2014-02-04 11:00:00 CET
2014-02-04 11:00:50 CET
REGULATED INFORMATION
Orion - Financial Statement Release
Orion Group Financial Statement Release for 2013
ORION CORPORATION FINANCIAL STATEMENT RELEASE 2013 4 FEBRUARY
2014 at 12:00 noon EET
Orion Group Financial Statement Release for 2013
Orion's net sales in 2013 totalled EUR 1,007 million (EUR 980 million in 2012),
up by 3% on the previous year.
* Operating profit was EUR 268 (278) million.
* Profit before taxes was EUR 264 (277) million.
* Equity ratio was 54% (61%).
* ROCE before taxes was 39% (46%).
* ROE after taxes was 40% (41%).
* Basic earnings per share were EUR 1.46 (1.47).
* Cash flow per share before financial items was EUR 1.02 (1.23).
* Board's proposal for dividend per share is EUR 1.25 (1.30) per share.
* Orion estimates that in 2014 net sales will be at similar level to 2013 and
operating profit will be slightly lower than in 2013.
* Orion has signed a licensing agreement with Janssen Pharmaceuticals for
development and commercialisation of ORM-12741, among others.
ORION'S KEY FIGURES FOR THE REVIEW PERIOD
Q4/13 Q4/12 Change % 2013 2012 Change %
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Net sales, EUR million 272.6 254.4 +7.1% 1,006.9 980.4 +2.7%
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International operations, EUR
million. 201.1 187.1 +7.5% 732.3 723.1 +1.3%
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% of net sales 73.8% 73.5% 72.7% 73.8%
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Operating profit, EUR million 65.8 58.8 +12.1% 267.7 278.3 -3.8%
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% of net sales 24.2% 23.1% 26.6% 28.4%
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Profit before taxes, EUR million 64.5 58.1 +10.9% 264.0 276.6 -4.6%
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% of net sales 23.6% 22.9% 26.2% 28.2%
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Income tax expense, EUR million 8.8 15.7 -43.9% 57.8 69.7 -17.0%
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R&D expenses, EUR million 29.7 31.9 -6.8% 101.9 105.8 -3.7%
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% of net sales 10.9% 12.5% 10.1% 10.8%
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Capital expenditure, EUR million 20.1 10.8 +86.5% 77.9 46.8 +66.3%
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% of net sales 7.4% 4.2% 7.7% 4.8%
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Assets total, EUR million 979.0 835.7 +17.2%
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Equity ratio, % 53.6% 61.0%
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Gearing, % 8.4% -1.7%
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Interest-bearing liabilities, EUR
million 257.8 136.7 +88.6%
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Non-interest-bearing liabilities,
EUR million 207.3 189.5 +9.4%
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Cash and cash equivalents, EUR
million 214.7 145.2 +47.8%
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ROCE (before taxes), % 38.5% 45.9%
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ROE (after taxes), % 40.3% 41.0%
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Basic earnings per share, EUR 0.40 0.30 +31.1% 1.46 1.47 -0.4%
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Diluted earnings per share, EUR 0.40 0.30 +31.1% 1.46 1.47 -0.4%
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Cash flow per share before
financial items, EUR 0.46 0.32 +45.2% 1.02 1.23 -17.3%
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Equity per share, EUR 3.66 3.62 +1.1%
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Personnel at the end of the period 3,519 3,486 +0.9%
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Average personnel during the
period 3,540 3,495 +1.3%
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Personnel expenses, EUR million 218.1 214.8 +1.5%
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President and CEO Timo Lappalainen's review"Orion's net sales over EUR 1 billion""Our net sales exceeded EUR 1 billion for the first time since the demerger in
2006. Our operating profit was as anticipated slightly down on the previous
year."Deliveries of our Parkinson's drugs to Novartis were lower than a year ago as
expected. Total sales generated by Stalevo(®) and Comtess(®) products in Orion's
own sales organisation were also slightly down. Despite the trend in sales of
Parkinson's drugs, net sales of the Proprietary Products business division
decreased only slightly because sales of other products in the portfolio grew.
In particular, the intensive care sedatives Dexdor(®) and Precedex(®) continued
to grow strongly. We are also pleased that all the other business divisions
increased net sales during the year. Fermion, which manufactures active
pharmaceutical ingredients, increased sales especially strongly. The Specialty
Products business division has grown as large as the Proprietary Products
business division, balancing the Group's structure."In 2013 we received positive news from many of our research projects. In March
we took a step in broadening the Easyhaler(®) product family into combination
products when we submitted an application for marketing authorisation for a
budesonide-formoterol formulation product in Europe. In June our partner
Novartis submitted a marketing authorisation application for Stalevo in Japan.
In December we announced that we had signed a licensing agreement with Janssen
Pharmaceuticals, which includes clinical phase trial of an alpha-2c adrenoceptor
antagonist (ORM-12741) being developed for the treatment of symptoms of
Alzheimer's disease."During the year we terminated our collaboration agreement with Endo
Pharmaceuticals concerning oncology drug research, development and
commercialisation. All rights to the androgen receptor inhibitor (ODM-201) for
the treatment of prostate cancer covered by the agreement reverted to Orion. We
have started preparations for a Phase III clinical trial with ODM-201 and
continue negotiations to find a suitable partner for collaboration on the next
phase of worldwide development and commercialisation of the product. We also
decided to end development of a more effective levodopa product (ODM-101) into a
finished product."The significant investment and production reorganisation projects progressed as
planned during 2013, and some of the projects are still continuing during the
current year. Through the measures being undertaken, we will develop and ensure
future growth, delivery reliability and quality standards. However, the projects
have been temporarily increasing production costs and decreasing production
capacity, and that reduced our margin during the year."In Europe data protection of Stalevo expired in October 2013, following which
sales of our Parkinson's drugs are forecast to continue to decline as generic
competition to Stalevo is expected to commence in Europe in 2014. The basic
patent for Precedex has expired and this product may also face generic
competitors during the current year. The generic competition to these products
will significantly affect Orion, but the precise timing of commencement of
competition is difficult to forecast. 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, and our capital expenditure will still be higher than
average. We estimate that our net sales in 2014 will be at similar level to
2013 and our operating profit will be slightly lower than in 2013. More
information on the outlook estimate and the basis for it can be found under
'Outlook for 2014' and 'Basis for outlook' in this report."
Events in 2013
On 5 February the Board of Directors of Orion Corporation decided on an
incentive plan for key persons.
On 21 March Orion announced that it had submitted a marketing authorisation
application for a combined budesonide-formoterol formulation in the Easyhaler(®)
product family in Europe.
On 10 April Orion Diagnostica gave a negotiation proposal on streamlining
operations and reducing the number of personnel in Finland by no more than 80.
On 23 April the Board of Directors of Orion Corporation decided to acquire
shares in the Company as authorised by the Annual General Meeting on 19 March
2013 to be used as part of the execution of the long-term Incentive Plan 2013
for key persons of the Orion Group.
On 3 June Orion Diagnostica's statutory co-operation negotiations were
completed.
On 4 June Orion announced that it would be issuing a EUR 150 million domestic
bond.
On 11 June the listing prospectus for Orion's bond was published.
On 25 July Orion announced that it had reached agreement with Mylan
Pharmaceuticals Inc. in the patent dispute concerning the proprietary drug
Stalevo(®).
On 21 October Orion Corporation and Hospira, Inc. announced that they had
extended the licensing agreement concerning the sedative agent Precedex(®) in
the markets outside Europe.
On 22 October Orion Corporation and Phyxius Pharma, Inc. announced that they had
entered into an agreement for licensing levosimendan injection rights in the USA
and Canada to Phyxius Pharma.
On 19 November Orion announced that Markku Huhta-Koivisto, Senior Vice President
responsible for the Specialty Products and Fermion business divisions, and Dr.
Liisa Hurme, Senior Vice President responsible for the Proprietary Products
business division, would exchange their responsibility areas with effect from 1
January 2014.
On 5 December Orion announced that Orion Corporation and Hospira, Inc. had
settled their patent dispute with Sandoz Inc. and Sandoz Canada Inc. over the
proprietary drug Precedex(®).
On 11 December Orion announced that it had completed the acquisition of its own
shares.
On 19 December Orion announced that it had signed a licensing agreement with
Janssen Pharmaceuticals for the development and commercialisation of a new drug
for Alzheimer's disease.
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 4 February 2014, 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 at Orion's website at
www.orion.fi/en. After the presentation, questions can be asked by telephone in
Finnish and English.
The teleconference code is 940874 and to participate in the teleconference,
please call:
from United States: +1 334 323 6201
from other countries: +44 (0)20 7162 0025
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 published on the Orion
website during Tuesday 4 February 2014.
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 2014
Deadline for registering for Annual Thursday 20 March 2014 at 10:00
General Meeting
Tuesday 25 March 2014 at 14:00 in
Annual General Meeting 2014 Helsinki
Friday 28 March 2014
Record date for dividend distribution
Dividend payment date Friday 4 April 2014
Interim Report January-March 2014 Tuesday 29 April 2014
Interim Report January-June 2014 Tuesday 29 July 2014
Tuesday 21 October 2014
Interim Report January-September 2014
The Financial Statements for 2013 and Corporate Governance Statement will be
published on the Company's website at the latest on 4 March 2014.
For additional information about the financial review:
Jari Karlson, CFO tel. +358 10 426 2883
Tuukka Hirvonen, Communications Manager tel. +358 10 426 2721 / mobile
+358 50 966 2721
www.orion.fi/en
www.orion.fi/en/investors
Financial review 2013
Net sales
The Orion Group's net sales in 2013 were EUR 1,007 million (EUR 980 million in
2012). The net effect of currency exchange rates was EUR -16 million of which
about half was due to depreciation of the Japanese yen.
The Pharmaceuticals business's net sales were EUR 953 (929) million. Net sales
of Orion's Stalevo(®) (carbidopa, levodopa and entacapone) and
Comtess(®)/Comtan(®) (entacapone) Parkinson's drugs were down by 17% at EUR 207
(250) million, which was 22% (27%) of the Pharmaceuticals business's net sales.
The net sales of other products in the portfolio were up by 10% at EUR 746 (679)
million.
The Diagnostics business's net sales were up by 5% at EUR 57 (54) million.
Operating profit
The Orion Group's operating profit was down by 4% at EUR 268 (278) million.
The Pharmaceuticals business's operating profit was down by 5% at EUR 273 (287)
million. The gross profit percentage was lower than in the comparative period
due to products with lower margins accounting for an increasing proportion of
sales, lower prices and higher production costs. Costs were increased by the
extensive investment and production facility modification projects in progress
during the year, which temporarily decreased production capacity and at the same
time increased costs. Operating expenses were slightly down. The operating
profit for the review period includes about EUR 3 million received from Janssen
Pharmaceuticals as part of the total payment of EUR 23 million under the
licensing agreement. Net sales and operating profit in the comparative period
were enhanced by a total of EUR 10 million of long-term compensatory payments
related to the pricing of partner deliveries.
The Diagnostics business's operating profit was up by 97% at EUR 4.6 (2.3)
million due to good growth in sales. The profit includes EUR 1.4 million of
expenses related to contraction of the product portfolio, closure of the Turku
manufacturing plant and personnel reductions.
Operating expenses
The Group's sales and marketing expenses were EUR 205 (206) million.
R&D expenses were down by 4% at EUR 102 (106) million and accounted for 10%
(11%) of the Group's net sales. Pharmaceutical R&D expenses amounted to EUR 94
(98) million. Research projects are reported in more detail under
Pharmaceuticals in the Business Reviews.
Administrative expenses were EUR 45 (46) million.
Other operating income and expenses increased profit by EUR 6 (6) million.
Group's profit
The Group's profit before taxes totalled EUR 264 (277) million. Basic earnings
per share were EUR 1.46 (1.47) and diluted earnings per share were EUR 1.46
(1.47). The decline of earnings per share was smaller than the decline of
operating profit due to decrease in deferred tax liabilities as a result of a
change in tax rate in Finland. Equity per share was EUR 3.66 (3.62). The return
on capital employed before taxes (ROCE) was 39% (46%) and the return on equity
after taxes (ROE) 40% (41%).
Financial position
The Group's gearing was 8% (-2%) and the equity ratio 54% (61%).
The Group's total liabilities at 31 December 2013 were EUR 465 (326) million. At
the end of the period, interest-bearing liabilities amounted to EUR 258 (137)
million, including EUR 233 (107) million of long-term loans.
The Group had EUR 215 (145) 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 slightly lower than in the comparative
period at EUR 215 (221) million. The decline was due to the decrease in
operating profit. The amount of cash tied up into working capital increased
slightly less than in the comparative period. The clear year-on-year increase in
inventories was mainly due to ensuring the reliability of deliveries as the
product portfolio and supply chain were expanded, and the lower margin of
products sold. The higher amount tied up into working capital than in the
comparative period was also due to trade receivables and especially other
receivables such as advance payments related to licensing agreements. However,
the overall increase in working capital was slowed by a clear increase in non-
interest bearing liabilities, including EUR 20 million received from Janssen
Pharmaceuticals as part of the total payment of EUR 23 million under the
licensing agreement and recorded in advance payments.
Cash flow from investing activities was EUR -71 (-47) million.
Cash flow from financing activities was EUR -74 (-152) million. The difference
was mainly due to the EUR 150 million bond issued in June 2013. Orion also
purchased its own shares to the value of EUR 10 million.
Capital expenditure
The Group's capital expenditure totalled EUR 78 (47) million. This comprised EUR
70 (40) million on property, plant and equipment and EUR 8 (7) million on
intangible assets.
Outlook for 2014
Net sales will be at similar level to 2013 (net sales in 2013 were EUR 1,007
million).
Operating profit will be slightly lower than in 2013 (operating profit in 2013
was EUR 268 million).
The Group's capital expenditure will be about EUR 60 million excluding
substantial corporate or product acquisitions (the Group's capital expenditure
in 2013 was EUR 78 million).
Basis for outlook
Competition in the Finnish market will remain intense in 2014. 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 has
decreased sales of Orion's Parkinson's drugs. US markets accounted for about EUR
60 million of the net sales of Orion's Parkinson's drugs in 2011, about EUR 33
million in 2012 and about EUR 10 million in 2013. In addition, sales of generic
entacapone products to the United States amounted to about EUR 9 million in
2013. In 2014 sales are expected to be still slightly lower.
The entacapone molecule patent expired in November 2012 in the main European
countries for Orion, and as a result generic competitors to Comtan and Comtess
entered these markets in 2013. Data protection of Stalevo expired in the
European Union in October 2013, and since then many generic pharmaceutical
companies have applied for marketing authorisation for their own products in
different European countries. Generic competition is expected to commence in
Europe in 2014.
Elsewhere in the world generic competition is not expected to have a material
impact on sales volumes of these products in the current year.
Sales of generic products will account for a greater proportion of Orion's total
sales and price competition will remain intense in many markets. Investments
commenced in 2012 to develop and ensure future growth, delivery reliability and
quality standards, and related reorganisations of production are still
continuing. Their effects in temporarily decreasing production capacity and
increasing production costs will be less than in 2013, but not yet totally
eliminated.
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 in 2014 were planned
mainly during the previous year.
Research and development costs will be slightly higher than in 2013. 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 2014 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 collaboration
arrangements and how the costs arising are allocated between Orion and its
collaboration partners.
Near-term risks and uncertainties relating to the outlook
Sales of Orion's Parkinson's drugs will decrease in 2014 due to generic
competition. The effects of the competition have been taken into account in the
outlook estimate. However, the timing of commencement of generic competition to
Stalevo in Europe entails uncertainty that may materially affect the accuracy of
the estimate made at this stage.
The basic Precedex patent expired in the United States in January. The outlook
estimate already includes the estimated effect of the consequent decrease in the
royalty payment on the product received by Orion and also the assumption that
generic competition will commence during 2014. However, the timing of
commencement of generic competition entails uncertainty that may materially
affect the accuracy of the estimate made at this stage.
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 among others
adjustments of stock levels. In addition, changes in market prices and exchange
rates affect the value of deliveries to Novartis.
A significant proportion of the exchange rate risk is related 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. Changes in the Japanese yen exchange rate have become more important
as sales of Parkinson's drugs in Japan have increased.
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. Any remedial
actions that may be required 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 the last, in other words 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.
Possible collaboration and licensing agreements may include advance payments
recorded in net sales that may materially affect Orion's financial results.
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 1.25
The parent company's distributable funds are EUR 237,391,611.21, including EUR
180,767,350.08 of profit for the financial year.
The Board of Directors proposes that a dividend of EUR 1.25 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 140,568,837, on which the
total dividend payment would be EUR 175,711,046.25. The Group's payout ratio for
the financial year 2013 would be 85.6% (88.4%). The dividend payment date would
be 4 April 2014, and shareholders registered in the Company's shareholder
register on 28 March 2014 would be entitled to the dividend payment.
The Board of Directors further proposes that EUR 250,000.00 be donated to
medical research and other purposes of public interest in accordance with a
separate decision by the Board and that EUR 61,430,564.96 remain in equity.
Strategy
In November 2013, Orion's Board of Directors confirmed that the strategic focus
remains the same for 2014-2018. 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
product portfolio or corporate acquisitions are evaluated against very strict
criteria.
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 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 healthcare 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 drug (ORM-12741) for treatment of Alzheimer's disease and
development of a drug for treatment of prostate cancer (ODM-201). In early
clinical phases Orion is developing drugs for treatment of Parkinson's disease
(ODM-103 and ODM-104, new more effective COMT inhibitors). 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
mainly through active product acquisition. 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, 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 2013 Orion had a total of 141,257,828 (141,257,828) shares, of
which 42,022,816 (43,267,218) were A shares and 99,235,012 (97,990,610) B
shares. The Group's share capital was EUR 92,238,541.46 (92,238,541.46). At the
end of December 2013 Orion held 688,991 (325,991) B shares as treasury shares.
On 31 December 2013 the aggregate number of votes conferred by the A and B
shares was 939,002,341 (963,008,979) excluding treasury shares.
At the end of December 2013, Orion had 56,762 (56,519) 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 2013 a total of 1,244,402 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 2013 the market capitalisation of the Company's shares excluding
treasury shares was EUR 2,868 million.
In 2013 a total of 2,736,284 A shares and 76,574,409 B shares were traded on
NASDAQ OMX Helsinki. The total value of the shares traded was EUR 1,600 million.
During the year, 6% of the A shares and 78% of the B shares were traded. The
average turnover in Orion's shares was 56%.
The price of Orion's A shares decreased by 8% and the price of its B shares
decreased by 8% during 2013. On 31 December 2013 the closing quotation was EUR
20.35 for the A shares and EUR 20.42 for the B shares. The highest quotation for
Orion's A shares in 2013 was EUR 24.42 and the lowest quotation was EUR 17.30.
The highest quotation for the B shares in 2013 was EUR 24.58 and the lowest
quotation was EUR 17.28.
Orion shares are also traded on various alternative trading platforms in
addition to NASDAQ OMX Helsinki. In 2013 NASDAQ OMX Helsinki accounted for about
92% of the entire trading volume in Orion A shares. In 2013 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 19
March 2013 to decide on acquisition of shares in the Company and on a share
issue in which shares held by the Company can be conveyed. The authorisation to
acquire shares is valid for 18 months and the authorisation to issue shares is
valid for five years from the decision taken by the Annual General Meeting. The
terms and conditions of the authorisations were reported in more detail in a
stock exchange release on 19 March 2013.
On 23 April 2013 Orion's Board of Directors decided to acquire shares in the
Company as authorised by the Annual General Meeting. In the period 22 November
to 11 December 2013 the Company acquired 500,000 B shares in the Company in
accordance with the decision. The shares were acquired for use as part of the
2013 long-term incentive plan for the Orion Group's key persons. Following the
acquisition, the Board of Directors does not have any outstanding authorisation
to decide to acquire shares in the Company.
The Board of Directors is authorised to decide on conveyance of no more than
600,000 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 the regulated market of the Stock
Exchange; 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
decision to authorise the share issue revoked the unexercised portion of the
outstanding share issue authorisation approved at Orion Corporation's Annual
General Meeting on 24 March 2010.
The Board of Directors is not authorised to increase the share capital or to
issue bonds with warrants or convertible bonds or stock options.
Orion Group's 2013 long-term incentive plan
In February 2013 Orion's Board of Directors decided on a new share-based
incentive plan for key persons of the Group. The Plan includes earning periods
and the Board of Directors will annually decide on the beginning and duration of
the earning periods in 2013, 2014 and 2015. The Board of Directors will decide
on the earnings criteria and on targets to be established for them at the
beginning of each earning period. The target group of the Plan consists of
approximately 35 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. The incentive plan is reported in more
detail in a stock exchange release on 5 February 2013.
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 2013 Orion had a total of 56,762 (56,519) registered
shareholders, of whom 95% (95%) were private individuals holding 46% (48%) of
the entire share stock and 64% (64%) of the total votes. There were altogether
48 (47) million nominee-registered shares, which was 34% (33%) of all shares,
and they conferred entitlement to 7% (7%) of the total votes.
At the end of December 2013 Orion held 688,991 (325,991) B shares as treasury
shares, which is 0.5% (0.2%) of the Company's total share stock and 0.07%
(0.03%) of the total votes.
Notification threshold
Orion did not receive any threshold notification and no transactions exceeding
the threshold regarding shareholdings or votes were brought to the attention of
the Company during 2013.
Management's shareholdings
At the end of 2013, the members of the Board of Directors owned a total of
2,166,557 of the Company's shares, of which 1,825,264 were A shares and 341,293
B shares. At the end of 2013, the President and CEO owned 37,250 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 143,775 of
the Company's shares, which were all B shares. Thus, the Company's executive
management held 1.67% of all of the Company's shares and 3.94% of the total
votes.
The Company does not have stock option programmes.
Management
Changes in Executive Management Board
Members of Orion's Executive Management Board Liisa Hurme and Markku Huhta-
Koivisto exchanged their responsibility areas with effect from 1 January 2014,
so since that date Markku Huhta-Koivisto has been Senior Vice President
responsible for the Proprietary Products business division and Liisa Hurme
Senior Vice President responsible for the Specialty Products and Fermion
business divisions.
Corporate Governance Statement
Orion will publish its Financial Statements for 2013, Report by the Board of
Directors and Auditor's Report, and a separate Corporate Governance Statement on
the Company's website at the latest on 4 March 2014.
Personnel
The average number of employees in the Orion Group in 2013 was 3,540 (3,495). At
the end of December 2013 the Group had a total of 3,519 (3,486) employees, of
whom 2,816 (2,783) worked in Finland and 703 (703) outside Finland.
Salaries and other personnel expenses in 2013 totalled EUR 218 (215) million.
As a result of co-operation negotiations held in Orion Diagnostica in 2013,
notice of termination of employment was given to a total of about 60 employees
in Finland. In addition, about 20 employees left their posts through for example
retirement or ending of a fixed-term contract.
Significant legal proceedings
Legal proceedings against the Sandoz companies have been settled
On 5 December 2013 Orion announced that Orion and Hospira, Inc. ("Hospira") had
executed a settlement agreement with Sandoz Inc. and Sandoz Canada Inc.
(hereinafter collectively "Sandoz") in the patent enforcement lawsuit filed by
Orion and Hospira in the United States against Sandoz regarding Sandoz's
submission of an abbreviated new drug application ("ANDA") for a generic version
of Orion's Precedex(®) product. The settlement relates to a lawsuit concerning
Orion's patent No. 4,910,214 and Orion's and Hospira's commonly owned patent No.
6,716,867.
Under the terms of the settlement agreement, Sandoz may launch a generic version
of Precedex in US markets on 26 December 2014, unless certain conditions
relating to launch, if triggered, lead to an earlier Sandoz market entry date.
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.
Business Reviews
Pharmaceuticals
Review of human pharmaceuticals market
According to IMS Health pharmaceutical sales statistics (previously Finnish
Pharmaceutical Data Ltd), Finnish wholesale of human pharmaceuticals in 2013 was
up by 2% on the previous year at EUR 2,067 (2,031) million.
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 IMS Health,
Orion's wholesale of human pharmaceuticals in Finland in 2013 amounted to EUR
233 (219) million, up by 6% compared with the previous year. Orion's market
share of Finnish pharmaceuticals markets grew slightly and was 11% (11%).
According to IMS Health pharmaceutical sales statistics, in the 12-month period
ending in September 2013 the total sales of Parkinson's drugs in the United
States were up by 5% at USD 791 million (USD 751 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 totalled EUR 979 (955) million in the
12-month period ending in September 2013, and the average market growth was 3%.
In Japan sales of Parkinson's drugs were down by 11% at EUR 523 (584) million.
According to IMS Health pharmaceutical sales statistics, in the 12-month period
ending in September 2013 the total sales of Parkinson's drugs containing
entacapone were USD 163 (196) million in the United States and EUR 153 (156)
million in the five largest European markets.
The most important individual therapy area for Orion is still the treatment of
Parkinson's disease. Orion's branded Parkinson's drugs containing entacapone
(Stalevo(®), Comtess(® )and Comtan(®)) account for about one-fifth of the
Group's net sales. Sales of these products clearly decreased in the United
States and slightly decreased in Europe. In Japan sales grew slightly better
than the market as a whole. According to IMS Health pharmaceutical sales
statistics, in the 12-month period ending in September 2013, sales of Orion's
branded Parkinson's drugs in the United States were down by 71% at USD 48 (162)
million. Sales were down by 3% at EUR 151 (156) million in the five largest
markets in Europe, and in Japan sales were EUR 59 (66) million. The market share
of Orion's branded Parkinson's drugs was 6% 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 Precedex(®)
intensive care sedative (dexmedetomidine) were up by 30% at USD 323 million in
the 12-month period ending in September 2013 (USD 249 million in the previous
12-month period). About four-fifths of the sales amounting to USD 264 (195)
million were in the United States, where Precedex sales grew by 36%.
According to IMS Health pharmaceutical sales statistics, total sales of the most
common intravenous anaesthetics and intensive care sedatives (propofol,
midazolam, remifentanil and dexmedetomidine) in Europe in the 12-month period
ending in September 2013 were EUR 476 (471) million. According to IMS Health
pharmaceutical sales statistics, in the 12-month period ending in September
2013 sales of Orion's dexdor(®) intensive care sedative (dexmedetomidine) were
up by 143% at EUR 20 (8) million in Europe.
Net sales and operating profit of the Pharmaceuticals business
Net sales of the Pharmaceuticals business in 2013 were EUR 953 (929) million, up
by 3% compared with the previous year. The operating profit of the
Pharmaceuticals business was down by 5% at EUR 273 (287) million. The operating
profit of the Pharmaceuticals business was 29% (31%) of the segment's net sales.
Net sales of Orion's top ten pharmaceuticals in 2013 were down by 2% at EUR 458
(468) million. They accounted for 48% (50%) of the total 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 2013 were down by 3% on the previous year
at EUR 390 (404) 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 2013 totalled EUR 207 (250) million. Sales
of Parkinson's drugs were down by 17% and accounted for 22% (27%) of the total
net sales of the Pharmaceuticals business. Net sales from deliveries of Stalevo
and Comtan to Novartis were down by 24% at EUR 115 (152) million. Deliveries of
Stalevo to Novartis were down by 15% at EUR 81 (95) million and deliveries of
Comtan were down by 41% at EUR 34 (56) million. Total net sales generated by
Stalevo and Comtess in Orion's own sales organisation were down by 6% at EUR 92
(98) million. Sales of Stalevo through Orion's own sales network were down by
3% at EUR 84 (86) million. Sales of Comtess were down by 32% at EUR 9 (13)
million. The entacapone molecule patent expired in October 2013 in the United
States, where generic competition had already commenced in April 2012. Orion has
delivered generic entacapone products to its partners in the United States and
will continue these deliveries after the expiry of the patent. In Europe data
protection of Stalevo expired in October 2013, and since then generic
competitors have been able to refer to results from Orion's clinical trials in
their applications for marketing authorisation.
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 2013 were up by 6% at EUR 46 (44) million.
Total net sales of the Easyhaler(®) product family for treatment of asthma and
chronic obstructive pulmonary disease were up by 8% in 2013 at EUR 29 (27)
million. Sales of Easyhaler products through Orion's own sales network in Europe
continued to grow strongly even though the repatriation of rights to Easyhaler
products in 2012, especially in Poland and to some extent in Germany, and the
related transitional phase slowed sales growth in 2013.
Net sales of the Precedex(®) intensive care sedative (dexmedetomidine) were up
by 30% in 2013 at EUR 59 (45) million. In the United States and markets outside
Europe the sedative is sold by Orion's partner Hospira. About four-fifths of net
sales of Precedex are in US markets, where the Precedex basic patent expired
after the review period in January 2014. Generic products have not yet entered
US markets. In October Orion and Hospira announced that they had extended their
licensing agreement concerning the sedative agent Precedex in the markets
outside Europe.
Net sales of Orion's dexdor(®) intensive care sedative (dexmedetomidine) in
2013 were up by 95% at EUR 25 (13) million. The launching of the product
progressed according to plan in 2013, and it is already available in almost all
countries in Europe.
Specialty Products
Net sales of the Specialty Products business division's off-patent, i.e. generic
prescription drugs and self-care products in 2013 were up by 5% at EUR 385 (367)
million. Sales of generic entacapone products were down by 40% at EUR 10 (17)
million. Sales of products from the rest of the portfolio were up by 7%.
Launches of generic prescription drugs and self-care products were weighted more
than before towards prescription drugs, consequently the total number of
launches was less than in 2012. There were 99
(116) product (product/market) launches in 2013.
Net sales of Orion's human pharmaceuticals in Finland in 2013 were up by 7% at
EUR 255 (238) million. 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 2013
were up by 18% at altogether EUR 74 (63) 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 2013 were EUR 71 (69)
million. Sales of the animal sedative product family at EUR 25 (23) million
accounted for 35% (33%) of the division's net sales. The product family
comprises Orion's animal sedatives Dexdomitor(®) (dexmedetomidine), Domitor(®)
(medetomidine) and Domosedan(®) (detomidine), and antagonist Antisedan(®)
(atipamezole), which reverses the effects of the sedatives.
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 2013 excluding pharmaceutical ingredients
supplied for Orion's own use were up by 31% at EUR 64 (48) 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 review period.
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 2013 were down by 4% at EUR 102 (106) million, of
which the Pharmaceuticals business accounted for EUR 94 (98) million. The
Group's R&D expenses accounted for 10% (11%) of the Group's net sales. R&D
expenses also include expenses related to development of the current portfolio.
The Phase II clinical trial of an androgen receptor inhibitor (ODM-201) for the
treatment of prostate cancer showed that initial results concerning efficacy
were promising, and the product was well tolerated with no significant adverse
events detected. Results were presented at the international ECCO oncology
congress at the end of September 2013 and at the international ASCO GU oncology
congress in January 2014. Orion and Endo Pharmaceuticals, which is part of Endo
Health Solutions Inc., terminated their collaboration agreement concerning
development of ODM-201 in October 2013. All rights to ODM-201 reverted to Orion,
with Orion paying Endo a royalty. Ending collaboration with Endo will not affect
progress of the project. Orion has commenced preparations for a Phase III
clinical trial and also continues negotiations to find a suitable partner for
collaboration on the next phase of worldwide development and commercialisation
of the product. The broader collaboration agreement between Orion and Endo
concerning oncology drug research, development and commercialisation was also
terminated in October 2013. All the drug candidates covered by the agreement and
all their rights reverted to the respective originators.
Orion has ongoing projects to broaden the range of the inhalable Easyhaler(®)
drugs product family. Orion submitted an application for marketing authorisation
for a combined budesonide-formoterol formulation in Europe in March 2013, and
the application is being processed. While the application was being processed,
Orion decided to withdraw the application for marketing authorisation in the
United Kingdom, France, Germany, the Netherlands and Austria. In this
formulation, budesonide acts as an anti-inflammatory agent and formoterol acts
as a long-acting bronchodilator.
In addition, Orion has another Easyhaler research programme in progress to
develop a combined fluticasone-salmeterol formulation for European markets. 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 submitted an application for marketing authorisation for the
product in June 2013.
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 behavioural symptoms related to
Alzheimer's disease. Positive results from Phase IIa clinical trials were
presented at the annual meeting of the American Academy of Neurology in mid-
March 2013. In December 2013 Orion entered into a licensing agreement with
Janssen Pharmaceuticals, Inc. for further development and commercialisation of
new alpha-2c adrenoceptor antagonists for treatment of symptoms of Alzheimer's
disease, including the ORM-12741 molecule, in clinical trials.
Orion has completed Phase I clinical trials with another alpha-2c adrenoceptor
antagonist (ODM-102), which was a backup molecule to ORM-12741. It was decided
on the basis of the results not to continue development of ODM-102.
Orion has decided not to develop the new more effective levodopa product (ODM-
101) into a finished product. ODM-101 does not contain a new chemical molecule,
so it cannot get strong product protection. That in turn substantially limits
the commercial potential of the product. However, the positive results obtained
from trials of ODM-101 and formulations can be utilised in development of new
Parkinson's drugs.
Orion has ongoing Phase I clinical safety trials initiated in summer 2012 with a
new COMT inhibitor (ODM-103). In addition, Orion has started Phase I clinical
safety trials with another new COMT inhibitor (ODM-104). ODM-103 and ODM-104 are
new molecules that enhance the therapeutic effects of levodopa used to treat
Parkinson's disease by blocking the COMT enzyme. The pre-clinical study results
indicated that they are more effective than the COMT inhibitor entacapone, which
is already in the markets.
In October Orion and Phyxius Pharma, Inc. agreed on licensing of levosimendan
injection rights to Phyxius Pharma. Under the agreement, Phyxius Pharma will
develop and commercialise levosimendan in US and Canadian markets for a new
cardiovascular indication, prevention of Low Cardiac Output Syndrome in cardiac
surgery patients.
In addition, Orion has several projects in the early research phase
investigating central nervous system diseases, cancer and neuropathic pain,
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 2013 were up by 5% at EUR 57 (54) million.
QuikRead(®) infection tests remained the main product, with sales continuing
strong. Launching of the QuikRead go(®) hsCRP+Hb test progressed as planned
during the year. Two results, for CRP and haemoglobin, can be obtained from a
single sample with the test. Launching of the QuikRead go iFOBT (Faecal Occult
Blood) quantitative test also commenced in the last quarter of the year. The new
product version is helpful in screening gastrointestinal disorders.
In December 2013 Orion Diagnostica signed a technology licensing agreement with
Eurofins Medigenomix GmbH concerning Orion Diagnostica's SIBA(®) isothermal
nucleic acid detection technology, to which Orion Diagnostica owns global rights
in all fields of application.
Through the measures decided following the negotiations in accordance with the
Act on Co-operation within Undertakings, in 2013 Orion Diagnostica streamlined
its operations and improved profitability by, among other things, simplifying
the product portfolio. As a result of the co-operation negotiations, it was
decided to give notice of termination of employment to about 60 employees. In
addition, about 20 employees left their posts through for example retirement or
ending of a fixed-term contract.
The operating profit of the Diagnostics business was up by 97% at EUR 4.6 (2.3)
million due to good growth in sales and measures to improve cost efficiency. The
profit includes EUR 1.4 million of expenses related to contraction of the
product portfolio, closure of the Turku manufacturing plant and personnel
reductions.
Espoo, 4 February 2014
Board of Directors of Orion Corporation
Orion Corporation
Timo Lappalainen Jari Karlson
President and CEO CFO
Tables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million Q4/13 Q4/12 Change % 2013 2012 Change %
-------------------------------------------------------------------------------
Net sales 272.6 254.4 +7.1% 1,006.9 980.4 +2.7%
-------------------------------------------------------------------------------
Cost of goods sold -106.6 -96.4 +10.5% -393.5 -350.8 +12.2%
-------------------------------------------------------------------------------
Gross profit 166.0 158.0 +5.1% 613.4 629.6 -2.6%
-------------------------------------------------------------------------------
Other operating income
and expenses 2.2 4.3 -49.2% 5.6 6.3 -12.1%
-------------------------------------------------------------------------------
Sales and marketing
expenses -60.2 -58.3 +3.1% -204.9 -206.1 -0.6%
-------------------------------------------------------------------------------
R&D expenses -29.7 -31.9 -6.8% -101.9 -105.8 -3.7%
-------------------------------------------------------------------------------
Administrative expenses -12.4 -13.2 -6.1% -44.5 -45.7 -2.7%
-------------------------------------------------------------------------------
Operating profit 65.8 58.8 +12.1% 267.7 278.3 -3.8%
-------------------------------------------------------------------------------
Finance income 1.0 0.1 4.4 4.9 -10.2%
-------------------------------------------------------------------------------
Finance expenses -2.4 -0.7 +242.4% -8.3 -6.6 +25.8%
-------------------------------------------------------------------------------
Share of associated
companies' results 0.3 0.1 +314.1%
-------------------------------------------------------------------------------
Profit before taxes 64.5 58.1 +10.9% 264.0 276.6 -4.6%
-------------------------------------------------------------------------------
Income tax expense -8.8 -15.7 -43.9% -57.8 -69.7 -17.0%
-------------------------------------------------------------------------------
Profit for the period 55.7 42.5 +31.1% 206.2 206.9 -0.4%
-------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME INCLUDING
TAX EFFECTS
-------------------------------------------------------------------------------
Change in value of cash
flow hedges 0.0 0.0 0.1 -0.2
-------------------------------------------------------------------------------
Change in value of
available-for-sale
financial assets 0.0 0.3
-------------------------------------------------------------------------------
Translation differences -0.3 -0.7 -1.3 1.1
-------------------------------------------------------------------------------
Items that may be
reclassified
subsequently to profit
and loss -0.3 -0.6 -1.2 1.2
-------------------------------------------------------------------------------
Items due to
remeasurement of
defined benefit plans -9.7 6.4 -9.7 25.6
-------------------------------------------------------------------------------
Items that will not be
reclassified to profit
and loss -9.7 6.4 -9.7 25.6
-------------------------------------------------------------------------------
Other comprehensive
income net of tax -10.1 5.8 -10.9 26.8
-------------------------------------------------------------------------------
Comprehensive income
for the period
including tax effects 45.6 48.2 -5.4% 195.3 233.7 -16.5%
-------------------------------------------------------------------------------
PROFIT ATTRIBUTABLE TO:
-------------------------------------------------------------------------------
Owners of the parent
company 55.7 42.5 +31.1% 206.2 206.9 -0.4%
-------------------------------------------------------------------------------
Non-controlling
interests 0.0 0.0 0.0 0.0
-------------------------------------------------------------------------------
COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
-------------------------------------------------------------------------------
Owners of the parent
company 45.6 48.2 -5.4% 195.3 233.7 -16.5%
-------------------------------------------------------------------------------
Non-controlling
interests 0.0 0.0 0.0 0.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Basic earnings per
share, EUR (1)) 0.40 0.30 +31.1% 1.46 1.47 -0.4%
-------------------------------------------------------------------------------
Diluted earnings per
share, EUR (1)) 0.40 0.30 +31.1% 1.46 1.47 -0.4%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Depreciation,
amortisation and
impairment 10.9 11.4 -3.9% 38.5 40.0 -3.8%
-------------------------------------------------------------------------------
Personnel expenses 61.3 60.0 +2.2% 218.1 214.8 +1.5%
-------------------------------------------------------------------------------
1) The figure has been calculated from the profit attributable to the
owners of the parent company."The 2012 comparative period data have been restated according to the
requirements of the amended IAS 19 Employee Benefits standard. More
information on the effects of the adjustment is in the appendices to
this Financial Statement Release."
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
EUR million 12/13 12/12 Change %
-------------------------------------------------------------------------------
Property, plant and equipment 247.3 205.3 +20.5%
-------------------------------------------------------------------------------
Goodwill 13.5 13.5
-------------------------------------------------------------------------------
Intangible rights 54.0 58.0 -6.9%
-------------------------------------------------------------------------------
Other intangible assets 3.3 4.3 -24.7%
-------------------------------------------------------------------------------
Investments in associates 1.7 1.4 +19.1%
-------------------------------------------------------------------------------
Available-for-sale financial assets 0.5 0.5
-------------------------------------------------------------------------------
Pension asset 26.6 38.4 -30.8%
-------------------------------------------------------------------------------
Deferred tax assets 1.2 2.0 -38.8%
-------------------------------------------------------------------------------
Other non-current assets 1.2 1.6 -23.5%
-------------------------------------------------------------------------------
Non-current assets total 349.2 325.0 +7.5%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Inventories 195.5 179.2 +9.1%
-------------------------------------------------------------------------------
Trade receivables 169.9 151.5 +12.2%
-------------------------------------------------------------------------------
Other receivables 49.7 34.8 +42.9%
-------------------------------------------------------------------------------
Cash and cash equivalents 214.7 145.2 +47.8%
-------------------------------------------------------------------------------
Current assets total 629.8 510.7 +23.3%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Assets total 979.0 835.7 +17.2%
-------------------------------------------------------------------------------
EQUITY AND LIABILITIES
EUR million 12/13 12/12 Change %
-------------------------------------------------------------------------------
Share capital 92.2 92.2
-------------------------------------------------------------------------------
Expendable fund 0.5 0.5
-------------------------------------------------------------------------------
Other reserves 1.6 0.8 +93.2%
-------------------------------------------------------------------------------
Retained earnings 419.6 416.0 +0.9%
-------------------------------------------------------------------------------
Equity attributable to owners of
the parent company 513.9 509.5 +0.9%
-------------------------------------------------------------------------------
Non-controlling interests 0.0 0.0 +20.4%
-------------------------------------------------------------------------------
Equity total 513.9 509.6 +0.9%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Deferred tax liabilities 32.1 42.5 -24.6%
-------------------------------------------------------------------------------
Pension liability 1.6 1.4 +18.1%
-------------------------------------------------------------------------------
Provisions 0.1 0.1 -21.2%
-------------------------------------------------------------------------------
Interest-bearing non-current
liabilities 233.3 107.4 +117.2%
-------------------------------------------------------------------------------
Other non-current liabilities 0.5 0.8 -40.2%
-------------------------------------------------------------------------------
Non-current liabilities total 267.6 152.2 +75.8%
-------------------------------------------------------------------------------
------------------------------------------------------------------------------- Trade payables 60.0 59.3 +1.3%
-------------------------------------------------------------------------------
Current tax liabilities 1.7 8.0 -78.1%
-------------------------------------------------------------------------------
Other current liabilities 111.2 77.4 +43.7%
-------------------------------------------------------------------------------
Provisions 0.1
-------------------------------------------------------------------------------
Interest-bearing current
liabilities 24.5 29.3 -16.3%
-------------------------------------------------------------------------------
Current liabilities total 197.5 173.9 +13.6%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Liabilities total 465.1 326.1 +42.6%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Equity and liabilities total 979.0 835.7 +17.2%
-------------------------------------------------------------------------------"The 2012 comparative period data have been restated according to the
requirements of the amended IAS 19 Employee Benefits standard. More
information on the effects of the adjustment is in the appendices to this
Financial Statement Release."
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
a. Share capital
b. Expendable fund
c. Other reserves
d. Items due to remeasurement of defined
benefit plans
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 31 December
2011 before change in
accounting policies 92.2 0.5 17.6 -3.8 393.4 0.0 500.0
-------------------------------------------------------------------------------
Effect of change in
accounting policies -25.4 -25.4
-------------------------------------------------------------------------------
Equity at 1 January 2012 92.2 0.5 17.6 -25.4 -3.8 393.4 0.0 474.6
-------------------------------------------------------------------------------
Profit for the period 206.9 206.9
-------------------------------------------------------------------------------
Other comprehensive
income:
-------------------------------------------------------------------------------
Change in value of cash flow
hedges -0.2 -0.2
-------------------------------------------------------------------------------
Change in value of
available-for-sale
investments 0.3 0.3
-------------------------------------------------------------------------------
Translation differences 1.1 1.1
-------------------------------------------------------------------------------
Items due to
remeasurement of defined
benefit plans 25.6 25.6
-------------------------------------------------------------------------------
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 0.2 -2.6 418.4 0.0 509.6
-------------------------------------------------------------------------------
Profit for the period 206.2 206.2
-------------------------------------------------------------------------------
Other comprehensive
income:
-------------------------------------------------------------------------------
Change in value of cash flow
hedges 0.1 0.1
-------------------------------------------------------------------------------
Translation differences -1.3 -1.3
-------------------------------------------------------------------------------
Items due to
remeasurement of defined
benefit plans -9.7 -9.7
-------------------------------------------------------------------------------
Transactions with owners
-------------------------------------------------------------------------------
Dividend and capital
repayment -183.4 -183.4
-------------------------------------------------------------------------------
Treasury shares -9.6 -9.6
-------------------------------------------------------------------------------
Share-based incentive
plan 2.2 2.2
-------------------------------------------------------------------------------
Other adjustments 0.7 -0.8 -0.2
-------------------------------------------------------------------------------
Equity at 31 December
2013 92.2 0.5 1.6 -9.5 -3.9 433.0 0.0 513.9
-------------------------------------------------------------------------------"The 2012 comparative period data have been restated according to the
requirements of the amended IAS 19 Employee Benefits standard. More information
on the effects of the adjustment is in the appendices to this Financial
Statement Release."
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million 2013 2012
-------------------------------------------------------------------------------
Operating profit 267.7 278.3
-------------------------------------------------------------------------------
Adjustments 42.2 41.5
-------------------------------------------------------------------------------
Change in working capital -21.9 -28.9
-------------------------------------------------------------------------------
Interest paid -6.1 -6.1
-------------------------------------------------------------------------------
Interest received 3.7 4.9
-------------------------------------------------------------------------------
Dividends received 0.3
-------------------------------------------------------------------------------
Income taxes paid -70.8 -68.6
-------------------------------------------------------------------------------
Total net cash flow from operating activities 215.2 221.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Investments in property, plant and equipment -65.9 -42.4
-------------------------------------------------------------------------------
Investments in intangible assets -7.4 -6.7
-------------------------------------------------------------------------------
Sales of property, plant and equipment and available-for-sale
investments 2.0 2.0
-------------------------------------------------------------------------------
Sales of intangible assets 0.0
-------------------------------------------------------------------------------
Total net cash flow from investing activities -71.3 -47.1
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Current loans raised 41.6 1.0
-------------------------------------------------------------------------------
Repayments of current loans -42.6 -2.2
-------------------------------------------------------------------------------
Non-current loans raised 149.0 75.0
-------------------------------------------------------------------------------
Repayments of non-current loans -28.1 -26.4
-------------------------------------------------------------------------------
Treasury shares -9.6
-------------------------------------------------------------------------------
Dividends paid and other distribution of profits -183.7 -199.9
-------------------------------------------------------------------------------
Total net cash flow from financing activities -73.5 -152.4
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Net change in cash and cash equivalents 70.3 21.5
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 145.2 123.0
-------------------------------------------------------------------------------
Foreign exchange differences -0.9 0.8
-------------------------------------------------------------------------------
Net change in cash and cash equivalents 70.3 21.5
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 214.7 145.2
-------------------------------------------------------------------------------
Following adoption of the revised IAS 19 Employee Benefits standard
retrospectively, the operating profit for the 2012 comparative period has been
adjusted by EUR -2.6 million and the adjustments item by EUR 2.6 million.
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 12/13 12/12
-------------------------------------------------------------
Carrying amount at the beginning of the period 205.3 190.7
-------------------------------------------------------------
Additions 70.1 40.1
-------------------------------------------------------------
Disposals -1.8 -1.1
-------------------------------------------------------------
Depreciation and impairments -26.2 -24.5
-------------------------------------------------------------
Carrying amount at the end of the period 247.3 205.3
-------------------------------------------------------------
CHANGES IN INTANGIBLE ASSETS (EXCLUDING GOODWILL)
EUR million 12/13 12/12
-------------------------------------------------------------
Carrying amount at the beginning of the period 62.3 71.3
-------------------------------------------------------------
Additions 7.5 6.6
-------------------------------------------------------------
Disposals -0.2 -0.0
-------------------------------------------------------------
Amortisation and impairments -12.3 -15.5
-------------------------------------------------------------
Carrying amount at the end of the period 57.3 62.3
-------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
EUR million 12/13 12/12
----------------------------------------------------------------------
CONTINGENCIES FOR OWN LIABILITIES
----------------------------------------------------------------------
Mortgages on land and buildings 32.0 41.0
----------------------------------------------------------------------
of which those to Orion Pension Fund 9.0
----------------------------------------------------------------------
Guarantees 2.4 1.5
----------------------------------------------------------------------
OTHER LIABILITIES
----------------------------------------------------------------------
Leasing liabilities (excluding finance lease contracts) 6.4 6.5
----------------------------------------------------------------------
Other liabilities 0.3 0.3----------------------------------------------------------------------
DERIVATIVES
EUR million 12/13 12/12
----------------------------------------------------------
CURRENCY FORWARD CONTRACTS AND CURRENCY SWAPS
----------------------------------------------------------
Fair value, EUR million 0.5 0.3
----------------------------------------------------------
Nominal value, EUR million 67.8 52.0
----------------------------------------------------------
CURRENCY OPTIONS
----------------------------------------------------------
Fair value, EUR million 0.1 0.2
----------------------------------------------------------
Nominal value, EUR million 47.2 51.3
----------------------------------------------------------
INTEREST RATE SWAPS
----------------------------------------------------------
Fair value, EUR million -0.2 -0.3
----------------------------------------------------------
Nominal value, EUR million 18.8 22.3
----------------------------------------------------------
CROSS CURRENCY SWAPS
----------------------------------------------------------
Fair value, EUR million 0.2
----------------------------------------------------------
Nominal value, EUR million 9.6
----------------------------------------------------------
ELECTRICITY DERIVATIVES
----------------------------------------------------------
Fair value, EUR million -0.7 -0.6
----------------------------------------------------------
Nominal amount, GWh 57 110
----------------------------------------------------------
DERIVATIVE CATEGORIES USING FAIR VALUE HIERARCHY
EUR million Level 1 Level 2 Level 3
------------------------------------------------------------------------------
Currency forward contracts and
currency swaps 0.5
------------------------------------------------------------------------------
Currency options 0.1
------------------------------------------------------------------------------
Interest rate swaps -0.2
------------------------------------------------------------------------------
Electricity derivatives -0.7
------------------------------------------------------------------------------
All derivatives are OTC derivatives, and market quotations available at the
end of the reporting period have been used as their fair value.
The fair value of level 1 derivatives is based on quotations available in
the markets. The fair value of level 2 derivatives is based on data
available in the markets. The fair value of level 3 derivatives cannot be
estimated on the basis of data available in the markets.
In the Group the principle is applied that transfers between levels of fair
value hierarchy are recognised on the date on which the event triggering the
transfer has occurred.
No transfers between levels occurred during the reporting period.
RELATED PARTY TRANSACTIONS
EUR million 2013 2012
---------------------------------------------
Management's employment benefits 6.4 4.4
---------------------------------------------
Operating segment performance
NET SALES BY BUSINESS DIVISION
EUR million Q4/13 Q4/12 Change % 2013 2012 Change %
-----------------------------------------------------------------------------
Pharmaceuticals 259.8 242.1 +7.3% 953.0 928.9 +2.6%
-----------------------------------------------------------------------------
Proprietary Products 105.5 103.9 +1.5% 390.4 403.7 -3.3%
-----------------------------------------------------------------------------
Specialty Products 105.9 97.6 +8.5% 384.9 367.2 +4.8%
-----------------------------------------------------------------------------
Animal Health 18.3 17.5 +4.3% 70.8 69.2 +2.4%
-----------------------------------------------------------------------------
Fermion 17.4 12.0 +44.9% 63.5 48.4 +31.3%
-----------------------------------------------------------------------------
Contract manufacturing
and other 12.7 11.2 +14.0% 43.3 40.5 +7.1%
-----------------------------------------------------------------------------
Diagnostics 13.7 13.1 +4.7% 57.1 54.1 +5.4%
-----------------------------------------------------------------------------
Group items -0.8 -0.8 +9.9% -3.2 -2.7 +18.5%
-----------------------------------------------------------------------------
Group total 272.6 254.4 +7.1% 1,006.9 980.4 +2.7%
-----------------------------------------------------------------------------
OPERATING PROFIT BY BUSINESS AREA
EUR million Q4/13 Q4/12 Change % 2013 2012 Change %
----------------------------------------------------------
Pharmaceuticals 67.9 62.2 +9.2% 272.9 286.5 -4.7%
----------------------------------------------------------
Diagnostics 0.7 -0.6 +229.7% 4.6 2.3 +97.3%
----------------------------------------------------------
Group items -2.8 -2.9 +1.1% -9.9 -10.5 +6.1%
----------------------------------------------------------
Group total 65.8 58.8 +12.1% 267.7 278.3 -3.8%
----------------------------------------------------------
NET SALES BY ANNUAL QUARTERS
2013 2012
+-----------------------+-----------------------+
EUR million | Q4 Q3 Q2 Q1| Q4 Q3 Q2 Q1|
----------------+-----------------------+-----------------------+
Pharmaceuticals|259.8 224.1 235.0 234.2|242.1 234.2 220.1 232.5|
----------------+-----------------------+-----------------------+
Diagnostics | 13.7 13.5 14.0 15.9| 13.1 12.1 13.4 15.5|
----------------+-----------------------+-----------------------+
Group items | -0.8 -0.7 -0.9 -0.8| -0.8 -0.5 -0.7 -0.6|
----------------+-----------------------+-----------------------+
Group total |272.6 236.9 248.0 249.4|254.4 245.8 232.8 247.4|
----------------+-----------------------+-----------------------+
OPERATING PROFIT BY ANNUAL QUARTERS
2013 2012
+-------------------+-------------------+
EUR million | Q4 Q3 Q2 Q1| Q4 Q3 Q2 Q1|
----------------+-------------------+-------------------+
Pharmaceuticals|67.9 66.7 64.4 73.9|62.2 78.0 67.5 78.8|
----------------+-------------------+-------------------+
Diagnostics | 0.7 2.0 -0.4 2.3|-0.6 0.0 0.5 2.5|
----------------+-------------------+-------------------+
Group items |-2.8 -2.2 -2.9 -2.0|-2.9 -2.3 -2.7 -2.6|
----------------+-------------------+-------------------+
Group total |65.8 66.6 61.1 74.1|58.8 75.6 65.3 78.6|
----------------+-------------------+-------------------+
GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS
2013 2012
+-----------------------+-----------------------+
EUR million | Q4 Q3 Q2 Q1| Q4 Q3 Q2 Q1|
--------------+-----------------------+-----------------------+
Finland | 71.5 67.6 67.7 67.8| 67.3 63.3 62.7 64.0|
--------------+-----------------------+-----------------------+
Scandinavia | 33.0 30.7 34.5 32.5| 33.3 30.3 30.3 32.4|
--------------+-----------------------+-----------------------+
Other Europe | 91.9 77.6 83.6 75.7| 68.1 76.5 79.2 78.7|
--------------+-----------------------+-----------------------+
North America| 45.2 32.7 33.6 34.5| 54.7 27.1 30.4 38.4|
--------------+-----------------------+-----------------------+
Other markets| 31.0 28.2 28.8 38.8| 31.0 48.6 30.2 33.9|
--------------+-----------------------+-----------------------+
Group total |272.6 236.9 248.0 249.4|254.4 245.8 232.8 247.4|
--------------+-----------------------+-----------------------+
Business reviews
KEY FIGURES FOR PHARMACEUTICALS BUSINESS
EUR million Q4/13 Q4/12 Change % 2013 2012 Change %
-------------------------------------------------------------------------------
Net sales 259.8 242.1 +7.3% 953.0 928.9 +2.6%
-------------------------------------------------------------------------------
Operating profit 67.9 62.2 +9.2% 272.9 286.5 -4.7%
-------------------------------------------------------------------------------
% of net sales 26.2% 25.7% 28.6% 30.8%
-------------------------------------------------------------------------------
R&D expenses 27.6 29.6 -6.5% 93.9 97.6 -3.8%
-------------------------------------------------------------------------------
% of net sales 10.6% 12.2% 9.9% 10.5%
-------------------------------------------------------------------------------
Capital expenditure 18.6 9.4 +98.0% 73.8 42.0 +75.6%
-------------------------------------------------------------------------------
% of net sales 7.2% 3.9% 7.7% 4.5%
-------------------------------------------------------------------------------
Sales revenue from proprietary
products 113.9 110.4 +3.2% 418.5 429.0 -2.5%
-------------------------------------------------------------------------------
Assets 704.3 627.3
-------------------------------------------------------------------------------
Liabilities 160.1 127.3
-------------------------------------------------------------------------------
Personnel at the end of the period 3,208 3,123
-------------------------------------------------------------------------------
TOP TEN BEST-SELLING PHARMACEUTICAL PRODUCTS
EUR million Q4/13 Q4/12 Change % 2013 2012 Change %
-------------------------------------------------------------------------------
Stalevo(®), Comtess(®) and Comtan(®)
(Parkinson's disease) 51.0 57.9 -11.8% 206.8 250.1 -17.3%
-------------------------------------------------------------------------------
Precedex(®) (intensive care
sedative) 18.5 16.9 +9.8% 59.1 45.3 +30.3%
-------------------------------------------------------------------------------
Simdax(®) (acute decompensated heart
failure) 12.8 11.5 +11.5% 46.0 43.6 +5.5%
-------------------------------------------------------------------------------
Easyhaler(®) product family
(asthma, COPD) 8.0 6.5 +23.8% 28.9 26.8 +7.7%
-------------------------------------------------------------------------------
dexdor(®) (intensive care sedative) 7.4 5.0 +46.9% 25.3 13.0 +94.9%
-------------------------------------------------------------------------------
Dexdomitor(®), Domitor(®),
Domosedan(®) and Antisedan(®)
(animal sedatives) 6.8 6.4 +7.4% 24.8 22.8 +9.1%
-------------------------------------------------------------------------------
Burana(®) (inflammatory pain) 6.1 5.8 +4.1% 23.2 23.3 -0.7%
-------------------------------------------------------------------------------
Marevan(®) (anticoagulant) 4.3 3.6 +17.2% 16.1 15.8 +1.8%
-------------------------------------------------------------------------------
Divina(®) range (menopausal
symptoms) 4.4 4.0 +9.9% 14.8 15.5 -4.1%
-------------------------------------------------------------------------------
Fareston(®) (breast cancer) 5.0 2.3 +116.6% 12.7 11.9 +6.1%
-------------------------------------------------------------------------------
Total 124.2 119.8 +3.7% 457.7 468.2 -2.2%
-------------------------------------------------------------------------------
Share of pharmaceutical net sales 48% 49% 48% 50%
-------------------------------------------------------------------------------
KEY FIGURES FOR DIAGNOSTICS BUSINESS
EUR million Q4/13 Q4/12 Change % 2013 2012 Change %
-----------------------------------------------------------------------------
Net sales 13.7 13.1 +4.7% 57.1 54.1 +5.4%
-----------------------------------------------------------------------------
Operating profit 0.7 -0.6 -229.7% 4.6 2.3 +97.3%
-----------------------------------------------------------------------------
% of net sales 5.4% 4.4% 8.1% 4.3%
-----------------------------------------------------------------------------
R&D expenses 2.2 2.4 -10.5% 8.3 8.3 -0.7%
-----------------------------------------------------------------------------
% of net sales 15.7% 18.4% 14.5% 15.4%
-----------------------------------------------------------------------------
Capital expenditure 1.2 1.2 +1.3% 3.3 4.2 -20.2%
-----------------------------------------------------------------------------
% of net sales 9.1% 9.4% 5.8% 7.7%
-----------------------------------------------------------------------------
Assets 47.3 47.2
-----------------------------------------------------------------------------
Liabilities 16.6 16.2
-----------------------------------------------------------------------------
Personnel at the end of the period 287 340
-----------------------------------------------------------------------------
Information on Orion's shares
BASIC SHARE INFORMATION 31 DECEMBER 2013
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 27.4 64.8 92.2
-------------------------------------------------------------------------------
Counter book value per share, EUR 0.65 0.65
-------------------------------------------------------------------------------
Total number of shares 42,022,816 99,235,012 141,257,828
-------------------------------------------------------------------------------
% of total share stock 30% 70% 100%
-------------------------------------------------------------------------------
Number of treasury shares 688,991 688,991
-------------------------------------------------------------------------------
Total number of shares excluding
treasury shares 42,022,816 98,546,021 140,568,837
-------------------------------------------------------------------------------
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 840,456,320 98,546,021 939,002,341
-------------------------------------------------------------------------------
% of total votes 90% 10% 100%
-------------------------------------------------------------------------------
Total number of shareholders 18,429 44,541 56,762
-------------------------------------------------------------------------------
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 2013
A shares B shares Total
------------------------------------------------------------------------------
Shares traded 2,736,284 76,574,409 79,310,693
------------------------------------------------------------------------------
% of the total number of shares 6.4% 77.6% 56.1%
------------------------------------------------------------------------------
Trading volume, EUR million 56.4 1,543.7 1,600.1
------------------------------------------------------------------------------
Closing quotation on 31 December 2012, EUR 22.05 22.18
------------------------------------------------------------------------------
Lowest quotation, EUR (A 24 June and B
4 September 2013) 17.30 17.28
------------------------------------------------------------------------------
Average quotation, EUR 20.60 20.16
------------------------------------------------------------------------------
Highest quotation, EUR (A and B 8 March 2013) 24.42 24.58
------------------------------------------------------------------------------
Closing quotation on 31 December 2013, EUR 20.35 20.42
------------------------------------------------------------------------------
Market capitalisation on 31 December 2013
excluding treasury shares, EUR million 855.2 2,012.3 2,867.5
------------------------------------------------------------------------------
PERFORMANCE PER SHARE
Q4/13 Q4/12 Change % 2013 2012 Change %
-------------------------------------------------------------------------------
Basic earnings per share,
EUR 0.40 0.30 +31.1% 1.46 1.47 -0.4%
-------------------------------------------------------------------------------
Diluted earnings per share,
EUR 0.40 0.30 +31.1% 1.46 1.47 -0.4%
-------------------------------------------------------------------------------
Cash flow per share before
financial items, EUR 0.46 0.32 +45.2% 1.02 1.23 -17.3%
-------------------------------------------------------------------------------
Equity per share, EUR 3.66 3.62 +1.1%
-------------------------------------------------------------------------------
Proposed dividend per share,
EUR 1.25 1.30 -3.8%
-------------------------------------------------------------------------------
Proposed payout ratio, % 85.6% 88.4%
-------------------------------------------------------------------------------
Total proposed dividend, EUR
million 175.7 183.2 -4.1%
-------------------------------------------------------------------------------
Effective dividend yield
according to proposal, %
-------------------------------------------------------------------------------
A share 6.1% 5.9%
-------------------------------------------------------------------------------
B share 6.1% 5.9%
-------------------------------------------------------------------------------
Price/earnings ratio (P/E)
-------------------------------------------------------------------------------
A share 13.94 15.00 -7.1%
-------------------------------------------------------------------------------
B share 13.99 15.09 -7.3%
-------------------------------------------------------------------------------
Average number of shares
excluding treasury shares,
1,000 shares 140,909 140,932 141,006 140,915
-------------------------------------------------------------------------------
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 the
IAS and IFRS standards as well as SIC and IFRIC interpretations effective at 31
December 2013.
The following new standards, interpretations and amendments to existing
standards endorsed by the EU have been adopted as of 1 January 2013:
· IFRS 7 (Amendment), Financial Instruments: Financial Statement
Disclosures
· IFRS 13, Fair Value Measurement
· IAS 1 (Amendment), Presentation of Financial Statements
· IAS 19 (Revised), Employee Benefits
· IASB's published annual improvements to the following standards:
° IAS 1, Presentation of Financial Statements
° IAS 16, Property, Plant and Equipment
° IAS 32, Financial Instruments: Presentation
° IAS 34, Interim Financial Reporting
The effects of the IAS 1 amendment and IAS 19 revision on the Consolidated
Financial Statements are described below. The other amendments and improvements
to IFRS standards, and the new IFRS 13 had no material effect on the
Consolidated Financial Statements.
IAS 1, Presentation of Financial Statements (amendment)
Following the adoption of the amendment to IAS 1, the Group has changed the
presentation of components under other comprehensive income. Components in other
comprehensive income, which will not be reclassified to profit and loss, will be
presented separately from other items under other comprehensive income that may
subsequently be reclassified to profit and loss.
IAS 19, Employee Benefits (revised)
Following adoption of the revised IAS 19, the Group has changed its accounting
procedure concerning defined benefit plans. The Group has stopped using the
corridor approach and, in accordance with the revised standard, recognises all
amounts arising from remeasurement of defined benefit plan assets directly into
components of other comprehensive income. Service costs and net interest arising
from plan assets are recognised functionally above operating profit. When the
previous standard was effective, interest expenses and the return anticipated on
plan assets were also recorded into the operative components above operating
profit. Net interest is calculated on defined benefit plan net debt using a
discount rate.
The restated figures in the Orion Group's Consolidated Statement of
Comprehensive Income and Statement of Financial Position and key figures for the
financial year 2012 are presented by annual quarters in the table appended to
this Interim Report. The amendment to the IAS 19 standard decreased the
operating profit for the 2012 financial year by EUR 2.6 million. The net effect
of the amendment on equity at 31 December 2012 was EUR -1.8 million. The
amendment decreased the equity at 1 January 2012 by EUR 25.4 million, but
increased the equity during the 2012 financial year by EUR 23.6 million.
The policies and calculation methods applied during the period can be found on
the Orion website at www.orion.fi/en/investors/.
Restated figures in Consolidated Statement of Comprehensive Income and Statement
of Financial Position and other key figures for 2012
Q1/12 Q1-Q2/12
Reported Reported
earlier Restated earlier Restated
-------------------------------------------------------------------------------
Operating profit, EUR million 79.3 78.6 145.2 143.9
-------------------------------------------------------------------------------
% of net sales 32.0% 31.8% 30.2% 30.0%
-------------------------------------------------------------------------------
Profit before taxes, EUR million 79.3 78.7 144.5 143.2
-------------------------------------------------------------------------------
% of net sales 32.1% 31.8% 30.1% 29.8%
-------------------------------------------------------------------------------
Income tax expense, EUR million 19.7 19.5 35.6 35.3
-------------------------------------------------------------------------------
R&D expenses, EUR million 22.8 23.1 47.1 47.5
-------------------------------------------------------------------------------
% of net sales 9.2% 9.3% 9.8% 9.9%
-------------------------------------------------------------------------------
Cost of goods sold, EUR million 86.6 86.8 168.5 169.0
-------------------------------------------------------------------------------
% of net sales 35.0% 35.1% 35.1% 35.2%
-------------------------------------------------------------------------------
Sales and marketing expenses,
EUR million 49.2 49.3 98.1 98.3
-------------------------------------------------------------------------------
% of net sales 19.9% 19.9% 20.4% 20.5%
-------------------------------------------------------------------------------
Administrative expenses,
EUR million 11.1 11.2 22.6 22.8
-------------------------------------------------------------------------------
% of net sales 4.5% 4.5% 4.7% 4.7%
-------------------------------------------------------------------------------
Profit for the period, EUR million 59.6 59.1 108.8 107.8
-------------------------------------------------------------------------------
Other comprehensive income net of tax, EUR
million 0.2 6.6 1.3 14.1
-------------------------------------------------------------------------------
Pension assets, EUR million 38.0 13.0 38.7 21.5
-------------------------------------------------------------------------------
Pension liabilities, EUR million 0.5 1.2 0.5 1.3
-------------------------------------------------------------------------------
Deferred tax liabilities, EUR million 41.6 35.3 42.4 38.0
-------------------------------------------------------------------------------
Equity total, EUR million 360.5 341.1 410.9 397.4
-------------------------------------------------------------------------------
Assets total, EUR million 905.2 880.1 746.1 729.0
-------------------------------------------------------------------------------
Equity ratio, % 39.8% 38.8% 55.1% 54.5%
-------------------------------------------------------------------------------
Gearing, % -20.0% -21.2% 23.2% 24.0%
-------------------------------------------------------------------------------
Non-interest-bearing liabilities,
EUR million 380.9 375.4 177.5 174.1
-------------------------------------------------------------------------------
ROCE (before taxes), % 57.8% 58.4% 51.4% 51.6%
-------------------------------------------------------------------------------
ROE (after taxes), % 55.4% 56.2% 47.8% 48.1%
-------------------------------------------------------------------------------
Basic earnings per share, EUR 0.42 0.42 0.77 0.77
-------------------------------------------------------------------------------
Diluted earnings per share, EUR 0.42 0.42 0.77 0.77
-------------------------------------------------------------------------------
Equity per share, EUR 2.56 2.42 2.92 2.82
-------------------------------------------------------------------------------
Personnel expenses, EUR million 52.6 53.3 105.7 107.0
-------------------------------------------------------------------------------
Q1-Q3/12 Q1-Q4/12
Reported Reported
earlier Restated earlier Restated
-------------------------------------------------------------------------------
Operating profit, EUR million 221.5 219.5 280.9 278.3
-------------------------------------------------------------------------------
% of net sales 30.5% 30.2% 28.7% 28.4%
-------------------------------------------------------------------------------
Profit before taxes, EUR million 220.5 218.5 279.3 276.6
-------------------------------------------------------------------------------
% of net sales 30.4% 30.1% 28.5% 28.2%
-------------------------------------------------------------------------------
Income tax expense, EUR million 54.5 54.0 70.4 69.7
-------------------------------------------------------------------------------
R&D expenses, EUR million 73.2 73.9 104.8 105.8
-------------------------------------------------------------------------------
% of net sales 10.1% 10.2% 10.7% 10.8%
-------------------------------------------------------------------------------
Cost of goods sold, EUR million 253.7 254.4 350.0 350.8
-------------------------------------------------------------------------------
% of net sales 34.9% 35.0% 35.7% 35.8%
-------------------------------------------------------------------------------
Sales and marketing expenses,
EUR million 147.5 147.8 205.7 206.1
-------------------------------------------------------------------------------
% of net sales 20.3% 20.4% 21.0% 21.0%
-------------------------------------------------------------------------------
Administrative expenses,
EUR million 32.2 32.5 45.3 45.7
-------------------------------------------------------------------------------
% of net sales 4.4% 4.5% 4.6% 4.7%
-------------------------------------------------------------------------------
Profit for the period, EUR million 166.0 164.5 208.9 206.9
-------------------------------------------------------------------------------
Other comprehensive income net of tax, EUR
million 1.9 21.1 1.1 26.7
-------------------------------------------------------------------------------
Pension assets, EUR million 39.3 30.1 39.6 38.4
-------------------------------------------------------------------------------
Pension liabilities, EUR million 0.5 1.4 0.3 1.4
-------------------------------------------------------------------------------
Deferred tax liabilities, EUR million 42.1 39.6 43.1 42.5
-------------------------------------------------------------------------------
Equity total, EUR million 468.7 461.1 511.3 509.6
-------------------------------------------------------------------------------
Assets total, EUR million 791.9 782.7 836.9 835.7
-------------------------------------------------------------------------------
Equity ratio, % 59.2% 58.9% 61.1% 61.0%
-------------------------------------------------------------------------------
Gearing, % 7.6% 7.7% -1.7% -1.7%
-------------------------------------------------------------------------------
Non-interest-bearing liabilities,
EUR million 173.0 171.7 189.0 189.5
-------------------------------------------------------------------------------
ROCE (before taxes), % 50.0% 49.9% 46.2% 45.9%
-------------------------------------------------------------------------------
ROE (after taxes), % 45.7% 45.6% 41.3% 41.0%
-------------------------------------------------------------------------------
Basic earnings per share, EUR 1.18 1.17 1.48 1.47
-------------------------------------------------------------------------------
Diluted earnings per share, EUR 1.18 1.17 1.48 1.47
-------------------------------------------------------------------------------
Equity per share, EUR 3.33 3.27 3.63 3.62
-------------------------------------------------------------------------------
Personnel expenses, EUR million 152.8 154.8 212.1 214.8
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Other matters
The data in this financial review are audited.
The figures in parentheses are for the corresponding 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 -
Cash and cash equivalents -
Gearing, % = Money market investments 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
share
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
Market capitalisation, EUR million = Number of shares at the end of
the period × 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 2013 amounted to EUR 1,007 million and the Company had
about 3,500 employees. Orion's A and B shares are listed on NASDAQ OMX Helsinki.
[HUG#1758832]
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