2013-02-05 11:00:00 CET
2013-02-05 11:01:19 CET
REGULATED INFORMATION
Orion - Financial Statement Release
Orion Group Financial Statement Release for 2012
ORION CORPORATION FINANCIAL STATEMENT RELEASE 2012 5 FEBRUARY 2013 at 12:00
noon EET
Orion's net sales in 2012 totalled EUR 980 million (EUR 918 million in 2011), up
by 7% on the previous year.
* Operating profit was EUR 281 (283) million.
* Profit before taxes was EUR 279 (282) million.
* Equity ratio was 61% (64%).
* ROCE before taxes was 46% (49%).
* ROE after taxes was 41% (43%).
* Basic earnings per share were EUR 1.48 (1.49).
* Cash flow per share before financial items was EUR 1.23 (1.10).
* Board's proposal for dividend per share is EUR 1.30 (1.30) per share.
* Orion estimates that in 2013 net sales will be at similar level to 2012 and
operating profit will be slightly lower than in 2012.
ORION'S KEY FIGURES FOR THE REVIEW PERIOD
Q4/12 Q4/11 Change % 2012 2011 Change %
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Net sales, EUR million 254.4 236.1 +7.8% 980.4 917.9 +6.8%
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International operations, EUR
million 187.1 174.3 +7.3% 723.1 677.2 +6.8%
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% of net sales 73.5% 73.9% 73.8% 73.8%
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Operating profit, EUR million 59.4 59.6 -0.2% 280.9 282.9 -0.7%
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% of net sales 23.4% 25.2% 28.7% 30.8%
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Profit before taxes, EUR million 58.8 59.5 -1.2% 279.3 282.0 -0.9%
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% of net sales 23.1% 25.2% 28.5% 30.7%
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Income tax expense, EUR million 15.8 14.3 +10.8% 70.4 72.4 -2.8%
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R&D expenses, EUR million 31.7 25.4 +24.7% 104.8 87.5 +19.8%
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% of net sales 12.4% 10.8% 10.7% 9.5%
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Capital expenditure, EUR million 10.8 12.9 -16.3% 46.8 49.5 -5.3%
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% of net sales 4.2% 5.5% 4.8% 5.4%
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Assets total, EUR million 836.9 779.1 +7.4%
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Equity ratio, % 61.1% 64.2%
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Gearing, % -1.7% -6.9%
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Interest-bearing liabilities, EUR
million 136.7 88.7 +54.1%
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Non-interest-bearing liabilities,
EUR million 189.0 190.5 -0.8%
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Cash and money market investments,
EUR million 145.2 123.0 +18.1%
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ROCE (before taxes), % 46.2% 49.4%
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ROE (after taxes), % 41.3% 43.3%
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Basic earnings per share, EUR 0.30 0.32 -5.1% 1.48 1.49 -0.4%
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Diluted earnings per share, EUR 0.30 0.32 -5.1% 1.48 1.49 -0.4%
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Cash flow per share before financial
items, EUR 0.32 0.33 -4.6% 1.23 1.10 +12.1%
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Equity per share, EUR 3.63 3.55 +2.2%
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Proposed dividend per share, EUR 1.30 1.30
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Personnel at the end of the period 3,486 3,425 +1.8%
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Average personnel during the period 3,495 3,328 +5.0%
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Personnel expenses, EUR million 212.1 186.0 +14.0%
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President and CEO Timo Lappalainen's review"Significant progress in Orion's research projects""Our net sales were higher than in the previous year and our operating profit
was similar to 2011 despite clearly higher research expenses."As anticipated, deliveries of our Parkinson's drugs to Novartis were lower than
in the previous year. Total sales generated by Stalevo(®) and Comtess(®) in
Orion's own sales organisation were, however, slightly higher. We were also able
to compensate for a significant part of the decrease in deliveries to Novartis
through sales of generic entacapone products to the USA."Sales from the rest of our pharmaceuticals product portfolio grew well
throughout the year. We were able to strengthen our market position because in
most markets our growth was faster than general growth of the pharmaceuticals
market. This was the case in all the Nordic markets, for example. Sales also
grew strongly in our other divisions, such as Fermion, which manufactures active
pharmaceutical ingredients, Contract Manufacturing and Orion Diagnostica."Sales of Dexdor(®) intensive care sedative (dexmedetomidine) launched at the
end of 2011 developed better than expected during the year and it is now
available in most European countries. Dexmedetomidine (Precedex(®)) sold through
our partner Hospira outside Europe also continued to perform well during the
year."We made significant progress in our research projects in 2012. We received
positive Phase I and II results with an alpha-2c adrenoceptor antagonist
developed for the treatment of Alzheimer's disease, an androgen receptor
antagonist developed for the treatment of advanced prostate cancer and a new
more effective levodopa product. Our project to expand the Easyhaler(®) product
family into combined formulations advanced to the stage of preparing the
application for marketing authorisation for the first product (budesonide-
formoterol), which we intend to submit in Europe in the first quarter of 2013.
We also began Phase I trials with a new COMT inhibitor for Parkinson's disease.
As the number of research projects increased, our research expenses were also
clearly higher in the past year than in 2011."Following the increase in sales in recent years, Orion's production capacity
reached almost full utilisation rate in 2012. To develop and ensure future
growth, delivery reliability and quality standards, we started investment
projects in 2012, one significant project being the packaging and logistics
centre to be established in Salo."Sales of our Parkinson's drugs will continue to decline due to generic
competition. The rest of the product portfolio will continue to grow, but
products with lower margins will account for an increasing proportion of sales.
Progress in our research projects will increase our research expenses. For
reasons such as these, we estimate that our net sales will be at similar level
to the previous year and our operating profit will be slightly lower than in
2012. More information on the outlook estimate and the basis for it can be found
on pages 6-7 of this report."
Events in 2012
On 7 February Orion announced that it would continue development of an inhalable
budesonide-formoterol combined formulation.
On 26 April Orion announced that it was suing Mylan in the United States to
enforce its US patents covering the proprietary drug Stalevo(®).
On 1 May the United States District Court gave its decision on the US patent
infringement lawsuit concerning Orion's proprietary drug Precedex(®).
On 3 July Orion upgraded its full-year outlook for 2012.
On 5 September Orion announced that the total number of Orion Corporation B
shares under the management of The Capital Group Companies, Inc. had increased
to more than one-twentieth (1/20) of the total number of Orion Corporation
shares.
On 9 October Orion upgraded its full-year outlook for 2012.
On 30 November Orion announced that it planned to apply for marketing
authorisation for a combined budesonide-formoterol formulation in the
Easyhaler(®) product family.
On 20 December Orion announced that it had reached a settlement with Mylan
Pharmaceuticals Inc. to a patent dispute over the proprietary drug Comtan(®).
Events after the period
There were no significant events after the period.
News conference and teleconference
A news conference and teleconference on the published results will be held
today, Tuesday 5 February 2013, at 13:30 EET 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
http://www.orion.fi/en/. After the presentation, questions can be asked by
telephone in Finnish and English.
The teleconference code is 927747 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 and a recording of the
presentation by the President and CEO in Finnish will be available on the Orion
website later today.
Financial report material
Financial reports 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 2013
Deadline for registering for Annual General Meeting Thursday 14 March 2013 at
10:00
Annual General Meeting 2013 Tuesday 19
March 2013 at 14:00 in Helsinki
Record date for dividend distribution Friday 22 March 2013
Dividend payment date Thursday 4 April 2013
Interim Report January-March 2013 Tuesday 23 April 2013
Interim Report January-June 2013 Tuesday 30 July 2013
Interim Report January-September 2013 Tuesday 22 October 2013
Capital Markets Day in Helsinki Wednesday 20 November 2013
The Annual Report 2012 will be published on the Company's website at the latest
in week 9/2013.
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 2012
Net sales
The Orion Group's net sales in 2012 were up by 7% at EUR 980 million (EUR 918
million in 2011). The net effect of currency exchange rates was plus EUR 16
million.
The Pharmaceuticals business's net sales were up by 7% at EUR 929 (871) million.
Net sales of Orion's Stalevo(®) (carbidopa, levodopa and entacapone) and
Comtess(®)/Comtan(®) (entacapone) Parkinson's drugs were down by 6% at EUR 250
(267) million, which was 27% (31%) of the Pharmaceuticals business's net sales.
The net sales of other products in the portfolio, including EUR 17 million of
net sales of generic entacapone products, were up by 12% at EUR 679 (604)
million. The branded products based on in-house R&D accounted for EUR 429 (421)
million, or 46% (48%) of the Pharmaceuticals business's net sales.
The Diagnostics business's net sales were up by 9% at EUR 54 (50) million.
Operating profit
The Orion Group's operating profit was EUR 281 (283) million.
The Pharmaceuticals business's operating profit was EUR 289 (288) million. Net
sales and operating profit were enhanced by long-term compensatory payments of
EUR 10 million related to the pricing of partner deliveries. In the comparative
period net sales and operating profit were enhanced by a non-recurring payment
of EUR 7 million. The gross profit percentage was lower than in the comparative
period because products with lower margins accounted for an increasing
proportion of sales. As anticipated, research and development costs were higher
than in the comparative period.
The Diagnostics business's operating profit was down by 47% at EUR 2.6 (4.9)
million as marketing and product development costs increased, although sales
grew well.
Operating expenses
The Group's sales and marketing expenses were EUR 206 (205) million.
R&D expenses were up by 20% at EUR 105 (88) million and accounted for 11% (10%)
of the Group's net sales. Pharmaceutical R&D expenses amounted to EUR 97 (81)
million. Research projects are reported in more detail under Pharmaceuticals in
the Business Reviews.
Administrative expenses were up at EUR 45 (41) million.
Other operating income and expenses increased profit by EUR 6 (3) million. The
income includes EUR 3 million insurance compensation payments relating to the
fire at the Turku manufacturing plant in 2011.
Group's profit
The Group's profit before taxes totalled EUR 279 (282) million. Basic earnings
per share were EUR 1.48 (1.49) and diluted earnings per share were EUR 1.48
(1.49). Equity per share was EUR 3.63 (3.55). The return on capital employed
before taxes (ROCE) was 46% (49%) and the return on equity after taxes (ROE)
41% (43%).
Financial position
The Group's gearing was -2% (-7%) and the equity ratio 61% (64%).
The Group's total liabilities at 31 December 2012 were EUR 326 (279) million. At
the end of the period, interest-bearing liabilities amounted to EUR 137 (89)
million, including EUR 107 (66) million of long-term loans.
The Group had EUR 145 (123) 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 higher than in the comparative period at
EUR 221 (199) million. Cash flow was higher because the amount tied up into
working capital grew by less than in the comparative period and the amount of
taxes paid was lower.
Cash flow from investing activities was EUR -47 (-44) million.
Cash flow from financing activities was EUR -152 (-200) million. Cash flow from
financing activities improved on the comparative period because new long-term
loans were raised.
Capital expenditure
The Group's capital expenditure totalled EUR 47 (50) million. This comprised EUR
40 (30) million on property, plant and equipment and EUR 7 (19) million on
intangible assets.
Outlook for 2013
Net sales will be at similar level to 2012 (net sales in 2012 were EUR 980
million).
Operating profit will be slightly lower than in 2012 (operating profit in 2012
was EUR 281 million).
The Group's capital expenditure will be about EUR 80 million excluding
substantial corporate or product acquisitions (the Group's capital expenditure
in 2012 was EUR 47 million).
Basis for outlook
Competition in the Finnish market will remain intense in 2013. However, product
launches will continue to support Orion's position as market leader.
The generic competition that commenced in April 2012 in the United States
decreased sales of Orion's Parkinson's drugs. The decrease will continue in
2013 because generic products will be in the markets during the whole year and,
in addition, the number of competitors will be greater than in 2012. US markets
accounted for about EUR 60 million of the net sales of Orion's Parkinson's drugs
in 2011 and about EUR 33 million in 2012. In addition, sales of generic
entacapone products to the United States amounted to about EUR 17 million in
2012.
The entacapone molecule patent expired in November 2012 in the main European
countries for Orion, and as a result there will be generic competitors to Comtan
and Comtess in these markets in 2013. Data protection of Stalevo will remain
valid in the European Union until October 2013 and generic competition is not
expected to commence in Europe during the current year, even though the first
generic marketing authorisation application in Europe has already been
submitted. The total sales of Orion's Parkinson's drugs in Europe are expected
to be slightly lower than in 2012. Elsewhere in the world generic competition is
not expected to have a material impact on sales of these products in the current
year.
A slight decrease in the gross profit as percentage of net sales is expected
because sales of generic products will account for an even greater proportion of
Orion's total sales and price competition will remain intense in many markets.
Marketing expenditure will be similar to the previous year. Because the
registrations and launches of new products are projects that take more than a
year, the increases in resources and other inputs required in2013 were planned
mainly during the previous year.
Research and development costs will be higher than in 2012. 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 2013 are either ongoing from the previous year or at an
advanced stage of planning, therefore their cost level can be estimated rather
accurately. The accrued costs are materially affected by how the costs arising
are allocated between Orion and its collaboration partners. The outlook estimate
does not assume that Orion receives any material milestone payments from
collaboration partners in 2013.
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.
Orion's production capacity is nearly fully utilised following the increase in
sales in recent years. Orion will make greater investments in production in
2013 than in recent years to develop and ensure future growth, delivery
reliability and quality standards. One significant project is the packaging and
logistics centre to be established in Salo, but significant investments will be
also made in current manufacturing plants, for instance to increase the
production capacity in Easyhaler drugs.
Near-term risks and uncertainties relating to the outlook
Sales of Orion's Parkinson's drugs will decrease in 2013 due to generic
competition. The effects of the competition have been taken into account in the
outlook estimate.
Sales of individual products and also Orion's sales in individual markets may
vary, for example 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. Royalties from Precedex may decrease materially in mid 2013 if
Hospira is not granted six months of pediatric exclusivity for the product in
the United States.
Most of the exchange rate risk relates to the US dollar. Typically, only less
than 15% of Orion's net sales comes 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.
Orion's currently high production capacity utilisation rate and its broad
product range may cause risks to the delivery reliability and make it more
challenging than before to maintain the very high quality standard required.
Authorities and key customers in different countries undertake regular and
detailed inspections of development and manufacturing of drugs. Possibly
required corrective actions may at least temporarily reduce delivery
reliability.
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. Orion generally
undertakes Phase III clinical trials in collaboration with other pharmaceutical
companies. Commencement of these collaboration relationships and their structure
also materially affect the schedule and cost level of research projects.
Group's financial objectives
Orion's financial objectives are ensuring the Group's financial stability and
profitable growth.
These objectives are achieved through:
* Increasing net sales. Achievement of this objective requires continuous
investment in development of the product portfolio.
* Maintaining profitability at a good level, the aim being operating profit
that exceeds 20% of net sales.
* Keeping the equity ratio at least 50%.
Orion's dividend distribution 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.
Proposal by the Board of Directors for distribution of profit: dividend per
share EUR 1.30
The parent company's distributable funds are EUR 246,624,622.55, including EUR
197,740,936.54 of profit for the financial year.
The Board of Directors proposes that a dividend of EUR 1.30 per share be paid
from the parent company's distributable funds. No dividend shall be paid on
treasury shares held by the Company on the dividend distribution record date. On
the day when the profit distribution was proposed, the number of shares
conferring entitlement to receive dividend totalled 140,931,837, on which the
total dividend payment would be EUR 183,211,388.10. The Group's payout ratio for
the financial year 2012 would be 87.8% (87.2%). The dividend payment date would
be 4 April 2013, and shareholders registered in the Company's shareholder
register on 22 March 2013 would be entitled to the dividend payment.
The Board of Directors further proposes that EUR 250,000 be donated to medical
research and other purposes of public interest in accordance with a separate
decision by the Board and that EUR 63,163,234.45 remain in equity.
Strategy
In November 2012, Orion's Board of Directors confirmed that the strategic focus
remains the same for 2013-2017. Orion's strategic aims are profitable growth and
increased shareholder value, whilst keeping business risks under control.
Orion's strategic focus continues to be on:
* growth of business operations through a competitive product portfolio
* strengthening market position in Europe
* improving the flexibility and efficiency of operations
All of Orion's business divisions have a major role in achieving the financial
objectives of the Group, but the two largest divisions, Proprietary Products and
Specialty Products, are crucial. Orion strives to enhance synergies between
patent-protected proprietary drugs, off-patent (i.e. generic) prescription drugs
and self-care products.
Competitive product portfolio
Growth is based on a competitive product portfolio developed through Orion's in-
house R&D, collaborative research and active product acquisition. Potential
corporate acquisitions are also continually evaluated.
Orion's core therapy areas are central nervous system drugs, oncology and
critical care drugs, and inhalable Easyhaler pulmonary drugs. Orion's R&D
operations concentrate on early-phase development. In addition to in-house
research, Orion invests in early-phase research jointly with universities and
other pharmaceutical companies. In the late phase of clinical development, Orion
aims to share the costs with other pharmaceutical companies. Orion generally
seeks partnerships for undertaking at least Phase III clinical trials, which are
the final phase, especially for projects oriented towards markets outside
Europe. Orion also seeks to acquire new early-phase product candidates and
further developed products to reinforce the research pipeline based on its own
research projects.
Orion continues the work to build up a competitive product portfolio. As regards
Proprietary Products customers, the focus is on neurologists, urologists,
pulmonary doctors, critical care doctors and other health care professionals in
these specialised fields. For Specialty Products, important customer groups in
Finland, for example, are general practitioners and pharmacy staff. Orion's
primary aim is to exploit all business opportunities from the drugs in the
current product portfolio, such as Dexdor(®), Stalevo(®), Simdax(®) and the
Easyhaler product family. Orion's next projects in late-phase development and
commercialisation are development of inhalable Easyhaler combined formulation
products, development of the Parkinson's drug Stalevo for Japanese markets,
development of a more effective levodopa product (ODM-101) and development of a
drug (ORM-12741) for treatment of Alzheimer's disease. In early clinical phases
Orion is developing drugs for treatment of advanced prostate cancer (ODM-201)
and for treatment of Parkinson's disease (ODM-103, a new more effective COMT
inhibitor). Orion also aims to ensure continuance of clinical trials through
active early-phase research.
To be successful in the generic (i.e. off-patent) prescription drug and self-
care product sector, it is especially important to have a broad and continually
renewed portfolio. Orion seeks to secure a continuous stream of product launches
through active product acquisition and its own development work. Orion
determines the product portfolios individually for each market. In Finland Orion
strives to maintain a broad range of prescription drugs and self-care products.
In other key markets, such as Scandinavia, Eastern Europe and Russia, Orion's
product portfolio focuses on generic prescription drugs in certain therapy
areas.
Strengthening market position in Europe
In specialised medical care, Orion concentrates on certain customer groups
through its own sales network throughout Europe and through partners worldwide.
Orion markets generic prescription drugs and self-care products mainly in the
Nordic countries and Eastern Europe through its own sales network. Orion aims to
strengthen its market leadership in Finland and make the Scandinavian countries
a domestic market in which it has a strong presence. Orion's aim in all the
Nordic countries is to have a presence with a broad product range. In Central
and Southern Europe the emphasis is on proprietary products and in Eastern
Europe on generic products. Outside Europe, Orion operates mainly with partners.
Flexible and efficient operations
Because the operating environment changes all the time, the agility and
flexibility of operations will in future be as crucial as cost-effectiveness.
Orion's key projects to improve operating efficiency have been implementing a
new research and development model, building up partnership models for early-
phase research, maintaining high delivery reliability in the supply chain cost
efficiently, capacity reorganisation (including investment in Salo), managing
diversification, improving the competitiveness of sales operations and general
simplification and streamlining of operating practices.
Networking and seeking partners throughout the value chain will facilitate
improvements to competitiveness and establishing a foundation for profitable
future growth. R&D collaboration and active networking will enable Orion to
increase the number of new research projects and balance the risks of projects
in the research pipeline. Through partnerships in the supply chain, Orion will
improve the efficiency of its operations by determining which products it will
manufacture itself and to what extent products or semi-finished products will be
acquired through its collaboration network. Partnerships in sales and marketing
will ensure a broad network of distribution channels through which proprietary
drugs developed by Orion will be distributed worldwide. Moreover, the product
portfolio can be expanded by selling the partners' products through Orion's own
sales network.
Through these strategic actions, Orion seeks to enhance its capability to
continue operating as a pharmaceuticals and diagnostics company that provides
new products and engages in R&D.
Shares and shareholders
On 31 December 2012 Orion had a total of 141,257,828 (141,257,828) shares, of
which 43,267,218 (44,993,218) were A shares and 97,990,610 (96,264,610) B
shares. The Group's share capital was EUR 92,238,541.46 (92,238,541.46). At the
end of December 2012 Orion held 325,991 (413,754) B shares as treasury shares.
On 31 December 2012 the aggregate number of votes conferred by the A and B
shares was 963,008,979 (995,715,216) excluding treasury shares.
At the end of December 2012, Orion had 56,519 (57,188) 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. The Company itself 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 2012 a total of 1,726,000 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 December 2012 the market capitalisation of the Company's shares excluding
treasury shares was EUR 3,120 million.
In 2012 a total of 4,054,722 A shares and 84,056,278 B shares were traded on
NASDAQ OMX Helsinki. The total value of the shares traded was EUR 1,435 million.
During the year, 9% of the A shares and 87% of the B shares were traded. The
average turnover in Orion's shares was 62%.
The price of Orion's A shares rose by 45% and the price of its B shares rose by
47% during 2012. On 31 December 2012 the closing quotation was EUR 22.05 for the
A shares and EUR 22.18 for the B shares. The highest quotation for Orion's A
shares in 2012 was EUR 22.57 and the lowest quotation was EUR 13.31. The highest
quotation for the B shares in 2012 was EUR 22.74 and the lowest quotation was
EUR 13.31.
Orion shares are also traded on various alternative trading platforms in
addition to NASDAQ OMX Helsinki. In 2012 NASDAQ OMX Helsinki accounted for about
95% of the entire trading volume in Orion A shares. In 2012 NASDAQ OMX Helsinki
accounted for about 50% of the entire trading volume in Orion B shares (source:
Fidessa Fragmentation Index).
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 a share issue in which shares held by the Company can be
conveyed. The authorisation to issue shares is valid for five years from the
decision taken by the Annual General Meeting.
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". On 31 December 2012 the Board of Directors had outstanding
authorisation to convey 309,337 Orion Corporation B shares held by the Company.
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 share-
based incentive plan for the Group key persons. The Plan includes earning
periods and the Board of Directors annually decided on the beginning and
duration of the earning periods in 2010, 2011 and 2012. The Board of Directors
decided 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 12 March 2012 Orion transferred altogether 87,763 Orion Corporation B shares
held by the Company as a share bonus for 2011 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 16.3848, which was the
volume weighted average quotation of Orion Corporation B shares on 12 March
2012. The total transaction price of the transferred shares was therefore EUR
1,437,979.20.
Share ownership
Orion's shares are in the book-entry system maintained by Euroclear Finland, and
Euroclear Finland maintains Orion's official shareholder register.
At the end of December 2012 Orion had a total of 56,519 (57,188) registered
shareholders, of whom 95% (95%) were private individuals holding 48% (50%) of
the entire share stock and 64% (65%) of the total votes. There were altogether
47 (44) million nominee-registered shares, which was 33% (31%) of all shares,
and they conferred entitlement to 7% (6%) of the total votes.
At the end of December 2012 Orion held 325,991 (413,754) B shares as treasury
shares, which is 0.2% (0.3%) of the Company's total share stock and 0.03%
(0.04%) of the total votes.
Notification threshold
On 5 September 2012 Orion announced that on 3 September 2012 the total number of
Orion Corporation B shares under the management of The Capital Group Companies,
Inc. had increased to more than one-twentieth (1/20) of all Orion Corporation
shares. According to the notification, The Capital Group Companies, Inc. owned
8,313,900 Orion B shares, which was 5.89% of the shares and 0.84% of Orion's
total number of votes.
Management's shareholdings
At the end of 2012, the members of the Board of Directors owned a total of
2,161,100 of the Company's shares, of which 1,825,264 were A shares and 335,836
B shares. At the end of 2012, the President and CEO owned 44,750 of the
Company's shares, which were all B shares. The members of the Group's Executive
Management Board (excluding the President and CEO) owned a total of 126,565 of
the Company's shares, which were all B shares. Thus, the Company's executive
management held 1.65% of all of the Company's shares and 3.84% of the total
votes.
The Company does not have stock option programmes.
Management
Changes in Executive Management Board
Virve Laitinen, M.Sc. (Tech.), M.B.A., became Senior Vice President for the
Supply Chain line function and a member of the Executive Management Board of the
Orion Group on 1 January 2012. She was previously Director responsible for the
Orion Business Planning and Control function.
Corporate Governance Statement
Orion will publish its Annual Report for 2012, including the Report by the Board
of Directors and Financial Statements for 2012, and a separate Corporate
Governance Statement, on the Company's website at the latest in week nine.
Personnel
The average number of employees in the Orion Group in 2012 was 3,495 (3,328). At
the end of December 2012 the Group had a total of 3,486 (3,425) employees, of
whom 2,783 (2,705) worked in Finland and 703 (720) outside Finland.
Salaries and other personnel expenses in 2012 totalled EUR 212 (186) million.
Significant legal proceedings
Legal proceedings against the Sandoz companies
On 1 May 2012 Orion announced that it had been informed that the United States
District Court for the District of New Jersey had given its decision on the
patent infringement lawsuit that Orion Corporation and Hospira, Inc. filed on 4
September 2009 to enforce US Patents Nos. 4,910,214 and 6,716,867. The
respondents in the case are Sandoz Inc., Sandoz International GmbH and Sandoz
Canada Inc. (hereinafter collectively "Sandoz").
The court found that US Patent No. 4,910,214 is valid and enforceable. Sandoz is
permanently enjoined from the commercial manufacture, use, sale or offer for
sale in the United States or importation into the United States of its generic
dexmedetomidine product until such time as US Patent No. 4,910,214 expires,
including any applicable extensions. The Court also ordered that the effective
date of Sandoz's Abbreviated New Drug Application No. 91-465 shall not occur
until the expiration of Patent No. 4,910,214, including any applicable
extensions. Separately, the court found that US Patent No. 6,716,867 is invalid
as obvious.
Orion's licensee Hospira, Inc. sells Precedex(®) in the United States and in
markets outside Europe.
Orion and Hospira have filed an appeal against the decision to the court of
appeals, and so has Sandoz.
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. Gland Pharma Ltd. has since been added as a
defendant in the lawsuit.
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. Consideration of the case has been
suspended pending the conclusion of the above-mentioned appeal proceedings
against the Sandoz companies concerning Patent No. 6,716,867.
Legal proceedings against Mylan Pharmaceuticals Inc.
On 20 December 2012 Orion announced that Orion Corporation and Mylan
Pharmaceuticals Inc. had agreed a settlement to the patent infringement lawsuit
filed by Orion in the United States against Mylan Pharmaceuticals Inc.
concerning Mylan's submission of an abbreviated new drug application (ANDA) for
a generic version of Orion's Comtan(®) with strength 200 mg.
The lawsuit was filed by Orion against Mylan in the United States in 2011. Under
the terms of the settlement agreement, Mylan may launch a generic version of
Comtan with strength 200 mg in US markets on 1 April 2013 at the earliest.
Subject to the Court's approval, the case will be dismissed and the US Patent
No. 5,446,194 will remain in force.
In addition, on 26 April 2012 Orion Corporation filed a patent infringement
lawsuit in the United States against Mylan Pharmaceuticals Inc. to enforce its
US Patents Nos. 5,446,194, 6,500,867 and 6,797,732.
Mylan is seeking authorisation to produce and market generic tablets (strengths
12.5/50/200 mg; 18.75/75/200 mg; 25/100/200 mg; 31.25/125/200 mg; 37.5/150/200
mg and 50/200/200 mg) in the United States, with carbidopa, levodopa and
entacapone as active ingredients in the same proportion as in Orion's
proprietary drug Stalevo(®) for treatment of Parkinson's disease. Stalevo is an
enhanced levodopa treatment which is marketed in the United States by Orion's
exclusive licensee, Novartis.
Business Reviews
Pharmaceuticals
Review of human pharmaceuticals market
According to statistics collected by Finnish Pharmaceutical Data Ltd, Finnish
wholesale of human pharmaceuticals in 2012 totalled EUR 2,031 (1,972) million,
up by 3% on 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 and 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 2012 amounted to EUR 219 (202) million, up by 9% compared with the previous
year. Orion's market share of Finnish pharmaceuticals markets was 11% (10%).
According to IMS Health pharmaceutical sales statistics, in the 12-month period
ending in September 2012 the total sales of Parkinson's drugs in the United
States were up by 3% at USD 751 million (USD 727 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
September 2012 totalled EUR 954 (987) million, and the average market decline
was 3%.
The most important individual therapy area for Orion is still the treatment of
Parkinson's disease. Orion's Parkinson's drugs account for about a quarter of
the Group's net sales. Sales of entacapone drugs in the United States remained
stable, and in Japan sales continued to grow well and clearly better than the
market as a whole. According to IMS Health pharmaceutical sales statistics, in
the 12-month period ending in September 2012, sales of entacapone drugs in the
United States totalled USD 195 million (USD 190 million in the previous 12-month
period). Stalevo and Comtan accounted for 83% of these sales and generic
entacapone products supplied by Orion accounted for 17%. Sales remained stable
at a total of EUR 157 (157) million in the five largest markets in Europe, and
were up by 23% at EUR 66 (53) million in Japan. The market share of entacapone
drugs was 26% in the United States, on average 16% in the five largest European
markets and 11% in Japan.
According to IMS Health pharmaceutical sales statistics, sales of Orion's
Precedex(®) intensive care sedative (dexmedetomidine) were up by 27% at USD 248
million in the 12-month period ending in September 2012 (USD 194 million in the
previous 12-month period). About four-fifths of the sales amounting to USD 193
(153) million were in the United States, where Precedex sales grew by 27%.
Net sales and operating profit of the Pharmaceuticals business
Net sales of the Pharmaceuticals business in 2012 were EUR 929 (871) million, up
by 7% on the previous year. The operating profit of the Pharmaceuticals business
was similar to the previous year at EUR 289 (288) million. The operating profit
of the Pharmaceuticals business was 31% (33%) of the segment's net sales.
Net sales of Orion's top ten pharmaceuticals in 2012 were up by 5% at EUR 473
(451) million. They accounted for 51% (52%) of the total net sales of the
Pharmaceuticals business.
Net sales of the branded products based on own in-house R&D were up by 2% at EUR
429 (421) million in 2012. These products accounted for 46% (48%) 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 2012 were similar to the previous year at
EUR 404 (409) million.
Orion's drugs for treatment of Parkinson's disease are Stalevo(®) (active
ingredients carbidopa, levodopa and entacapone) and Comtess(®)/Comtan(®)
(entacapone), and their net sales in 2012 totalled EUR 250 (267) million. Sales
of Parkinson's drugs were down by 6% and accounted for 27% (31%) of the total
net sales of the Pharmaceuticals business. The decrease in sales is mainly due
to commencement of generic competition in the United States in April 2012, which
decreased deliveries to Novartis. Net sales from deliveries of Stalevo and
Comtan to Novartis were down by 11% at a total of EUR 152 (171) million.
Deliveries of Stalevo to Novartis were down by 8% at EUR 95 (103) million, and
deliveries of Comtan by 17% at EUR 56 (68) million. Total net sales generated by
Stalevo and Comtess in Orion's own sales organisation were up slightly at EUR
98 (96) million. Sales through Orion's own sales network were up by 6% at EUR
86 (81) million for Stalevo and down by 16% at EUR 13 (15) 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. The FDA has requested additional data based on databases
concerning the significance of the results of the STRIDE-PD study, and
consequently Orion and Novartis have undertaken epidemiological studies and
results from them were submitted to authorities for review in the third quarter
of 2012.
Net sales of Simdax(®), a drug for treatment of acute decompensated heart
failure, in 2012 were similar to the previous year at EUR 44 (44) million.
Total net sales of the Easyhaler(®) product family for treatment of asthma and
chronic obstructive pulmonary disease were down by 12% in 2012 at EUR 27 (31)
million. Sales of Easyhaler products through Orion's own sales network in Europe
continued to grow strongly, but sales through partners were lower than in the
previous year. Orion continued repatriating the rights to Easyhaler products,
and this transitional phase reduced sales through partners in the financial
period.
Net sales of the Precedex(®) intensive care sedative (dexmedetomidine) were up
by 38% in 2012 at EUR 45 (33) million. 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.
Net sales of Orion's dexdor(®) intensive care sedative (dexmedetomidine) in
2012 were EUR 13 (1) million. Launching of the product progressed as planned in
2012, and it is already available in over fifteen European countries. It is
anticipated that the product will be launched in Southern Europe and France
during the current year.
Specialty Products
Net sales of the Specialty Products business division's off-patent, i.e. generic
prescription drugs and self-care products in 2012 were up by 14% at EUR 367
(321) million. The growth was enhanced among others by sales of Orion's generic
entacapone products, which commenced at the beginning of the year and totalled
EUR 17 million, and are reported as part of the net sales of the Specialty
Products business division.
The launches of generic prescription drugs and self-care products were weighted
more towards prescription drugs than before, and for that reason the total
number of launches was less than in 2011. There were 116 (135) product launches
(product/market) in 2012.
Net sales of Orion's human pharmaceuticals in Finland were up by 8% at EUR 238
(220) million in 2012. Specialty Products accounted for the majority of sales.
Orion managed to increase its sales, especially in prescription drugs.
Net sales of Orion's human pharmaceuticals in Eastern Europe and Russia in 2012
were up by 16% at altogether EUR 63 (54) million. Specialty Products account for
the majority of sales in the region.
Animal Health
In the Nordic countries and some Eastern European markets Orion itself sells
veterinary drugs, and in other markets the Company operates through partners. In
addition, in the Nordic countries Orion markets and sells veterinary drugs
manufactured by several international companies. Orion's Animal Health business
division has a strong market position in the Nordic countries, its home markets.
Net sales of the Animal Health business division in 2012 were EUR 69 (68)
million. Sales of the animal sedatives at EUR 23 (23) million accounted for 33%
(34%) of the division's net sales. Orion's animal sedatives are Dexdomitor(®)
(dexmedetomidine), Domitor(®) (medetomidine), Domosedan(®) (detomidine) and
Antisedan(®) (atipamezole).
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 2012 excluding pharmaceutical ingredients
supplied for Orion's own use were up by 12% at EUR 48 (43) 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.
Capacity utilisation at Fermion's plants was very high during the period under
review. Capacity utilisation was increased by manufacturing active ingredients
required for development work on Orion's own proprietary drugs, in addition to
the normal product range.
Research and development projects
The Group's R&D expenses in 2012 were up by 20% at EUR 105 (88) million, of
which the Pharmaceuticals business accounted for EUR 97 (81) million. The
Group's R&D expenses accounted for 11% (10%) of the Group's net sales. R&D
expenses also include expenses relating to development of the current portfolio.
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. Following the positive results obtained in the
pharmacokinetic studies of the Easyhaler development programme in late 2012,
Orion plans to apply for marketing authorisation for the budesonide-formoterol
formulation. Orion anticipates that the application for marketing authorisation
in Europe could be submitted in the first quarter of 2013.
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
markets. Novartis initiated the necessary clinical bioavailability study in
November 2012.
Orion is continuing to develop an androgen receptor antagonist (ODM-201) for the
treatment of advanced prostate cancer jointly with Endo Pharmaceuticals Inc.
with the objective of approval of the drug globally. Phase I/II clinical trials
on safety, efficacy and pharmacokinetics showed that initial results concerning
efficacy were promising, and the product was well tolerated with no significant
adverse events detected. The results were presented at the ESMO international
oncology congress at the end of September 2012. Development of the product is
now in Phase II clinical trials. Negotiations to find a suitable partner for
markets outside Europe and North America are ongoing.
Orion has completed Phase II clinical trials with an alpha-2c adrenoceptor
antagonist (ORM-12741). The trials investigated the efficacy and safety of the
drug candidate in treatment of cognitive and behavioral symptoms relating to
Alzheimer's disease. The results from Phase II clinical trials in 2012 were
positive, and negotiations to find a suitable partner for the next development
phase are ongoing.
Orion is developing a new more effective levodopa product (ODM-101) based on
optimised new formulations and doses of known compounds. The results obtained
from Phase II clinical trials in 2012 were positive. Negotiations to find a
suitable partner for the next development phase are ongoing.
In 2012 Orion began Phase I clinical safety trials with a new COMT inhibitor
(ODM-103). It is a new molecule that enhances the therapeutic effects of
levodopa used to treat Parkinson's disease by blocking the COMT enzyme. The pre-
clinical study results indicated that the new molecule is more effective than
the COMT inhibitor entacapone, which is already in the markets.
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.
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 2012 were up by 9% at EUR 54 (50) million.
QuikRead(®) infection tests remained the main product, with sales continuing
strong in the review period. Sales of the more user-friendly prefilled QuikRead
101 system and QuikRead go(®), a new generation testing instrument, developed
well. Launching of the FOB (Faecal Occult Blood) quantitative test for the
QuikRead 101 system began during the review period. The new product version
helps to screen gastrointestinal disorders.
Launching of two QuikRead go tests for the QuikRead go system also commenced
during the review period. With a QuikRead go CRP+Hb test, a patient's C-reactive
protein (CRP) and haemoglobin (Hb) values can be determined in one blood sample.
The QuikRead go Strep A test helps to detect patients with pharyngitis who would
benefit from antibiotic treatment.
Sales growth was strongest in China, Japan and Germany. In Nordic countries
sales grew strongly in Norway, and in the other Nordic countries sales continued
at nearly the same level as in the previous year. In 2012 Orion Diagnostica
focused strongly on taking the early-phase technology it had acquired in the
previous year into full use in its research and product development programmes.
The operating profit of the Diagnostics business was EUR 2.6 (4.9) million. The
profit development was affected among others by the above mentioned increases in
expenditure on product development and sales.
Espoo, 5 February 2013
Board of Directors of Orion Corporation
Orion Corporation
Timo Lappalainen Jari Karlson
President and CEO CFO
Tables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million Q4/12 Q4/11 Change % 2012 2011 Change %
-------------------------------------------------------------------------------
Net sales 254.4 236.1 +7.8% 980.4 917.9 +6.8%
-------------------------------------------------------------------------------
Cost of goods sold -96.2 -85.2 +12.9% -350.0 -305.1 +14.7%
-------------------------------------------------------------------------------
Gross profit 158.2 150.8 +4.9% 630.4 612.8 +2.9%
-------------------------------------------------------------------------------
Other operating income and
expenses 4.3 0.5 +774.3% 6.3 3.0 +108.8%
-------------------------------------------------------------------------------
Sales and marketing expenses -58.2 -53.7 +8.6% -205.7 -204.8 +0.4%
-------------------------------------------------------------------------------
R&D expenses -31.7 -25.4 +24.7% -104.8 -87.5 +19.8%
-------------------------------------------------------------------------------
Administrative expenses -13.1 -12.7 +3.3% -45.3 -40.6 +11.5%
-------------------------------------------------------------------------------
Operating profit 59.4 59.6 -0.2% 280.9 282.9 -0.7%
-------------------------------------------------------------------------------
Finance income 0.1 1.9 -96.5% 4.9 5.0 -3.2%
-------------------------------------------------------------------------------
Finance expenses -0.7 -1.9 -64.2% -6.6 -6.0 +9.7%
-------------------------------------------------------------------------------
Share of associated companies'
results 0.0 0.0 0.1 0.0
-------------------------------------------------------------------------------
Profit before taxes 58.8 59.5 -1.2% 279.3 282.0 -0.9%
-------------------------------------------------------------------------------
Income tax expense -15.8 -14.3 +10.8% -70.4 -72.4 -2.8%
-------------------------------------------------------------------------------
Profit for the period 43.0 45.2 -5.0% 208.9 209.5 -0.3%
-------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME INCLUDING TAX EFFECTS
-------------------------------------------------------------------------------
Change in value of cash flow
hedges 0.0 -0.3 -0.2 -1.4
-------------------------------------------------------------------------------
Change in value of available-for-
sale financial assets 0.0 -0.1 0.3 -0.3
-------------------------------------------------------------------------------
Translation differences -0.8 1.1 1.1 0.6
-------------------------------------------------------------------------------
Other comprehensive income net of
tax -0.7 0.7 1.1 -1.1
-------------------------------------------------------------------------------
Comprehensive income for the
period including tax effects 42.2 45.9 -8.0% 210.1 208.4 +0.8%
-------------------------------------------------------------------------------
PROFIT ATTRIBUTABLE TO:
-------------------------------------------------------------------------------
Owners of the parent company 43.0 45.3 -5.0% 208.9 209.5 -0.3%
-------------------------------------------------------------------------------
Non-controlling interests 0.0 0.0 0.0 0.0
-------------------------------------------------------------------------------
COMPREHENSIVE INCOME ATTRIBUTABLE
TO:
-------------------------------------------------------------------------------
Owners of the parent company 42.2 45.9 -8.0% 210.1 208.4 +0.8%
-------------------------------------------------------------------------------
Non-controlling interests 0.0 0.0 0.0 0.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Basic earnings per share, EUR (1)) 0.30 0.32 -5.1% 1.48 1.49 -0.4%
-------------------------------------------------------------------------------
Diluted earnings per share, EUR
(1)) 0.30 0.32 -5.1% 1.48 1.49 -0.4%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Depreciation, amortisation and
impairment 11.4 9.5 +19.9% 40.0 42.5 -6.0%
-------------------------------------------------------------------------------
Personnel expenses 59.3 51.7 +14.7% 212.1 186.0 +14.0%
-------------------------------------------------------------------------------
(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 12/12 12/11 Change %
-------------------------------------------------------------------------
Property, plant and equipment 205.3 190.7 +7.7%
-------------------------------------------------------------------------
Goodwill 13.5 13.5
-------------------------------------------------------------------------
Intangible rights 58.0 66.6 -12.9%
-------------------------------------------------------------------------
Other intangible assets 4.3 4.8 -8.6%
-------------------------------------------------------------------------
Investments in associates 1.4 1.4 +4.8%
-------------------------------------------------------------------------
Available-for-sale financial assets 0.5 1.1 -55.6%
-------------------------------------------------------------------------
Pension asset 39.6 37.4 +5.9%
-------------------------------------------------------------------------
Deferred tax assets 2.0 1.4 +42.2%
-------------------------------------------------------------------------
Other non-current assets 1.6 1.8 -12.8%
-------------------------------------------------------------------------
Non-current assets total 326.2 318.6 +2.4%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Inventories 179.2 151.4 +18.4%
-------------------------------------------------------------------------
Trade receivables 151.5 155.3 -2.5%
-------------------------------------------------------------------------
Other receivables 34.8 30.8 +12.9%
-------------------------------------------------------------------------
Cash and cash equivalents 145.2 123.0 +18.1%
-------------------------------------------------------------------------
Current assets total 510.7 460.5 +10.9%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Assets total 836.9 779.1 +7.4%
-------------------------------------------------------------------------
EQUITY AND LIABILITIES
EUR million 12/12 12/11 Change %
-------------------------------------------------------------------------
Share capital 92.2 92.2
-------------------------------------------------------------------------
Expendable fund 0.5 0.5
-------------------------------------------------------------------------
Other reserves 0.8 17.6 -95.4%
-------------------------------------------------------------------------
Retained earnings 417.7 389.6 +7.2%
-------------------------------------------------------------------------
Equity attributable to owners of the parent company 511.2 499.9 +2.3%
-------------------------------------------------------------------------
Non-controlling interests 0.0 0.0
-------------------------------------------------------------------------
Equity total 511.3 500.0 +2.3%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Deferred tax liabilities 43.1 42.2 +2.0%
-------------------------------------------------------------------------
Pension liability 0.3 0.5 -32.6%
-------------------------------------------------------------------------
Provisions 0.1 0.3 -54.8%
-------------------------------------------------------------------------
Interest-bearing non-current liabilities 107.4 66.0 +62.8%
-------------------------------------------------------------------------
Other non-current liabilities 0.8 0.3 +184.5%
-------------------------------------------------------------------------
Non-current liabilities total 151.8 109.3 +38.9%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Trade payables 59.3 66.3 -10.6%
-------------------------------------------------------------------------
Current tax liabilities 8.0 6.4 +24.0%
-------------------------------------------------------------------------
Other current liabilities 77.4 74.5 +4.0%
-------------------------------------------------------------------------
Provisions 0.0
-------------------------------------------------------------------------
Interest-bearing current liabilities 29.3 22.7 +29.0%
-------------------------------------------------------------------------
Current liabilities total 173.9 169.9 +2.4%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Liabilities total 325.7 279.1 +16.7%
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Equity and liabilities total 836.9 779.1 +7.4%
-------------------------------------------------------------------------
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
2011 92.2 17.8 8.9 1.6 -4.4 351.2 0.0 467.4
-------------------------------------------------------------------------------
Profit for the period 209.5 209.5
-------------------------------------------------------------------------------
Other comprehensive
income:
-------------------------------------------------------------------------------
Change in value of cash flow
hedges -1.4 -1.4
-------------------------------------------------------------------------------
Change in value of available-for-
sale financial assets -0.3 -0.3
-------------------------------------------------------------------------------
Translation differences 0.6 0.6
-------------------------------------------------------------------------------
Transactions with owners
-------------------------------------------------------------------------------
Dividend and capital
repayment -8.5 -169.0 -177.5
-------------------------------------------------------------------------------
Share-based incentive
plan 1.7 1.7
-------------------------------------------------------------------------------
Transfer between
different components of
equity -17.8 17.8
-------------------------------------------------------------------------------
Other adjustments 0.0 -0.1 -0.1
-------------------------------------------------------------------------------
Equity at 31 December
2011 92.2 0.5 17.6 -3.8 393.4 0.0 500.0
-------------------------------------------------------------------------------
Profit for the period 208.9 208.9
-------------------------------------------------------------------------------
Other comprehensive
income:
-------------------------------------------------------------------------------
Change in value of cash flow
hedges -0.2 -0.2
-------------------------------------------------------------------------------
Change in value of available-for-
sale financial assets 0.3 0.3
-------------------------------------------------------------------------------
Translation differences 1.1 1.1
-------------------------------------------------------------------------------
Transactions with owners
-------------------------------------------------------------------------------
Dividend and capital
repayment -16.9 -183.2 -200.1
-------------------------------------------------------------------------------
Share-based incentive
plan 1.5 1.5
-------------------------------------------------------------------------------
Other adjustments 0.0 -0.1 -0.1
-------------------------------------------------------------------------------
Equity at 31 December
2012 92.2 0.5 0.8 -2.7 420.5 0.0 511.3
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million 2012 2011
-------------------------------------------------------------------------------
Operating profit 280.9 282.9
-------------------------------------------------------------------------------
Adjustments 38.9 39.0
-------------------------------------------------------------------------------
Change in working capital -28.9 -42.6
-------------------------------------------------------------------------------
Interest paid -6.1 -6.2
-------------------------------------------------------------------------------
Interest received 4.9 5.0
-------------------------------------------------------------------------------
Dividends received 0.1
-------------------------------------------------------------------------------
Income taxes paid -68.6 -79.3
-------------------------------------------------------------------------------
Total net cash flow from operating activities 221.0 198.9
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Investments in property, plant and equipment -42.4 -25.6
-------------------------------------------------------------------------------
Investments in intangible assets -6.7 -19.9
-------------------------------------------------------------------------------
Acquisition of an associate -0.0
-------------------------------------------------------------------------------
Sale of a subsidiary less cash and cash equivalents at sale date 0.3
-------------------------------------------------------------------------------
Sales of property, plant and equipment
and available-for-sale investments 2.0 1.2
-------------------------------------------------------------------------------
Sales of intangible assets 0.0
-------------------------------------------------------------------------------
Total net cash flow from investing activities -47.1 -43.9
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Short-term loans raised 1.0 0.8
-------------------------------------------------------------------------------
Repayments of short-term loans -2.2 -2.1
-------------------------------------------------------------------------------
Long-term loans raised 75.0 19.1
-------------------------------------------------------------------------------
Repayments of long-term loans -26.4 -40.1
-------------------------------------------------------------------------------
Dividends paid and other distribution of profits -199.9 -177.5
-------------------------------------------------------------------------------
Total net cash flow from financing activities -152.4 -199.7
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Net change in cash and cash equivalents 21.5 -44.7
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 123.0 167.2
-------------------------------------------------------------------------------
Foreign exchange differences 0.8 0.5
-------------------------------------------------------------------------------
Net change in cash and cash equivalents 21.5 -44.7
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 145.2 123.0
-------------------------------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 12/12 12/11
-----------------------------------------------------------
Carrying amount at the beginning of the period 190.7 187.1
-----------------------------------------------------------
Additions 40.1 30.3
-----------------------------------------------------------
Disposals -1.1 -1.4
-----------------------------------------------------------
Depreciation and impairments -24.5 -25.3
-----------------------------------------------------------
Carrying amount at the end of the period 205.3 190.7
-----------------------------------------------------------
CHANGES IN INTANGIBLE ASSETS (EXCLUDING GOODWILL)
EUR million 12/12 12/11
-----------------------------------------------------------
Carrying amount at the beginning of the period 71.3 69.5
-----------------------------------------------------------
Additions 6.6 19.1
-----------------------------------------------------------
Disposals -0.0 -0.0
-----------------------------------------------------------
Depreciation and impairments -15.5 -17.2
-----------------------------------------------------------
Carrying amount at the end of the period 62.3 71.3
-----------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
EUR million 12/12 12/11
--------------------------------------------------------------------
CONTINGENCIES FOR OWN LIABILITIES
--------------------------------------------------------------------
Mortgages on land and buildings 41.0 41.0
--------------------------------------------------------------------
of which those to Orion Pension Fund 9.0 9.0
--------------------------------------------------------------------
Guarantees 1.5 1.6
--------------------------------------------------------------------
OTHER LIABILITIES
--------------------------------------------------------------------
Leasing liabilities (excluding finance lease contracts) 6.5 4.5
--------------------------------------------------------------------
Other liabilities 0.3 0.3
--------------------------------------------------------------------
DERIVATIVES
EUR million 12/12 12/11
----------------------------------------------------
CURRENCY FORWARD CONTRACTS AND CURRENCY SWAPS
----------------------------------------------------
Fair value, EUR million 0.3 -0.4
----------------------------------------------------
Nominal value, EUR million 52.0 40.7
----------------------------------------------------
CURRENCY OPTIONS
----------------------------------------------------
Fair value, EUR million 0.2 -0.2
----------------------------------------------------
Nominal value, EUR million 51.3 63.1
----------------------------------------------------
INTEREST RATE SWAPS
----------------------------------------------------
Fair value, EUR million -0.3
----------------------------------------------------
Nominal value, EUR million 22.3
----------------------------------------------------
CROSS CURRENCY SWAPS
----------------------------------------------------
Fair value, EUR million 0.2 0.3
----------------------------------------------------
Nominal value, EUR million 9.6 19.1
----------------------------------------------------
ELECTRICITY DERIVATIVES
----------------------------------------------------
Fair value, EUR million -0.6 -0.4
----------------------------------------------------
Nominal value, EUR million 110 153
----------------------------------------------------
RELATED PARTY TRANSACTIONS
EUR million 2012 2011
-------------------------------------------
Management's employment benefits 4.4 4.8
-------------------------------------------
Operating segment performance
NET SALES BY BUSINESS DIVISION
EUR million Q4/12 Q4/11 Change % 2012 2011 Change %
---------------------------------------------------------------------------
Pharmaceuticals 242.1 223.8 +8.2% 928.9 870.6 +6.7%
---------------------------------------------------------------------------
Proprietary Products 103.9 103.4 +0.5% 403.7 408.9 -1.3%
---------------------------------------------------------------------------
Specialty Products 97.6 82.5 +18.3% 367.2 320.8 +14.4%
---------------------------------------------------------------------------
Animal Health 17.5 19.3 -9.3% 69.2 67.8 +2.0%
---------------------------------------------------------------------------
Fermion 12.0 11.8 +1.4% 48.4 43.3 +11.7%
---------------------------------------------------------------------------
Contract manufacturing
and other 11.2 6.8 +64.2% 40.5 29.7 +36.1%
---------------------------------------------------------------------------
Diagnostics 13.1 12.9 +1.6% 54.1 49.5 +9.3%
---------------------------------------------------------------------------
Group items -0.8 -0.6 +28.7% -2.7 -2.2 +20.3%
---------------------------------------------------------------------------
Group total 254.4 236.1 +7.8% 980.4 917.9 +6.8%
---------------------------------------------------------------------------
OPERATING PROFIT BY BUSINESS AREA
EUR million Q4/12 Q4/11 Change % 2012 2011 Change %
----------------------------------------------------------
Pharmaceuticals 62.8 61.4 +2.2% 288.9 287.6 +0.5%
----------------------------------------------------------
Diagnostics -0.5 0.7 -178.5% 2.6 4.9 -46.9%
----------------------------------------------------------
Group items -2.9 -2.5 +13.1% -10.6 -9.5 +10.7%
----------------------------------------------------------
Group total 59.4 59.6 -0.2% 280.9 282.9 -0.7%
----------------------------------------------------------
NET SALES BY ANNUAL QUARTERS
2012 2011
+-----------------------+-----------------------+
EUR million | Q4 Q3 Q2 Q1| Q4 Q3 Q2 Q1|
----------------+-----------------------+-----------------------+
Pharmaceuticals|242.1 234.2 220.1 232.5|223.8 199.8 215.9 231.0|
----------------+-----------------------+-----------------------+
Diagnostics | 13.1 12.1 13.4 15.5| 12.9 11.3 11.7 13.7|
----------------+-----------------------+-----------------------+
Group items | -0.8 -0.5 -0.7 -0.6| -0.6 -0.5 -0.6 -0.6|
----------------+-----------------------+-----------------------+
Group total |254.4 245.8 232.8 247.4|236.1 210.7 227.0 244.1|
----------------+-----------------------+-----------------------+
OPERATING PROFIT BY ANNUAL QUARTERS
2012 2011
+-------------------+-------------------+
EUR million | Q4 Q3 Q2 Q1| Q4 Q3 Q2 Q1|
----------------+-------------------+-------------------+
Pharmaceuticals|62.8 78.6 68.1 79.4|61.4 66.8 67.1 92.3|
----------------+-------------------+-------------------+
Diagnostics |-0.5 0.0 0.5 2.5| 0.7 0.8 0.7 2.8|
----------------+-------------------+-------------------+
Group items |-2.9 -2.3 -2.7 -2.7|-2.5 -2.1 -2.7 -2.1|
----------------+-------------------+-------------------+
Group total |59.4 76.3 66.0 79.3|59.6 65.4 65.1 92.9|
----------------+-------------------+-------------------+
GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS
2012 2011
+-----------------------+-----------------------+
EUR million | Q4 Q3 Q2 Q1| Q4 Q3 Q2 Q1|
--------------+-----------------------+-----------------------+
Finland | 67.3 63.3 62.7 64.0| 61.7 60.1 59.8 59.1|
--------------+-----------------------+-----------------------+
Scandinavia | 33.3 30.3 30.3 32.4| 28.5 28.1 30.3 33.4|
--------------+-----------------------+-----------------------+
Other Europe | 68.1 76.5 79.2 78.7| 79.6 71.5 77.2 80.2|
--------------+-----------------------+-----------------------+
North America| 54.7 27.1 30.4 38.4| 36.0 24.0 29.2 38.7|
--------------+-----------------------+-----------------------+
Other markets| 31.0 48.6 30.2 33.9| 30.3 26.9 30.6 32.8|
--------------+-----------------------+-----------------------+
Group total |254.4 245.8 232.8 247.4|236.1 210.7 227.0 244.1|
--------------+-----------------------+-----------------------+
Business reviews
KEY FIGURES FOR PHARMACEUTICALS BUSINESS
EUR million Q4/12 Q4/11 Change % 2012 2011 Change %
-------------------------------------------------------------------------------
Net sales 242.1 223.8 +8.2% 928.9 870.6 +6.7%
-------------------------------------------------------------------------------
Operating profit 62.8 61.4 +2.2% 288.9 287.6 +0.5%
-------------------------------------------------------------------------------
% of net sales 25.9% 27.5% 31.1% 33.0%
-------------------------------------------------------------------------------
R&D expenses 29.4 23.6 +24.3% 96.6 81.1 +19.1%
-------------------------------------------------------------------------------
% of net sales 12.1% 10.6% 10.4% 9.3%
-------------------------------------------------------------------------------
Capital expenditure 9.4 12.4 -24.4% 42.0 38.8 +8.4%
-------------------------------------------------------------------------------
% of net sales 3.9% 5.6% 4.5% 4.5%
-------------------------------------------------------------------------------
Sales revenue from proprietary
products 110.4 111.3 -0.9% 429.0 421.1 +1.9%
-------------------------------------------------------------------------------
Assets 628.5 597.5 +5.2%
-------------------------------------------------------------------------------
Liabilities 127.3 132.2 -3.7%
-------------------------------------------------------------------------------
Personnel at the end of the period 3,123 3,079 +1.4%
-------------------------------------------------------------------------------
TOP TEN BEST-SELLING PHARMACEUTICAL PRODUCTS
EUR million Q4/12 Q4/11 Change % 2012 2011 Change %
-------------------------------------------------------------------------------
Stalevo(®), Comtess(®) and Comtan(®)
(Parkinson's disease) 57.9 64.3 -10.0% 250.1 266.7 -6.2%
-------------------------------------------------------------------------------
Precedex(®) (intensive care
sedative) 16.9 10.6 +59.1% 45.3 33.0 +37.5%
-------------------------------------------------------------------------------
Simdax(®) (acute decompensated heart
failure) 11.5 12.7 -9.4% 43.6 44.0 -0.9%
-------------------------------------------------------------------------------
Easyhaler(®) product family
(asthma, COPD) 6.5 7.5 -13.4% 26.8 30.5 -12.1%
-------------------------------------------------------------------------------
Burana(®) (inflammatory pain) 5.8 6.1 -4.3% 23.3 23.5 -0.6%
-------------------------------------------------------------------------------
Dexdomitor(®), Domitor(®),
Domosedan(®) and Antisedan(®)
(animal sedatives) 6.4 8.9 -28.2% 22.8 23.2 -1.9%
-------------------------------------------------------------------------------
Generic entacapone products
(Parkinson's disease) 4.2 0.3 17.0 0.3
-------------------------------------------------------------------------------
Marevan(®) (anticoagulant) 3.6 4.0 -9.2% 15.8 15.6 +1.1%
-------------------------------------------------------------------------------
Divina(®) range (menopausal
symptoms) 4.0 3.4 +17.1% 15.5 13.2 +17.2%
-------------------------------------------------------------------------------
Dexdor(®) (intensive care sedative) 5.0 0.9 +466.3% 13.0 0.9
-------------------------------------------------------------------------------
Total 121.8 118.6 +2.7% 473.2 450.9 +5.0%
-------------------------------------------------------------------------------
Share of pharmaceutical net sales 50% 53% 51% 52%
-------------------------------------------------------------------------------
KEY FIGURES FOR DIAGNOSTICS BUSINESS
EUR million Q4/12 Q4/11 Change % 2012 2011 Change %
-----------------------------------------------------------------------------
Net sales 13.1 12.9 +1.6% 54.1 49.5 +9.3%
-----------------------------------------------------------------------------
Operating profit -0.5 0.7 -178.5% 2.6 4.9 -46.9%
-----------------------------------------------------------------------------
% of net sales 3.9% 5.1% 4.8% 9.9%
-----------------------------------------------------------------------------
R&D expenses 2.4 1.8 +32.9% 8.3 6.4 +29.2%
-----------------------------------------------------------------------------
% of net sales 18.3% 14.0% 15.3% 12.9%
-----------------------------------------------------------------------------
Capital expenditure 1.2 0.3 +260.2% 4.2 10.4 -60.1%
-----------------------------------------------------------------------------
% of net sales 9.4% 2.6% 7.7% 21.1%
-----------------------------------------------------------------------------
Assets 47.3 44.4 +6.5%
-----------------------------------------------------------------------------
Liabilities 16.2 17.4 -6.6%
-----------------------------------------------------------------------------
Personnel at the end of the period 340 322 +5.5%
-----------------------------------------------------------------------------
Information on Orion's shares
BASIC SHARE INFORMATION 31 DECEMBER 2012
A shares B shares Total
-------------------------------------------------------------------------------
Trading code on NASDAQ OMX Helsinki ORNAV ORNBV
-------------------------------------------------------------------------------
Listing day 1 July 2006 1 July 2006
-------------------------------------------------------------------------------
ISIN code FI0009014369 FI0009014377
-------------------------------------------------------------------------------
ICB code 4500 4500
-------------------------------------------------------------------------------
Reuters code ORNAV.HE ORNBV.HE
-------------------------------------------------------------------------------
Bloomberg code ORNAV.FH ORNBV.FH
-------------------------------------------------------------------------------
Share capital, EUR million 28.2 64.0 92.2
-------------------------------------------------------------------------------
Counter book value per share, EUR 0.65 0.65
-------------------------------------------------------------------------------
Total number of shares 43,267,218 97,990,610 141,257,828
-------------------------------------------------------------------------------
% of total share stock 31% 69% 100%
-------------------------------------------------------------------------------
Number of treasury shares 325,991 325,991
-------------------------------------------------------------------------------
Total number of shares excluding
treasury shares 43,267,218 97,664,619 140,931,837
-------------------------------------------------------------------------------
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 865,344,360 97,664,619 963,008,979
-------------------------------------------------------------------------------
% of total votes 90% 10% 100%
-------------------------------------------------------------------------------
Total number of shareholders 18,946 43,937 56,519
-------------------------------------------------------------------------------
A shares and B shares confer equal rights to the Company's assets and
dividends.
INFORMATION ON TRADING ON NASDAQ OMX HELSINKI 1 JANUARY - 31 DECEMBER 2012
A shares B shares Total
-------------------------------------------------------------------------------
Shares traded 4,054,722 84,056,278 88,111,000
-------------------------------------------------------------------------------
% of the total number of shares 9.1% 86.9% 62.4%
-------------------------------------------------------------------------------
Trading volume, EUR million 68.2 1,366.5 1,434.7
-------------------------------------------------------------------------------
Closing quotation on 31 December 2011, EUR 15.18 15.05
-------------------------------------------------------------------------------
Lowest quotation, EUR (A and B 5 June 2012) 13.31 13.31
-------------------------------------------------------------------------------
Average quotation, EUR 16.82 16.26
-------------------------------------------------------------------------------
Highest quotation, EUR (A and B 7 December
2012) 22.57 22.74
-------------------------------------------------------------------------------
Closing quotation on 31 December 2012, EUR 22.05 22.18
-------------------------------------------------------------------------------
Market capitalisation on 31 December 2012
excluding treasury shares, EUR million 954.0 2,166.2 3,120.2
-------------------------------------------------------------------------------
PERFORMANCE PER SHARE
Q4/12 Q4/11 Change % 2012 2011 Change %
-------------------------------------------------------------------------------
Basic earnings per share,
EUR 0.30 0.32 -5.1% 1.48 1.49 -0.4%
-------------------------------------------------------------------------------
Diluted earnings per share,
EUR 0.30 0.32 -5.1% 1.48 1.49 -0.4%
-------------------------------------------------------------------------------
Cash flow per share before
financial items, EUR 0.32 0.33 -4.6% 1.23 1.10 +12.1%
-------------------------------------------------------------------------------
Equity per share, EUR 3.63 3.55 +2.2%
-------------------------------------------------------------------------------
Proposed dividend per share,
EUR (1)) 1.30 1.30
-------------------------------------------------------------------------------
Proposed payout ratio, % 87.8% 87.2%
-------------------------------------------------------------------------------
Total proposed dividend, EUR
million 183.2 183.1 +0.1%
-------------------------------------------------------------------------------
Effective dividend yield
according to proposal, %
-------------------------------------------------------------------------------
A share 5.9% 8.6%
-------------------------------------------------------------------------------
B share 5.9% 8.6%
-------------------------------------------------------------------------------
Price/earnings ratio (P/E)
-------------------------------------------------------------------------------
A share 14.90 10.19 +46.2%
-------------------------------------------------------------------------------
B share 14.99 10.10 +48.4%
-------------------------------------------------------------------------------
Average number of shares
excluding treasury shares,
1,000 shares 140 932 140 844 140 915 140 827
-------------------------------------------------------------------------------
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
* Proprietary Products (patented prescription products for three therapy
areas)
* Specialty Products (off-patent, generic prescription products and self-
care products)
* Animal Health (veterinary products for pets and production animals)
* Fermion (active pharmaceutical ingredients for Orion and other
companies)
* Diagnostics business
* 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
The Consolidated Financial Statements of the Orion Group have been prepared in
accordance with International Financial Reporting Standards (IFRS) applying IAS
and IFRS standards as well as SIC and IFRIC interpretations effective at 31
December 2012.
The following new standards, interpretations and amendments to existing
standards endorsed by the EU have been adopted as of 1 January 2012. However,
they do not have material effects on the Consolidated Financial Statements:
* IFRS 7 (Amendment), Financial Instruments: Financial Statement Disclosures -
Offsetting Financial Assets and Liabilities
* IAS 12 (Amendment), Income Taxes
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 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), % =----------------------------------x 100
Total equity (average during the
period)
Equity
Equity ratio, % =----------------------------------x 100
Total assets - Advances received
Interest-bearing liabilities -
Gearing, % = Cash and cash equivalents x 100
----------------------------------
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
Dividend to be distributed for
the period
Dividend per share, EUR =----------------------------------
Number of shares at the end of
the period, excluding treasury
shares
Dividend per share
Payout ratio, % =----------------------------------x 100
Earnings per share
Dividend per share
Effective dividend yield, % =----------------------------------x 100 Closing quotation of the period
Closing quotation of the period
Price/earnings ratio (P/E) =----------------------------------
Earnings per share
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 x Closing quotation
of the period
Publisher:
Orion Corporation
www.orion.fi/
www.twitter.com/OrionCorpIR
Orion is a globally operating Finnish company developing pharmaceuticals and
diagnostic tests - a builder of well-being. Orion develops, manufactures and
markets human and veterinary pharmaceuticals, active pharmaceutical ingredients
and diagnostic tests. The company is continuously developing new drugs and
treatment methods. Pharmaceutical R&D focuses on central nervous system drugs,
oncology and critical care drugs, and Easyhaler(®) pulmonary drugs.
Orion's net sales in 2012 amounted to EUR 980 million and the Company had about
3,500 employees. Orion's A and B shares are listed on NASDAQ OMX Helsinki.
[HUG#1675477]
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