specialty Products accounted for the majority of
sales in Finland. Orion has a broad product portfolio, particularly in
substitutable prescription drugs, and a competitive self-care product portfolio
in Finland.
Net sales of Orion's human pharmaceuticals in Eastern Europe in January-March
2011 were up by 35% at EUR 14 (10) million. Specialty Products account for the
majority of sales in the region. The robust growth in net sales is the result of
prolonged work to strengthen the market position through a competitive product
portfolio.
Animal Health
Net sales of the Animal Health business division in January-March 2011 were up
by 12% at EUR 17 (15) million. Net sales of the animal sedatives were up by 18%
and accounted for 39% (37%) of the division's net sales. Orion's animal
sedatives are Dexdomitor® (dexmedetomidine), Domitor® (medetomidine), Domosedan®
(detomidine) and Antisedan® (atipamezole)
Product launches and new distribution agreements in the first quarter
strengthened Orion's position in the Nordic veterinary drug market, where Orion
is one of the three largest marketers of veterinary drugs.
According to statistics collected by Pharma Industry Finland, the Finnish market
for veterinary drugs totalled about EUR 11 (11) million in the first quarter of
2011. Orion was the second-largest marketer, with a market share of 19% (19%).
Orion was the only one of the five largest veterinary drug companies that
increased its sales compared with the corresponding period last year.
Fermion
Fermion manufactures active pharmaceutical ingredients for Orion and other
pharmaceutical companies. Its product range comprises nearly 30 pharmaceutical
ingredients. Fermion's net sales in January-March 2011 excluding pharmaceutical
ingredients supplied for Orion's own use were EUR 13 (14) million and accounted
for about two-thirds of Fermion's entire net sales. Several key products
performed well, even though competition in the markets remained intense.
Research and development projects
The Group's R&D expenses in January-March 2011 totalled EUR 20 (19) million, of
which the Pharmaceuticals business accounted for EUR 18 (18) million. The
Group's R&D expenses accounted for 8% (9%) of the Group's net sales. R&D
expenses also include expenses relating to development of the current portfolio.
In January, Orion and Endo Pharmaceuticals Inc. announced that they had signed a
novel collaboration agreement for the discovery, development and
commercialisation of assets in oncology. The companies will begin development of
altogether eight drug candidates, four from each of them. One of the programmes
is in the clinical phase. The companies are sharing the clinical research costs.
For products arising from the development work, Orion will have the marketing
rights in Europe and Russia, and Endo Pharmaceuticals in North America.
Concurrently with the establishment of the partnership, Endo Pharmaceuticals
exercised its option to license the lead asset in this collaboration discovered
at Orion, a novel androgen receptor antagonist for the treatment of advanced
prostate cancer. The companies will now jointly continue developing this drug
candidate with the objective of approval globally. Endo Pharmaceuticals has made
a non-recurring payment of EUR 7 million to Orion. Clinical trials commenced in
the first quarter of the current year in Europe.
Processing of the marketing authorisation application for Orion's intensive care
sedative dexmedetomidine by the European Medicines Agency is continuing as
anticipated and in accordance with the earlier announced schedule. In March the
results from clinical trials with the product were presented for the first time
at the International Symposium on Intensive Care and Emergency Medicine (ISICEM)
in Brussels.
Orion has ongoing projects to broaden the range of the inhalable Easyhaler®
drugs product family. Orion is developing a budesonide-formoterol formulation
that combines budesonide as an anti-inflammatory agent and formoterol as a long-
acting bronchodilator. The results of research with the objective of a marketing
authorisation application are expected during 2011. In addition, Orion has
another Easyhaler® research programme in progress to develop a fluticasone-
salmeterol formulation. In this formulation fluticasone acts as an anti-
inflammatory agent and salmeterol acts as a long-acting bronchodilator.
Orion is collaborating with Novartis to develop Stalevo® drug for the Japanese
market. Novartis intends to submit a marketing authorisation application during
2011.
Orion has Phase II clinical trials with the alpha 2c receptor antagonist in
progress. In early research, this compound has been found to be possibly
suitable for the treatment of Alzheimer's disease and Raynaud's phenomenon.
Orion is developing a new more effective levodopa product based on optimised new
formulations and doses of known compounds. Product development is in the
clinical trials phase.
In addition, Orion has several projects in the early research phase
investigating prostate cancer, neuropathic pain, Parkinson's disease and
Alzheimer's disease, among others.
In March the US pharmaceutical company GTx announced that GTx and French
pharmaceutical company Ipsen had ended their collaboration that focused on the
use of 80 mg doses of toremifene for treating the adverse effects of prostate
cancer treatment. Orion originally developed toremifene for treatment of breast
cancer.
Diagnostics
Orion Diagnostica manufactures convenient and quick in vitro diagnostic tests
and testing systems suitable for point-of-care testing. Net sales of the
Diagnostics business in January-March 2011 were up by 17% at EUR 14 (12)
million.
Sales of QuikRead® infection tests remained strong. Sales of collagen tests that
measure bone and connective tissue metabolism also developed well. Progress in
the Nordic countries was stronger than in the comparative period, and sales
continued to grow in China and the Czech Republic, for example.
The launching of the new more user-friendly prefilled QuikRead 101 system and
QuikRead go®, a new generation testing instrument, which began in 2010,
progressed as planned in the first quarter of this year.
The operating profit of the Diagnostics business was up 23% at EUR 2.8 (2.2)
million and accounted for 20% (19%) of the segment's net sales.
Espoo, 27 April 2011
Board of Directors of Orion Corporation
Orion Corporation
Timo Lappalainen Jari Karlson
President and CEO CFO
Tables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million Q1/11 Q1/10 Change % 2010
--------------------------------------------------------------------------------
Net sales 244.1 214.5 +13.8% 849.9
Cost of goods sold -72.7 -69.7 +4.3% -283.2
----------------------------------------------------------------- -------
Gross profit 171.4 144.8 +18.4% 566.8
----------------------------------------------------------------- -------
Other operating income and expenses 2.1 -2.4 +185.8% 1.2
Selling and marketing expenses -52.1 -43.9 +18.6% -188.9
R&D expenses -19.8 -19.2 +3.1% -85.5
Administrative expenses -8.7 -8.2 +6.4% -39.3
------------- -------
Operating profit 92.9 71.0 +30.7% 254.2
----------------------------------------------------------------- -------
Finance income 1.3 1.0 +32.6% 4.2
Finance expenses -1.5 -1.2 +26.0% -5.9
----------------------------------------------------------------- -------
Profit before taxes 92.7 70.8 +30.8% 252.6
----------------------------------------------------------------- -------
Income tax expense -24.2 -18.5 +31.1% -67.9
----------------------------------------------------------------- -------
Profit for the period 68.5 52.4 +30.7% 184.7
--------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME INCLUDING TAX EFFECTS
--------------------------------------------------------------------------------
Change in value of cash flow hedges -0.5 -0.2 +131.3% 1.6
Change in value of available-for-sale financial
assets -0.1
Translation differences -0.6 0.4 -230.5% 1.3
Other comprehensive income net of tax -1.2 0.2 -692.4% 2.9
--------------------------------------------------------------------------------
Comprehensive income for the period including tax
effects 67.3 52.6 +27.9% 187.6
--------------------------------------------------------------------------------
PROFIT ATTRIBUTABLE TO:
--------------------------------------------------------------------------------
Owners of the parent company 68.5 52.4 +30.7% 184.7
Non-controlling interests 0.0 0.0 0.0
--------------------------------------------------------------------------------
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
--------------------------------------------------------------------------------
Owners of the parent company 67.3 52.6 +27.9% 187.6
Non-controlling interests 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Basic earnings per share, EUR (1)) 0.49 0.37 +30.9% 1.31
--------------------------------------------------------------------------------
Diluted earnings per share, EUR (1)) 0.49 0.37 +30.9% 1.31
--------------------------------------------------------------------------------
Depreciation, amortisation and impairment 12.9 8.7 +48.2% 38.9
Personnel expenses 44.4 40.1 +10.7% 170.3
--------------------------------------------------------------------------------
1) The figure has been calculated from the profit attributable to the owners of
the parent company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
EUR million 3/11 3/10 Change % 2010
---------------------------------------------------------
Property, plant and equipment 185.1 190.9 -3.0% 187.1
Goodwill 13.5 13.5 13.5
Intangible rights 61.0 63.7 -4.3% 65.3
Other intangible assets 4.4 3.7 +19.2% 4.2
Investments in associates 1.4 0.1 1.3
Available-for-sale investments 1.3 1.0 +35.7% 1.0
Pension asset 32.7 29.8 +9.7% 31.6
Deferred tax assets 2.7 5.5 -50.9% 2.9
Other non-current assets 2.3 0.8 +212.9% 2.4
---------------------------------------------------------
Non-current assets total 304.4 308.9 -1.5% 309.3
---------------------------------------------------------
---------------------------------------------------------
Inventories 136.9 123.8 +10.5% 131.1
Trade receivables 131.7 121.6 +8.3% 118.3
Other receivables 24.5 15.6 +56.4% 20.0
Money market investments 77.7
---------------------------------------------------------
Cash and cash equivalents 214.9 201.8 +6.5% 89.5
---------------------------------------------------------
Current assets total 507.9 462.9 +9.7% 436.5
---------------------------------------------------------
---------------------------------------------------------
Assets total 812.3 771.8 +5.3% 745.8
---------------------------------------------------------
EQUITY AND LIABILITIES
EUR million 3/11 3/10 Change % 2010
------------------------------------------------------------------------------
Share capital 92.2 92.2 92.2
Share premium 17.8 17.8 17.8
Expendable fund 0.5 8.9 -94.5% 8.9
Other reserves 0.9 -0.2 +525.3% 1.6
Retained earnings 246.9 217.8 +13.3% 346.8
------------------------------------------------------------------------------
Equity attributable to owners of the parent company 358.3 336.6 +6.5% 467.4
Non-controlling interests 0.0 0.0 +18.8% 0.0
------------------------------------------------------------------------------
Equity total 358.4 336.6 +6.5% 467.4
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Deferred tax liabilities 44.3 41.9 +5.8% 44.8
Pension liability 0.7 0.8 -13.7% 0.7
Provisions 0.3 0.4 -43.7% 0.4
Interest-bearing non-current liabilities 87.5 108.8 -19.5% 87.5
Other non-current liabilities 0.1 0.4 -72.9% 0.1
------------------------------------------------------------------------------
Non-current liabilities total 132.9 152.3 -12.7% 133.6
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Trade payables 41.4 40.5 +2.3% 49.0
Income tax liabilities 23.9 10.7 +123.3% 12.7
Other current liabilities 233.1 208.8 +11.7% 60.6
Provisions 0.0 0.0
Interest-bearing current liabilities 22.6 22.8 -1.1% 22.5
------------------------------------------------------------------------------
Current liabilities total 321.1 282.8 +13.5% 144.8
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Liabilities total 454.0 435.2 +4.3% 278.4
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Equity and liabilities total 812.3 771.8 +5.3% 745.8
------------------------------------------------------------------------------
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. Non-controlling interests
h. Equity total
Equity attributable to owners of the parent
company
---------------------------------------------
EUR million a. b. c. d. e. f. g. h.
--------------------------------------------------------------------------------
Equity at 1 January 2010 92.2 17.8 23.0 0.0 -5.7 311.7 0.0 439.1
--------------------------------------------------------------------------------
Profit for the period 52.4 52.4
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Change in value of cash
flow hedges -0.2 -0.2
Translation differences 0.4 0.4
--------------------------------------------------------------------------------
Transactions with owners and non-controlling interests:
--------------------------------------------------------------------------------
Dividend and capital
repayment -14.1 -141.0 -155.1
Share-based incentive
plan 0.1 0.1
Equity at 31 March 2010 92.2 17.8 8.9 -0.2 -5.3 223.2 0.0 336.6
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity at 1 January 2011 92.2 17.8 8.9 1.6 -4.4 351.2 0.0 467.4
--------------------------------------------------------------------------------
Profit for the period 68.5 68.5
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Change in value of cash
flow hedges -0.5 -0.5
Change in value of
available-for-sale
financial assets -0.1 -0.1
--------------------------------------------------------------------------------
Translation differences -0.6 -0.6
--------------------------------------------------------------------------------
Transactions with owners and non-controlling
interests:
--------------------------------------------------------------------------------
Dividend and capital
repayment -8.5 -169.0 -177.5
Share-based incentive
plan 1.3 1.3
Other adjustments -0.2 -0.2
Equity at 31 March 2011 92.2 17.8 0.5 0.9 -5.0 251.9 0.0 358.4
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million Q1/11 Q1/10 2010
--------------------------------------------------------------------------------
Operating profit 92.9 71.0 254.2
Adjustments 12.0 10.1 33.7
Change in working capital -33.9 -34.7 -27.6
Interest paid -1.3 -0.9 -5.7
Interest received 1.4 1.0 4.3
Income taxes paid -13.4 -7.2 -49.9
--------------------------------------------------------------------------------
Net cash generated from operating activities, total 57.7 39.4 209.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Investments in property, plant and equipment -6.0 -6.4 -22.1
Investments in intangible assets -3.7 -2.0 -13.3
Acquisition of an associate -0.0 -1.3
Sale of a subsidiary less cash and cash equivalents at sale
date 0.3 4.5
Sales of property, plant and equipment
and available-for-sale investments 0.1 0.1 1.2
Sales of intangible assets 0.0 0.2 0.2
--------------------------------------------------------------------------------
Net cash used in investing activities, total -9.2 -8.1 -30.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-term loans raised 0.1 0.1 0.6
Repayments of short-term loans -0.3 -0.3 -2.0
Repayments of long-term loans -21.0
Repurchase of own shares -4.6
Dividends paid and other distribution of profits -0.0 -0.0 -155.3
--------------------------------------------------------------------------------
Total net cash flow from financing activities -0.2 -0.2 -182.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash, cash equivalents and money market
investments 48.3 31.1 -4.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash, cash equivalents and money market investments at the
beginning of the period 167.2 170.5 170.5
Foreign exchange differences -0.5 0.3 0.7
Net change in cash, cash equivalents and money market
investments 48.3 31.1 -4.0
Cash, cash equivalents and money market investments at the
end of the period 214.9 201.8 167.2
--------------------------------------------------------------------------------
Reconciliation of cash and cash equivalents in Statement of
Financial Position
--------------------------------------------------------------------------------
Cash and cash equivalents at 31 March in Statement of
Financial Position 214.9 201.8 89.5
Money market investments at 31 March 77.7
--------------------------------------------------------------------------------
Cash and cash equivalents in Statement of Cash Flows 214.9 201.8 167.2
--------------------------------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 3/11 3/10 2010
----------------------------------------------------------------
Carrying amount at the beginning of the period 187.1 192.0 192.0
Additions 4.7 5.4 23.3
Sale of real estate limited company -0.5
Other disposals -0.3 -0.1 -1.1
Depreciation and impairments -6.4 -6.5 -26.6
----------------------------------------------------------------
Carrying amount at the end of the period 185.1 190.9 187.1
----------------------------------------------------------------
CHANGES IN INTANGIBLE ASSETS (EXCLUDING GOODWILL)
EUR million 3/11 3/10 2010
--------------------------------------------------------------
Carrying amount at the beginning of the period 69.5 67.0 67.0
Additions 2.5 2.6 14.6
Disposals -0.0 -0.0
Depreciation and impairments -6.5 -2.2 -12.3
--------------------------------------------------------------
Carrying amount at the end of the period 65.4 67.4 69.5
--------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
EUR million 3/11 3/10 2010
----------------------------------------------------------------------
CONTINGENCIES FOR OWN LIABILITIES
----------------------------------------------------------------------
Mortgages on land and buildings 41.0 41.0 41.0
of which those to Orion Pension Fund 9.0 9.0 9.0
Guarantees 1.2 1.1 1.3
----------------------------------------------------------------------
OTHER LIABILITIES
----------------------------------------------------------------------
Leasing liabilities (excluding finance lease contracts) 3.8 4.2 4.1
Other liabilities 0.3 0.3 0.3
----------------------------------------------------------------------
DERIVATIVES
EUR million 3/11 3/10 2010
----------------------------------------------------------------------
----------------------------------------------------------------------
FORWARD EXCHANGE CONTRACTS AND CURRENCY SWAPS
----------------------------------------------------------------------
Fair value, EUR million 0.7 -1.8 -0.8
----------------------------------------------------------------------
Nominal value, EUR million 49.4 70.5 56.1
----------------------------------------------------------------------
----------------------------------------------------------------------
CURRENCY OPTIONS
----------------------------------------------------------------------
Fair value, EUR million 0.6 -0.0
----------------------------------------------------------------------
Nominal value, EUR million 41.2 33.4
----------------------------------------------------------------------
----------------------------------------------------------------------
ELECTRICITY FORWARD CONTRACTS
----------------------------------------------------------------------
Fair value, EUR million 1.2 -0.5 1.9
----------------------------------------------------------------------
Nominal value, GWh 183 156 171
----------------------------------------------------------------------
RELATED PARTY TRANSACTIONS
EUR million Q1/11 Q1/10 2010
-------------------------------------------------
Management's employment benefits 3.0 2.6 4.4
-------------------------------------------------
Operating segment performance
NET SALES BY BUSINESS DIVISION
EUR million Q1/11 Q1/10 Change % 2010
-----------------------------------------------------------
Pharmaceuticals 231.0 203.3 +13.6% 806.2
Proprietary Products 113.4 93.5 +21.3% 370.9
Specialty Products 80.2 73.1 +9.6% 298.6
Animal Health 17.1 15.3 +11.9% 67.5
Fermion 12.9 13.5 -4.8% 44.9
Contract manufacturing
and other 7.4 7.9 -5.7% 24.4
Diagnostics 13.7 11.7 +16.7% 46.1
Group items -0.6 -0.6 -2.4% -2.4
-----------------------------------------------------------
Group total 244.1 214.5 +13.8% 849.9
-----------------------------------------------------------
OPERATING PROFIT BY BUSINESS AREA
EUR million Q1/11 Q1/10 Change % 2010
------------------------------------------
Pharmaceuticals 92.3 70.5 +30.8% 252.2
Diagnostics 2.8 2.2 +23.4% 6.1
Group items -2.1 -1.7 +24.0% -4.1
------------------------------------------
Group total 92.9 71.0 +30.7% 254.2
------------------------------------------
NET SALES BY ANNUAL QUARTERS
2011 2010 2009
+-----+-----------------------+-----------------+
EUR million | Q1| Q4 Q3 Q2 Q1| Q4 Q3 Q2|
---------------+-----+-----------------------+-----------------+
Pharmaceuticals|231.0|203.7 203.2 196.0 203.3|181.9 181.8 185.9|
| | | |
Diagnostics | 13.7| 11.8 10.5 12.1 11.7| 12.0 10.5 11.0|
| | | |
Group items | -0.6| -0.6 -0.5 -0.7 -0.6| -0.6 -0.5 -0.5|
---------------+-----+-----------------------+-----------------+
Group total |244.1|214.9 213.2 207.4 214.5|193.3 191.8 196.4|
---------------+-----+-----------------------+-----------------+
OPERATING PROFIT BY ANNUAL QUARTERS
2011 2010 2009
+----+-------------------+--------------+
EUR million | Q1| Q4 Q3 Q2 Q1| Q4 Q3 Q2|
---------------+----+-------------------+--------------+
Pharmaceuticals|92.3|49.9 71.5 60.4 70.5|45.5 56.6 51.6|
| | | |
Diagnostics | 2.8| 1.0 1.0 1.9 2.2| 1.2 1.0 1.1|
| | | |
Group items |-2.1| 1.7 -1.8 -2.3 -1.7|-2.8 -1.9 -2.3|
---------------+----+-------------------+--------------+
Group total |92.9|52.6 70.6 60.0 71.0|43.9 55.7 50.4|
---------------+----+-------------------+--------------+
GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS
2011 2010 2009
+-----+-----------------------+-----------------+
EUR million | Q1| Q4 Q3 Q2 Q1| Q4 Q3 Q2|
-------------+-----+-----------------------+-----------------+
Finland | 59.1| 61.0 57.6 53.7 56.9| 59.2 55.6 55.0|
| | | |
Scandinavia | 33.4| 28.6 28.4 28.1 29.0| 25.9 24.5 25.8|
| | | |
Other Europe | 80.2| 77.4 70.0 72.7 72.1| 72.8 68.9 71.8|
| | | |
North America| 38.7| 22.1 31.1 26.3 30.3| 12.1 18.1 18.2|
| | | |
Other markets| 32.8| 25.8 26.0 26.7 26.1| 23.4 24.7 25.6|
-------------+-----+-----------------------+-----------------+
Group total |244.1|214.9 213.2 207.4 214.5|193.3 191.8 196.4|
-------------+-----+-----------------------+-----------------+
Business reviews
KEY FIGURES FOR PHARMACEUTICALS BUSINESS
EUR million Q1/11 Q1/10 Change % 2010
------------------------------------------------------------------
Net sales 231.0 203.3 +13.6% 806.2
Operating profit 92.3 70.5 +30.8% 252.2
% of net sales 39.9% 34.7% 31.3%
R&D expenses 18.2 17.9 +2.2% 79.5
% of net sales 7.9% 8.8% 9.9%
Capital expenditure 6.8 7.5 -9.2% 36.2
% of net sales 2.9% 3.7% 4.5%
Sales revenue from proprietary products 114.1 100.6 +13.5% 397.1
Personnel at the end of the period 2,885 2,795 2,803
------------------------------------------------------------------
NET SALES OF ORION'S TOP 10 PHARMACEUTICAL PRODUCTS
EUR million Q1/11 Q1/10 Change % 2010
--------------------------------------------------------------------------------
Stalevo®, Comtess® and Comtan®
(Parkinson's disease) 73.6 65.8 +11.8% 252.7
Simdax® (acute decompensated heart failure) 10.6 10.3 +3.1% 39.9
Easyhaler® product family (asthma, COPD) 8.5 7.2 +18.2% 28.1
Precedex® (intensive care sedative) 8.3 5.4 +52.4% 27.2
Dexdomitor®, Domitor®, Domosedan® and Antisedan®
(animal sedatives) 6.6 5.6 +18.2% 24.2
Burana® (inflammatory pain) 5.8 5.0 +15.2% 21.5
Marevan® (anticoagulant) 3.8 3.1 +19.3% 13.1
Divina® range (menopausal symptoms) 3.4 3.3 +4.2% 13.3
Fareston® (breast cancer) 3.2 3.0 +6.7% 11.7
Enanton® (prostate cancer) 3.0 3.1 -1.4% 13.0
--------------------------------------------------------------------------------
Total 126.7 111.8 +13.3% 444.6
Share of pharmaceutical net sales 55% 55% 55%
--------------------------------------------------------------------------------
KEY FIGURES FOR DIAGNOSTICS BUSINESS
EUR million Q1/11 Q1/10 Change % 2010
-------------------------------------------------------------
Net sales 13.7 11.7 +16.7% 46.1
Operating profit 2.8 2.2 +23.4% 6.1
% of net sales 20.2% 19.1% 13.3%
R&D expenses 1.6 1.4 +14.9% 6.0
% of net sales 11.5% 11.7% 13.1%
Capital expenditure 0.3 0.5 -35.1% 2.5
% of net sales 2.5% 4.4% 5.5%
Personnel at the end of the period 308 293 301
-------------------------------------------------------------
Information on Orion's shares
BASIC SHARE INFORMATION 31 MARCH 2011
A shares B shares Total
--------------------------------------------------------------------------------
Trading code on NASDAQ OMX Helsinki ORNAV ORNBV
Listing day 1 Jul 2006 1 Jul 2006
ISIN code FI0009014369 FI0009014377
GICS code 35202010 35202010
Reuters code ORNAV.HE ORNBV.HE
Bloomberg code ORNAV.FH ORNBV.FH
Share capital, EUR million 31.0 61.2 92.2
Counter book value per share, EUR 0.65 0.65
Total number of shares 47,483,699 93,774,129 141,257,828
% of total share stock 34% 66% 100%
Number of treasury shares 413,754 413,754
Total number of shares excluding
treasury shares 47,483,699 93,360,375 140,844,074
Minimum number of shares 1
Maximum number of A and B shares, and
maximum number of all shares 500,000,000 1,000,000,000 1,000,000,000
Votes per share 20 1
Number of votes excluding treasury
shares 949,673,980 93,360,375 1,043,034,355
% of total votes 91% 9% 100%
Total number of shareholders 19,875 47,192 60,388
--------------------------------------------------------------------------------
A shares and B shares confer equal rights to the Company's assets and dividends.
INFORMATION ON TRADING 1 JANUARY - 31 MARCH 2011
A shares B shares Total
--------------------------------------------------------------------------------
Shares traded 1,098,793 18,296,686 19,395,479
% of the total number of shares 2.3% 19.5% 13.7%
Trading volume, EUR million 18.4 305.6 323.9
Closing quotation on 31 Dec 2010, EUR 16.40 16.37
Lowest quotation, EUR (A and B 15 March 2011) 16.04 16.08
Average quotation, EUR 16.70 16.70
Highest quotation, EUR (A 13 April, B 9 and 23
March 2011) 17.14 17.13
Closing quotation on 31 March 2011, EUR 17.08 17.12
Market capitalisation on 31 March 2011 excluding
treasury shares, EUR million 811.0 1,598.3 2,409.4
--------------------------------------------------------------------------------
PERFORMANCE PER SHARE
Q1/11 Q1/10 Change % 2010
--------------------------------------------------------------------------------
Basic earnings per share, EUR 0.49 0.37 +30.9% 1.31
Diluted earnings per share, EUR 0.49 0.37 +30.9% 1.31
Cash flow per share before financial items, EUR 0.34 0.22 +55.2% 1.26
Equity per share, EUR 2.54 2.39 +6.6% 3.32
Average number of shares
excluding treasury shares, 1,000 shares 140,775 141,000 140,917
--------------------------------------------------------------------------------
Appendices
Reporting
Orion Corporation is the parent company of the Orion Group. The Group consists
of two business areas, or operating segments, and five business divisions. Orion
reports on its operations segmentally.
· Pharmaceuticals business
o Proprietary Products (patented prescription products for three therapy
areas)
o Specialty Products (off-patent, generic prescription products and self-care
products)
o Animal Health (veterinary products for pets and production animals)
o Fermion (active pharmaceutical ingredients for Orion and other companies)
· Diagnostics business
o Orion Diagnostica (diagnostic test systems for point-of-care in healthcare
and hygiene tests for industry).
Contract manufacturing and other, i.e. manufacturing for other companies, is
included in the Pharmaceuticals business segment, but it is not a separate
business division, it is part of the Group's Supply Chain organisation.
Accounting policies
This Interim Report has been prepared in accordance with IAS 34 Interim
Financial Reporting standard applying the same accounting policies as for the
Financial Statements 2010. In addition, the following new standards,
interpretations and amendments to existing standards and interpretations
endorsed by the EU have been adopted as of 1 January 2011. However, they do not
have material effects on the Consolidated Financial Statements:
· IAS 24 (Revised), Related Party Disclosures
· IAS 32 (Amendment), Financial Instruments: Presentation - Classification of
Rights Issues
· IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments
· IFRIC 14 (Amendment), IAS 19, Prepayments of a Minimum Funding Requirement
IASB published changes to seven standards or interpretations in 2010 as part of
the annual improvements to standards. As of 1 January 2011 the Group has adopted
the following changes endorsed by the EU, but they do not have material effects
on the Consolidated Financial Statements.
· IFRS 3 (Amendments), Business Combinations
· IFRS 7 (Amendment), Financial Instruments: Financial Statement Disclosures
· IAS 1 (Amendment), Presentation of Financial Statements - Statement of
Changes in Equity
· IAS 27 (Amendment), Consolidated and Separate Financial Statements
· IAS 34 (Amendment), Interim Financial Reporting
· IFRIC 13 (Amendment), Customer Loyalty Programmes
The policies and calculation methods applied during the period can be found on
the Orion website at www.orion.fi/en/investors.
Other matters
The data in this financial review are not audited.
The figures in parentheses are for the comparative period of the previous year.
All the figures in this report 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 finance expenses
Return on capital employed (ROCE), % =-----------------------------------x 100
Total assets - Non-interest-
bearing liabilities (average
during the period)
Profit for the period
-----------------------------------
Return on equity (ROE), % = Total equity (average during the x 100
period) = Equity
Equity ratio, % -----------------------------------x 100
Total assets - Advances received
Interest-bearing liabilities -
= Cash and cash equivalents - Money x 100
Gearing, % market investments
-----------------------------------
Equity
Profit available for the owners
= of the parent company
Earnings per share, EUR -----------------------------------
Average number of shares during
the period, excluding treasury
shares
Cash flow from operating
= activities + Cash flow from
Cash flow per share before financial investing activities
items, EUR -----------------------------------
Average number of shares during
the period, excluding treasury
shares
Equity of the owners of the
= parent company
Equity per share, EUR -----------------------------------
Number of shares at the end of
the period, excluding treasury
shares
= Total EUR value of shares traded
Average share price, EUR -----------------------------------
Average number of traded shares
during the period
Number of shares at the end of
Market capitalisation, EUR million = the period × Closing quotation of
the period
Publisher:
Orion Corporation
Orionintie 1A, FI-02200 Espoo
www.orion.fi
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 and diagnostic
tests. Orion's pharmaceutical R&D focuses on the following core therapy areas:
central nervous system drugs, cancer and critical care drugs, and Easyhaler®
pulmonary drugs.
The Group's net sales in 2010 amounted to approximately EUR 850 million. The
Company invested EUR 85 million in research and development. At the end of
2010, the Group had a total of approximately 3,100 employees, of whom 2,450
worked in Finland and 650 in other countries. Orion's A and B shares are listed
on NASDAQ OMX Helsinki.
[HUG#1509061]
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