2017-07-19 12:16:36 CEST
2017-07-19 12:16:36 CEST
REGULATED INFORMATION
Orion - Half Year financial report
Orion Group Half-Year Financial Report January-June 2017
ORION CORPORATION HALF-YEAR FINANCIAL REPORT JANUARY-JUNE 2017 19 JULY
2017 AT 13.15 EEST
Orion Group Half-Year Financial Report January-June 2017
Orion's net sales in January-June 2017 totalled EUR 552 million (EUR 535 million
in January-June 2016).
* Operating profit was EUR 164 (164) million.
* Profit before taxes was EUR 160 (162) million.
* Equity ratio was 58% (57%).
* ROCE before taxes was 44% (45%).
* ROE after taxes was 43% (46%).
* Basic earnings per share were EUR 0.90 (0.92).
* Cash flow per share before financial items was EUR 0.40 (0.56).
* The outlook estimate for 2017 remains unchanged. Orion estimates that in
2017 net sales will be at similar level to 2016 and operating profit
excluding material capital gains will be at least EUR 280 million.
ORION'S KEY FIGURES FOR THE REVIEW PERIOD
Q2/17 Q2/16 Change % H1/17 H1/16 Change % 2016
--------------------------------------------------------------------------------
Net sales, EUR million 272.4 273.1 -0.2% 551.6 535.1 +3.1% 1,073.5
--------------------------------------------------------------------------------
Operating profit, EUR million 71.8 83.5 -14.0% 163.5 163.9 -0.2% 314.6
--------------------------------------------------------------------------------
% of net sales 26.4% 30.6% 29.6% 30.6% 29.3%
--------------------------------------------------------------------------------
Profit before taxes, EUR
million 70.7 82.6 -14.4% 159.5 162.3 -1.7% 310.9
--------------------------------------------------------------------------------
% of net sales 25.9% 30.2% 28.9% 30.3% 29.0%
--------------------------------------------------------------------------------
Income tax expense, EUR
million 14.2 16.9 -16.0% 32.7 33.3 -1.7% 61.9
--------------------------------------------------------------------------------
R&D expenses, EUR million 26.6 28.4 -6.4% 52.3 53.4 -2.0% 118.2
--------------------------------------------------------------------------------
% of net sales 9.8% 10.4% 9.5% 10.0% 11.0%
--------------------------------------------------------------------------------
Capital expenditure, EUR
million 23.9 13.2 +81.4% 39.3 22.2 +76.8% 51.1
--------------------------------------------------------------------------------
% of net sales 8.8% 4.8% 7.1% 4.2% 4.8%
--------------------------------------------------------------------------------
Assets total, EUR million 947.5 935.7 +1.3% 1,062.9
--------------------------------------------------------------------------------
Equity ratio, % 58.4% 56.5% 60.8%
--------------------------------------------------------------------------------
Gearing, % 15.2% 12.8% -12.4%
--------------------------------------------------------------------------------
Interest-bearing liabilities,
EUR million 151.4 186.7 -18.9% 152.5
--------------------------------------------------------------------------------
Non-interest-bearing
liabilities, EUR million 245.8 225.9 +8.8% 269.0
--------------------------------------------------------------------------------
Cash and cash equivalents and
money market investments, EUR
million 67.7 119.7 -43.4% 231.9
--------------------------------------------------------------------------------
ROCE (before taxes), % 43.9% 45.2% 40.9%
--------------------------------------------------------------------------------
ROE (after taxes), % 42.5% 46.2% 40.3%
--------------------------------------------------------------------------------
Basic earnings per share, EUR 0.40 0.47 -13.9% 0.90 0.92 -1.5% 1.77
--------------------------------------------------------------------------------
Diluted earnings per share,
EUR 0.40 0.47 -13.9% 0.90 0.92 -1.5% 1.77
--------------------------------------------------------------------------------
Cash flow per share before
financial items, EUR 0.06 0.27 -76.7% 0.40 0.56 -29.2% 1.62
--------------------------------------------------------------------------------
Equity per share, EUR 3.91 3.72 +5.1% 4.57
--------------------------------------------------------------------------------
Personnel at the end of the
period 3,633 3,528 +3.0% 3,469
--------------------------------------------------------------------------------
Average personnel during the
period 3,518 3,428 +2.6% 3,446
--------------------------------------------------------------------------------
Personnel expenses, EUR
million 112.1 113.2 -0.9% 224.4
--------------------------------------------------------------------------------
President and CEO Timo Lappalainen:
"Year has progressed as planned"
"In the first half of 2017 our net sales grew slightly from the comparative
period and our operating profit was at similar level to January-June of the
previous year.
"In Proprietary Products sales of the Easyhaler product family for treatment of
asthma and chronic obstructive pulmonary disease have continued to grow, led by
the Bufomix Easyhaler combined formulation. In addition, in the beginning of
April we submitted a marketing authorisation application in Europe for a new
salmeterol-fluticasone combined formulation in the product family. As regards
our other key proprietary products, sales of the intensive care sedative Dexdor
remained strong, despite the start of generic competition in Germany. Sales of
Simdax for treatment of acute decompensated heart failure, which has been in the
markets for a long time, have also continued to grow. As expected, sales of
Orion's branded Parkinson's drugs Stalevo, Comtess and Comtan declined, but
other growing products have been able to compensate for this decease. Sales of
Proprietary Products as a whole were slightly greater than in the previous year.
"Net sales of the Specialty Products business division were slightly higher than
in the comparative period. Changes in the market environment and ever-
intensifying price competition, especially in Finland, where changes were made
to the pricing system for substitutable prescription drugs at the beginning of
the year that narrowed the so-called price band, had a negative impact on net
sales of the business division. However, winning the national tendering
competition in Norway increased sales of the biosimilar Remsima relative to the
comparative period.
"Sales of Fermion, which manufactures active pharmaceutical ingredients,
developed well in the first half of the year, and its net sales excluding
deliveries for Orion's own use clearly increased. In recent years order cycles
in the trade in pharmaceutical raw materials have become ever shorter, and this
has led to clearly greater fluctuation in business volume than before within
each year and between different years. Sales of veterinary drugs have also
grown, mainly due to the timing of deliveries of animal sedatives to
collaboration partners compared with the previous year.
"Sales and marketing costs have grown due to increased sales efforts in
Easyhaler products, for example.
"Orion's research and development programmes have proceeded as planned.
"We estimate that in 2017 net sales will be at similar level to 2016. We
estimate that operating profit excluding material capital gains will be at least
EUR 280 million. Our outlook estimate and the basis for it can be found in this
report under 'Outlook for 2017' and 'Basis for outlook'."
Events during the period
On 6 April the amendments to Sections 5 and 9 (1) of Orion Corporation's
Articles of Association were entered in the Trade Register.
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 on
Wednesday 19 July 2017 at 13.30 EEST in Hotel Kämp (address: Pohjoisesplanadi
29, Helsinki). President and CEO Timo Lappalainen will give a brief presentation
in English on the financial review.
The event can be followed as a live webcast accessible on Orion's website at
http://www.orion.fi/en/investors. After the presentation, questions can be asked
also via teleconference in Finnish and English.
The conference call ID is 3998996 and the telephone numbers to participate in
the teleconference are:
Finland: +358 (0)9 7479 0404
Sweden: +46 (0)8 5065 3942
United Kingdom: +44 (0)330 336 9411
United States: +1 719 325 2202
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 Orion's
website during Wednesday 19 July 2017.
Financial report material
Financial reports and related presentation material are available at
http://www.orion.fi/en/investors promptly after publication. The website also
has a form for subscribing to Orion's releases.
Dates in Orion Calendar 2017-2018
Interim Report January-September 2017 Thursday 26 October 2017
Financial Statement Release for 2017 Wednesday 7 February 2018
Annual General Meeting 2018 Planned to be held on Tuesday 20 March
2018
Interim Report January-March 2018 Tuesday 24 April 2018
Half-Year Financial Report January-June Wednesday 18 July 2018
2018
Interim Report January-September 2018 Wednesday 24 October 2018
The Financial Statements and Report by the Board of Directors for 2017 will be
published on the Company's website at the latest in week 9/2018.
For additional information about the report:
Jari Karlson, CFO
tel. +358 50 966 2883
http://www.orion.fi/en
http://www.orion.fi/en/investors
Financial review 1/1/2017-30/6/2017
Net sales
The Orion Group's net sales in January-June 2017 were up by 3% at EUR 552
million (EUR 535 million in January-June 2016). The net effect of currency
exchange rates was plus EUR 3 million.
The Pharmaceuticals business's net sales were up by 3% at EUR 526 (509) million.
Net sales of Orion's Stalevo(®) (carbidopa, levodopa and entacapone) and
Comtess(®)/Comtan(®) (entacapone) Parkinson's drugs were down by 19% at EUR 58
(72) million, which was 11% (14%) of the Pharmaceuticals business's net sales.
The Diagnostics business's net sales were down by 4% at EUR 27 (28) million.
Operating profit
The Orion Group's operating profit was EUR 164 (164) million. Milestone payments
accounted for EUR 8 (9) million of the operating profit.
The Pharmaceuticals business's operating profit was EUR 164 (165) million.
Milestone payments accounted for EUR 8 (9) million of the operating profit.
The Diagnostics business's operating profit was up by 8% at EUR 4.8 (4.4)
million.
Operating expenses
The Group's sales and marketing expenses were EUR 101 (93) million.
R&D expenses were EUR 52 (53) million and accounted for 10% (10%) of the Group's
net sales. Pharmaceutical R&D expenses amounted to EUR 49 (50) million. Research
projects are reported in more detail under Pharmaceuticals in the Business
Reviews.
Administrative expenses were EUR 24 (23) million.
Other operating income and expenses were EUR 0 (-0) million.
Group's profit
The Group's profit before taxes was down by 2% at EUR 160 (162) million. Basic
earnings per share were EUR 0.90 (0.92) and diluted earnings per share were EUR
0.90 (0.92). Equity per share was EUR 3.91 (3.72). The return on capital
employed before taxes (ROCE) was 44% (45%) and the return on equity after taxes
(ROE) 43% (46%).
Financial position
The Group's gearing was 15% (13%) and the equity ratio 58% (57%).
The Group's total liabilities at 30 June 2017 were EUR 397 (413) million. At the
end of the period, interest-bearing liabilities amounted to EUR 151 (187)
million, including EUR 150 (176) million of long-term loans.
The Group had EUR 68 (120) million of cash and cash equivalents and money market
investments at the end of the period.
Cash flow
Cash flow from operating activities was EUR 92 (101) million, the cash flow from
investing activities was EUR -36 (-21) million, and the cash flow from financing
activities was EUR -219 (-200) million.
Capital expenditure
The Group's capital expenditure totalled EUR 39 (22) million. This comprised EUR
32 (19) million on property, plant and equipment and EUR 7 (3) million on
intangible assets. Fermion has an ongoing significant expansion investment at
its Hanko manufacturing plant, and Orion has ongoing expansion of Easyhaler
production capacity at its Espoo pharmaceuticals production plant.
Outlook for 2017 (provided on 8 February 2017)
Net sales are estimated to be at similar level to 2016 (net sales were EUR
1,074 million in 2016).
Operating profit excluding material capital gains is estimated to be at least
EUR 280 million (operating profit excluding capital gains was EUR 293 million in
2016).
Basis for outlook
Orion's branded Parkinson's drugs are Comtess(®), Comtan(®) and Stalevo(®).
Generic competition to these products commenced in the United States in 2012 and
has already extended to nearly all markets. As a result of the competition,
Orion's sales of these products have decreased to low levels in the United
States and some other markets, and competition is expected to extend gradually.
However, in 2017 growth in sales of other products is expected to continue to
compensate for the decline in sales of these products. Sales of the Easyhaler
product family are forecast to continue to grow. Orion has become aware that in
some European countries marketing authorisation has been granted for a generic
version of Dexdor(®), and in Germany a generic version of the product has been
launched in the market. Orion is continuing actions to defend its rights. The
impact of generic competition on sales is still difficult to estimate at this
stage. The patent for the Simdax(®) molecule expired in September 2015 but this
is still not expected to have a material impact on sales of the product in 2017.
Sales of generic products account for a significant proportion of Orion's total
sales, and price competition has continued in many markets. Competition in
Finland, the most important generic market for Orion, will remain intense in
2017. In addition, at the beginning of the current year in Finland changes were
made to the pricing system for substitutable prescription drugs by narrowing the
so-called price band. The estimated negative impact of this change on Orion's
sales has been taken into account in the outlook estimate. However, product
launches continue to support Orion's position as market leader. In 2016 sales of
Remsima(®) generated a significant portion of the growth in net sales of the
Speciality Products business division. Sales of Remsima in 2017 are expected to
grow from the previous year.
Collaboration agreements with other pharmaceutical companies are an important
component of Orion's business model. Often payments related to these agreements,
which vary greatly from year to year, are recorded in net sales. Forecasting the
timing and amount of payments is difficult. Possible future payments relating to
agreements already made have in some cases been conditional on, for instance,
the progress of research projects or results received, which are not known until
studies have been completed. On the other hand, making new agreements is
generally a process for which neither the schedule nor the outcome is known
before the final signing of the agreement.
The Group's total capital expenditure in 2017 is expected to be higher than in
2016, when it was EUR 51 million. The largest single ongoing projects are
expansion of Fermion's Hanko manufacturing plant and increasing Easyhaler
product portfolio production capacity in Espoo.
Marketing expenditure will be higher than in the previous year due to additional
promotion of sales from the Easyhaler product portfolio, for example. 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 2017 were
planned mainly during the previous year.
Research and development costs will be similar to 2016. 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 2017 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. For instance, Bayer is paying the majority of the
darolutamide (ODM-201) research costs.
Near-term risks and uncertainties
Sales of Orion's branded Parkinson's drugs will decrease in 2017 due to generic
competition. The effects of the competition have been taken into account in the
outlook estimate for the current year. However, the timing of the extension and
intensity of generic competition to Stalevo in Europe and elsewhere still
entails uncertainty that may materially affect the accuracy of the estimate made
at this stage. The basic Simdax and Dexdor patents have expired. However, the
products have other still valid product protection. Nevertheless, for these
products there is a possibility that generic competition might commence before
expiry of the respective product protection. Orion has become aware that in some
European countries marketing authorisation has been granted for a generic
version of Dexdor, and in Germany a generic version of the product has been
launched in the market. Orion is continuing actions to defend its rights. The
impact of generic competition on sales is still difficult to estimate 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 focus on Orion's products. Deliveries of Parkinson's drugs to
Novartis, the most important collaboration partner, 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.
The exchange rate risk due to the US dollar has decreased in recent years
because the share of Orion's net sales invoiced in dollars has fallen to below
ten per cent and at the same time the value of purchases in dollars has
increased. The greatest exchange rate risk at present relates to European
currencies such the Swedish crown and British pound. However, the overall effect
of the risk due to currencies of European countries 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. The exchange rate effect related to
the Russian rouble has increased due to the strong volatility of the currency.
However, Russian sales are not a significant portion of Orion's entire net
sales.
Orion's broad product range may cause risks to the delivery reliability and make
it challenging to maintain the high quality standard required in production.
Authorities and key customers in different countries undertake regular and
detailed inspections of development and manufacturing of drugs at Orion's
production sites. Any remedial actions that may be required may at least
temporarily have effects that decrease delivery reliability and increase costs.
Orion's product range also includes products manufactured by other
pharmaceutical companies. Possible problems related to the delivery reliability
or quality of the products of those manufacturers may cause a risk to Orion's
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.
Collaboration arrangements are an important component of Orion's business model.
Possible collaboration and licensing agreements related to these arrangements
also often include payments to be recorded in net sales that may materially
affect Orion's financial results. In 2014-2016 the annual payments varied from
EUR 8 million to EUR 39 million. The payments may be subject to certain
conditions relating to the development of research projects or sales, and
whether these conditions are triggered and the timing of triggering always
entail uncertainties.
Financial objectives (provided on 8 February 2017)
Through the financial objectives Orion aims to develop the Group's shareholder
value and ensure financial stability and profitable growth. Orion's financial
objectives are:
* Growing net sales more rapidly than growth of the pharmaceuticals market.
Achievement of this objective requires continuous investment in development
of the product portfolio.
* Maintaining profitability at a good level. The aim is operating profit that
exceeds 25% of net sales.
* Keeping the equity ratio at least 50%.
* Distributing an annual dividend that in the next few years will be at least
EUR 1.30 per share, and increasing the dividend in the long term.
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.
Shares and shareholders
On 30 June 2017 Orion had a total of 141,257,828 (141,257,828) shares, of which
37,266,346 (38,681,154) were A shares and 103,991,482 (102,576,674) B shares.
The Group's share capital was EUR 92,238,541.46 (92,238,541.46). At the end of
June 2017 Orion held 675,401 (783,366) B shares as treasury shares. On 30 June
2017 the aggregate number of votes conferred by the A and B shares was
848,643,001 (875,416,388) excluding treasury shares.
At the end of June 2017, Orion had 47,828 (48,789) 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 a General Meeting of Shareholders. The Company itself and Orion
Pension Fund do not have the right to vote at an Orion Corporation General
Meeting of Shareholders.
Both share classes, A and B, confer equal rights to the Company's assets and
dividends.
Conversion of shares
The Articles of Association entitle shareholders to demand the conversion of
their A shares to B shares within the limitation on the maximum number of shares
of a class. In January-June 2017 in total 1,027,808 shares were converted.
Trading in Orion's shares
Orion's A shares and B shares are quoted on Nasdaq 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 30 June 2017 the market capitalisation of the Company's shares, excluding
treasury shares, was EUR 7,853 million.
Orion shares are also traded on various alternative trading platforms in
addition to Nasdaq Helsinki.
Authorisations of the Board of Directors
Orion's Board of Directors was authorised by the Annual General Meeting on 22
March 2016 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 was utilised during 2016. The terms and conditions of the
authorisation were reported in more detail in a stock exchange release on 22
March 2016.
The Board of Directors is not authorised to increase the share capital or to
issue bonds with warrants or convertible bonds or stock options.
Share-based Incentive Plans
Orion has two currently operating share-based incentive plans for key persons of
the Group, which were announced in stock exchange releases published on 5
February 2013 and 2 February 2016.
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 June 2017, Orion had a total of 47,828 (48,789) registered
shareholders, of whom 96% (96%) were private individuals holding 38% (40%) of
the entire share stock and 61% (62%) of the total votes. There were altogether
65 (59) million nominee-registered and foreign-owned shares, which was 46% (42%)
of all shares, and they conferred entitlement to 10% (9%) of the total votes.
At the end of June 2017 Orion held 675,401 (783,366) B shares as treasury
shares, which is 0.48% (0.55%) of the Company's total share stock and 0.08%
(0.09%) of the total votes.
Personnel
The average number of employees in the Orion Group in January-June 2017 was
3,518 (3,428). At the end of June 2017 the Group had a total of 3,633 (3,528)
employees, of whom 2,952 (2,862) worked in Finland and 681 (666) outside
Finland.
Salaries and other personnel expenses in January-June 2017 totalled EUR 112
(113) million.
Significant legal proceedings
Companies belonging to the Orion Group are parties to various legal disputes,
which are not, however, considered to be significant legal proceedings for the
Group.
Business Reviews
Pharmaceuticals
Review of human pharmaceuticals market
Finland is the most important individual market for Orion, generating about one-
third of the total net sales. According to IMS Health statistics, Finnish
wholesale of human pharmaceuticals in January-June 2017 was up by 1% on the
previous year at EUR 1,131 (1,115) million. Orion was able to increase its sales
faster than market growth, 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 January-June 2017
amounted to EUR 147 (143) million, up by 2% compared with the previous year.
Orion's market share of Finnish pharmaceuticals markets was 13% (13%).
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 slightly over 10% of the
Group's net sales.
Total sales of Orion's branded Parkinson's drugs:
EUR or USD million MAT3/2017 MAT3/2016 Change %
-----------------------------------------------------------------------------
United States USD 8 11 -21%
-----------------------------------------------------------------------------
Europe TOP 5 EUR 63 87 -27%
-----------------------------------------------------------------------------
Japan EUR 79 68 +16%
-----------------------------------------------------------------------------
Source: IMS Health pharmaceutical sales statistics MAT3/2017 (4/2016-3/2017)
Europe TOP 5: Germany, United Kingdom, France, Spain and Italy.
Sales of Orion's branded Parkinson's drugs decreased in Europe due to
commencement of generic competition. Sales increased in Japan, mainly due to
growth in Stalevo, which was launched in that market in 2015.
According to IMS Health pharmaceutical sales statistics, in Europe total sales
of the most common intravenous anaesthetics and intensive care sedatives
(propofol, midazolam, remifentanil and dexmedetomidine) in the 12-month period
ending in March 2017 were up by 1% at EUR 530 (527) million. According to IMS
Health pharmaceutical sales statistics, sales of Orion's Dexdor(®) intensive
care sedative (dexmedetomidine) were up by 39% at EUR 53 (38) million in Europe.
Net sales and operating profit of the Pharmaceuticals business
In January-June 2017 the Pharmaceuticals business's net sales were EUR 526 (509)
million and its operating profit was EUR 164 (165) million. Milestone payments
accounted for EUR 8 (9) million of the net sales and operating profit, and they
comprised payments related to marketing rights. The operating profit of the
Pharmaceuticals business was 31% (32%) of the segment's net sales.
Net sales of Orion's top ten pharmaceuticals in January-June 2017 were up by 8%
at EUR 246 (229) million. They accounted for 47% (45%) 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 January-June 2017 were EUR 186 (185)
million. Sales of Parkinson's drugs continued to decline, but sales of other
products developed well.
Orion's drugs for treatment of Parkinson's disease are Stalevo(®) (active
ingredients carbidopa, levodopa and entacapone) and Comtess(®)/Comtan(®)
(entacapone). Their total net sales in January-June 2017 were down by 19% at EUR
58 (72) million. In the United States Orion's Parkinson's drugs have several
generic competitors, and competition is increasing in Europe and also other
markets. In Japan the first marketing authorisations for generic Comtan products
were granted, but generic competition has not yet commenced.
Breakdown of sales of Parkinson's drugs:
EUR million H1/2017 H1/2016 Change %
-------------------------------------------------------
Stalevo deliveries to Novartis 33 39 -15%
-------------------------------------------------------
Comtan deliveries to Novartis 11 15 -30%
-------------------------------------------------------
Orion's Stalevo sales 12 15 -20%
-------------------------------------------------------
Orion's Comtess sales 2 2 -23%
-------------------------------------------------------
Net sales of Simdax(®), a drug for treatment of acute decompensated heart
failure, in January-June 2017 were up by 8% at EUR 30 (28) million. Simdax is
sold in altogether over fifty countries worldwide.
Total net sales of the Easyhaler(®) product family for treatment of asthma and
chronic obstructive pulmonary disease were up by 16% in January-June 2017 at EUR
37 (32) million. The increase was mainly due to sales of the Bufomix
Easyhaler(®) combined formulation (budesonide-formoterol).
Sales of Bufomix Easyhaler were up by 31% at EUR 17 (13) million in January-June
2017. In the last quarter of 2016, through the decentralised procedure Bufomix
received marketing authorisation for Germany, the United Kingdom and France.
Sales of the product have commenced in Germany. The national approval process is
still ongoing in the United Kingdom and France. Orion is expanding Easyhaler
production at the Espoo pharmaceuticals production plant. In April 2017 Orion
submitted a marketing authorisation application for a salmeterol-fluticasone
combined formulation in Europe. As regards commercialisation of the Easyhaler
product family, negotiations are being held in new markets. In addition, the
evaluation of possible new products is ongoing.
Net sales of Orion's Dexdor(®) intensive care sedative (dexmedetomidine) in
January-June 2017 were up by 22% at EUR 34 (28) million. Orion has become aware
that in some European countries marketing authorisation has been granted for a
generic version of Dexdor, and in Germany a generic version of the product has
been launched in the market. Orion is continuing actions to defend its rights.
The impact of generic competition on sales is still difficult to estimate at
this stage. Sales of the Precedex(®) intensive care sedative were up by 36% at
EUR 13 (10) million, mainly due to greater deliveries of the pharmaceutical
ingredient to the partner than in the comparative period.
Specialty Products
Net sales of the Specialty Products business division's off-patent, i.e. generic
prescription drugs, self-care products and biosimilars in January-June 2017 were
up by 3% at EUR 255 (246) million.
Finland, Scandinavia, and Eastern Europe and Russia are the most important
markets for Specialty Products. The business division's sales in Finland in
January-June 2017 were up by 2% at EUR 145 (143) million due to good development
in sales of self-care products and Remsima(®).
In Scandinavia sales were up by 12% at EUR 47 (42) million. In Eastern Europe
and Russia sales were up by 15% at EUR 30 (26) million.
Net sales of the biosimilar Remsima for treatment of rheumatoid arthritis among
other things were up by 28% at EUR 28 (22) million mainly due to winning the
national tendering competition in Norway and commencement of deliveries related
to it. During the review period Orion and South Korean Celltrion Healthcare
signed an exclusive agreement for sales, marketing and distribution rights of a
biosimilar rituximab (MabThera(®)) in the Nordic countries and Estonia. In these
countries Orion is already the distributor of Celltrion Healthcare's Remsima
(Remicade(®) biosimilar infliximab). The main indications for MabThera are non-
Hodgkin's lymphoma (NHL), chronic lymphocytic leukaemia (CLL) and autoimmune
diseases such as rheumatoid arthritis (RA).
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 other 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 January-June 2017 were up by
7% at EUR 41 (38) million. Sales of the animal sedative product family at EUR
18 (12) million accounted for 43% (32%) 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. For other pharmaceutical companies Fermion manufactures generic
pharmaceutical ingredients and offers contract manufacturing services for
development and manufacturing of new active pharmaceutical ingredients.
Fermion's sales developed well in the first half of the year. In recent years
order cycles in the trade in pharmaceutical raw materials have become ever
shorter, and this has led to clearly greater fluctuation in business volume than
before within each year and between different years. The business division's net
sales in January-June 2017 excluding deliveries for Orion's own use were up by
39% at EUR 28 (20) million and accounted for over one-half of Fermion's entire
net sales. Fermion has an ongoing significant expansion investment at its Hanko
manufacturing plant.
Research and development
The Group's R&D expenses in January-June 2017 were EUR 52 (53) million, of which
the Pharmaceuticals business accounted for EUR 49 (50) million. The Group's R&D
expenses accounted for 10% (10%) of the Group's net sales. R&D expenses also
include expenses related to development of the current portfolio.
In 2014 Orion commenced global collaboration with Bayer in the development and
commercialisation of the novel oral androgen receptor antagonist darolutamide
(ODM-201). The companies have an ongoing joint Phase III clinical trial (ARAMIS)
for evaluation of the efficacy and safety of darolutamide in patients with non-
metastatic castration-resistant prostate cancer (nmCRPC).
In 2016 Orion and Bayer agreed to expand the darolutamide development programme
and towards the end of the year commenced a new Phase III trial (ARASENS) that
will evaluate the efficacy and safety of the drug candidate in combination with
standard androgen deprivation therapy (ADT) and the chemotherapy drug docetaxel
in patients having newly diagnosed metastatic hormone-sensitive prostate cancer
(mHSPC) who are starting hormone therapy.
In December 2016 Orion completed trials with a salmeterol-fluticasone combined
formulation in the Easyhaler(®) product family. Based on the positive findings,
in April 2017 Orion submitted a marketing authorisation application for the
product in Europe. In this formulation fluticasone acts as an anti-inflammatory
agent and salmeterol acts as a long-acting bronchodilator.
Orion is continuing development of an alpha-2c adrenoceptor antagonist (ORM-
12741) for treatment of symptoms of Alzheimer's disease in collaboration with
Janssen Pharmaceuticals Inc. Orion has an ongoing Phase IIa clinical trial with
a new drug formulation. In the initial Phase IIa clinical trial conducted by
Orion, the efficacy and safety of the drug candidate in treatment of cognitive
and behavioural symptoms related to Alzheimer's disease were investigated with
positive results.
Orion has completed the Phase II clinical trial with orally administered
levosimendan (ODM-109) for treatment of patients with amyotrophic lateral
sclerosis (ALS). Although the trial did not achieve its primary objective, the
findings were, however, promising. Based on the findings, Orion is planning to
continue the development programme. The US Food and Drug Administration (FDA)
has granted ODM-109 Orphan Drug Designation.
Orion has an ongoing Phase II clinical trial with a drug candidate for treatment
of symptoms of Parkinson's disease in which the COMT inhibitor (ODM-104)
developed by Orion is combined with the pharmaceutical ingredients carbidopa and
long-acting levodopa used to treat Parkinson's disease. In the trial the
efficacy of the drug candidate in treating symptoms of Parkinson's disease will
be investigated and the product will be compared with a Stalevo product already
in the markets in which the active ingredients are the COMT inhibitor
entacapone, carbidopa and levodopa.
Orion has an ongoing Phase II clinical trial with a new targeted FGFR+VEGFR
inhibitor (ODM-203) for treatment of cancers. The trial will investigate the
efficacy of the drug candidate in slowing the growth of solid cancerous tumours
in patients in which FGFR changes in cancerous tumours have been detected.
Orion has an ongoing Phase I clinical trial with a BET protein inhibitor (ODM-
207) which inhibits transcription of key oncogenes such as Myc in many cancers.
In preclinical studies, ODM-207 has shown antiproliferative effects in several
solid tumour cell lines. The trial will investigate the safety and the
tolerability of the drug candidate and provisionally its efficacy in cancer
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 January-June 2017 were down by 4% at EUR 27 (28) million
due to, among other things, the periodisation of purchases by one significant
collaboration partner.
QuikRead(®) infection tests remained the main product, with sales continuing to
increase. With the help of CRP tests from the QuikRead go(®) product family in
infectious disease diagnostics, antibiotic treatment can be targeted at patients
that need it and use of antibiotics avoided in situations in which a patient
would not benefit from them. Avoiding unnecessary antibiotic treatments helps in
tackling the growing problem of antibiotic resistance.
The operating profit of the Diagnostics business was up by 8% at EUR 4.8 (4.4)
million thanks to growth in sales with good margins, among other things. The
operating profit accounted for 18% (16%) of the segment's net sales.
Espoo, 19 July 2017
Board of Directors of Orion Corporation
Orion Corporation
Timo Lappalainen Jari Karlson
President and CEO CFO
Tables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million Q2/17 Q2/16 Change % H1/17 H1/16 Change % 2016
--------------------------------------------------------------------------------
Net sales 272.4 273.1 -0.2% 551.6 535.1 +3.1% 1,073.5
--------------------------------------------------------------------------------
Cost of goods sold -108.0 -99.4 +8.7% -211.4 -201.7 +4.8% -421.7
--------------------------------------------------------------------------------
Gross profit 164.4 173.7 -5.4% 340.1 333.4 +2.0% 651.8
--------------------------------------------------------------------------------
Other operating income
and expenses -0.0 0.1 -127.2% 0.1 -0.1 +256.5% 24.3
--------------------------------------------------------------------------------
Sales and marketing
expenses -53.1 -49.1 +8.1% -100.5 -92.8 +8.3% -194.7
--------------------------------------------------------------------------------
R&D expenses -26.6 -28.4 -6.4% -52.3 -53.4 -2.0% -118.2
--------------------------------------------------------------------------------
Administrative expenses -12.8 -12.7 +0.8% -23.9 -23.4 +2.3% -48.7
--------------------------------------------------------------------------------
Operating profit 71.8 83.5 -14.0% 163.5 163.9 -0.2% 314.6
--------------------------------------------------------------------------------
Finance income 0.1 0.3 -81.9% 0.1 0.4 -77.4% 0.8
--------------------------------------------------------------------------------
Finance expenses -1.2 -1.2 -0.7% -4.1 -2.4 +69.5% -4.9
--------------------------------------------------------------------------------
Share of associated
companies' results 0.4 -100.0% 0.4
--------------------------------------------------------------------------------
Profit before taxes 70.7 82.6 -14.4% 159.5 162.3 -1.7% 310.9
--------------------------------------------------------------------------------
Income tax expense -14.2 -16.9 -16.0% -32.7 -33.3 -1.7% -61.9
--------------------------------------------------------------------------------
Profit for the period 56.5 65.7 -14.0% 126.7 129.0 -1.7% 249.0
--------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME INCLUDING TAX EFFECTS
--------------------------------------------------------------------------------
Change in value of
available-for-sale
financial assets 0.5 -5.2
--------------------------------------------------------------------------------
Translation differences -1.4 -1.7 -1.2 -3.8 -4.6
--------------------------------------------------------------------------------
Items that may be
reclassified
subsequently to profit
and loss -1.4 -1.7 -1.2 -3.3 -9.8
--------------------------------------------------------------------------------
Items due to
remeasurement of
defined benefit plans -0.0 -0.0 0.0 -0.0 3.7
--------------------------------------------------------------------------------
Items that will not be
reclassified to profit
and loss -0.0 -0.0 0.0 -0.0 3.7
--------------------------------------------------------------------------------
Other comprehensive
income net of tax -1.4 -1.7 -1.2 -3.3 -6.1
--------------------------------------------------------------------------------
Comprehensive income
for the period
including tax effects 55.1 63.9 -13.8% 125.6 125.7 -0.1% 243.0
--------------------------------------------------------------------------------
PROFIT ATTRIBUTABLE TO:
--------------------------------------------------------------------------------
Owners of the parent
company 56.5 65.7 -14.0% 126.8 129.0 -1.7% 249.0
--------------------------------------------------------------------------------
Non-controlling
interests -0.0 0.0 -0.0 0.0 0.0
--------------------------------------------------------------------------------
COMPREHENSIVE INCOME ATTRIBUTABLE TO:
--------------------------------------------------------------------------------
Owners of the parent
company 55.1 63.9 -13.8% 125.6 125.7 -0.1% 243.0
--------------------------------------------------------------------------------
Non-controlling
interests -0.0 0.0 -0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Basic earnings per
share, EUR (1)) 0.40 0.47 -13.9% 0.90 0.92 -1.5% 1.77
--------------------------------------------------------------------------------
Diluted earnings per
share, EUR (1)) 0.40 0.47 -13.9% 0.90 0.92 -1.5% 1.77
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Depreciation,
amortisation and
impairment 10.5 10.3 +2.0% 20.8 20.2 +2.9% 40.6
--------------------------------------------------------------------------------
Personnel expenses 58.8 59.8 -1.8% 112.1 113.2 -0.9% 224.4
--------------------------------------------------------------------------------
(1)) The figure has been calculated from the profit
attributable to the owners of the parent company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
EUR million 6/17 6/16 Change % 12/16
--------------------------------------------------------------------------------
Property, plant and equipment 304.7 279.4 +9.0% 289.1
--------------------------------------------------------------------------------
Goodwill 13.5 13.5 13.5
--------------------------------------------------------------------------------
Intangible rights 39.9 39.7 +0.3% 37.9
--------------------------------------------------------------------------------
Other intangible assets 2.8 2.5 +12.1% 2.5
--------------------------------------------------------------------------------
Investments in associates 0.1 3.0 -97.7% 0.1
--------------------------------------------------------------------------------
Available-for-sale financial assets 0.3 7.6 -96.5% 0.4
--------------------------------------------------------------------------------
Pension asset 20.6 20.4 +1.0% 22.8
--------------------------------------------------------------------------------
Deferred tax assets 1.3 1.2 +6.2% 1.5
--------------------------------------------------------------------------------
Other non-current assets 2.3 4.1 -44.9% 3.8
--------------------------------------------------------------------------------
Non-current assets total 385.3 371.4 +3.7% 371.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Inventories 238.4 213.6 +11.6% 227.5
--------------------------------------------------------------------------------
Trade receivables 208.1 186.9 +11.3% 200.1
--------------------------------------------------------------------------------
Other receivables 48.0 44.1 +8.9% 31.9
--------------------------------------------------------------------------------
Money market investments 3.1 -100.0% 31.0
--------------------------------------------------------------------------------
Cash and cash equivalents 67.7 116.6 -42.0% 200.9
--------------------------------------------------------------------------------
Current assets total 562.2 564.3 -0.4% 691.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Assets total 947.5 935.7 +1.3% 1,062.9
--------------------------------------------------------------------------------
EQUITY AND LIABILITIES
EUR million 6/17 6/16 Change % 12/16
--------------------------------------------------------------------------------
Share capital 92.2 92.2 92.2
--------------------------------------------------------------------------------
Expendable fund 0.5 0.5 0.5
--------------------------------------------------------------------------------
Other reserves 2.4 7.7 -69.2% 2.0
--------------------------------------------------------------------------------
Retained earnings 455.2 422.6 +7.7% 546.6
--------------------------------------------------------------------------------
Equity attributable to owners of the parent company 550.3 523.0 +5.2% 641.4
--------------------------------------------------------------------------------
Non-controlling interests 0.0 0.0 -337.2% 0.0
--------------------------------------------------------------------------------
Equity total 550.3 523.0 +5.2% 641.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Deferred tax liabilities 37.0 37.4 -1.1% 37.1
--------------------------------------------------------------------------------
Pension liability 3.1 3.1 3.2
--------------------------------------------------------------------------------
Provisions 0.3 0.3 0.3
--------------------------------------------------------------------------------
Interest-bearing non-current liabilities 150.3 175.7 -14.5% 150.2
--------------------------------------------------------------------------------
Other non-current liabilities 0.0 0.0 +3.5% 0.0
--------------------------------------------------------------------------------
Non-current liabilities total 190.7 216.5 -11.9% 190.8
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Trade payables 97.6 74.4 +31.3% 106.1
--------------------------------------------------------------------------------
Current tax liabilities 6.9 8.4 -17.1% 9.1
--------------------------------------------------------------------------------
Other current liabilities 100.6 102.4 -1.8% 112.9
--------------------------------------------------------------------------------
Provisions 0.4 0.0 0.2
--------------------------------------------------------------------------------
Interest-bearing current liabilities 1.1 11.0 -90.2% 2.3
--------------------------------------------------------------------------------
Current liabilities total 206.5 196.1 +5.3% 230.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Liabilities total 397.2 412.6 -3.7% 421.5
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity and liabilities total 947.5 935.7 +1.3% 1,062.9
--------------------------------------------------------------------------------
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 1 January 2016 92.2 0.5 6.9 -1.6 -1.5 498.4 0.0 594.9
--------------------------------------------------------------------------------
Profit for the period 129.0 129.0
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Change in value of
available-for-sale financial
assets 0.5 0.5
--------------------------------------------------------------------------------
Translation differences -3.8 -3.8
--------------------------------------------------------------------------------
Items due to remeasurement
of defined benefit plans -0.0 -0.0
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividend and capital
repayment -183.3 -183.3
--------------------------------------------------------------------------------
Treasury shares -16.8 -16.8
--------------------------------------------------------------------------------
Share-based incentive plan 2.5 2.5
--------------------------------------------------------------------------------
Other adjustments 0.3 -0.4 0.0 -0.1
--------------------------------------------------------------------------------
Equity at 30 June 2016 92.2 0.5 7.7 -1.7 -5.3 429.5 0.0 523.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity at 1 January 2017 92.2 0.5 2.0 2.0 -6.2 550.7 0.0 641.4
--------------------------------------------------------------------------------
Profit for the period 126.8 126.8
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Translation differences -1.2 -1.2
--------------------------------------------------------------------------------
Items due to remeasurement
of defined benefit plans 0.0 0.0
--------------------------------------------------------------------------------
Transactions with owners
--------------------------------------------------------------------------------
Dividend and capital
repayment -218.2 -218.2
--------------------------------------------------------------------------------
Share-based incentive plan 1.5 1.5
--------------------------------------------------------------------------------
Other adjustments 0.3 -0.3 -0.0 0.0
--------------------------------------------------------------------------------
Equity at 30 June 2017 92.2 0.5 2.4 2.1 -7.3 460.5 0.0 550.3
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million H1/17 H1/16 2016
--------------------------------------------------------------------------------
Operating profit 163.5 163.9 314.6
--------------------------------------------------------------------------------
Adjustments 24.9 26.2 26.8
--------------------------------------------------------------------------------
Change in working capital -56.8 -57.5 -33.0
--------------------------------------------------------------------------------
Interest paid -5.0 -8.4 -11.9
--------------------------------------------------------------------------------
Interest received 0.6 4.0 7.7
--------------------------------------------------------------------------------
Dividends received 0.0 0.1 0.1
--------------------------------------------------------------------------------
Income taxes paid -35.3 -27.6 -55.2
--------------------------------------------------------------------------------
Total net cash flow from operating activities 91.9 100.7 249.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Investments in property, plant and equipment -29.6 -18.2 -41.0
--------------------------------------------------------------------------------
Investments in intangible assets -7.5 -3.8 -6.7
--------------------------------------------------------------------------------
Sales of property, plant and equipment, and available-for-
sale investments 1.1 0.6 26.6
--------------------------------------------------------------------------------
Total net cash flow from investing activities -35.9 -21.4 -21.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Current loans raised 1.2 1.2 1.2
--------------------------------------------------------------------------------
Repayments of current loans -1.8 -0.8 -1.5
--------------------------------------------------------------------------------
Repayments of non-current loans -2.3 -36.7
--------------------------------------------------------------------------------
Treasury shares -16.8 -16.8
--------------------------------------------------------------------------------
Dividends paid and other distribution of profits -217.9 -181.1 -183.6
--------------------------------------------------------------------------------
Total net cash flow from financing activities -218.5 -199.8 -237.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash and cash equivalents -162.6 -120.5 -9.4
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 231.9 245.2 245.2
--------------------------------------------------------------------------------
Foreign exchange differences -1.7 -5.1 -3.9
--------------------------------------------------------------------------------
Net change in cash and cash equivalents -162.6 -120.5 -9.4
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 67.7 119.7 231.9
--------------------------------------------------------------------------------
Reconciliation of cash and cash equivalents in statement of
financial position
--------------------------------------------------------------------------------
Cash and cash equivalents in statement of financial
position at the end of the period 67.7 116.6 200.9
--------------------------------------------------------------------------------
Money market investments at the end of the period 3.1 31.0
--------------------------------------------------------------------------------
Cash and cash equivalents in the statement of cash flows 67.7 119.7 231.9
--------------------------------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 6/17 6/16 12/16
---------------------------------------------------------------------------
Carrying amount at the beginning of the period 289.1 276.4 276.4
---------------------------------------------------------------------------
Additions 32.1 18.8 44.5
---------------------------------------------------------------------------
Disposals -0.5 -0.7 -1.4
---------------------------------------------------------------------------
Depreciation and impairments -15.7 -15.1 -30.5
---------------------------------------------------------------------------
Carrying amount at the end of the period 305.0 279.4 289.1
---------------------------------------------------------------------------
CHANGES IN INTANGIBLE ASSETS (EXCLUDING GOODWILL)
EUR million 6/17 6/16 12/16
---------------------------------------------------------------------------
Carrying amount at the beginning of the period 40.4 44.3 44.3
---------------------------------------------------------------------------
Additions 7.3 3.0 6.2
---------------------------------------------------------------------------
Disposals -0.0 -0.0
---------------------------------------------------------------------------
Amortisation and impairments -5.0 -5.1 -10.1
---------------------------------------------------------------------------
Carrying amount at the end of the period 42.5 42.2 40.4
---------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
EUR million 6/17 6/16 12/16
---------------------------------------------------------------------------
CONTINGENCIES FOR OWN LIABILITIES
---------------------------------------------------------------------------
Guarantees 4.3 4.4 4.1
---------------------------------------------------------------------------
OTHER LIABILITIES
---------------------------------------------------------------------------
Leasing liabilities (excluding finance lease contracts) 5.5 6.3 6.7
---------------------------------------------------------------------------
Other liabilities 0.3 0.3 0.3
---------------------------------------------------------------------------
DERIVATIVES
EUR million 6/17 6/16 12/16
---------------------------------------------------------------------------
CURRENCY FORWARD CONTRACTS AND CURRENCY SWAPS
---------------------------------------------------------------------------
Fair value, EUR million -0.8 -1.0 -0.1
---------------------------------------------------------------------------
Nominal value, EUR million 34.5 40.6 25.1
---------------------------------------------------------------------------
CURRENCY OPTIONS
---------------------------------------------------------------------------
Fair value, EUR million 0.1 -0.0 -0.0
---------------------------------------------------------------------------
Nominal value, EUR million 50.8 35.4 31.7
---------------------------------------------------------------------------
FAIR VALUE MEASUREMENT AND HIERARCHY OF FINANCIAL INSTRUMENTS
EUR million Level 1 Level 2 Level 3 Total
--------------------------------------------------------------------------------
Derivatives
--------------------------------------------------------------------------------
Currency derivatives 0.4 0.4
--------------------------------------------------------------------------------
Available-for-sale financial
assets
--------------------------------------------------------------------------------
Shares and investments 0.3 0.3
--------------------------------------------------------------------------------
Assets total 0.4 0.3 0.7
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Derivatives
--------------------------------------------------------------------------------
Currency derivatives -1.1 -1.1
--------------------------------------------------------------------------------
Liabilities total -1.1 -1.1
--------------------------------------------------------------------------------
The level 1 fair value of financial instruments is based on quotations available
in active markets. The level 2 fair value of financial instruments is based on
data feeds 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 occurred.
No transfers between levels occurred during the reporting
period.
RELATED PARTY TRANSACTIONS
EUR million H1/17 H1/16 2016
--------------------------------------------------------------------------------
Management's employment
benefits 5.9 5.4 6.8
--------------------------------------------------------------------------------
Operating segment performance
NET SALES BY BUSINESS DIVISION
EUR million Q2/17 Q2/16 Change % H1/17 H1/16 Change % 2016
---------------------------------------------------------------------------
Pharmaceuticals 260.7 259.5 +0.5% 526.1 508.7 +3.4% 1,021.6
---------------------------------------------------------------------------
Proprietary Products 87.5 97.3 -10.0% 185.9 185.3 +0.3% 350.4
---------------------------------------------------------------------------
Specialty Products 132.7 123.2 +7.8% 254.5 246.0 +3.5% 507.8
---------------------------------------------------------------------------
Animal Health 21.8 20.0 +8.9% 40.9 38.3 +7.0% 77.3
---------------------------------------------------------------------------
Fermion 12.5 9.7 +29.8% 28.0 20.2 +38.8% 47.6
---------------------------------------------------------------------------
Contract manufacturing
and other 6.1 9.3 -34.8% 16.8 19.0 -11.5% 38.5
---------------------------------------------------------------------------
Diagnostics 12.4 14.4 -13.4% 26.8 27.9 -3.7% 54.8
---------------------------------------------------------------------------
Group items -0.7 -0.7 -8.3% -1.4 -1.5 -7.5% -2.8
---------------------------------------------------------------------------
Group total 272.4 273.1 -0.2% 551.6 535.1 +3.1% 1,073.5
---------------------------------------------------------------------------
OPERATING PROFIT BY BUSINESS AREA
EUR million Q2/17 Q2/16 Change % H1/17 H1/16 Change % 2016
-----------------------------------------------------------------
Pharmaceuticals 73.5 84.9 -13.4% 163.7 165.0 -0.8% 316.4
-----------------------------------------------------------------
Diagnostics 1.3 1.8 -27.7% 4.8 4.4 +7.9% 8.4
-----------------------------------------------------------------
Group items -3.0 -3.2 -5.5% -5.0 -5.6 -10.8% -10.2
-----------------------------------------------------------------
Group total 71.8 83.5 -14.0% 163.5 163.9 -0.2% 314.6
-----------------------------------------------------------------
NET SALES BY ANNUAL QUARTERS
2017 2016 2015
+-----------+-----------------------+------ |
EUR million | Q2 Q1| Q4 Q3 Q2 Q1| Q4 Q3|
---------------+-----------+-----------------------+-----------+
Pharmaceuticals|260.7 265.5|267.1 245.7 259.5 249.3|247.3 227.1|
---------------+-----------+-----------------------+-----------+
Diagnostics | 12.4 14.4| 13.5 13.4 14.4 13.5| 15.2 12.5|
---------------+-----------+-----------------------+-----------+
Group items | -0.7 -0.7| -0.7 -0.6 -0.7 -0.8| -0.9 -0.5|
---------------+-----------+-----------------------+-----------+
Group total |272.4 279.2|279.9 258.6 273.1 262.0|261.6 239.1|
---------------+-----------+-----------------------+-----------+
OPERATING PROFIT BY ANNUAL QUARTERS
2017 2016 2015
+---------+-------------------+- |
EUR million | Q2 Q1| Q4 Q3 Q2 Q1| Q4 Q3|
---------------+---------+-------------------+---------+
Pharmaceuticals|73.5 90.2|59.6 91.8 84.9 80.1|52.1 59.7|
---------------+---------+-------------------+---------+
Diagnostics | 1.3 3.5| 1.7 2.2 1.8 2.6| 1.7 1.1|
---------------+---------+-------------------+---------+
Group items |-3.0 -2.0|-2.6 -2.0 -3.2 -2.4|-2.9 -2.3|
---------------+---------+-------------------+---------+
Group total |71.8 91.7|58.7 92.0 83.5 80.3|50.9 58.6|
---------------+---------+-------------------+---------+
GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS
2017 2016 2015
+-----------+-----------------------+- |
EUR million | Q2 Q1| Q4 Q3 Q2 Q1| Q4 Q3|
-------------+-----------+-----------------------+-----------+
Finland | 82.8 81.9| 91.8 84.4 82.1 80.1| 85.1 78.1|
-------------+-----------+-----------------------+-----------+
Scandinavia | 50.1 44.7| 45.5 39.6 44.3 44.7| 47.0 39.1|
-------------+-----------+-----------------------+-----------+
Other Europe | 81.7 83.0| 89.0 78.1 85.5 83.2| 81.9 70.7|
-------------+-----------+-----------------------+-----------+
North America| 16.1 19.6| 29.7 18.7 19.6 18.2| 16.1 17.9|
-------------+-----------+-----------------------+-----------+
Other markets| 41.7 50.0| 23.9 37.8 41.6 35.8| 31.5 33.2|
-------------+-----------+-----------------------+-----------+
Group total |272.4 279.2|279.9 258.6 273.1 262.0|261.6 239.1|
-------------+-----------+-----------------------+-----------+
Business reviews
KEY FIGURES FOR PHARMACEUTICALS BUSINESS
EUR million Q2/17 Q2/16 Change % H1/17 H1/16 Change % 2016
--------------------------------------------------------------------------------
Net sales 260.7 259.5 +0.5% 526.1 508.7 +3.4% 1,021.6
--------------------------------------------------------------------------------
Operating profit 73.5 84.9 -13.4% 163.7 165.0 -0.8% 316.4
--------------------------------------------------------------------------------
% of net sales 28.2% 32.7% 31.1% 32.4% 31.0%
--------------------------------------------------------------------------------
R&D expenses 25.0 26.6 -5.9% 49.3 50.0 -1.4% 111.5
--------------------------------------------------------------------------------
% of net sales 9.6% 10.2% 9.4% 9.8% 10.9%
--------------------------------------------------------------------------------
Capital expenditure 23.4 13.1 +79.6% 38.4 21.8 +75.7% 49.7
--------------------------------------------------------------------------------
% of net sales 9.0% 5.0% 7.3% 4.3% 4.9%
--------------------------------------------------------------------------------
Sales revenue from proprietary
products 101.8 101.5 +0.4% 202.7 194.4 +4.3% 377.0
--------------------------------------------------------------------------------
Assets 814.1 747.7 776.9
--------------------------------------------------------------------------------
Liabilities 191.2 169.1 209.0
--------------------------------------------------------------------------------
Personnel at the end of the
period 3,312 3,205 3,161
--------------------------------------------------------------------------------
TOP TEN BEST-SELLING PHARMACEUTICAL PRODUCTS
EUR million Q2/17 Q2/16 Change % H1/17 H1/16 Change % 2016
--------------------------------------------------------------------------------
Stalevo(®), Comtess(®) and
Comtan(®)
(Parkinson's disease) 27.2 38.9 -30.2% 57.7 71.6 -19.4% 124.2
--------------------------------------------------------------------------------
Easyhaler(® )product family
(asthma, COPD) 18.9 16.3 +15.7% 36.9 31.9 +15.5% 63.7
--------------------------------------------------------------------------------
Dexdor(®) (intensive care
sedative) 17.0 13.5 +26.2% 33.7 27.7 +21.8% 56.8
--------------------------------------------------------------------------------
Simdax(®) (acute decompensated
heart failure) 14.4 13.8 +3.8% 29.7 27.6 +7.7% 56.4
--------------------------------------------------------------------------------
Remsima(®) (rheumatoid
arthritis, inflammatory bowel
diseases) 16.7 10.0 +66.5% 27.7 21.7 +27.6% 42.3
--------------------------------------------------------------------------------
Dexdomitor(®), Domitor(®),
Domosedan(®) and Antisedan(®)
(animal sedatives) 10.1 5.3 +91.4% 17.6 12.1 +45.4% 28.1
--------------------------------------------------------------------------------
Precedex(®) (intensive care
sedative) 6.5 6.0 +8.6% 13.4 9.8 +36.2% 19.6
--------------------------------------------------------------------------------
Burana(®) (inflammatory pain) 5.7 5.2 +9.8% 11.4 10.3 +9.9% 23.1
--------------------------------------------------------------------------------
Marevan(®) (anticoagulant) 5.5 3.8 +44.1% 9.5 9.0 +5.5% 18.2
--------------------------------------------------------------------------------
Divina(®) range (menopausal
symptoms) 4.9 3.7 +33.7% 8.6 6.9 +24.0% 16.1
--------------------------------------------------------------------------------
Total 126.8 116.5 +8.8% 246.0 228.6 +7.6% 448.5
--------------------------------------------------------------------------------
Share of pharmaceutical net
sales 49% 45% 47% 45% 44%
--------------------------------------------------------------------------------
KEY FIGURES FOR DIAGNOSTICS BUSINESS
EUR million Q2/17 Q2/16 Change % H1/17 H1/16 Change % 2016
--------------------------------------------------------------------------------
Net sales 12.4 14.4 -13.4% 26.8 27.9 -3.7% 54.8
--------------------------------------------------------------------------------
Operating profit 1.3 1.8 -27.7% 4.8 4.4 +7.9% 8.4
--------------------------------------------------------------------------------
% of net sales 10.5% 12.6% 17.8% 15.9% 15.3%
--------------------------------------------------------------------------------
R&D expenses 1.7 1.9 -12.9% 3.1 3.5 -11.3% 6.9
--------------------------------------------------------------------------------
% of net sales 13.4% 13.3% 11.7% 12.7% 12.6%
--------------------------------------------------------------------------------
Capital expenditure 0.4 0.1 +384.6% 0.6 0.3 +118.2% 1.1
--------------------------------------------------------------------------------
% of net sales 3.1% 0.6% 2.3% 1.0% 2.0%
--------------------------------------------------------------------------------
Assets 49.5 48.9 45.8
--------------------------------------------------------------------------------
Liabilities 8.4 8.3 17.6
--------------------------------------------------------------------------------
Personnel at the end of the
period 293 299 284
--------------------------------------------------------------------------------
KEY CLINICAL PHARMACEUTICAL DEVELOPMENT PROJECTS
+----------------------+--------------------+--------------------+-------------+
| | | PHASE | |
| Project | Indication +---+----+-----------+Registration |
| | | I | II | III | |
+----------------------+--------------------+---+----+-----------+-------------+
|Easyhaler(®) |Asthma, COPD |Bioequivalence study|Registration*|
|salmeterol-fluticasone| | | |
+----------------------+--------------------+---+----+-----------+-------------+
|Darolutamide (ODM- |Prostate cancer | I | II | III* | |
|201) (1)) |(nmCRPC) | | | | |
+----------------------+--------------------+---+----+-----------+-------------+
|Darolutamide (ODM- |Prostate cancer | I | II | III* | |
|201) (1)) |(mHSPC) | | | | |
+----------------------+--------------------+---+----+-----------+-------------+
|ORM-12741 (alpha-2c | | | | | |
|adrenoceptor |Alzheimer's disease | I |IIa*| | |
|antagonist) (2)) | | | | | |
+----------------------+--------------------+---+----+-----------+-------------+
|ODM-109 (oral |ALS | I | II | | |
|levosimendan) | | | | | |
+----------------------+--------------------+---+----+-----------+-------------+
|ODM-104 (more | | | | | |
|effective COMT |Parkinson's disease | I |II* | | |
|inhibitor) | | | | | |
+----------------------+--------------------+---+----+-----------+-------------+
|ODM-203 (targeted |Solid tumours | I |II* | | |
|FGFR+VEGFR inhibitor) | | | | | |
+----------------------+--------------------+---+----+-----------+-------------+
|ODM-207 (BET protein |Cancer |I* | | | |
|inhibitor) | | | | | |
+----------------------+--------------------+---+----+-----------+-------------+
| | * |= Phase ongoing |
| +---+------------------------------+
|(1) )In collaboration with Bayer (2) )In |III|= Status changed vs. previous |
|collaboration with Janssen Pharmaceuticals.| |quarter |
| +---+------------------------------+
| | | |
+-------------------------------------------+---+------------------------------+
Information on Orion's shares
BASIC SHARE INFORMATION, 30 JUNE 2017
A shares B shares Total
------------------------------------------------------------------------------
Trading code
on Nasdaq
Helsinki ORNAV ORNBV
------------------------------------------------------------------------------
Listing day 1.7.2006 1.7.2006
------------------------------------------------------------------------------
ISIN code FI0009014369 FI0009014377
------------------------------------------------------------------------------
ICB code 4500 4500
------------------------------------------------------------------------------
Reuters code ORNAV.HE ORNBV.HE
------------------------------------------------------------------------------
Bloomberg
code ORNAV.FH ORNBV.FH
------------------------------------------------------------------------------
Share
capital, EUR
million 24.3 67.9 92.2
------------------------------------------------------------------------------
Counter book
value per
share, EUR 0.65 0.65
------------------------------------------------------------------------------
Total number
of shares 37,266,346 103,991,482 141,257,828
------------------------------------------------------------------------------
% of total
share stock 26% 74% 100%
------------------------------------------------------------------------------
Number of
treasury
shares 675,401 675,401
------------------------------------------------------------------------------
Total number
of shares
excluding
treasury
shares 37,266,346 103,316,081 140,582,427
------------------------------------------------------------------------------
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 745,326,920 103,316,081 848,643,001
------------------------------------------------------------------------------
% of total
votes 88% 12% 100%
-----------------------------------------------------------------------
Total number
of
shareholders 16,658 36,681 47,828
-----------------------------------------------------------------------
Both share classes, A and B, confer equal rights to the
Company's assets and dividends.
INFORMATION ON TRADING ON NASDAQ HELSINKI, 1 JANUARY - 30 JUNE 2017
A shares B shares Total
------------------------------------------------------------------------------
Shares traded 1,754,420 34,502,915 36,257,335
------------------------------------------------------------------------------
% of the total number of
shares 4.6% 33.4% 25.7%
------------------------------------------------------------------------------
Trading volume, EUR million 89.7 1,745.8 1,835.5
------------------------------------------------------------------------------
Closing quotation on 31
December 2016, EUR 42.38 42.29
------------------------------------------------------------------------------
Lowest quotation,
EUR (A 3 and 25
January 2017, B
25 January 2017) 42.00 41.99
------------------------------------------------------------------------------
Average quotation, EUR 51.10 50.60
------------------------------------------------------------------------------
Highest quotation, EUR (A and
B
2 June 2017) 58.35 58.50
------------------------------------------------------------------------------
Closing quotation on 30 June
2017, EUR 55.75 55.90
------------------------------------------------------------------------------
Market capitalisation
excluding treasury shares on
30 June 2017, EUR million 2,077.6 5,775.4 7,853.0
------------------------------------------------------------------------------
PERFORMANCE PER
SHARE
Change
Q2/17 Q2/16 % H1/17 H1/16 Change % 2016
------------------------------------------------------------------------------
Basic earnings
per share, EUR 0.40 0.47 -13.9% 0.90 0.92 -1.5% 1.77
------------------------------------------------------------------------------
Diluted
earnings per
share, EUR 0.40 0.47 -13.9% 0.90 0.92 -1.5% 1.77
------------------------------------------------------------------------------
Cash flow per
share before
financial
items, EUR 0.06 0.27 -76.7% 0.40 0.56 -29.2% 1.62
------------------------------------------------------------------------------
Equity per
share, EUR 3.91 3.72 +5.1% 4.57
------------------------------------------------------------------------------
Average number
of shares
excluding
treasury
shares, 1,000
shares 140,582 140,860 140,547 140,869 140,671
------------------------------------------------------------------------------
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
This report has been prepared in accordance with the IAS 34 Interim Financial
Reporting standard. The same accounting policies as for the Financial Statements
for 2016, supplemented by amendments to existing IFRS and IAS standards endorsed
by the EU that have been adopted as of 1 January 2017, have been applied in
preparing the report. The amendments to standards had no effect on the
Consolidated Financial Statements.
The policies and calculation methods applied during the period can be found on
the Orion website at http://www.orion.fi/en/investors.
Other matters
The data in this financial review are not 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 - Money
Gearing, % = 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
http://www.orion.fi/
http://www.twitter.com/OrionCorpIR
Orion is a globally operating Finnish pharmaceutical company - 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. The core
therapy areas of Orion's pharmaceutical R&D are central nervous system (CNS)
disorders, oncology and respiratory for which Orion develops inhaled
Easyhaler(®) pulmonary drugs. Orion's net sales in 2016 amounted to EUR 1,074
million and the Company had about 3,500 employees. Orion's A and B shares are
listed on Nasdaq Helsinki. Orion, established in 1917, is celebrating its
centenary in 2017.
[]
© 2024 Nasdaq, Inc. All Rights Reserved |