2011-10-25 11:00:03 CEST
2011-10-25 11:01:14 CEST
REGULATED INFORMATION
Orion - Interim report (Q1 and Q3)
Orion Group Interim Report January-September 2011
ORION CORPORATION / INTERIM REPORT / JANUARY-SEPTEMBER 2011 / 25 October 2011 at
12:00 noon EEST
Orion's net sales for January-September 2011 totalled EUR 682 million (EUR 635
million for January-September 2010), up by 7% on the comparative period last
year.
* Operating profit was EUR 223 (202) million.
* Profit before taxes was EUR 222 (200) million.
* Equity ratio was 64% (62%).
* ROCE before taxes was 53% (49%).
* ROE after taxes was 48% (46%).
* Basic earnings per share were EUR 1.17 (1.05).
* Cash flow per share before financial items was EUR 0.77 (0.82).
* The outlook estimate for 2011 remains the same. Orion estimates that net
sales will be slightly higher and operating profit excluding non-recurring
items higher in 2011 than in 2010.
ORION'S KEY FIGURES FOR THE REVIEW PERIOD
Q3/11 Q3/10 Change % Q1-Q3/11 Q1-Q3/10 Change % 2010
--------------------------------------------------------------------------------
Net sales, EUR million 210.7 213.2 -1.2% 681.8 635.0 +7.4% 849.9
--------------------------------------------------------------------------------
International operations, 150.5 155.5 -3.2% 502.8 466.8 +7.7% 620.7
EUR million
--------------------------------------------------------------------------------
% of net sales 71.5% 73.0% 73.8% 73.5% 73.0%
--------------------------------------------------------------------------------
Operating profit, EUR 65.4 70.6 -7.4% 223.4 201.6 +10.8% 254.2
million
--------------------------------------------------------------------------------
% of net sales 31.1% 33.1% 32.8% 31.8% 29.9%
--------------------------------------------------------------------------------
Profit before taxes, EUR 65.0 70.0 -7.2% 222.4 200.2 +11.1% 252.6
million
--------------------------------------------------------------------------------
% of net sales 30.8% 32.8% 32.6% 31.5% 29.7%
--------------------------------------------------------------------------------
Income tax expense, EUR 17.1 18.4 -6.8% 58.1 52.2 +11.3% 67.9
million
--------------------------------------------------------------------------------
R&D expenses, EUR million 19.4 19.5 -0.6% 62.1 58.9 +5.4% 85.5
--------------------------------------------------------------------------------
% of net sales 9.2% 9.1% 9.1% 9.3% 10.1%
--------------------------------------------------------------------------------
Capital expenditure, EUR 19.4 10.2 +90.3% 36.7 27.9 +31.2% 39.2
million
--------------------------------------------------------------------------------
% of net sales 9.2% 4.8% 5.4% 4.4% 4.6%
--------------------------------------------------------------------------------
Assets total, EUR million 706.9 693.8 +1.9% 745.8
--------------------------------------------------------------------------------
Equity ratio, % 64.2% 61.9% 62.7%
--------------------------------------------------------------------------------
Gearing, % 2.9% 1.4% -12.2%
--------------------------------------------------------------------------------
Interest-bearing 99.9 121.3 -17.6% 110.0
liabilities, EUR million
--------------------------------------------------------------------------------
Non-interest-bearing 153.1 143.3 +6.9% 168.4
liabilities, EUR million
--------------------------------------------------------------------------------
Cash and money market 87.0 115.4 -24.6% 167.2
investments, EUR million
--------------------------------------------------------------------------------
ROCE (before taxes), % 53.4% 48.8% 45.0%
--------------------------------------------------------------------------------
ROE (after taxes), % 47.6% 45.5% 40.7%
--------------------------------------------------------------------------------
Basic earnings per share, 0.34 0.37 -7.3% 1.17 1.05 +11.1% 1.31
EUR
--------------------------------------------------------------------------------
Diluted earnings per 0.34 0.37 -7.3% 1.17 1.05 +11.1% 1.31
share, EUR
--------------------------------------------------------------------------------
Cash flow per share 0.23 0.34 -32.5% 0.77 0.82 -5.8% 1.26
before financial items,
EUR
--------------------------------------------------------------------------------
Equity per share, EUR 3.22 3.05 +5.7% 3.32
--------------------------------------------------------------------------------
Personnel at the end of 3,410 3,124 +9.2% 3,131
the period
--------------------------------------------------------------------------------
Average personnel during 3,300 3,141 +5.1% 3,137
the period
--------------------------------------------------------------------------------
Personnel expenses, EUR 134.3 123.3 +8.9% 170.3
million
--------------------------------------------------------------------------------
President and CEO Timo Lappalainen's review"Dexdor gained marketing authorisation""Our net sales and operating profit were higher than in the previous year."As anticipated, the strong growth in deliveries of our Parkinson drugs to
Novartis in the first half of the year levelled off in recent months. Growth in
sales from the rest of our product range also slowed slightly. Nevertheless, we
have succeeded in further strengthening our market position in Finland and
growing elsewhere in Europe."In September the European Commission granted centralised marketing
authorisation for Orion's intensive care sedative dexdor(®) (dexmedetomidine),
and we have already started launching and launch preparations in various parts
of Europe. Dexmedetomidine (Precedex(®)) sold by our partner Hospira has
performed well in recent years, especially in the United States, and we believe
that in the coming years it will bring us considerable sales in Europe too,
where we will generally be marketing it ourselves."Another event during the period under review important for the future was
entering into a collaboration agreement with Nycomed in the summer for co-
marketing of Easyhaler(® )combination products under development in the major
European countries. In addition, Nycomed obtains the exclusive right to license
and distribute the products in the Middle East and North Africa. Orion and
Nycomed will both market the products covered by the agreement for treatment of
asthma and chronic obstructive pulmonary disease under the Easyhaler umbrella
brand."Our outlook estimate remains the same. We estimate that net sales will be
slightly higher and operating profit excluding non-recurring items higher than
in 2010. More information on the outlook estimate and the basis for it can be
found on pages 6-7 of this Interim Report."
Events during the period
On 22 July Orion announced that it had been informed that the Committee for
Medicinal Products for Human Use (CHMP) of the European Medicines Agency (EMA)
had issued a positive opinion recommending the granting of marketing
authorisation for dexdor(®)( )(dexmedetomidine), a new intensive care sedative.
On 22 July Orion Diagnostica strengthened its research and product development
base by acquiring new early-phase technology through purchasing all the shares
of English technology company GeneForm Technologies Ltd.
On 4 August Orion announced that it had entered into a collaboration agreement
with Nycomed for co-marketing of Easyhaler(®) combination products for treatment
of asthma and chronic obstructive pulmonary disease in the major European
countries, and an exclusive licensing and distribution arrangement in the Middle
East and North Africa region.
On 21 September Orion announced that it had been informed that the European
Commission had granted centralised marketing authorisation for Orion's intensive
care sedative dexdor(®) (dexmedetomidine).
On 21 September Orion announced the new composition of the Company's Nomination
Committee.
On 26 September Orion announced that the total number of Orion B shares owned by
mutual funds under the management of Capital Research and Management Company had
increased to more than one-twentieth (1/20) of the total number of Orion
Corporation shares.
News conference and teleconference
A news conference and teleconference on the published results will be held
today, Tuesday 25 October 2011, at 13:30 EEST in Hotel Kämp, address:
Pohjoisesplanadi 29, Helsinki. President and CEO Timo Lappalainen will give a
brief presentation in English on the financial review.
The event can be followed live as a webcast accessible via the Orion website at
http://www.orion.fi/en/. After the presentation, questions can be asked by
telephone in Finnish and English.
The teleconference code is 891291 and to participate in the teleconference
please call:
from United States: +1 866 803 8344
from other countries: +44 (0)20 7162 0125
News conference recordings
A recording of the webcast of the event in English and a recording of the
presentation by the President and CEO in Finnish will be available on the Orion
website later today.
Financial report material
Financial reports and related presentation material are available at
www.orion.fi/en/ promptly after publication. The website also has a form for
subscribing to Orion's releases.
Dates in Orion Calendar 2012
Financial Statements 2011 Tuesday 7 February 2012
Annual General Meeting 2012 Tuesday 20 March 2012
Interim Report January-March 2012 Tuesday 24 April 2012
Capital Markets Day in Helsinki Thursday 24 May 2012
Interim Report January-June 2012 Tuesday 31 July 2012
Interim Report January-September 2012 Tuesday 23 October 2012
The Annual Report 2011 will be published on the Company's website at the latest
in week 10/2012.
For additional information about the financial review:
Jari Karlson, CFO, tel. +358 10 426 2883
www.orion.fi/en
www.orion.fi/en/investors/
Financial review Q1-Q3/2011
Net sales
The Orion Group's net sales in January-September 2011 totalled EUR 682 million
(EUR 635 million in January-September 2010), up by 7% on the comparative period
of the previous year. Foreign exchange rates had no significant effect on net
sales in the review period.
The Pharmaceuticals business's net sales were up by 7% at EUR 647 (603) million.
The products based on in-house R&D accounted for EUR 310 (300) million, or 48%
(50%) of the Pharmaceuticals business's net sales. Net sales of Orion's
Parkinson's drugs were up by 5% at EUR 202 (193) million, which is 31% (32%) of
the Pharmaceuticals business's net sales. The net sales of other products in the
portfolio (excluding Parkinson's drugs) were up by 9% at EUR 444 (409) million.
The Diagnostics business's net sales were up by 7% at EUR 37 (34) million.
Operating profit
The Orion Group's operating profit was up by 11% at EUR 223 (202) million.
The Pharmaceuticals business's operating profit was EUR 226 (202) million, up by
12% on the comparative period. The gross profit grew slightly faster than net
sales due especially to an increase in royalties and milestone payments. The
fixed costs of the business operations were as anticipated higher than in the
comparative period.
The Diagnostics business's operating profit was EUR 4.2 (5.1) million, down by
17% on the comparative period due to higher fixed costs.
Operating expenses
The Group's sales and marketing expenses were higher, as anticipated, at EUR
151 (134) million. This 13% increase was due to the intensified sales drives,
especially in Scandinavia and Eastern Europe. The expenses also include
intangible asset impairment charges recorded on product rights.
R&D expenses were up by 5% at EUR 62 (59) million and accounted for 9% (9%) of
the Group's net sales. Pharmaceutical R&D expenses amounted to EUR 58 (54)
million. Research projects are reported in more detail under Pharmaceuticals in
the Business Reviews.
Administrative expenses were EUR 28 (28) million.
Other operating income and expenses increased profit by EUR 3 million (profit
decrease in comparative period EUR 3 million). They comprise items arising
mainly from foreign exchange hedges.
Profit before taxes
Group profit before taxes totalled EUR 222 (200) million. Basic earnings per
share were EUR 1.17 (1.05) and diluted earnings per share were EUR 1.17 (1.05).
Equity per share was EUR 3.22 (3.05). The return on capital employed before
taxes (ROCE) was 53% (49%) and the return on equity after taxes (ROE) 48% (46%).
Financial position
The Group's gearing was 3% (1%) and the equity ratio 64% (62%).
The Group's total liabilities at 30 September 2011 were EUR 253 (265) million.
At the end of the period, interest-bearing liabilities amounted to EUR 100 (121)
million, including EUR 77 (98) million of long-term loans.
The Group had EUR 87 (115) 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.
The share premium fund was reduced by transferring EUR 17,797,958.60 into the
reserve for invested unrestricted equity. The reduction was based on a decision
by the Annual General Meeting on 31 March 2011.
Cash flow
Cash flow from operating activities was higher than in the comparative period at
EUR 143 (141) million. Operating profit improved in the first half of 2011, and
the amount tied up into working capital was slightly less than in the
comparative period at EUR 53 (55) million. The EUR 60 (34) million of income
taxes paid was higher than in the comparative period. The increase was due to
the improvement in profits and the timing of tax payments for the financial year
2010.
Cash flow from investing activities was EUR -35 (-26) million. Cash flow from
financing activities was EUR -188 (-171) million. This change was due to the
higher dividend than in the previous year.
Capital expenditure
The Group's capital expenditure totalled EUR 37 (28) million. This comprised EUR
20 (17) million on property, plant and equipment and EUR 17 (11) million on
intangible assets.
Outlook for 2011
Net sales will be slightly higher than in 2010.
Marketing expenditure will be higher due to the increased number of product
launches. Research expenditure will be higher than in 2010.
Operating profit excluding non-recurring items will be higher than in 2010.
The Group's capital expenditure will be about EUR 45 million excluding
substantial corporate or product acquisitions.
Basis for outlook
Price competition in the Finnish market will persist in 2011. However, product
launches will continue to support Orion's position as market leader.
The generic competition commencing in April 2012 in the United States is not
expected to have a material impact on sales of Orion's Parkinson's drugs in
2011.
Because the registrations and launches of new products are projects that take
more than a year, the increases in resources and other inputs required in 2011
were planned mainly during the previous year.
Research and development costs can be estimated quite accurately in advance.
They are partly the Company's internal fixed cost items, such as salaries and
maintenance of the operating infrastructure, and partly external variable costs.
External costs arise from, among other things, long-term clinical trials, which
are typically performed in clinics located in several countries. The most
important clinical trials scheduled for 2011 are either ongoing from the
previous year or at an advanced stage of planning, therefore their cost level
can be estimated rather accurately.
The estimated costs of the ongoing patent litigation in the United States are
based on the planned timetables and work estimates. The costs due to the
litigation will depend on a number of factors, which are difficult to estimate
accurately.
Near-term risks and uncertainties relating to the outlook
The Company is not aware of any significant risk factors relating to the
earnings outlook for 2011.
Sales of individual products and also Orion's sales in individual markets may
vary slightly depending on the extent to which the ever-tougher price and other
competition prevailing in pharmaceutical markets in recent years will
specifically affect Orion's products. Deliveries to Novartis are based on
timetables that are jointly agreed in advance. Nevertheless, they can change,
for example as a consequence of decisions by Novartis concerning adjustments of
stock levels.
Most of the exchange rate risk relates to the US dollar. Typically, only less
than 15% of Orion's net sales come from the United States. As regards currencies
in European countries, the overall effect will be abated by the fact that Orion
has organisations of its own in most of these countries, which means that in
addition to sales income, there are also costs in these currencies.
Research projects always entail uncertainty factors that may either increase or
decrease estimated costs. The projects may progress more slowly or faster than
assumed, or they may be discontinued. Nonetheless, changes that may occur in
ongoing clinical studies are reflected in costs relatively slowly, and they are
not expected to have a material impact on earnings in the current year. Owing to
the nature of the research process, the timetables and costs of new studies that
are being started are known well in advance. They therefore typically do not
lead to unexpected changes in the estimated cost structure.
Financial objectives
Orion's financial objectives are ensuring the Group's financial stability and
creating a foundation for long-term profitable growth.
The principal means of achieving these objectives are:
* improving the organic development of net sales and operating profit through
product, product portfolio and corporate acquisitions
* increasing the efficiency of operations and cost control
* maintaining a stable financial position, with the equity ratio at least 50%
Sales of Stalevo(®) and Comtess(®)/Comtan(®) currently account for approximately
one-third of Orion's net sales. The key patents for these Parkinson's drugs in
Orion's main markets will expire in 2012-2013, which is why their sales are
expected to decline over the next few years. Orion is continuously bringing new
products to the market to replace this drop in net sales.
The development of Orion's net sales and profitability in the next few years
will depend on how fast the sales of Parkinson's drugs will decline and, on the
other hand, how the sales of other products will increase in the future. This
creates a point of discontinuity in the Group's operations.
Dividend policy
Orion's dividend distribution takes into account the distributable funds and the
capital expenditure and other financial requirements in the medium and long term
to achieve the financial objectives.
Shares and shareholders
On 30 September 2011 Orion had a total of 141,257,828 (141,257,828) shares, of
which 45,247,646 (47,885,511) were A shares and 96,010,182 (93,372,317) B
shares. The Group's share capital was EUR 92,238,541.46 (92,238,541.46). At the
end of September 2011 Orion held 413,754 (516,654) B shares as treasury shares.
On 30 September 2011 the aggregate number of votes conferred by the A and B
shares was 1,000,549,348 (1,050,565,883) excluding treasury shares.
At the end of September 2011, Orion had 56,539 (57,293) registered shareholders.
Voting rights conferred by shares
Each A share entitles its holder to twenty (20) votes at a General Meeting 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. In addition, Orion 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-September 2011 a total of 2,315,919 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 30 September 2011 the market capitalisation of the Company's shares excluding
treasury shares was EUR 2,135 million.
Authorisations of the Board of Directors
Orion's Board of Directors was authorised by the Annual General Meeting on 24
March 2010 to decide on a share issue in which shares held by the Company can be
conveyed. The authorisation to issue shares is valid for five years from the
decision taken by the Annual General Meeting.
The Board of Directors is authorised to decide on conveyance of no more than
500,000 Orion Corporation B shares held by the Company. Such shares held by the
Company can be conveyed either against or without payment. Such shares held by
the Company can be conveyed by selling them in public trading on NASDAQ OMX
Helsinki; in a share issue placement to the Company's shareholders in proportion
to their holdings at the time of the conveyance regardless of whether they own A
or B shares; or in a share issue placement deviating from shareholders' pre-
emptive rights if there is a weighty financial reason, such as the development
of the capital structure of the Company, using the shares to finance possible
corporate acquisitions or other business arrangements of the Company, financing
capital expenditure or as part of the Company's incentive plan. The share issue
placement can be without payment only if there is an especially weighty
financial reason in the view of the Company and to the benefit of all its
shareholders. The amounts paid for shares in the Company conveyed shall be
recorded in a distributable equity fund. The Board of Directors shall decide on
other matters related to the conveyance of shares held by the Company. The
authorisation was exercised as described below under the heading "Share-based
Incentive Plan". On 30 September 2011 the Board of Directors had outstanding
authorisation to convey 397,100 Orion Corporation B shares held by the Company.
The Board of Directors is not authorised to increase the share capital or to
issue bonds with warrants or convertible bonds or stock options.
Share-based Incentive Plan
In February 2010 the Board of Directors of Orion Corporation decided on a share-
based incentive plan for the Group key persons. The Plan includes earning
periods and the Board of Directors will annually decide on the beginning and
duration of the earning periods in 2010, 2011 and 2012. The Board of Directors
will decide on the earnings criteria and on targets to be established for them
at the beginning of each earning period. The target group of the Plan consists
of approximately 30 people. The total maximum amount of rewards to be paid on
the basis of the Plan is 500,000 Orion Corporation B shares and a cash payment
corresponding to the value of the shares.
On 1 March 2011 Orion transferred altogether 102,900 Orion Corporation B shares
held by the Company as a share bonus for 2010 to the key persons employed by the
Group and belonging to the Share-based Incentive Plan of the Group. The transfer
was based on the authorisation by the Annual General Meeting on 24 March 2010.
Share ownership
At the end of September 2011 Orion had a total of 56,539 (57,293) registered
shareholders, of whom 95% (95%) were private individuals holding 49% (52%) of
the entire share stock and 65% (64%) of the total votes. There were altogether
45 (37) million nominee-registered shares, which is 32% (26%) of all shares, and
they conferred entitlement to 6% (4%) of the votes.
At the end of September 2011 Orion held 413,754 (516,654) B shares as treasury
shares, which is 0.3% (0.4%) of the Company's total share stock and 0.04%
(0.05%) of the total votes.
The total number of Orion B shares owned by mutual funds under the management of
Capital Research and Management Company increased to more than one-twentieth
(1/20) of the total number of Orion Corporation shares.
Personnel
The average number of employees in the Orion Group in January-September 2011 was
3,300 (3,141). At the end of September 2011 the Group had a total of 3,410
(3,124) employees, of whom 2,680 (2,473) worked in Finland and 730 (651) outside
Finland. The number of employees increased mainly in production as production
volumes increased.
Salaries and other personnel expenses in January-September 2011 totalled EUR
134 (123) million.
Significant legal proceedings
Legal proceedings against the Sandoz companies
On 4 September 2009 Orion Corporation and Hospira, Inc. filed together a patent
infringement lawsuit in the United States against Sandoz International GmbH and
Sandoz Inc. to enforce their patents valid in the United States. Sandoz Canada
Inc. has since been added as a defendant in the lawsuit. The legal proceedings
concern Orion's US Patent No. 4,910,214 and Orion's and Hospira's commonly owned
US Patent No. 6,716,867.
Sandoz Inc. has sought authorisation to produce and market in the United States
a generic version of Orion's proprietary drug Precedex(®) (dexmedetomidine
hydrochloride 100 µg/ml), which is marketed in the United States by Orion's
licensee Hospira.
Orion expects the costs of the legal proceedings against the Sandoz companies to
be substantially less than the costs of the entacapone patent litigation that
had previously been pending in the United States.
Legal proceedings against Caraco Pharmaceutical Laboratories, Ltd.
On 12 November 2010 Orion Corporation and Hospira, Inc. jointly filed a patent
infringement lawsuit in the United States against Caraco Pharmaceutical
Laboratories, Ltd. to enforce Orion's and Hospira's joint patent No. 6,716,867
valid in the United States. 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. According to the schedule
confirmed by the court, the main hearing of the case will commence on 13
November 2012.
Legal proceedings against Mylan Pharmaceuticals Inc.
On 24 January 2011 Orion Corporation filed a patent infringement lawsuit in the
United States against Mylan Pharmaceuticals Inc. to enforce its US patent No.
5,446,194.
Mylan intends to market in the United States a generic version of entacapone
tablets with strength 200 mg like Orion's Comtan(®) proprietary drug. Comtan is
used as an adjunct to levodopa/carbidopa therapy to treat patients with
idiopathic Parkinson's disease who experience the signs and symptoms of end-of-
dose "wearing-off." Novartis is Orion's exclusive licensee for marketing the
drug Comtan in the United States.
Business Reviews
Pharmaceuticals
Review of human pharmaceuticals market
According to statistics collected by Finnish Pharmaceutical Data Ltd, Finnish
wholesale of human pharmaceuticals in January-September 2011 totalled EUR 1,453
(1,415) million, up by 3% on the comparative period of the previous year.
Finland is the most important individual market for Orion, generating about one-
quarter of the total net sales. Orion was able to increase its sales faster than
the markets as a whole, so it strengthened its position as leader in marketing
pharmaceuticals in Finland. According to statistics collected by Finnish
Pharmaceutical Data Ltd, Orion's wholesale of human pharmaceuticals in Finland
in January-September amounted to EUR 150 (141) million, up by 6% compared with
the corresponding period in the previous year. Orion's market share in Finnish
pharmaceutical markets was 10% (10%).
According to IMS Health pharmaceutical sales statistics, in the 12-month period
ending in June 2011 the total sales of Parkinson's drugs in the United States
were down by 26% at USD 758 million (USD 1,025 million in the previous 12-month
period). The decrease in in-market sales was due to commencement of generic
competition in certain products. The five largest European markets for
Parkinson's disease drugs were Germany, the United Kingdom, France, Spain and
Italy. In these countries, the combined sales of Parkinson's drugs in the 12-
month period ending in June 2011 totalled EUR 1,015 (991) million, and the
average market growth was 2%.
The most important individual therapy area for Orion is still the treatment of
Parkinson's disease. Orion's Parkinson's drugs account for just under one-third
of the Group's net sales. Sales of Orion's Parkinson's drugs continued to grow
well and clearly better than the market as a whole in the United States and in
Japan. According to IMS Health pharmaceutical sales statistics, in the 12-month
period ending in June 2011, sales of Orion's Parkinson's drugs in the United
States totalled USD 181 (180) million. Sales were up by 2% at a total of EUR
158 (154) million in the five largest markets in Europe, and up by 32% at EUR
52 (39) million in Japan. The market share of Orion's Parkinson's drugs was 24%
in the United States, on average 16% in the five largest European markets and
10% in Japan.
According to IMS Health pharmaceutical sales statistics, sales of Orion's
Precedex(®) intensive care sedative (dexmedetomidine) were up by 38% at USD 180
million in the 12-month period ending in June 2011 (USD 131 million in the
previous 12-month period). About four-fifths of the sales amounting to USD 146
(113) million were in the United States, where Precedex sales grew by 29%.
Net sales and operating profit of the Pharmaceuticals business
Net sales of the Pharmaceuticals business in January-September 2011 were EUR
647 (603) million, up by 7% on the comparative period of the previous year. The
operating profit of the Pharmaceuticals business was up by 12% at EUR 226 (202)
million. The operating profit of the Pharmaceuticals business was 35% (34%) of
the segment's net sales.
Net sales of Orion's top ten pharmaceuticals in January-September 2011 were up
by 5% at EUR 349 (331) million. They accounted for 54% (55%) of the total net
sales of the Pharmaceuticals business.
Net sales of the products based on own in-house R&D were up by 3% at EUR 310
(300) million in January-September 2011. These products accounted for about 48%
(50%) of the net sales of the Pharmaceuticals business.
Proprietary Products
The product portfolio of Proprietary Products consists of patented prescription
products in three therapy areas: central nervous system diseases, oncology and
critical care, and Easyhaler(®) pulmonary drugs.
Net sales of Proprietary Products in January-September 2011 were up by 9% at EUR
306 (281) 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 January-September 2011 totalled EUR 202
(193) million. The net sales of Parkinson's drugs were up by 5% and accounted
for 31% (32%) of the total net sales of the Pharmaceuticals business. Net sales
from deliveries of Stalevo and Comtan to Novartis were up by 10% at a total of
EUR 130 (118) million. Deliveries of Stalevo to Novartis increased by 8%, and
deliveries of Comtan by 14%. Total net sales generated by Stalevo and Comtess in
Orion's own sales organisation totalled EUR 72 (75) million. Sales through
Orion's own sales organisation totalled EUR 60 (62) million for Stalevo and EUR
12 (13) million for Comtess.
The US Food and Drug Administration (FDA) has an ongoing safety review of
Stalevo, which began in spring 2009. Orion is assisting the FDA in undertaking
the safety review. The FDA has requested additional data based on databases
concerning the significance of the results of the STRIDE-PD study, and
consequently Orion and Novartis have decided to undertake two epidemiological
studies, which must be completed by July 2012.
Net sales of Simdax(®), a drug for acute decompensated heart failure, were up by
5% at EUR 31 (30) million in January-September 2011.
Net sales of the Easyhaler(®) product family for treatment of asthma and chronic
obstructive pulmonary disease were up by 11% in January-September 2011 at EUR
23 (21) million. In August Orion announced that it had entered into a
collaboration agreement with Nycomed for co-marketing of Easyhaler(®
)combination products under development in the major European countries, and an
exclusive licensing and distribution arrangement in the Middle East and North
Africa region. Both companies will market the products under the Easyhaler
umbrella brand.
Net sales of the Precedex(®) intensive care sedative (dexmedetomidine) were up
by 12% in January-September 2011 at EUR 22 (20) million. In the United States
and markets outside Europe the sedative is sold by Orion's partner Hospira. US
markets account for about four-fifths of net sales of Precedex.
In September Orion's new dexdor(®) intensive care sedative (dexmedetomidine)
gained centralised marketing authorisation covering all 27 member states of the
European Union from the European Commission. Orion has started launching
dexdor(®) and it is already available in Germany, Austria, Denmark, Sweden,
Finland, the United Kingdom and Ireland. The product will be launched in most
European countries during 2012 as pricing and reimbursement processes progress
country by country.
Specialty Products
Net sales of the Specialty Products business division's off-patent, i.e.
generic, prescription drugs and self-care products in January-September 2011
were up by 8% at EUR 238 (222) million. Net sales of the business division in
markets outside Finland were up by 9% compared with the corresponding period in
the previous year. Growth slowed in many markets during the third quarter. The
number of launches of generic prescription drugs and self-care products remained
high.
Net sales of Orion's human pharmaceuticals in Finland were up by 6% at EUR 164
(154) million in January-September 2011. Specialty Products accounted for the
majority of sales. In Finland Orion has a broad product portfolio, particularly
in substitutable prescription drugs, and a competitive self-care product
portfolio.
Net sales of Orion's human pharmaceuticals in Eastern Europe in January-
September 2011 were up by 14% at EUR 40 (35) million. Specialty Products account
for the majority of sales in the region.
Animal Health
Net sales of the Animal Health business division in January-September 2011
remained similar to the comparative period at EUR 49 (49) million. Net sales of
the animal sedatives at EUR 14 million accounted for 30% (33%) of the division's
net sales. Orion's animal sedatives are Dexdomitor(®) (dexmedetomidine),
Domitor(®) (medetomidine), Domosedan(®) (detomidine) and Antisedan(®)
(atipamezole).
According to statistics collected by Pharma Industry Finland, the Finnish market
for veterinary drugs was up by 3% at about EUR 39 (38) million in January-
September 2011. Orion was the second-largest marketer, with a market share of
20% (20%).
Fermion
Fermion manufactures active pharmaceutical ingredients for Orion and other
pharmaceutical companies. Its product range comprises nearly 30 pharmaceutical
ingredients. Fermion's net sales in January-September 2011 excluding
pharmaceutical ingredients supplied for Orion's own use were EUR 32 (34) million
and accounted for about two-thirds of Fermion's entire net sales. Several key
products performed well, even though competition in the markets remained
intense.
Research and development projects
The Group's R&D expenses in January-September 2011 totalled EUR 62 (59) million,
of which the Pharmaceuticals business accounted for EUR 58 (55) million. The
Group's R&D expenses accounted for 9% (9%) of the Group's net sales. R&D
expenses also include expenses relating to development of the current portfolio.
Orion has ongoing projects to broaden the range of the inhalable Easyhaler(®)
drugs product family. Orion is developing a budesonide-formoterol formulation
that combines budesonide as an anti-inflammatory agent and formoterol as a long-
acting bronchodilator. Results from bioequivalence studies are anticipated in
early 2012. In addition, Orion has another Easyhaler research programme in
progress to develop a fluticasone-salmeterol formulation. In this formulation
fluticasone acts as an anti-inflammatory agent and salmeterol acts as a long-
acting bronchodilator.
Orion is collaborating with Novartis to develop Stalevo(®) drug for the Japanese
market. The timeline for regulatory submission is under evaluation by Novartis.
Orion is continuing to develop an androgen receptor antagonist for the treatment
of advanced prostate cancer jointly with Endo Pharmaceuticals Inc. with the
objective of approval of the drug globally. Clinical trials commenced in the
first quarter of the current year in Europe.
Orion has Phase II clinical trials with the alpha 2(c) receptor antagonist in
progress. The trials are investigating the efficacy and safety of the drug
candidate in treating Alzheimer's disease and Raynaud's phenomenon.
Orion is developing a new more effective levodopa product based on optimised new
formulations and doses of known compounds. Product development is in the
clinical trials phase.
In addition, Orion has several projects in the early research phase
investigating prostate cancer, neuropathic pain, Parkinson's disease and
Alzheimer's disease, among others.
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-September 2011 were up by 7% at EUR 37 (34)
million.
QuikRead(®) infection tests remained the main product, with sales continuing
strong in the review period. Further progress was achieved in sales in the
Nordic countries and, for example, China and the Czech Republic. In July Orion
Diagnostica strengthened its research and product development base by acquiring
new early-phase technology through purchasing all the shares of English
technology company GeneForm Technologies Ltd.
The operating profit of the Diagnostics business was down by 17% at EUR 4.2
(5.1) million and accounted for 12% (15%) of the segment's net sales. The profit
decreased because expenditure on product development and marketing increased and
the margin structure of the product sales portfolio was weaker than in the
comparative period.
Espoo, 25 October 2011
Board of Directors of Orion Corporation
Orion Corporation
Timo Lappalainen Jari Karlson
President and CEO CFO
Tables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million Q3/11 Q3/10 Change % Q1-Q3/11 Q1-Q3/10 Change % 2010
--------------------------------------------------------------------------------
Net sales 210.7 213.2 -1.2% 681.8 635.0 +7.4% 849.9
--------------------------------------------------------------------------------
Cost of goods sold -72.4 -71.6 +1.1% -219.8 -209.4 +5.0% -283.2
--------------------------------------------------------------------------------
Gross profit 138.3 141.6 -2.3% 462.0 425.6 +8.5% 566.8
--------------------------------------------------------------------------------
Other operating income -0.5 1.7 -127.3% 2.5 -2.9 +188.6% 1.2
and expenses
--------------------------------------------------------------------------------
Selling and marketing -44.6 -45.2 -1.4% -151.2 -134.0 +12.8% -188.9
expenses
--------------------------------------------------------------------------------
R&D expenses -19.4 -19.5 -0.6% -62.1 -58.9 +5.4% -85.5
--------------------------------------------------------------------------------
Administrative expenses -8.4 -8.0 +5.5% -27.9 -28.2 -1.2% -39.3
--------------------------------------------------------------------------------
Operating profit 65.4 70.6 -7.4% 223.4 201.6 +10.8% 254.2
--------------------------------------------------------------------------------
Finance income 0.5 0.7 -25.5% 3.1 3.4 -7.6% 4.2
--------------------------------------------------------------------------------
Finance expenses -1.0 -1.3 -26.4% -4.1 -4.8 -14.5% -5.9
--------------------------------------------------------------------------------
Profit before taxes 65.0 70.0 -7.2% 222.4 200.2 +11.1% 252.6
--------------------------------------------------------------------------------
Income tax expense -17.1 -18.4 -6.8% -58.1 -52.2 +11.3% -67.9
--------------------------------------------------------------------------------
Profit for the period 47.8 51.6 -7.4% 164.3 148.0 +11.0% 184.7
--------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME INCLUDING
TAX EFFECTS
--------------------------------------------------------------------------------
Change in value of cash -0.2 0.3 -154.5% -1.1 0.3 -424.7% 1.6
flow hedges
--------------------------------------------------------------------------------
Change in value of 0.0 -0.2
available-for-sale
financial assets
--------------------------------------------------------------------------------
Translation differences 0.6 -0.9 +162.9% -0.5 1.2 -138.4% 1.3
--------------------------------------------------------------------------------
Other comprehensive 0.4 -0.6 +163.2% -1.8 1.5 -216.2% 2.9
income net of tax
--------------------------------------------------------------------------------
Comprehensive income for 48.2 51.0 -5.5% 162.5 149.5 +8.7% 187.6
the period including tax
effects
--------------------------------------------------------------------------------
PROFIT ATTRIBUTABLE TO:
--------------------------------------------------------------------------------
Owners of the parent 47.8 51.6 -7.4% 164.3 148.0 +11.0% 184.7
company
--------------------------------------------------------------------------------
Non-controlling interests 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
--------------------------------------------------------------------------------
Owners of the parent 48.2 51.0 -5.5% 162.5 149.5 +8.7% 187.6
company
--------------------------------------------------------------------------------
Non-controlling interests 0.0 0.0 0.0 0.0 0.0
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Basic earnings per share, 0.34 0.37 -7.3% 1.17 1.05 +11.1% 1.31
EUR(1))
--------------------------------------------------------------------------------
Diluted earnings per 0.34 0.37 -7.3% 1.17 1.05 +11.1% 1.31
share, EUR(1))
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Depreciation, 9.2 11.7 -21.9% 33.1 29.2 +13.3% 38.9
amortisation and
impairment
--------------------------------------------------------------------------------
Personnel expenses 40.3 38.8 +3.9% 134.3 123.3 +8.9% 170.3
--------------------------------------------------------------------------------
1) The figure has been calculated from the profit attributable to the owners of
the parent company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
EUR million 9/11 9/10 Change % 2010
---------------------------------------------------------
Property, plant and equipment 186.9 189.0 -1.1% 187.1
---------------------------------------------------------
Goodwill 13.5 13.5 13.5
---------------------------------------------------------
Intangible rights 67.8 64.1 +5.7% 65.3
---------------------------------------------------------
Other intangible assets 4.5 4.0 +12.8% 4.2
---------------------------------------------------------
Investments in associates 1.4 0.1 1.3
---------------------------------------------------------
Available-for-sale investments 1.2 1.0 +19.0% 1.0
---------------------------------------------------------
Pension asset 34.7 29.8 +16.4% 31.6
---------------------------------------------------------
Deferred tax assets 2.6 5.2 -50.6% 2.9
---------------------------------------------------------
Other non-current assets 1.8 0.9 +88.1% 2.4
---------------------------------------------------------
Non-current assets total 314.4 307.7 +2.2% 309.3
---------------------------------------------------------
---------------------------------------------------------
Inventories 147.7 127.5 +15.8% 131.1
---------------------------------------------------------
Trade receivables 134.4 122.5 +9.7% 118.3
---------------------------------------------------------
Other receivables 23.4 20.7 +13.0% 20.0
---------------------------------------------------------
Money market investments 77.7
---------------------------------------------------------
Cash and cash equivalents 87.0 115.4 -24.6% 89.5
---------------------------------------------------------
Current assets total 392.5 386.1 +1.7% 436.5
---------------------------------------------------------
---------------------------------------------------------
Assets total 706.9 693.8 +1.9% 745.8
---------------------------------------------------------
EQUITY AND LIABILITIES
9/11 9/10 Change % 2010
EUR million
------------------------------------------------------------------------------
Share capital 92.2 92.2 92.2
------------------------------------------------------------------------------
Share premium 17.8 17.8
------------------------------------------------------------------------------
Expendable fund 0.5 8.9 -94.5% 8.9
------------------------------------------------------------------------------
Other reserves 18.1 0.4 1.6
------------------------------------------------------------------------------
Retained earnings 343.0 309.8 +10.7% 346.8
------------------------------------------------------------------------------
Equity attributable to owners of the parent company 453.8 429.1 +5.7% 467.4
------------------------------------------------------------------------------
Non-controlling interests 0.0 0.0 +19.7% 0.0
------------------------------------------------------------------------------
Equity total 453.8 429.2 +5.7% 467.4
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Deferred tax liabilities 44.3 42.2 +4.8% 44.8
------------------------------------------------------------------------------
Pension liability 0.7 0.8 -17.6% 0.7
------------------------------------------------------------------------------
Provisions 0.3 0.5 -44.3% 0.4
------------------------------------------------------------------------------
Interest-bearing non-current liabilities 76.8 98.1 -21.7% 87.5
------------------------------------------------------------------------------
Other non-current liabilities 0.1 0.1 -7.7% 0.1
------------------------------------------------------------------------------
Non-current liabilities total 122.1 141.7 -13.8% 133.6
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Trade payables 43.0 38.7 +11.2% 49.0
------------------------------------------------------------------------------
Income tax liabilities 11.3 17.0 -33.3% 12.7
------------------------------------------------------------------------------
Other current liabilities 53.5 44.1 +21.5% 60.6
------------------------------------------------------------------------------
Provisions 0.0 0.0
------------------------------------------------------------------------------
Interest-bearing current liabilities 23.1 23.2 -0.3% 22.5
------------------------------------------------------------------------------
Current liabilities total 131.0 122.9 +6.6% 144.8
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Liabilities total 253.1 264.6 -4.4% 278.4
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Equity and liabilities total 706.9 693.8 +1.9% 745.8
------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
a. Share capital
b. Share premium
c. Expendable fund
d. Other reserves
e. Translation differences
f. Retained earnings
g. Non-controlling interests
h. Equity total
Equity attributable to owners of the parent
company
-------------------------------------------------
EUR million a. b. c. d. e. f. g. h.
--------------------------------------------------------------------------------
Equity at 1 January 92.2 17.8 23.0 0.0 -5.7 311.7 0.0 439.1
2010
--------------------------------------------------------------------------------
Profit for the period 148.0 148.0
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Change in value of 0.3 0.3
cash flow hedges
--------------------------------------------------------------------------------
Translation 1.2 1.2
differences
--------------------------------------------------------------------------------
Transactions with owners and non-controlling interests:
--------------------------------------------------------------------------------
Dividend and capital -14.1 -141.0 -155.1
repayment
--------------------------------------------------------------------------------
Treasury shares -4.6
-4.6
--------------------------------------------------------------------------------
Share-based incentive 0.3 0.3
plan
--------------------------------------------------------------------------------
Equity at 30 92.2 17.8 8.9 0.4 -4.5 314.4 0.0 429.2
September 2010
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Equity at 1 January 92.2 17.8 8.9 1.6 -4.4 351.2 0.0 467.4
2011
--------------------------------------------------------------------------------
Profit for the period 164.3 164.3
--------------------------------------------------------------------------------
Other comprehensive
income:
--------------------------------------------------------------------------------
Change in value of -1.1 -1.1
cash flow hedges
--------------------------------------------------------------------------------
Change in value of -0.2 -0.2
available-for-sale
financial assets
--------------------------------------------------------------------------------
Translation -0.5 -0.5
differences
--------------------------------------------------------------------------------
Transactions with owners and non-controlling
interests:
--------------------------------------------------------------------------------
Dividend and capital -8.5 -169.0 -177.5
repayment
--------------------------------------------------------------------------------
Share-based incentive 1.5 1.5
plan
--------------------------------------------------------------------------------
Transfer between -17.8 17.8
different components
of equity
--------------------------------------------------------------------------------
Other adjustments -0.2 -0.2
0.0
--------------------------------------------------------------------------------
Equity at 30 92.2 0.0 0.5 18.1 -4.9 347.8 0.0 453.8
September 2011
--------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million Q1-Q3/11 Q1-Q3/10 2010
--------------------------------------------------------------------------------
Operating profit 223.4 201.6 254.2
--------------------------------------------------------------------------------
Adjustments 32.7 28.9 33.7
--------------------------------------------------------------------------------
Change in working capital -52.6 -54.9 -27.6
--------------------------------------------------------------------------------
Interest paid -4.0 -4.1 -5.7
--------------------------------------------------------------------------------
Interest received 3.0 3.6 4.3
--------------------------------------------------------------------------------
Dividends received 0.1 0.1 0.1
--------------------------------------------------------------------------------
Income taxes paid -60.1 -34.4 -49.9
--------------------------------------------------------------------------------
Total net cash flow from operating activities 142.7 140.9 209.1
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Investments in property, plant and equipment -17.5 -17.0 -22.2
--------------------------------------------------------------------------------
Investments in intangible assets -18.0 -9.9 -13.3
--------------------------------------------------------------------------------
Acquisition of an associate -0.0 -1.3
--------------------------------------------------------------------------------
Sale of a subsidiary less cash and cash equivalents at 0.3 4.5
sale date
--------------------------------------------------------------------------------
Sales of property, plant and equipment
and available-for-sale investments 0.7 0.8 1.2
--------------------------------------------------------------------------------
Sales of intangible assets 0.0 0.2 0.2
--------------------------------------------------------------------------------
Total net cash flow from investing activities -34.5 -25.9 -30.9
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Short-term loans raised 0.7 0.6 0.6
--------------------------------------------------------------------------------
Repayments of short-term loans -0.9 -1.0 -2.0
--------------------------------------------------------------------------------
Repayments of long-term loans -10.5 -10.5 -21.0
--------------------------------------------------------------------------------
Repurchase of own shares -4.6 -4.6
--------------------------------------------------------------------------------
Dividends paid and other distribution of profits -177.4 -155.2 -155.3
--------------------------------------------------------------------------------
Total net cash flow from financing activities -188.1 -170.7 -182.2
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Net change in cash, cash equivalents and money market -79.9 -55.7 -4.0
investments
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Cash, cash equivalents and money market investments at 167.2 170.5 170.5
the beginning of the period
--------------------------------------------------------------------------------
Foreign exchange differences -0.3 0.6 0.7
--------------------------------------------------------------------------------
Net change in cash, cash equivalents and money market -79.9 -55.7 -4.0
investments
--------------------------------------------------------------------------------
Cash, cash equivalents and money market investments at 87.0 115.4 167.2
the end of the period
--------------------------------------------------------------------------------
Reconciliation of cash and cash equivalents in
Statement of Financial Position
--------------------------------------------------------------------------------
Cash and cash equivalents at 30 September in Statement 87.0 115.4 89.5
of Financial Position
--------------------------------------------------------------------------------
Money market investments at 30 September 77.7
--------------------------------------------------------------------------------
Cash and cash equivalents in Statement of Cash Flows 87.0 115.4 167.2
--------------------------------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 9/11 9/10 2010
----------------------------------------------------------------
Carrying amount at the beginning of the period 187.1 192.0 192.0
----------------------------------------------------------------
Additions 19.6 17.2 23.3
----------------------------------------------------------------
Sale of real estate limited company -0.5
----------------------------------------------------------------
Other disposals -0.8 -0.8 -1.1
----------------------------------------------------------------
Depreciation and impairments -18.9 -19.5 -26.6
----------------------------------------------------------------
Carrying amount at the end of the period 186.9 189.0 187.1
----------------------------------------------------------------
CHANGES IN INTANGIBLE ASSETS (EXCLUDING GOODWILL)
EUR million 9/11 9/10 2010
---------------------------------------------------------------
Carrying amount at the beginning of the period 69.5 67.0 67.0
---------------------------------------------------------------
Additions 17.1 10.7 14.6
---------------------------------------------------------------
Disposals -0.0 -0.0
---------------------------------------------------------------
Depreciation and impairments -14.2 -9.8 -12.3
---------------------------------------------------------------
Carrying amount at the end of the period 72.3 68.1 69.5
---------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
EUR million 9/11 9/10 2010
----------------------------------------------------------------------
CONTINGENCIES FOR OWN LIABILITIES
----------------------------------------------------------------------
Mortgages on land and buildings 41.0 41.0 41.0
----------------------------------------------------------------------
of which those to Orion Pension Fund 9.0 9.0 9.0
----------------------------------------------------------------------
Guarantees 1.2 1.1 1.3
----------------------------------------------------------------------
OTHER LIABILITIES
----------------------------------------------------------------------
Leasing liabilities (excluding finance lease contracts) 3.5 4.1 4.1
----------------------------------------------------------------------
Other liabilities 0.3 0.3 0.3
----------------------------------------------------------------------
DERIVATIVES
EUR million 9/11 9/10 2010
----------------------------------------------------------------------
FORWARD EXCHANGE CONTRACTS AND CURRENCY SWAPS
----------------------------------------------------------------------
Fair value, EUR million -0.2 0.3 -0.8
----------------------------------------------------------------------
Nominal value, EUR million 21.4 55.6 56.1
----------------------------------------------------------------------
CURRENCY OPTIONS
----------------------------------------------------------------------
Fair value, EUR million -0.2 -0.0
----------------------------------------------------------------------
Nominal value, EUR million 43.7 33.4
----------------------------------------------------------------------
ELECTRICITY FORWARD CONTRACTS
----------------------------------------------------------------------
Fair value, EUR million 0.4 0.3 1.9
----------------------------------------------------------------------
Nominal value, GWh 156 144 171
----------------------------------------------------------------------
RELATED PARTY TRANSACTIONS
EUR million Q1-Q3/11 Q1-Q3/10 2010
-------------------------------------------------------
Management's employment benefits 4.3 3.6 4.4
-------------------------------------------------------
Operating segment performance
NET SALES BY BUSINESS DIVISIONS
EUR million Q3/11 Q3/10 Change % Q1-Q3/11 Q1-Q3/10 Change % 2010
--------------------------------------------------------------------------------
Pharmaceuticals 199.8 203.2 -1.7% 646.8 602.5 +7.4% 806.2
--------------------------------------------------------------------------------
Proprietary 91.9 96.7 -5.0% 305.5 281.0 +8.7% 370.9
Products
--------------------------------------------------------------------------------
Specialty 80.5 77.8 +3.4% 238.3 221.5 +7.6% 298.6
Products
--------------------------------------------------------------------------------
Animal Health 14.0 16.4 -14.2% 48.5 49.1 -1.2% 67.5
--------------------------------------------------------------------------------
Fermion 6.6 8.2 -19.5% 31.5 34.1 -7.7% 44.9
--------------------------------------------------------------------------------
Contract 6.9 4.2 +63.7% 22.9 16.8 +36.3% 24.4
manufacturing
and other
--------------------------------------------------------------------------------
Diagnostics 11.3 10.5 +8.2% 36.7 34.3 +6.9% 46.1
--------------------------------------------------------------------------------
Group items -0.5 -0.5 -7.0% -1.6 -1.8 -8.5% -2.4
--------------------------------------------------------------------------------
Group total 210.7 213.2 -1.2% 681.8 635.0 +7.4% 849.9
--------------------------------------------------------------------------------
OPERATING PROFIT BY BUSINESS AREAS
EUR million Q3/11 Q3/10 Change % Q1-Q3/11 Q1-Q3/10 Change % 2010
---------------------------------------------------------------------
Pharmaceuticals 66.8 71.5 -6.6% 226.1 202.4 +11.8% 252.2
---------------------------------------------------------------------
Diagnostics 0.8 1.0 -18.8% 4.2 5.1 -17.4% 6.1
---------------------------------------------------------------------
Group items -2.1 -1.8 +17.9% -7.0 -5.8 +19.9% -4.1
---------------------------------------------------------------------
Group total 65.4 70.6 -7.4% 223.4 201.6 +10.8% 254.2
---------------------------------------------------------------------
NET SALES BY ANNUAL QUARTERS
2011 2010 2009
+-----------------+-----------------------+-----+
EUR million | Q3 Q2 Q1| Q4 Q3 Q2 Q1| Q4|
---------------+-----------------+-----------------------+-----+
Pharmaceuticals|199.8 215.9 231.0|203.7 203.2 196.0 203.3|181.9|
---------------+-----------------+-----------------------+-----+
Diagnostics | 11.3 11.7 13.7| 11.8 10.5 12.1 11.7| 12.0|
---------------+-----------------+-----------------------+-----+
Group items | -0.5 -0.6 -0.6| -0.6 -0.5 -0.7 -0.6| -0.6|
---------------+-----------------+-----------------------+-----+
Group total |210.7 227.0 244.1|214.9 213.2 207.4 214.5|193.3|
---------------+-----------------+-----------------------+-----+
OPERATING PROFIT BY ANNUAL QUARTERS
2011 2010 2009
+--------------+-------------------+----+
EUR million | Q3 Q2 Q1| Q4 Q3 Q2 Q1| Q4|
---------------+--------------+-------------------+----+
Pharmaceuticals|66.8 67.1 92.3|49.9 71.5 60.4 70.5|45.5|
---------------+--------------+-------------------+----+
Diagnostics | 0.8 0.7 2.8| 1.0 1.0 1.9 2.2| 1.2|
---------------+--------------+-------------------+----+
Group items |-2.1 -2.7 -2.1| 1.7 -1.8 -2.3 -1.7|-2.8|
---------------+--------------+-------------------+----+
Group total |65.4 65.1 92.9|52.6 70.6 60.0 71.0|43.9|
---------------+--------------+-------------------+----+
GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS
2011 2010 2009
+-----------------+-----------------------+-----+
EUR million | Q3 Q2 Q1| Q4 Q3 Q2 Q1| Q4|
-------------+-----------------+-----------------------+-----+
Finland | 60.1 59.8 59.1| 61.0 57.6 53.7 56.9| 59.2|
-------------+-----------------+-----------------------+-----+
Scandinavia | 28.1 30.3 33.4| 28.6 28.4 28.1 29.0| 25.9|
-------------+-----------------+-----------------------+-----+
Other Europe | 71.5 77.2 80.2| 77.4 70.0 72.7 72.1| 72.8|
-------------+-----------------+-----------------------+-----+
North America| 24.0 29.2 38.7| 22.1 31.1 26.3 30.3| 12.1|
-------------+-----------------+-----------------------+-----+
Other markets| 26.9 30.6 32.8| 25.8 26.0 26.7 26.1| 23.4|
-------------+-----------------+-----------------------+-----+
Group total |210.7 227.0 244.1|214.9 213.2 207.4 214.5|193.3|
-------------+-----------------+-----------------------+-----+
Business reviews
KEY FIGURES FOR PHARMACEUTICALS BUSINESS
EUR million Q3/11 Q3/10 Change % Q1-Q3/11 Q1-Q3/10 Change % 2010
--------------------------------------------------------------------------------
Net sales 199.8 203.2 -1.7% 646.8 602.5 +7.4% 806.2
--------------------------------------------------------------------------------
Operating profit 66.8 71.5 -6.6% 226.1 202.4 +11.8% 252.2
--------------------------------------------------------------------------------
% of net sales 33.4% 35.2% 35.0% 33.6% 31.3%
--------------------------------------------------------------------------------
R&D expenses 17.9 18.0 -0.5% 57.5 54.5 +5.6% 79.5
--------------------------------------------------------------------------------
% of net sales 9.0% 8.9% 8.9% 9.0% 9.9%
--------------------------------------------------------------------------------
Capital expenditure 10.2 9.2 +10.8% 26.4 25.9 +1.8% 36.2
--------------------------------------------------------------------------------
% of net sales 5.1% 4.5% 4.1% 4.3% 4.5%
--------------------------------------------------------------------------------
Sales revenue from 92.7 102.9 -9.9% 309.7 299.5 +3.4% 397.1
proprietary products
--------------------------------------------------------------------------------
Assets 558.0 525.4 +6.2% 527.7
--------------------------------------------------------------------------------
Liabilities 90.1 77.3 +16.6% 102.1
--------------------------------------------------------------------------------
Personnel at the end of 3,070 2,801 2,802
the period
--------------------------------------------------------------------------------
NET SALES OF ORION'S TOP 10 PHARMACEUTICAL PRODUCTS
EUR million Q3/11 Q3/10 Change % Q1-Q3/11 Q1-Q3/10 Change % 2010
--------------------------------------------------------------------------------
Stalevo(®), Comtess(®) and 59.8 67.8 -11.7% 202.4 193.3 +4.7% 252.7
Comtan(®)
(Parkinson's disease)
--------------------------------------------------------------------------------
Simdax(®) (acute 10.1 9.6 +4.5% 31.3 29.8 +4.9% 39.9
decompensated heart
failure)
--------------------------------------------------------------------------------
Easyhaler(®) product 6.3 6.2 +1.3% 23.1 20.8 +10.8% 28.1
family (asthma, COPD)
--------------------------------------------------------------------------------
Precedex(®) (intensive 8.0 7.1 +12.7% 22.4 20.0 +12.0% 27.2
care sedative)
--------------------------------------------------------------------------------
Burana(®) (inflammatory 6.0 5.7 +5.6% 17.4 15.8 +10.2% 21.5
pain)
--------------------------------------------------------------------------------
Dexdomitor(®), Domitor(®), 3.3 5.3 -37.5% 14.3 16.2 -11.3% 24.2
Domosedan(®) and
Antisedan(®) (animal
sedatives)
--------------------------------------------------------------------------------
Marevan(®) (anticoagulant) 3.6 3.3 +9.4% 11.6 9.7 +20.2% 13.1
--------------------------------------------------------------------------------
Divina(®) range 3.0 3.0 -0.8% 9.8 9.9 -0.6% 13.3
(menopausal symptoms)
--------------------------------------------------------------------------------
Enanton(®) (prostate 2.9 3.2 -7.8% 9.1 9.6 -5.3% 13.0
cancer)
--------------------------------------------------------------------------------
Solomet(®) (inflammatory 2.7 1.6 +67.2% 7.6 6.1 +24.4% 8.6
diseases)
--------------------------------------------------------------------------------
Total 105.7 112.8 -6.3% 349.0 331.2 +5.4% 441.5
--------------------------------------------------------------------------------
Share of pharmaceutical 53% 56% 54% 55% 55%
net sales
--------------------------------------------------------------------------------
KEY FIGURES FOR DIAGNOSTICS BUSINESS
EUR million Q3/11 Q3/10 Change % Q1-Q3/11 Q1-Q3/10 Change % 2010
--------------------------------------------------------------------------------
Net sales 11.3 10.5 +8.2% 36.7 34.3 +6.9% 46.1
--------------------------------------------------------------------------------
Operating profit 0.8 1.0 -18.8% 4.2 5.1 -17.4% 6.1
--------------------------------------------------------------------------------
% of net sales 7.1% 9.5% 11.5% 14.9% 13.3%
--------------------------------------------------------------------------------
R&D expenses 1.5 1.5 -1.4% 4.6 4.4 +3.8% 6.0
--------------------------------------------------------------------------------
% of net sales 13.1% 14.4% 12.6% 13.0% 13.1%
--------------------------------------------------------------------------------
Capital expenditure 9.1 0.9 +936.7% 10.1 1.8 +455.8% 2.5
--------------------------------------------------------------------------------
% of net sales 80.7% 8.4% 27.5% 5.3% 5.5%
--------------------------------------------------------------------------------
Assets 44.4 33.3 +33.2% 34.2
--------------------------------------------------------------------------------
Liabilities 15.2 5.5 +176.6% 9.1
--------------------------------------------------------------------------------
Personnel at the end of 317 298 302
the period
--------------------------------------------------------------------------------
Information on Orion's shares
BASIC SHARE INFORMATION 30 SEPTEMBER 2011
A shares B shares Total
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Trading code on NASDAQ OMX Helsinki ORNAV ORNBV
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Listing day 1 Jul 2006 1 Jul 2006
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ISIN code FI0009014369 FI0009014377
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GICS code 35202010 35202010
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Reuters code ORNAV.HE ORNBV.HE
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Bloomberg code ORNAV.FH ORNBV.FH
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Share capital, EUR million 29.5 62.7 92.2
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Counter book value per share, EUR 0.65 0.65
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Total number of shares 45,247,646 96,010,182 141,257,828
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% of total share stock 32% 68% 100%
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Number of treasury shares 413,754 413,754
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Total number of shares excluding 45,247,646 95,596,428 140,844,074
treasury shares
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Minimum number of shares 1
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Maximum number of A and B shares, and 500,000,000 1,000,000,000 1,000,000,000
maximum
number of all shares
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Votes per share 20 1
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Number of votes excluding treasury 904,952,920 95,596,428 1,000,549,348
shares
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% of total votes 90% 10% 100%
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Total number of shareholders 19,157 43,870 56,539
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A shares and B shares confer equal rights to the Company's assets and dividends.
INFORMATION ON TRADING 1 JANUARY - 30 SEPTEMBER 2011
A shares B shares Total
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Shares traded 3,701,539 60,896,993 64,598,532
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% of the total number of shares 7.9% 64.5% 45.7%
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Trading volume, EUR million 60.8 1,001.4 1,062.2
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Closing quotation on 31 Dec 2010, EUR 16.40 16.37
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Lowest quotation, EUR (A and B 9 August 2011) 13.10 13.19
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Average quotation, EUR 16.42 16.44
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Highest quotation, EUR (A 3 June, B 1 June 2011) 18.05 18.14
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Closing quotation on 30 September 2011, EUR 15.20 15.14
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Market capitalisation on 30 September 2011 687.8 1,447.3 2,135.1
excluding treasury shares, EUR million
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PERFORMANCE PER SHARE
Q3/11 Q3/10 Change % Q1-Q3/11 Q1-Q2/10 Change % 2010
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Basic earnings per 0.34 0.37 -7.3% 1.17 1.05 +11.1% 1.31
share, EUR
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Diluted earnings per 0.34 0.37 -7.3% 1.17 1.05 +11.1% 1.31
share, EUR
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Cash flow per share 0.23 0.34 -32.5% 0.77 0.82 -5.8% 1.26
before financial
items, EUR
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Equity per share, 3.22 3.05 +5.7% 3.32
EUR
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Average number of 140,844 140,751 140,821 140,977 140,917
shares excluding
treasury shares,
1,000 shares
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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 Interim Report has been prepared in accordance with IAS 34 Interim
Financial Reporting standard applying the same accounting policies as for the
Financial Statements 2010. In addition, the following new standards,
interpretations and amendments to existing standards and interpretations
endorsed by the EU have been adopted as of 1 January 2011. However, they do not
have material effects on the Consolidated Financial Statements.
* IAS 24 (Revised), Related Party Disclosures
* IAS 32 (Amendment), Financial Instruments: Presentation - Classification of
Rights Issues
* IFRIC 19, Extinguishing Financial Liabilities with Equity Instruments
* IFRIC 14 (Amendment), IAS 19, Prepayments of a Minimum Funding Requirement
IASB published changes to seven standards or interpretations in 2010 as part of
the annual improvements to standards. As of 1 January 2011 the Group has adopted
the following changes endorsed by the EU, but they do not have material effects
on the Consolidated Financial Statements.
* IFRS 3 (Amendments), Business Combinations
* IFRS 7 (Amendment), Financial Instruments: Financial Statement Disclosures
* IAS 1 (Amendment), Presentation of Financial Statements - Statement of
Changes in Equity
* IAS 27 (Amendment), Consolidated and Separate Financial Statements
* IAS 34 (Amendment), Interim Financial Reporting
* IFRIC 13 (Amendment), Customer Loyalty Programmes
The policies and calculation methods applied during the period can be found on
the Orion website at www.orion.fi/en/investors.
Other matters
The data in this financial review are not audited.
The figures in parentheses are for the comparative period of the previous year.
All the figures in this report have been rounded, which is why the total sums of
individual figures may differ from the total sums shown.
CALCULATION OF THE KEY FIGURES
Return on capital employed (ROCE),% Profit before taxes + Interest x 100
and other finance expenses
-----------------------------------
= Total assets - Non-interest-
bearing liabilities (average
during the period)
Return on equity (ROE),% x 100
Profit for the period
-----------------------------------
= Total equity (average during the
period)
Equity ratio,% Equity x 100
=-----------------------------------
Total assets - Advances received
Gearing,% Interest-bearing liabilities - x 100
= Cash and cash equivalents - Money
market investments
-----------------------------------
Equity
Earnings per share, EUR Profit available for the owners = of the parent company
-----------------------------------
Average number of shares during
the period, excluding treasury
shares
Cash flow per share before financial Cash flow from operating
items, EUR activities + Cash flow from
= investing activities
-----------------------------------
Average number of shares during
the period, excluding treasury
shares
Equity per share, EUR Equity of the owners of the
parent company
=-----------------------------------
Number of shares at the end of
the period, excluding treasury
shares
Average share price, EUR Total EUR value of shares traded
=-----------------------------------
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/
Orion is an innovative European R&D-based pharmaceutical and diagnostic company
with a special emphasis on developing medicinal treatments and diagnostic tests
for global markets. Orion develops, manufactures and markets human and
veterinary pharmaceuticals, active pharmaceutical ingredients and diagnostic
tests. Orion's pharmaceutical R&D focuses on the following core therapy areas:
central nervous system drugs, oncology and critical care drugs, and Easyhaler(®)
pulmonary drugs.
The Group's net sales in 2010 amounted to EUR 850 million. The Company invested
EUR 86 million in research and development. At the end of 2010, the Group had
about 3,100 employees, of whom 2,500 worked in Finland and the rest in other
countries. Orion's A and B shares are listed on NASDAQ OMX Helsinki.
[HUG#1557115]
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