ORION CORPORATION FINANCIAL STATEMENT RELEASE 2014 4 FEBRUARY 2015 at 12:00 noon
EET
Orion Group Financial Statement Release for 2014
Orion's net sales in 2014 totalled EUR 1,015 million (EUR 1,007 million in
2013).
* Operating profit was EUR 272 (268) million.
* Profit before taxes was EUR 268 (264) million.
* Equity ratio was 52% (54%).
* ROCE before taxes was 37% (39%).
* ROE after taxes was 41% (40%).
* Basic earnings per share were EUR 1.50 (1.46).
* Cash flow per share before financial items was EUR 1.72 (1.02).
* Board's proposal for dividend per share is EUR 1.30 (1.25).
* A dividend distribution target of distributing an annual dividend that in
the next few years will be at least EUR 1.20 per share and increasing the
dividend in the long term has been added to Orion's financial objectives.
* Orion estimates that in 2015 net sales will be slightly lower than in 2014.
Operating profit is estimated to exceed EUR 200 million.
ORION'S KEY FIGURES FOR THE REVIEW PERIOD
Q4/14 Q4/13 Change % 2014 2013 Change %
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Net sales, EUR million 255.3 272.6 -6.3% 1,015.3 1,006.9 +0.8%
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International operations, EUR
million. 175.7 201.1 -12.6% 719.8 732.3 -1.7%
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% of net sales 68.8% 73.8% 70.9% 72.7%
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Operating profit, EUR million 55.3 65.8 -16.1% 272.4 267.7 +1.8%
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% of net sales 21.7% 24.2% 26.8% 26.6%
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Profit before taxes, EUR million 53.8 64.5 -16.5% 267.8 264.0 +1.4%
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% of net sales 21.1% 23.6% 26.4% 26.2%
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Income tax expense, EUR million 13.0 8.8 +47.9% 56.6 57.8 -2.2%
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R&D expenses, EUR million 28.3 29.7 -4.9% 106.2 101.9 +4.2%
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% of net sales 11.1% 10.9% 10.5% 10.1%
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Capital expenditure, EUR million 14.3 20.1 -29.2% 57.1 77.9 -26.8%
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% of net sales 5.6% 7.4% 5.6% 7.7%
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Assets total, EUR million 1,001.5 979.0 +2.3%
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Equity ratio,% 52.3% 53.6%
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Gearing,% -4.7% 8.4%
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Interest-bearing liabilities,
EUR million 234.5 257.8 -9.0%
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Non-interest-bearing
liabilities, EUR million 252.0 207.3 +21.6%
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Cash and cash equivalents and
money market investments, EUR
million 258.5 214.7 +20.4%
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ROCE (before taxes),% 36.6% 38.5%
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ROE (after taxes),% 41.1% 40.3%
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Basic earnings per share, EUR 0.29 0.40 -26.6% 1.50 1.46 +2.7%
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Diluted earnings per share, EUR 0.29 0.40 -26.6% 1.50 1.46 +2.7%
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Cash flow per share before
financial items, EUR 0.38 0.46 -17.0% 1.72 1.02 +68.4%
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Equity per share, EUR 3.66 3.66 +0.1%
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Personnel at the end of the
period 3,450 3,519 -2.0%
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Average personnel during the
period 3,493 3,540 -1.3%
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Personnel expenses, EUR million 219.2 218.1 +0.5%
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President and CEO Timo Lappalainen:
"Good year in pharmaceutical development and commercialisation projects"
"In 2014 our net sales and operating profit were both similar to the previous
year. However, as regards operating profit in particular, it should be noted
that milestone payments from collaboration partners higher than in the previous
year are included.
"We are especially pleased with the strides forward in our main clinical
pharmaceutical development and commercialisation projects in 2014. During the
year we received national marketing authorisations for our new Bufomix
Easyhaler® in most European countries, and in the summer our collaboration
partner Novartis received marketing authorisation for Stalevo® in Japan.
"In June we commenced global collaboration with Bayer in the development and
commercialisation of the ODM-201 compound for treatment of prostate cancer. We
have jointly started a Phase III clinical trial, and in accordance with our
agreement, since the beginning of 2015 Bayer has been the driving force for the
project and taken main responsibility for future costs.
"As regards the alpha-2c adrenoceptor antagonist for treatment of symptoms of
Alzheimer's disease (ORM-12741), during the year with our collaboration partner
Janssen Pharmaceuticals we focused on optimising the drug composition and we are
preparing to commence a new Phase IIa clinical trial with the compound. Of the
two COMT inhibitors for treatment of Parkinson's disease (ODM-103 and ODM-104),
we selected ODM-104 for further development. In addition, we began Phase I
clinical safety trials with the ODM-203 molecule, which is a new targeted
FGFR+VEGFR inhibitor that slows growth of certain solid cancerous tumours.
During the current year, our clinical development pipeline will be further
boosted as we commence Phase I clinical safety trials with an investigational
CYP17 enzyme and androgen receptor inhibitor (ODM-204) for treatment of
castration-resistant prostate cancer, and with a GABA-B receptor positive
allosteric modulator (ODM-106) for treatment of symptoms of essential tremor.
"Deliveries of our Parkinson's drugs to Novartis and sales through Orion's own
sales network were lower than a year ago. In Europe generic competition to
Stalevo commenced in Germany in 2014, and competition is expected to have
extended in Europe by the end of this year, decreasing Orion's sales. In
addition, generic competition to the Precedex(®) intensive care sedative
commenced in the United States during autumn 2014, and sales of the product and
the royalties received from it have subsequently clearly decreased.
"Sales of other products especially through Orion's own sales network developed
well and sales of Pharmaceuticals as a whole remained similar to the previous
year. The intensive care sedative Dexdor(®) and the Easyhaler(®) product family
in particular maintained their strong growth. In the Specialty Products business
division, net sales of generic entacapone products grew especially strongly, and
sales of the other products in the portfolio also grew.
"In 2012 we commenced for Orion significant investment and production
reorganisation projects to develop and ensure future growth, delivery
reliability and quality standards. During 2014 these projects progressed as
planned, and among other things, we celebrated the inauguration of the new Salo
plant in March. During the current year we will mostly complete the investment
programme and projects still in progress.
"A financial objective of Orion is to increase net sales. During the current
year the steadily growing business areas such as Specialty Products, Dexdor and
the Easyhaler product family will not be able to compensate fully for the
decrease in net sales and operating profit due to some rapid changes, such as
extension of generic competition to Stalevo in Europe, declining royalties from
Precedex and the timing of milestone payments. For these reasons among others,
we estimate that our net sales will be slightly lower in 2015. We estimate that
operating profit will remain above 20% of net sales, in line with our financial
objectives. The negative impact due to Stalevo and Precedex is expected to level
out in 2016 as growth in other areas starts to have a positive effect on
development of the entire company. We estimate that in 2015 our net sales will
be slightly lower than in 2014. Operating profit is estimated to exceed EUR 200
million. Our outlook estimate and the basis for it can be found in this report
under 'Outlook for 2015' and 'Basis for outlook'."
Events in 2014
On 14 April Orion announced that it had received the first marketing
authorisations in Europe for Bufomix Easyhaler(®).
On 2 June Orion and Bayer entered into an agreement for development and
commercialisation of a novel prostate cancer treatment. At the same time Orion
upgraded its outlook estimate for 2014.
On 4 July Orion's collaboration partner Novartis received marketing
authorisation for Stalevo(®) in Japan.
On 22 September Orion announced that the settlement agreement concerning the
proprietary drug Precedex(®) had been amended.
On 24 September Orion announced that it had received from The Capital Group
Companies, Inc. a disclosure under Chapter 9, Section 5 of the Securities
Markets Act according to which the total number of Orion B shares under the
management of The Capital Group Companies, Inc. decreased below five (5) per
cent of the total number of Orion Corporation shares on 22 September 2014.
Events after the period
There were no significant events after the period.
News conference and teleconference
A news conference and teleconference on the published results will be held
today, Wednesday 4 February 2015, at 13:30 EET in Hotel Kämp, address:
Pohjoisesplanadi 29, Helsinki. President and CEO Timo Lappalainen will give a
brief presentation in English on the financial review.
The event can be followed live as a webcast accessible at Orion's website at
www.orion.fi/en/investors. After the presentation, questions can be asked by
telephone in Finnish and English.
The teleconference code is 951029 and to participate in the teleconference,
please call:
from United States: +1 334 323 6201
from other countries: +44 (0)20 7162 0077
News conference recordings
A recording of the webcast of the event in English and a recording of the
presentation by the President and CEO in Finnish will be published on the Orion
website during Wednesday 4 February 2015.
Financial report material
Financial reports and related presentation material are available at
www.orion.fi/en/investors promptly after publication. The website also has a
form for subscribing to Orion's releases.
Dates in Orion Calendar 2015
Annual General Meeting 2015 Tuesday 24 March 2015
Interim Report January-March 2015 Wednesday 29 April 2015
Capital Market Day 2015 Tuesday 26 May 2015
Interim Report January-June 2015 Tuesday 28 July 2015
Interim Report January-September 2015 Tuesday 27 October 2015
The Financial Statements and Report by
the Board of Directors for 2014 will be published on the Company's website at
the latest in week 10/2015.
For additional information about the financial review:
Jari Karlson, CFO tel. +358 10 426 2883
Tuukka Hirvonen, Communications Manager tel. +358 10 426 2721 / mobile
+358 50 966 2721
http://www.orion.fi/en
http://www.orion.fi/en/investors
Financial review 2014
Net sales
The Orion Group's net sales in 2014 were EUR 1,015 million (EUR 1,007 million in
2013). The net effect of currency exchange rates was EUR -11 million.
The Pharmaceuticals business's net sales were EUR 962 (953) million. Net sales
of Orion's Stalevo(®) (carbidopa, levodopa and entacapone) and
Comtess(®)/Comtan(®) (entacapone) Parkinson's drugs were down by 18% at EUR 169
(207) million, which was 18% (22%) of the Pharmaceuticals business's net sales.
The Pharmaceuticals business's net sales of products in the portfolio other than
Stalevo(®) and Comtess(®)/Comtan(®) and excluding milestone payments were up by
2% at EUR 754 (741) million.
The Diagnostics business's net sales were EUR 56 (57) million. Net sales in the
comparative period include sales of products discontinued in 2013.
Operating profit
The Orion Group's operating profit was up by 2% at EUR 272 (268) million.
Milestone payments accounted for EUR 39 (5) million of the operating profit.
The Pharmaceuticals business's operating profit was EUR 276 (273) million,
including the EUR 39 (5) million of milestone payments. The gross profit
percentage on product sales remained similar to the previous year.
The Diagnostics business's operating profit was up by 38% at EUR 6.4 (4.6)
million. The operating profit in the comparative period included EUR 1.4 million
of costs related to contraction of the product portfolio, closure of the Turku
manufacturing plant and personnel reductions.
Operating expenses
The Group's sales and marketing expenses were down by 6% at EUR 193 (205)
million. The single most important reason for the decrease in expenses was the
ending of Simdax royalty payments to AbbVie in April 2014.
R&D expenses were up by 4% at EUR 106 (102) million and accounted for 11% (10%)
of the Group's net sales. Pharmaceutical R&D expenses amounted to EUR 99 (94)
million. Research projects are reported in more detail under Pharmaceuticals in
the Business Reviews.
Administrative expenses were down by 3% at EUR 43 (45) million.
Other operating income and expenses were EUR 2 (6) million, improving the
financial results.
Group's profit
The Group's profit before taxes totalled EUR 268 (264) million. Basic earnings
per share were EUR 1.50 (1.46) and diluted earnings per share were EUR 1.50
(1.46). Equity per share was EUR 3.66 (3.66). The return on capital employed
before taxes (ROCE) was 37% (39%) and the return on equity after taxes (ROE)
41% (40%).
Financial position
The Group's gearing was -5% (8%) and the equity ratio 52% (54%).
The Group's total liabilities at 31 December 2014 were EUR 487 (465) million. At
the end of the period, interest-bearing liabilities amounted to EUR 235 (258)
million, including EUR 210 (233) million of non-current loans.
The Group had EUR 259 (215) million of cash and cash equivalents and money
market investments at the end of the period. The cash and cash equivalents are
invested in short-term interest-bearing instruments issued by financially solid
financial institutions and corporations.
Cash flow
Cash flow from operating activities was higher than in the comparative period at
EUR 297 (215) million.
The significant improvement was mainly due to the increase in operating profit
and the decrease of EUR 43 million in the amount of cash tied up in working
capital. Working capital increased by EUR 22 million in the comparative period.
All items included in working capital developed well during the year.
Cash flow from investing activities was EUR -55 (-71) million.
Cash flow from financing activities was EUR -201 (-74) million. The change was
mainly due to the EUR 150 million bond issued in the comparative period.
Capital expenditure
The Group's capital expenditure totalled EUR 57 (78) million. This comprised EUR
52 (70) million on property, plant and equipment and EUR 5 (8) million on
intangible assets.
Outlook for 2015
Net sales will be slightly lower than in 2014 (net sales were EUR 1,015 million
in 2014).
Operating profit is estimated to exceed EUR 200 million.
The Group's capital expenditure will be about EUR 50 million excluding
substantial corporate or product acquisitions. (The Group's capital expenditure
was EUR 57 million in 2014)
Basis for outlook
A financial objective of Orion is to increase net sales. During the current year
the steadily growing business areas such as Specialty Products, Dexdor(®) and
the Easyhaler(®) product family will not be able to compensate fully for the
decreases in net sales and operating profit due to some rapid changes, such as
extension of generic competition to Stalevo(®) in Europe, decreasing royalties
from Precedex(®) and the timing of milestone payments. For these reasons among
others, net sales are not expected to grow in 2015. However, operating profit is
estimated to remain above 20% of net sales, in line with the financial
objectives. The negative impact due to Stalevo and Precedex is expected to level
out in 2016 as growth in other areas starts to have a positive effect on
development of the entire company.
Orion's Parkinson's drugs are Comtess(®), Comtan(®) and Stalevo(®). Generic
competition to them commenced in the United States in 2012, and in 2014 US
markets accounted for about EUR 12 million of Orion's EUR 169 million total net
sales of Parkinson's drugs. In Europe the majority of net sales come from
Stalevo. Generic competition to Comtess and Comtan, which have clearly lower
sales, commenced already in 2013. The first generic marketing authorisations for
Stalevo were granted in Germany and generic competition commenced there in
2014. The competition is expected to extend in Europe during 2015 and
significantly decrease Orion's sales of Stalevo. In 2014 Europe accounted for
about EUR 111 million of the net sales of Orion's Parkinson's drugs. Elsewhere
in the world generic competition is not expected to have a material impact on
sales volumes of these products in the current year.
In the United States two competitor companies received marketing authorisation
for their own generic versions of Precedex in August 2014. In addition, the
agreement previously reached with Sandoz was amended in September 2014 to allow
Sandoz to launch its generic version earlier than originally agreed. Following
these changes, the royalties from Precedex received by Orion decreased. They
were EUR 10 million in the second half of 2014, which was 64% less than in the
corresponding period a year ago. The decline is continuing in 2015, and
royalties will be clearly lower than in 2014.
Sales of Dexdor and the Easyhaler product family, which are also key proprietary
drugs, are forecast to continue to grow. The patent for the Simdax(®) molecule
expires in September 2015 but this is not expected to have a material impact on
sales in the current year.
Sales of generic products have been accounting for a greater proportion of
Orion's total sales, and price competition has remained intense in many markets.
Competition in Finland, the most important generic market for Orion, remains
intense in 2015. However, product launches continue to support Orion's position
as market leader.
Collaboration agreements with other pharmaceutical companies are an important
component of Orion's business model. Often payments related to these agreements
are recorded in net sales, and in 2014 they totalled EUR 39 million. 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.
Investments commenced in 2012 to develop and ensure future growth, delivery
reliability and quality standards, and the related reorganisations of production
will mostly be completed during 2015. They are no longer expected materially to
decrease production capacity and increase production costs. Projects launched as
part of the reorganisations to increase production efficiency are expected
gradually to improve productivity from the beginning of 2015.
Marketing expenditure will be at similar level to the previous year. Because the
registrations and launches of new products are projects that take more than a
year, the increases in resources and other inputs required in 2015 were planned
mainly during the previous year. Royalty payments to AbbVie previously recorded
in marketing expenditure and related to the reacquisition of rights to Simdax
ended in April 2014. About EUR 10 million of royalties were paid in 2013 and
about EUR 3 million in 2014.
Research and development costs will be slightly higher than in 2014. 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 2015 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 ODM-
201 research costs.
Near-term risks and uncertainties
Sales of Orion's Parkinson's drugs will decrease in 2015 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 commencement and
the intensity of generic competition to Stalevo in Europe still entails
uncertainty that may materially affect the accuracy of the estimate made at this
stage. Competition is expected to have extended in Europe by the end of 2015,
decreasing Stalevo sales.
Sales of individual products and also Orion's sales in individual markets may
vary, for example depending on the extent to which the ever-tougher price and
other competition prevailing in pharmaceutical markets in recent years will
specifically affect Orion's products. Deliveries 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.
A significant proportion of the exchange rate risk is related to the US dollar.
Typically, less than 15% of Orion's net sales comes from the United States. As
regards currencies in European countries, the overall effect will be abated by
the fact that Orion has organisations of its own in most of these countries,
which means that in addition to sales income, there are also costs in these
currencies. Changes in the Japanese yen exchange rate have become more important
as sales of Parkinson's drugs in Japan have increased. In 2014 rapid and severe
weakening of the Russian rouble towards the end of the year had a negative
currency exchange rate effect. However, Russian sales are not a significant
portion of Orion's entire net sales.
Orion's currently high production capacity utilisation rate and its broad
product range may cause risks to the delivery reliability and make it more
challenging than before to maintain the very high quality standard required.
Authorities and key customers in different countries undertake regular and
detailed inspections of development and manufacturing of drugs. Any remedial
actions that may be required may at least temporarily have effects that decrease
delivery reliability and increase costs.
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 a total of EUR 39 million of such
payments were received, which was clearly higher than average for the payments
received by Orion in previous years. 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.
Orion's dividend distribution policy
Orion's dividend distribution takes into account the distributable funds and the
capital expenditure and other financial requirements in the medium and long term
to achieve the financial objectives.
Proposal by the Board of Directors for distribution of profit:
dividend per share EUR 1.30
The parent company's distributable funds are EUR 255,953,061.62 or EUR 1.82 per
share, including EUR 191,746,498.98, or EUR 1.36 per share, of profit for the
financial year. These per share amounts are calculated excluding treasury shares
held by the Company.
The Board of Directors proposes that a dividend of EUR 1.30 per share be paid
from the parent company's distributable funds. No dividend shall be paid on
treasury shares held by the Company on the dividend distribution record date. On
the day when the profit distribution was proposed, the number of shares
conferring entitlement to receive dividend totalled 140,688,163, on which the
total dividend payment would be EUR 182,894,611.90. The Group's payout ratio for
the financial year 2014 would be 86.7% (85.6%). The dividend payment date would
be 2 April 2015, and shareholders registered in the Company's shareholder
register on 26 March 2015 would be entitled to the dividend payment.
The Board of Directors further proposes that EUR 250,000 (250,000) be donated to
medical research and other purposes of public interest in accordance with a
separate decision by the Board and that EUR 72,808,449.72 remain in equity.
Strategy
Orion's Board of Directors has updated the Company's strategy.
Operating environment
Orion's strategy is affected by global healthcare megatrends that have material
impact on trends in consumption of drugs, the price level of drugs and progress
in pharmaceutical research. These megatrends include:
* Ageing of population
* Advances in science, such as personalised medicine, increased genetic and
epigenetic data, developments in drug dosing and developments in diagnostics
* The increasing cost burden of healthcare and consequent need for cost-
effective treatments and drugs
* Increased personal responsibility for own health
Mission and values
Orion's mission is to build well-being. Orion builds well-being by bringing to
markets drugs and diagnostic tests that give patients help and an effective
treatment for their illnesses. An effective drug also creates added value for
the patient by improving the quality of life. Underlying Orion's strategy are
Orion's values, which characterise our way of working within the Company. These
values are:
* mutual trust and respect
* quality, reliability and safety
* customer focus
* innovation
* achievement
Focus areas
To fulfil our mission and achieve the strategic targets defined for Orion,
within the Company there must be systematic concentration on key focus areas and
their development. The crucial focus areas for implementing our strategy are:
* Quality and safety. High quality, product safety and complying with
requirements of authorities are indispensable in the pharmaceutical
industry. To meet ever increasing requirements and expectations of
stakeholder groups, we are continuously and systematically developing these
areas.
* Productivity and flexibility. Under pressure from declining prices for
drugs, we need cost awareness in our operations and seamless co-operation
between different parts of Orion to achieve the targeted profitability
level. In addition, operations must be flexible and able to react rapidly to
changes identified in the operating environment. Due to its size, Orion can
be more agile than large companies and gain a competitive advantage from
this.
* Partnerships. Our operations are almost in their entirety based on utilising
worldwide networks in which well-managed partnerships and collaborations are
a competitive advantage for us. This requires us to be unprejudiced and open
to learning new things from our partners and collaborators. Partnerships
must also be managed so that jointly agreed modes of operation and
responsibilities are adopted at every level.
* Competitive and strong portfolio, which is crucial for our success. This
requires from us continuous striving to renew the portfolio, which in
addition to product development, acquisition or manufacturing, includes
effective launching of products and management of their entire life cycle.
* Strong corporate culture of working together, the basis of which is valuable
and important work for the customer. We want to be an excellent workplace
and a responsible and attractive employer that promotes the well-being of
its personnel at work and continuously develops their expertise.
Strategic targets
The following strategic targets have been confirmed, and their achievement is
monitored with clearly defined indicators:
* Providing new innovative and cost-effective drugs and treatments for
patients. We launch a steady stream of new drugs and diagnostic tests into
markets. The product development pipeline has balanced numbers of
proprietary products and generic projects in different phases. In our
research we aim for the best input/output ratio in the field.
* Working together to benefit the customer. Our personnel are committed and
understand the needs of our customers. Our working atmosphere, our customer
satisfaction and the image of Orion are outstanding.
* Continuous improvement in operations as regards sustainability. Patient
safety is the most vital aspect of our corporate responsibility. The key to
patient safety is that our products are safe when used appropriately.
Managing the Company's environmental responsibilities is also an important
part of sustainability. Our aims additionally include continuous development
of our personnel's occupational safety and ability to cope with their work.
* Growing faster than the markets. Growth enables a company to develop and
take manageable risks. This aim should be achieved by the Company as a whole
and in the geographic and product areas in which Orion operates.
* Strong development of profitability.
Financial objectives
We have updated Orion's financial objectives. Through them we aim, as until now,
to develop the Group's shareholder value and ensure financial stability and
profitable growth.
Orion's financial objectives are:
* Increasing net sales. Achievement of this objective requires continuous
investment in development of the product portfolio.
* Maintaining profitability at a good level, the aim being operating profit
that exceeds 20% of net sales.
* Keeping the equity ratio at least 50%.
* Distributing an annual dividend that in the next few years will be at least
EUR 1.20 per share, and increasing the dividend in the long term.
In the short term what actually happens may deviate from the objectives.
Especially in 2015, the steadily growing business areas such as Specialty
Products, Dexdor and Bufomix Easyhaler will not be able to compensate fully for
the decrease in net sales and operating profit due to some rapid changes, such
as extension of generic competition to Stalevo in Europe, declining royalties
from Precedex and the timing of milestone payments. However, the negative impact
due to Stalevo and Precedex is expected to level out in 2016 as growth in other
areas starts to have a positive effect on development of the entire company.
Promising developments in the R&D project pipeline will probably somewhat
increase the Company's research expenses in the next few years. However,
agreements already made relating to research projects (Bayer/ODM-201,
Janssen/ORM-12741) and possible new agreements with partners relating to other
projects are expected to generate material upfront and milestone payments in
coming years, and thereby have a positive effect on Orion's net sales and
especially operating profit even before possible approval of new proprietary
drugs and before the actual commencement of product sales.
Shares and shareholders
On 31 December 2014 Orion had a total of 141,257,828 (141,257,828) shares, of
which 40,412,981 (42,022,816) were A shares and 100,844,847 (99,235,012) B
shares. The Group's share capital was EUR 92,238,541.46 (92,238,541.46). At the
end of December 2014 Orion held 569,665 (688,991) B shares as treasury shares.
On 31 December 2014 the aggregate number of votes conferred by the A and B
shares was 908,534,802 (939,002,341) excluding treasury shares.
At the end of December 2014, Orion had 51,917 (56,762) 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 2014 a total of 1,609,835 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 31 December 2014 the market capitalisation of the Company's shares excluding
treasury shares was EUR 3,596 million.
In 2014 a total of 2,595,181 A shares and 74,824,531 B shares were traded on
NASDAQ Helsinki. The total value of the shares traded was EUR 1,982 million.
During the year, 6% of the A shares and 75% of the B shares were traded. The
average turnover in Orion's shares was 55%.
The price of Orion's A shares increased by 23% and the price of its B shares by
26% during 2014. On 31 December 2014 the closing quotation was EUR 25.03 for the
A shares and EUR 25.77 for the B shares. The highest quotation for Orion's A
shares in 2014 was EUR 31.11 and the lowest quotation was EUR 19.13. The highest
quotation for the B shares in 2014 was EUR 31.33 and the lowest quotation was
EUR 19.07.
Orion shares are also traded on various alternative trading platforms in
addition to NASDAQ Helsinki. In 2014 NASDAQ Helsinki accounted for about 92% of
the entire trading volume in Orion A shares. In 2014 NASDAQ Helsinki accounted
for about 43% of the entire trading volume in Orion B shares (source: Fidessa
Fragmentation Index).
Authorisations of the Board of Directors
Orion's Board of Directors was authorised by the Annual General Meeting on 19
March 2013 to decide on acquisition of shares in the Company and on a share
issue in which shares held by the Company can be conveyed. The authorisation to
acquire shares was utilised during 2013. The Board of Directors is authorised to
decide on conveyance of no more than 600,000 Orion Corporation B shares held by
the Company. The authorisation to issue shares is valid for five years from the
decision taken by the Annual General Meeting. The terms and conditions of the
authorisations were reported in more detail in a stock exchange release on 19
March 2013.
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 18
February 2010 and 5 February 2013.
Share ownership
Orion's shares are in the book-entry system maintained by Euroclear Finland, and
Euroclear Finland maintains Orion's official shareholder register.
At the end of 2014 Orion had a total of 51,917 (56,762) registered shareholders,
of whom 95% (95%) were private individuals holding 43% (46%) of the entire share
stock and 63% (64%) of the total votes. There were altogether 57 (48) million
nominee-registered shares, which was 40% (34%) of all shares, and they conferred
entitlement to 8% (7%) of the total votes.
At the end of December 2014 Orion held 569,665 (688,991) B shares as treasury
shares, which is 0.4% (0.5%) of the Company's total share stock and 0.06%
(0.07%) of the total votes.
Notification threshold
On 24 September 2014 Orion announced that on 22 September 2014 the total number
of Orion Corporation B shares under the management of The Capital Group
Companies, Inc. had decreased below five (5) per cent of all Orion Corporation
shares. According to the notification, The Capital Group Companies, Inc. owned
6,975,982 Orion B shares, which was 4.9384% of the shares and 0.7586% of Orion's
total number of votes.
Management's shareholdings
At the end of 2014, the members of the Board of Directors owned a total of
2,172,289 of the Company's shares, of which 1,825,264 were A shares and 347,025
B shares. At the end of 2014, the President and CEO owned 52,519 of the
Company's shares, which were all B shares. The members of the Group's Executive
Management Board (excluding the President and CEO) owned a total of 141,260 of
the Company's shares, which were all B shares. Thus, the Company's executive
management held 1.68% of all of the Company's shares and 4.07% of the total
votes.
The Company does not have stock option programmes.
Personnel
The average number of employees in the Orion Group in 2014 was 3,493 (3,540). At
the end of 2014 the Group had a total of 3,450 (3,519) employees, of whom 2,769
(2,816) worked in Finland and 681 (703) outside Finland.
Salaries and other personnel expenses in 2014 totalled EUR 219 (218) million.
Significant legal proceedings
Legal proceedings in the United States concerning patent No. 6,716,867
On 12 November 2010 Orion Corporation and Hospira, Inc. filed a patent
infringement lawsuit in the United States against Sun Pharmaceutical Industries,
Inc. (previously Caraco Pharmaceutical Laboratories, Ltd.) and Gland Pharma Ltd.
to enforce Orion's and Hospira's joint patent No. 6,716,867, which protects
Orion's proprietary drug Precedex(®) (dexmedetomidine hydrochloride 100 µg/ml).
In addition, there are also other patent infringement lawsuits pending in the
United States relating to patent No. 6,716,867 with Hospira and Orion as
plaintiffs.
Orion estimates that the costs of the aforesaid legal proceedings will not be
material for the Company.
The previously reported lawsuit brought by Par Sterile Products, LLC against
Hospira and Orion has since been settled.
Business Reviews
Pharmaceuticals
Review of human pharmaceuticals market
Finland is the most important individual market for Orion, generating about one-
quarter of the total net sales. According to IMS Health statistics, Finnish
wholesale of human pharmaceuticals in 2014 was up by 5% on the previous year at
EUR 2,167 (2,070) million. Orion was able to increase its sales and maintained
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 2014 amounted to EUR 251 (233) million, up by 8% compared with the
previous year. Orion's market share of Finnish pharmaceuticals markets was 12%
(11%).
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(®)) accounted for about one-sixth of the
Group's net sales in 2014.
Total sales of all Parkinson's drugs:
EUR or USD million MAT9/2014 MAT9/2013 Change %
------------------------------------------------------------------------------
United States USD 810 751 +8%
------------------------------------------------------------------------------
Europe TOP 5 EUR 996 978 +2%
------------------------------------------------------------------------------
Japan EUR 497 523 -5%
------------------------------------------------------------------------------
Source: IMS Health pharmaceutical sales statistics MAT9/2014 (10/2013-9/2014)
The five largest European markets for Parkinson's disease drugs were Germany,
the United Kingdom, France, Spain and Italy. The size of the Japanese market as
a whole decreased due to depreciation of the yen exchange rate. Measured in
terms of local currency, sales of Orion's Parkinson's drugs grew in Japan.
Total sales of all Parkinson's drugs containing entacapone:
EUR or USD million MAT9/2014 MAT9/2013 Change %
------------------------------------------------------------------------------
United States USD 119 153 -22%
------------------------------------------------------------------------------
Europe TOP 5 EUR 147 153 -4%
------------------------------------------------------------------------------
Japan EUR 53 59 -10%
------------------------------------------------------------------------------
Source: IMS Health pharmaceutical sales statistics MAT9/2014 (10/2013-9/2014)
Total sales of Orion's branded Parkinson's drugs:
EUR or USD million MAT9/2014 MAT9/2013 Change %
------------------------------------------------------------------------------
United States USD 20 37 -47%
------------------------------------------------------------------------------
Europe TOP 5 EUR 127 131 -4%
------------------------------------------------------------------------------
Japan EUR 53 59 -10%
------------------------------------------------------------------------------
Source: IMS Health pharmaceutical sales statistics MAT9/2014 (10/2013-9/2014)
Sales of Orion's branded Parkinson's drugs decreased in the United States due
the trend to generics in the market and in Japan due to depreciation of the yen
exchange rate. The market share of Orion's branded Parkinson's drugs was 2% in
the United States, on average 13% in the five largest European markets and 11%
in Japan.
According to IMS Health pharmaceutical sales statistics, sales of Precedex(®)
intensive care sedative (dexmedetomidine) were up by 10% at USD 401 million in
the 12-month period ending in September 2014 (USD 365 million in the previous
12-month period). The largest market, with sales of USD 335 (305) million, was
the United States, where Precedex sales grew by 10%. IMS Health pharmaceutical
sales statistics have become more comprehensive as regards reporting of
Precedex, following which the figures for the reported period and comparative
period are greater than as previously. Generic competition to Precedex in the
United States commenced in August 2014, but the effect of competition was not
yet significant in the figures reported by IMS Health for the period ending in
September 2014.
According to IMS Health pharmaceutical sales statistics, total sales of the most
common intravenous anaesthetics and intensive care sedatives (propofol,
midazolam, remifentanil and dexmedetomidine) in Europe in the 12-month period
ending in September 2014 were up by 3% at EUR 490 (476) million. According to
IMS Health pharmaceutical sales statistics, in the 12-month period ending in
September 2014 sales of Orion's Dexdor(®) intensive care sedative
(dexmedetomidine) were up by 29% at EUR 26 (20) million in Europe.
Net sales and operating profit of the Pharmaceuticals business
Net sales of the Pharmaceuticals business in 2014 were EUR 962 (953) million.
The operating profit of the Pharmaceuticals business was EUR 276 (273) million,
including milestone payments of EUR 39 (5) million. The operating profit of the
Pharmaceuticals business was 29% (29%) of the segment's net sales.
Net sales of Orion's top ten pharmaceuticals in 2014 were down by 7% at EUR 422
(455) million. They accounted for 44% (48%) 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 2014 were down by 4% at EUR 373 (390)
million.
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 2014 were down by 18% at EUR 169 (207)
million. In the United States Orion's Parkinson's drugs have several generic
competitors. In Europe Comtess and Comtan have several generic competitors, and
generic competition to Stalevo commenced in Germany in 2014.
Breakdown of sales of Parkinson's drugs:
EUR million 2014 2013 Change %
--------------------------------------------------
Stalevo deliveries to Novartis 73 81 -11%
--------------------------------------------------
Comtan deliveries to Novartis 26 34 -23%
--------------------------------------------------
Orion's Stalevo sales 64 84 -23%
--------------------------------------------------
Orion's Comtess sales 7 9 -21%
--------------------------------------------------
After the review period Orion received notification that the US Food and Drug
Administration (FDA) had completed the safety review of Stalevo that began in
spring 2009. Epidemiological studies undertaken at the request of the FDA
indicate that Stalevo does not increase the risk of myocardial infarction or
prostate cancer. According to the FDA statement, the additional studies
undertaken are sufficient and there is no need for further studies or actions.
Net sales of Simdax(®), a drug for treatment of acute decompensated heart
failure, in 2014 were up by 2% at EUR 47 (46) million.
Total net sales of the Easyhaler(®) product family for treatment of asthma and
chronic obstructive pulmonary disease were up by 22% in 2014 at EUR 35 (29)
million. The increase was due to good development of sales of monoproducts that
have been on the markets for a long time and sales of Bufomix Easyhaler(®)
(budesonide-formoterol), the new combined formulation in the product family.
Sales of Bufomix Easyhaler totalled EUR 3 (0) million in 2014. Bufomix Easyhaler
received national marketing authorisations in over twenty European countries in
2014 and processing of the national phase of marketing authorisation application
is still ongoing in Greece and Italy. Sales of Bufomix Easyhaler have commenced
in more than ten countries, but because it is not within generic substitution in
pharmacies, growth is slower than for ordinary generic products, especially in
the launch phase. In 2014 Orion and Takeda terminated the collaboration
agreement relating to co-promoting of Easyhaler combined formulations in Europe.
Collaboration regarding the Middle East and North Africa remains unchanged, and
the agreement has been extended to cover certain other African countries too. In
Europe Orion currently markets the products through its own sales network and
local partners.
Net sales of the Precedex(®) intensive care sedative (dexmedetomidine) were down
by 50% in 2014 at EUR 30 (59) million. In the United States and markets outside
Europe the sedative is sold by Orion's partner Hospira. Following the expiry of
the Precedex basic patent in the United States in January, the royalties
received by Orion from Hospira decreased. The decline in sales recorded by Orion
accelerated in August when the first generic competitors entered the US market.
Most of the net sales of Precedex has come from the United States.
Net sales of Orion's Dexdor(®) intensive care sedative (dexmedetomidine) in
2014 were up by 39% at EUR 35 (25) million.
Specialty Products
Net sales of the Specialty Products business division's off-patent, i.e. generic
prescription drugs, self-care products and biosimilars in 2014 were up by 11% at
EUR 427 (385) million. Sales of generic entacapone products were up by 151% at
EUR 26 (10) million. Sales of products from the rest of the portfolio were up by
7%.
Finland, Scandinavia, and Eastern Europe and Russia are the most important
markets for Specialty Products. The business division's sales in Finland in
2014 were up by 9% at EUR 256 (234) million. Orion managed to increase its
sales, especially in prescription drugs. Sales were up by 21% at EUR 50 (42)
million in Scandinavia and sales were EUR 56 (56) million in Eastern Europe and
Russia. Depreciation of the rouble weakened the development of sales in Eastern
Europe and Russia.
Net sales of Remsima(®) for treatment of rheumatoid arthritis among other things
were EUR 6 million in 2014. Remsima is a biosimilar infliximab developed and
manufactured by Orion's collaboration partner, for which Orion has marketing
rights in Finland, Scandinavia and the Baltic States.
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 2014 were EUR 70 (71)
million. Sales of the animal sedative product family at EUR 25 (25) million
accounted for 35% (35%) of the division's net sales. The product family
comprises Orion's animal sedatives Dexdomitor(®) (dexmedetomidine), Domitor(®)
(medetomidine) and Domosedan(®) (detomidine), and antagonist Antisedan(®)
(atipamezole), which reverses the effects of the sedatives.
Fermion
Fermion manufactures active pharmaceutical ingredients for Orion and other
pharmaceutical companies. Its product range comprises nearly 30 pharmaceutical
ingredients. Fermion's net sales in 2014 excluding pharmaceutical ingredients
supplied for Orion's own use were down by 10% at EUR 57 (64) million and
accounted for about two-thirds of Fermion's entire net sales. Significant sales
of one individual product clearly increased net sales in the comparative period.
Net sales from rest of the product range were slightly higher in 2014 than in
the previous year. Several key products performed well, even though competition
in the markets remained intense. Arto Toivonen became President of Fermion on 1
January 2015.
Research and development projects
The Group's R&D expenses in 2014 were up by 4% at EUR 106 (102) million, of
which the Pharmaceuticals business accounted for EUR 99 (94) million. The
Group's R&D expenses accounted for 11% (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 an investigational novel oral androgen receptor inhibitor
(ODM-201). ODM-201 is in clinical development for the treatment of patients with
prostate cancer. Bayer and Orion jointly have started a Phase III clinical trial
for further evaluation of the efficacy and safety of ODM-201 in patients with
non-metastatic castration-resistant prostate cancer (nm-CRPC).
Orion has an ongoing project to broaden the range of the inhalable Easyhaler(®)
drugs product family.
Orion is developing a fluticasone-salmeterol combined formulation for European
markets. In this formulation fluticasone acts as an anti-inflammatory agent and
salmeterol acts as a long-acting bronchodilator.
Orion has commenced additional trials with the Bufomix Easyhaler(®) combined
formulation (budesonide-formoterol). The aim is to obtain marketing
authorisation for the product in at least some of the European countries that
were not included in the decentralised marketing authorisation application
process. In this formulation budesonide acts as an anti-inflammatory agent and
formoterol 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. 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. In 2014 Orion and Janssen focussed on
optimising the drug composition, and Orion is preparing to commence a new Phase
IIa clinical trial with the drug candidate.
Orion has completed Phase I clinical safety trials with new COMT inhibitors
(ODM-103 and ODM-104). Based on the results obtained, Orion has decided to
select ODM-104 for further development and is preparing to commence Phase II
clinical trials with the molecule. ODM-104 is a new molecule that enhances the
therapeutic effects of levodopa used to treat Parkinson's disease by blocking
the COMT enzyme. The pre-clinical and pharmacokinetic study results indicated
that it is more effective than the COMT inhibitor entacapone, which is already
in the markets.
Orion has commenced Phase I clinical safety trials with a new targeted
FGFR+VEGFR inhibitor (ODM-203) for treatment of cancers. Pre-clinical study
results indicate that ODM-203 slows growth of certain solid cancerous tumours.
Orion is commencing Phase I clinical safety trials with a unique investigational
CYP17 enzyme and androgen receptor inhibitor (ODM-204). The pre-clinical study
results indicated that ODM-204 blocks the growth of castration-resistant
prostate cancer (CRPC).
Orion is commencing Phase I safety trials with a GABA-B receptor positive
allosteric modulator (ODM-106) for treatment of symptoms of essential tremor
(ET). Preclinical studies indicate that ODM-106 has the potential to alleviate
essential tremor, parkinsonian tremor and levodopa-induced dyskinesia in
patients with Parkinson's disease, without causing sedation.
Orion's partner Tenax Therapeutics, Inc. (formerly Oxygen Biotherapeutics, Inc.)
will develop and commercialise levosimendan in US and Canadian markets for a new
cardiovascular indication, prevention of low cardiac output syndrome (LCOS) in
cardiac surgery patients. The company has an ongoing Phase III clinical trial.
Orion's collaboration partner Recro Pharma, Inc. is developing an intranasal
formulation of dexmedetomidine for treatment of pain. Recro has an ongoing Phase
IIb clinical trial with patients suffering from post-operative pain.
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 2014 were EUR 56 (57) million. Net sales in the
comparative period included sales of products discontinued in 2013.
QuikRead(®) infection tests remained the main product, with sales continuing to
increase. Launching of new QuikRead go(®) tests progressed as planned in 2014.
With the QuikRead go(®) hsCRP+Hb test, two results - for CRP and haemoglobin -
can be obtained from a single sample. The QuikRead go(®) iFOBT (Faecal Occult
Blood) quantitative test is helpful in screening gastrointestinal disorders.
At the end of the review period the first new Orion GenRead(®) test system
products were released for sale - an instrument and a C. difficile test for
detecting intestinal Clostridium difficile infection occurring during antibiotic
treatment. Orion GenRead(®) is based on an isothermal nucleic acid amplification
technique, SIBA(® )technology, global rights to which are owned by Orion
Diagnostica in all fields of application.
The QuikRead go(®) Feeder instrument was also released for sale during the
review period. It offers increased automation for users handling large test
volumes.
The operating profit of the Diagnostics business was up by 38% at EUR 6.4 (4.6)
million. The operating profit in the comparative period included EUR 1.4 million
of costs related to contraction of the product portfolio, closure of the Turku
manufacturing plant and personnel reductions.
Espoo, 4 February 2015
Board of Directors of Orion Corporation
Orion Corporation
Timo Lappalainen Jari Karlson
President and CEO CFO
Tables
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
EUR million Q4/14 Q4/13 Change % 2014 2013 Change %
-------------------------------------------------------------------------------
Net sales 255.3 272.6 -6.3% 1,015.3 1,006.9 +0.8%
-------------------------------------------------------------------------------
Cost of goods sold -106.2 -106.6 -0.4% -401.7 -393.5 +2.1%
-------------------------------------------------------------------------------
Gross profit 149.1 166.0 -10.2% 613.6 613.4
-------------------------------------------------------------------------------
Other operating income
and expenses 2.1 2.2 -4.8% 1.7 5.6 -68.8%
-------------------------------------------------------------------------------
Sales and marketing
expenses -55.5 -60.2 -7.8% -193.4 -204.9 -5.6%
-------------------------------------------------------------------------------
R&D expenses -28.3 -29.7 -4.9% -106.2 -101.9 +4.2%
-------------------------------------------------------------------------------
Administrative
expenses -12.1 -12.4 -2.5% -43.3 -44.5 -2.7%
-------------------------------------------------------------------------------
Operating profit 55.3 65.8 -16.1% 272.4 267.7 +1.8%
-------------------------------------------------------------------------------
Finance income 0.7 1.0 -24.6% 4.8 4.4 +11.3%
-------------------------------------------------------------------------------
Finance expenses -2.2 -2.4 -6.7% -9.9 -8.3 +19.2%
-------------------------------------------------------------------------------
Share of associated
companies' results 0.4 0.3 +55.6%
-------------------------------------------------------------------------------
Profit before taxes 53.8 64.5 -16.5% 267.8 264.0 +1.4%
-------------------------------------------------------------------------------
Income tax expense -13.0 -8.8 +47.9% -56.6 -57.8 -2.2%
-------------------------------------------------------------------------------
Profit for the period 40.8 55.7 -26.7% 211.3 206.2 +2.5%
-------------------------------------------------------------------------------
OTHER COMPREHENSIVE INCOME
INCLUDING TAX EFFECTS
-------------------------------------------------------------------------------
Change in value of
cash flow hedges 0.0 0.0 0.0 0.1
-------------------------------------------------------------------------------
Change in value of
available-for-sale
investments 0.4 4.1
-------------------------------------------------------------------------------
Translation
differences -0.9 -0.3 0.6 -1.3
-------------------------------------------------------------------------------
Items that may be
reclassified
subsequently to profit
and loss -0.5 -0.3 4.7 -1.2
-------------------------------------------------------------------------------
Items due to
remeasurement of
defined benefit plans -41.3 -9.7 -41.3 -9.7
-------------------------------------------------------------------------------
Items that will not be
reclassified to profit
and loss -41.3 -9.7 -41.3 -9.7
-------------------------------------------------------------------------------
Other comprehensive
income net of tax -41.7 -10.1 -36.5 -10.9
-------------------------------------------------------------------------------
Comprehensive income
for the period
including tax effects -0.9 45.6 -102.0% 174.7 195.3 -10.5%
-------------------------------------------------------------------------------
PROFIT ATTRIBUTABLE
TO:
-------------------------------------------------------------------------------
Owners of the parent
company 40.8 55.7 -26.7% 211.3 206.2 +2.5%
-------------------------------------------------------------------------------
Non-controlling
interests 0.0 0.0 0.0 0.0
-------------------------------------------------------------------------------
COMPREHENSIVE INCOME
ATTRIBUTABLE TO:
-------------------------------------------------------------------------------
Owners of the parent
company -0.9 45.6 -102.0% 174.7 195.3 -10.5%
-------------------------------------------------------------------------------
Non-controlling
interests 0.0 0.0 0.0 0.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Basic earnings per
share, EUR (1)) 0.29 0.40 -26.6% 1.50 1.46 +2.7%
-------------------------------------------------------------------------------
Diluted earnings per
share, EUR (1)) 0.29 0.40 -26.6% 1.50 1.46 +2.7%
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Depreciation,
amortisation and
impairment 10.7 10.9 -2.0% 39.6 38.5 +2.9%
-------------------------------------------------------------------------------
Personnel expenses 58.1 61.3 -5.2% 219.2 218.1 +0.5%
-------------------------------------------------------------------------------
1) The figure has been calculated from the profit
attributable to the owners of the parent company.
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
ASSETS
EUR million 12/14 12/13 Change %
---------------------------------------------------------------------------
Property, plant and equipment 269.1 247.3 +8.8%
---------------------------------------------------------------------------
Goodwill 13.5 13.5
---------------------------------------------------------------------------
Intangible rights 47.7 54.0 -11.7%
---------------------------------------------------------------------------
Other intangible assets 2.7 3.3 -16.4%
---------------------------------------------------------------------------
Investments in associates 2.1 1.7 +25.0%
---------------------------------------------------------------------------
Available-for-sale investments 5.6 0.5
---------------------------------------------------------------------------
Pension asset 26.6 -100.0%
---------------------------------------------------------------------------
Deferred tax assets 6.7 1.2 +457.3%
---------------------------------------------------------------------------
Other non-current assets 1.6 1.2 +34.8%
---------------------------------------------------------------------------
Non-current assets total 349.1 349.2
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Inventories 178.7 195.5 -8.6%
---------------------------------------------------------------------------
Trade receivables 174.0 169.9 +2.4%
---------------------------------------------------------------------------
Other receivables 41.2 49.7 -17.1%
---------------------------------------------------------------------------
Money market investments 73.0
---------------------------------------------------------------------------
Cash and cash equivalents 185.5 214.7 -13.6%
---------------------------------------------------------------------------
Current assets total 652.4 629.8 +3.6%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Assets total 1,001.5 979.0 +2.3%
---------------------------------------------------------------------------
EQUITY AND LIABILITIES
EUR million 12/14 12/13 Change %
---------------------------------------------------------------------------
Share capital 92.2 92.2
---------------------------------------------------------------------------
Expendable fund 0.5 0.5
---------------------------------------------------------------------------
Other reserves 5.9 1.6 +270.4%
---------------------------------------------------------------------------
Retained earnings 416.3 419.6 -0.8%
---------------------------------------------------------------------------
Equity attributable to owners of the parent company 514.9 513.9 +0.2%
---------------------------------------------------------------------------
Non-controlling interests 0.0 0.0 -85.2%
---------------------------------------------------------------------------
Equity total 514.9 513.9 +0.2%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Deferred tax liabilities 30.1 32.1 -6.1%
---------------------------------------------------------------------------
Pension liability 31.1 1.6
---------------------------------------------------------------------------
Provisions 0.4 0.1 +292.5%
---------------------------------------------------------------------------
Interest-bearing non-current liabilities 210.0 233.3 -10.0%
---------------------------------------------------------------------------
Other non-current liabilities 0.2 0.5 -64.3%
---------------------------------------------------------------------------
Non-current liabilities total 271.8 267.6 +1.6%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Trade payables 66.6 60.0 +11.0%
---------------------------------------------------------------------------
Current tax liabilities 1.1 1.7 -35.7%
---------------------------------------------------------------------------
Other current liabilities 122.5 111.2 +10.2%
---------------------------------------------------------------------------
Provisions 0.1 -100.0%
---------------------------------------------------------------------------
Interest-bearing current liabilities 24.5 24.5 -0.2%
---------------------------------------------------------------------------
Current liabilities total 214.7 197.5 +8.7%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Liabilities total 486.5 465.1 +4.6%
---------------------------------------------------------------------------
---------------------------------------------------------------------------
Equity and liabilities total 1,001.5 979.0 +2.3%
---------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
a. Share capital
b. Expendable fund
c. Other reserves
d. Items due to remeasurement of defined
benefit plans
e. Translation
differences
f. Retained earnings
g. Non-controlling interests
h. Equity total
Equity attributable to owners of the
parent company
-------------------------------------------
EUR million a. b. c. d. e. f. g. h.
-------------------------------------------------------------------------------
Equity at 31 December
2012 before change in
accounting policies 92.2 0.5 0.8 -2.6 420.5 0.0 511.3
-------------------------------------------------------------------------------
Effect of change in
accounting policies 0.2 -2.0 -1.8
-------------------------------------------------------------------------------
Equity at 1 January 2013 92.2 0.5 0.8 0.2 -2.6 418.4 0.0 509.6
-------------------------------------------------------------------------------
Profit for the period 206.2 206.2
-------------------------------------------------------------------------------
Other comprehensive
income:
-------------------------------------------------------------------------------
Change in value of cash flow
hedges 0.1 0.1
-------------------------------------------------------------------------------
Translation differences -1.3 -1.3
-------------------------------------------------------------------------------
Items due to
remeasurement of defined
benefit plans -9.7 -9.7
-------------------------------------------------------------------------------
Transactions with owners
-------------------------------------------------------------------------------
Dividend and capital
repayment -183.4 -183.4
-------------------------------------------------------------------------------
Treasury shares -9.6 -9.6
-------------------------------------------------------------------------------
Share-based incentive
plan 2.2 2.2
-------------------------------------------------------------------------------
Other adjustments 0.7 -0.8 0.0 -0.2
-------------------------------------------------------------------------------
Equity at 31 December
2013 92.2 0.5 1.6 -9.5 -3.9 433.0 0.0 513.9
-------------------------------------------------------------------------------
Profit for the period 211.3 211.3
-------------------------------------------------------------------------------
Other comprehensive
income:
-------------------------------------------------------------------------------
Change in value of cash flow
hedges 0.0 0.0
-------------------------------------------------------------------------------
Change in value of
available-for-sale
investments 4.1 4.1
-------------------------------------------------------------------------------
Translation differences 0.6 0.6
-------------------------------------------------------------------------------
Items due to
remeasurement of defined
benefit plans -41.3 -41.3
-------------------------------------------------------------------------------
Transactions with owners
-------------------------------------------------------------------------------
Dividend and capital
repayment -175.9 -175.9
-------------------------------------------------------------------------------
Share-based incentive
plan 2.4 2.4
-------------------------------------------------------------------------------
Other adjustments 0.2 -0.4 -0.0 -0.3
-------------------------------------------------------------------------------
Equity at 31 December
2014 92.2 0.5 5.9 -50.8 -3.3 470.4 0.0 514.9
-------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
EUR million 2014 2013
-------------------------------------------------------------------------------
Operating profit 272.4 267.7
-------------------------------------------------------------------------------
Adjustments 47.8 42.2
-------------------------------------------------------------------------------
Change in working capital 43.2 -21.9
-------------------------------------------------------------------------------
Interest paid -9.6 -6.1
-------------------------------------------------------------------------------
Interest received 3.5 3.7
-------------------------------------------------------------------------------
Dividends received 0.2 0.3
-------------------------------------------------------------------------------
Income taxes paid -60.9 -70.8
-------------------------------------------------------------------------------
Total net cash flow from operating activities 296.7 215.2
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Investments in property, plant and equipment -51.5 -65.9
-------------------------------------------------------------------------------
Investments in intangible assets -4.9 -7.4
-------------------------------------------------------------------------------
Sales of property, plant and equipment and available-for-sale
investments 1.5 2.0
-------------------------------------------------------------------------------
Sales of intangible assets 0.0
-------------------------------------------------------------------------------
Total net cash flow from investing activities -54.9 -71.3
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Current loans raised 1.9 41.6
-------------------------------------------------------------------------------
Repayments of current loans -3.2 -42.6
-------------------------------------------------------------------------------
Non-current loans raised 149.0
-------------------------------------------------------------------------------
Repayments of non-current loans -23.0 -28.1
-------------------------------------------------------------------------------
Treasury shares -9.6
-------------------------------------------------------------------------------
Dividends paid and other distribution of profits -176.2 -183.7
-------------------------------------------------------------------------------
Total net cash flow from financing activities -200.5 -73.5
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Net change in cash and cash equivalents 41.2 70.3
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Cash and cash equivalents at the beginning of the period 214.7 145.2
-------------------------------------------------------------------------------
Foreign exchange differences 2.6 -0.9
-------------------------------------------------------------------------------
Net change in cash and cash equivalents 41.2 70.3
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 258.5 214.7
-------------------------------------------------------------------------------
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 185.5 214.7
-------------------------------------------------------------------------------
Money market investments at the end of the period 73.0
-------------------------------------------------------------------------------
Cash and cash equivalents in the statement of cash flows 258.5 214.7
-------------------------------------------------------------------------------
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 12/14 12/13
---------------------------------------------------------------
Carrying amount at the beginning of the period 247.3 205.3
---------------------------------------------------------------
Additions 51.5 70.1
---------------------------------------------------------------
Disposals -1.7 -1.8
---------------------------------------------------------------
Depreciation and impairments -27.9 -26.2
---------------------------------------------------------------
Carrying amount at the end of the period 269.1 247.3
---------------------------------------------------------------
CHANGES IN INTANGIBLE ASSETS (EXCLUDING GOODWILL)
EUR million 12/14 12/13
---------------------------------------------------------------
Carrying amount at the beginning of the period 57.3 62.3
---------------------------------------------------------------
Additions 5.1 7.5
---------------------------------------------------------------
Disposals -0.2 -0.2
---------------------------------------------------------------
Amortisation and impairments -11.8 -12.3
---------------------------------------------------------------
Carrying amount at the end of the period 50.4 57.3
---------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
EUR million 12/14 12/13
------------------------------------------------------------------------
CONTINGENCIES FOR OWN LIABILITIES
------------------------------------------------------------------------
Mortgages on land and buildings 32.0 32.0
------------------------------------------------------------------------
Guarantees 2.7 2.4
------------------------------------------------------------------------
OTHER LIABILITIES
------------------------------------------------------------------------
Leasing liabilities (excluding finance lease contracts) 8.1 6.4
------------------------------------------------------------------------
Other liabilities 0.3 0.3
------------------------------------------------------------------------
DERIVATIVES
EUR million 12/14 12/13
------------------------------------------------------------
CURRENCY FORWARD CONTRACTS AND CURRENCY SWAPS
------------------------------------------------------------
Fair value, EUR million 1.1 0.5
------------------------------------------------------------
Nominal value, EUR million 51.3 67.8
------------------------------------------------------------
CURRENCY OPTIONS
------------------------------------------------------------
Fair value, EUR million 0.2 0.1
------------------------------------------------------------
Nominal value, EUR million 39.7 47.2
------------------------------------------------------------
INTEREST RATE SWAPS
------------------------------------------------------------
Fair value, EUR million -0.1 -0.2
------------------------------------------------------------
Nominal value, EUR million 15.2 18.8
------------------------------------------------------------
ELECTRICITY DERIVATIVES
------------------------------------------------------------
Fair value, EUR million -0.3 -0.7
------------------------------------------------------------
Nominal amount, GWh 22 57
------------------------------------------------------------
FAIR VALUE MEASUREMENT AND HIERARCHY OF FINANCIAL INSTRUMENTS
EUR million Level 1 Level 2 Level 3 Total
-------------------------------------------------------------------------------
Derivatives
-------------------------------------------------------------------------------
Currency derivatives 1.7 1.7
-------------------------------------------------------------------------------
Available-for-sale financial
assets
-------------------------------------------------------------------------------
Shares and investments 5.3 0.3 5.6
-------------------------------------------------------------------------------
Interest-bearing instruments 73.0 73.0
-------------------------------------------------------------------------------
Assets total 5.3 74.7 0.3 80.3
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Derivatives
-------------------------------------------------------------------------------
Currency derivatives -0.4 -0.4
-------------------------------------------------------------------------------
Interest rate swaps -0.1 -0.1
-------------------------------------------------------------------------------
Electricity derivatives -0.3 -0.3
-------------------------------------------------------------------------------
Liabilities total -0.3 -0.5 -0.8
-------------------------------------------------------------------------------
The fair value of level 1 financial instruments is based on quotations
available in active markets. The fair value of level 2 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. During the financial period about EUR 5.3 million of shares
and investments were transferred from level 3 to level 1 because a market
price could then be found for the share. Following the share revaluation, EUR
5.1 million of income (excluding tax effect) was recognised in other
comprehensive income. The income is disclosed in the row "Change in value of
available-for-sale investments".
RELATED PARTY TRANSACTIONS
EUR million 2014 2013
-----------------------------------------------
Management's employment benefits 6.8 6.4
-----------------------------------------------
Operating segment performance
NET SALES BY BUSINESS DIVISION
EUR million Q4/14 Q4/13 Change % 2014 2013 Change %
-------------------------------------------------------------------------
Pharmaceuticals 241.5 259.8 -7.0% 962.0 953.0 +0.9%
-------------------------------------------------------------------------
Proprietary Products 88.5 105.5 -16.1% 373.4 390.4 -4.4%
-------------------------------------------------------------------------
Specialty Products 116.8 105.9 +10.3% 427.1 384.9 +11.0%
-------------------------------------------------------------------------
Animal Health 20.2 18.3 +10.3% 70.2 70.8 -0.8%
-------------------------------------------------------------------------
Fermion 11.0 17.4 -36.7% 56.9 63.5 -10.4%
-------------------------------------------------------------------------
Contract manufacturing
and other 5,1 12.7 -60.0% 34.3 43.3 -20.8%
-------------------------------------------------------------------------
Diagnostics 14.5 13.7 +6.2% 56.4 57.1 -1.2%
-------------------------------------------------------------------------
Group items -0.8 -0.8 -10.4% -3.1 -3.2 -2.8%
-------------------------------------------------------------------------
Group total 255.3 272.6 -6.3% 1,015.3 1,006.9 +0.8%
-------------------------------------------------------------------------
OPERATING PROFIT BY BUSINESS AREA
EUR million Q4/14 Q4/13 Change % 2014 2013 Change %
--------------------------------------------------------------
Pharmaceuticals 56.9 67.9 -16.3% 275.7 272.9 +1.0%
--------------------------------------------------------------
Diagnostics 1.5 0.7 +101.1% 6.4 4.6 +37.6%
--------------------------------------------------------------
Group items -3.1 -2.8 +9.9% -9.6 -9.8 -1.8%
--------------------------------------------------------------
Group total 55.3 65.8 -16.1% 272.4 267.7 +1.8%
--------------------------------------------------------------
NET SALES BY ANNUAL QUARTERS
2014 2013
+-----------------------+-----------------------+
EUR million | Q4 Q3 Q2 Q1| Q4 Q3 Q2 Q1|
----------------+-----------------------+-----------------------+
Pharmaceuticals|241.5 226.2 264.8 229.5|259.8 224.1 235.0 234.2|
----------------+-----------------------+-----------------------+
Diagnostics | 14.5 12.8 12.7 16.3| 13.7 13.5 14.0 15.9|
----------------+-----------------------+-----------------------+
Group items | -0.8 -0.6 -0.9 -0.8| -0.8 -0.7 -0.9 -0.8|
----------------+-----------------------+-----------------------+
Group total |255.3 238.3 276.7 245.0|272.6 236.9 248.0 249.4|
----------------+-----------------------+-----------------------+
OPERATING PROFIT BY ANNUAL QUARTERS
2014 2013
+-------------------+-------------------+
EUR million | Q4 Q3 Q2 Q1| Q4 Q3 Q2 Q1|
----------------+-------------------+-------------------+
Pharmaceuticals|56.9 63.8 88.3 66.7|67.9 66.7 64.4 73.9|
----------------+-------------------+-------------------+
Diagnostics | 1.5 1.7 0.6 2.6| 0.7 2.0 -0.4 2.3|
----------------+-------------------+-------------------+
Group items |-3.1 -1.8 -2.9 -1.9|-2.8 -2.2 -2.9 -2.0|
----------------+-------------------+-------------------+
Group total |55.3 63.8 86.0 67.4|65.8 66.6 61.1 74.1|
----------------+-------------------+-------------------+
GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS
2014 2013
+-----------------------+-----------------------+
EUR million | Q4 Q3 Q2 Q1| Q4 Q3 Q2 Q1|
--------------+-----------------------+-----------------------+
Finland | 79.6 73.5 72.0 70.4| 71.5 67.6 67.7 67.8|
--------------+-----------------------+-----------------------+
Scandinavia | 35.6 31.7 34.6 33.3| 33.0 30.7 34.5 32.5|
--------------+-----------------------+-----------------------+
Other Europe | 89.1 81.3 104.9 79.1| 91.9 77.6 83.6 75.7|
--------------+-----------------------+-----------------------+
North America| 24.5 15.2 34.0 30.7| 45.2 32.7 33.6 34.5|
--------------+-----------------------+-----------------------+
Other markets| 26.5 36.6 31.2 31.5| 31.0 28.2 28.8 38.8|
--------------+-----------------------+-----------------------+
Group total |255.3 238.3 276.7 245.0|272.6 236.9 248.0 249.4|
--------------+-----------------------+-----------------------+
Business reviews
KEY FIGURES FOR PHARMACEUTICALS BUSINESS
EUR million Q4/14 Q4/13 Change % 2014 2013 Change %
-------------------------------------------------------------------------------
Net sales 241.5 259.8 -7.0% 962.0 953.0 +0.9%
-------------------------------------------------------------------------------
Operating profit 56.9 67.9 -16.3% 275.7 272.9 +1.0%
-------------------------------------------------------------------------------
% of net sales 23.6% 26.2% 28.7% 28.6%
-------------------------------------------------------------------------------
R&D expenses 26.3 27.6 -4.7% 99.1 93.9 +5.5%
-------------------------------------------------------------------------------
% of net sales 10.9% 10.6% 10.3% 9.9%
-------------------------------------------------------------------------------
Capital expenditure 12.1 18.6 -35.0% 51.3 73.8 -30.4%
-------------------------------------------------------------------------------
% of net sales 5.0% 7.2% 5.3% 7.7%
-------------------------------------------------------------------------------
Sales revenue from proprietary
products 93.1 113.9 -18.3% 363.3 418.5 -13.2%
-------------------------------------------------------------------------------
Assets 669.4 704.3
-------------------------------------------------------------------------------
Liabilities 180.7 160.1
-------------------------------------------------------------------------------
Personnel at the end of the period 3,131 3,208
-------------------------------------------------------------------------------
TOP TEN BEST-SELLING PHARMACEUTICAL PRODUCTS
EUR million Q4/14 Q4/13 Change % 2014 2013 Change %
-------------------------------------------------------------------------------
Stalevo(®), Comtess(®) and Comtan(®)
(Parkinson's disease) 39.3 51.0 -23.0% 169.2 206.8 -18.2%
-------------------------------------------------------------------------------
Simdax(®) (acute decompensated heart
failure) 12.4 12.8 -3.4% 47.1 46.0 +2.3%
-------------------------------------------------------------------------------
Easyhaler(®) product family (asthma,
COPD) 10.7 8.0 +33.0% 35.3 28.9 +21.9%
-------------------------------------------------------------------------------
Dexdor(®) (intensive care sedative) 10.5 7.4 +43.1% 35.2 25.3 +39.1%
-------------------------------------------------------------------------------
Precedex(®) (intensive care
sedative) 4.9 18.5 -73.4% 29.8 59.1 -49.5%
-------------------------------------------------------------------------------
Generic entacapone products
(Parkinson's disease) 6.0 3.4 +77.6% 25.5 10.2 +150.8%
-------------------------------------------------------------------------------
Dexdomitor(®), Domitor(®),
Domosedan(®) and Antisedan(®)
(animal sedatives) 8.9 6.8 +29.5% 24.7 24.8 -0.5%
-------------------------------------------------------------------------------
Burana(®) (inflammatory pain) 6.2 6.1 +3.2% 23.1 23.2 -0.4%
-------------------------------------------------------------------------------
Marevan(®) (anticoagulant) 4.6 4.3 +8.6% 17.2 16.1 +7.2%
-------------------------------------------------------------------------------
Divina(®) range (menopausal
symptoms) 4.6 4.4 +4.9% 14.7 14.8 -1.0%
-------------------------------------------------------------------------------
Total 108.1 122.7 -11.9% 421.9 455.2 -7.3%
-------------------------------------------------------------------------------
Share of pharmaceutical net sales 45% 47% 44% 48%
-------------------------------------------------------------------------------
KEY FIGURES FOR DIAGNOSTICS BUSINESS
EUR million Q4/14 Q4/13 Change % 2014 2013 Change %
-----------------------------------------------------------------------------
Net sales 14.5 13.7 +6.2% 56.4 57.1 -1.2%
-----------------------------------------------------------------------------
Operating profit 1.5 0.7 +101.1% 6.4 4.6 +37.6%
-----------------------------------------------------------------------------
% of net sales 10.3% 5.4% 11.3% 8.1%
-----------------------------------------------------------------------------
R&D expenses 2.0 2.2 -8.5% 7.2 8.3 -12.9%
-----------------------------------------------------------------------------
% of net sales 13.6% 15.7% 12.8% 14.5%
-----------------------------------------------------------------------------
Capital expenditure 2.1 1.2 +66.2% 6.3 3.3 +91.2%
-----------------------------------------------------------------------------
% of net sales 14.2% 9.1% 11.3% 5.8%
-----------------------------------------------------------------------------
Assets 48.9 47.3
-----------------------------------------------------------------------------
Liabilities 16.5 16.6
-----------------------------------------------------------------------------
Personnel at the end of the period 296 287
-----------------------------------------------------------------------------
Information on Orion's shares
BASIC SHARE INFORMATION 31 DECEMBER 2014
A shares B shares Total
-------------------------------------------------------------------------------
Trading code on NASDAQ OMX Helsinki ORNAV ORNBV
-------------------------------------------------------------------------------
Listing day 1 July 2006 1 July 2006
-------------------------------------------------------------------------------
ISIN code FI0009014369 FI0009014377
-------------------------------------------------------------------------------
ICB code 4500 4500
-------------------------------------------------------------------------------
Reuters code ORNAV.HE ORNBV.HE
-------------------------------------------------------------------------------
Bloomberg code ORNAV.FH ORNBV.FH
-------------------------------------------------------------------------------
Share capital, EUR million 26.4 65.8 92.2
-------------------------------------------------------------------------------
Counter book value per share, EUR 0.65 0.65
-------------------------------------------------------------------------------
Total number of shares 40,412,981 100,844,847 141,257,828
-------------------------------------------------------------------------------
% of total share stock 29% 71% 100%
-------------------------------------------------------------------------------
Number of treasury shares 569,665 569,665
-------------------------------------------------------------------------------
Total number of shares excluding
treasury shares 40,412,981 100,275,182 140,688,163
-------------------------------------------------------------------------------
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 808,259,620 100,275,182 908,534,802
-------------------------------------------------------------------------------
% of total votes 89% 11% 100%
-------------------------------------------------------------------------------
Total number of shareholders 17,343 40,459 51,917
-------------------------------------------------------------------------------
A shares and B shares confer equal rights to the Company's assets and
dividends.
INFORMATION ON TRADING ON NASDAQ HELSINKI 1 JANUARY - 31 DECEMBER 2014
A shares B shares Total
-------------------------------------------------------------------------------
Shares traded 2,595,181 74,824,531 77,419,712
-------------------------------------------------------------------------------
% of the total number of shares 6.3% 74.9% 54.8%
-------------------------------------------------------------------------------
Trading volume, EUR million 66.7 1,914.9 1,981.6
-------------------------------------------------------------------------------
Closing quotation on 31 December 2013, EUR 20.35 20.42
-------------------------------------------------------------------------------
Lowest quotation, EUR (A and B 4 February
2014) 19.13 19.07
-------------------------------------------------------------------------------
Average quotation, EUR 25.70 25.59
-------------------------------------------------------------------------------
Highest quotation, EUR (A and B 30 September
2014) 31.11 31.33
-------------------------------------------------------------------------------
Closing quotation on 31 December 2014, EUR 25.03 25.77
-------------------------------------------------------------------------------
Market capitalisation on 31 December 2014
excluding treasury shares, EUR million 1,011.5 2,584.1 3,595.6
-------------------------------------------------------------------------------
PERFORMANCE PER SHARE
Q4/14 Q4/13 Change % 2014 2013 Change %
-------------------------------------------------------------------------------
Basic earnings per share,
EUR 0.29 0.40 -26.6% 1.50 1.46 +2.7%
-------------------------------------------------------------------------------
Diluted earnings per share,
EUR 0,29 0.40 -26.6% 1.50 1.46 +2.7%
-------------------------------------------------------------------------------
Cash flow per share before
financial items, EUR 0,38 0.46 -17.0% 1.72 1.02 +68.4%
-------------------------------------------------------------------------------
Equity per share, EUR 3.66 3.66 +0.1%
-------------------------------------------------------------------------------
Proposed dividend per share,
EUR 1.30 1.25 +4,0 %
-------------------------------------------------------------------------------
Proposed payout ratio, % 86.7% 85.6%
-------------------------------------------------------------------------------
Total proposed dividend, EUR
million 182.9 175.7 +4,1 %
-------------------------------------------------------------------------------
Effective dividend yield
according to proposal, %
-------------------------------------------------------------------------------
A share 5.2% 6.1%
-------------------------------------------------------------------------------
B share 5.0% 6.1%
-------------------------------------------------------------------------------
Price/earnings ratio (P/E)
-------------------------------------------------------------------------------
A share 16.69 13.94 +19.7%
-------------------------------------------------------------------------------
B share 17.18 13.99 +22.8%
-------------------------------------------------------------------------------
Average number of shares
excluding treasury shares,
1,000 shares 140,688 140,909 140,668 141,006
-------------------------------------------------------------------------------
Appendices
Reporting
Orion Corporation is the parent company of the Orion Group. The Group consists
of two business areas, or operating segments, and five business divisions. Orion
reports on its operations segmentally.
* Pharmaceuticals business
* Proprietary Products (patented prescription products for three therapy
areas)
* Specialty Products (off-patent, generic prescription products and self-
care products)
* Animal Health (veterinary products for pets and production animals)
* Fermion (active pharmaceutical ingredients for Orion and other
companies)
* Diagnostics business
* Orion Diagnostica (diagnostic test systems for point-of-care in
healthcare and hygiene tests for industry).
Contract manufacturing and other, i.e. manufacturing for other companies, is
included in the Pharmaceuticals business segment, but it is not a separate
business division, it is part of the Group's Supply Chain organisation.
Accounting policies
The Consolidated Financial Statements of the Orion Group have been prepared in
accordance with International Financial Reporting Standards (IFRS) applying the
IAS and IFRS standards as well as SIC and IFRIC interpretations effective at 31
December 2014.
* IFRS 10, Consolidated Financial Statements
* IFRS 11, Joint Arrangements
* IFRS 12, Disclosures of Interests in Other Entities
* An amendment to transitional provisions relating to the following standards:
IFRS 10, Consolidated Financial Statements, IFRS 11, Joint Arrangements, and
IFRS 12 Disclosures of Interests in Other Entities
* IAS 28 (revised), Associates and Joint Ventures
* IAS 32 (amendment), Financial Instruments: Presentation - Offsetting
Financial Assets and Financial Liabilities
* IAS 36 (amendment), Impairment of Assets
* IAS 39 (amendment), Financial Instruments: Recognition and Measurement
* IFRIC 21, Levies
The effects of the new IFRS 11 on the consolidated financial statements are
described below. The other new IFRS standards and amendments or improvements to
them had no material effect on the consolidated financial statements.
IFRS 11, Joint Arrangements
The Group applies the new IFRS 11 to accounting for joint arrangements. Joint
arrangements are either joint ventures or joint operations.
Joint operations are joint arrangements that have been implemented without a
separate investment instrument or in which the legal form of the arrangement is
such that the parties have direct rights to certain assets or obligations for
certain liabilities. Joint operations are incorporated into the consolidated
financial statements in accordance with the proportional interest in the joint
operation. Expenses for research and development projects that are classified as
joint operations are included in the Group's research and development expenses.
The portion of the expenses that corresponds to the Group's contractual share of
a project is recognised as an expense.
Joint ventures are joint arrangements in which the parent companies or
subsidiaries have joint control of an entity that is not part of the Group and
in which a parent company or subsidiary has rights to the net assets of the
arrangement. Associates and joint ventures are incorporated into the
consolidated financial statements using the equity method of accounting.
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 audited.
The figures in parentheses are for the corresponding period of the previous
year. All the figures in this report have been rounded, which is why the total
sums of individual figures may differ from the total sums shown.
CALCULATION OF THE KEY FIGURES
Profit before taxes + Interest
and other finance expenses
Return on capital employed (ROCE), % =----------------------------------X 100
Total assets - Non-interest-
bearing liabilities (average
during the period)
Profit for the period
Return on equity (ROE), % =----------------------------------X 100
Total equity (average during the
period)
Equity
Equity ratio, % =----------------------------------x 100
Total assets - Advances received
Interest-bearing liabilities -
Cash and cash equivalents -
Gearing, % = Money market investments x 100
----------------------------------
Equity
Profit available for the owners
of the parent company
Earnings per share, EUR =----------------------------------
Average number of shares during
the period, excluding treasury
shares
Cash flow from operating
activities + Cash flow from
Cash flow per share before financial investing activities
items, EUR =----------------------------------
Average number of shares during
the period, excluding treasury
shares
Equity of the owners of the
parent company
Equity per share, EUR =----------------------------------
Number of shares at the end of
the period, excluding treasury
share
Dividend to be distributed for
the period
Dividend per share, EUR =----------------------------------
Number of shares at the end of
the period, excluding treasury
shares
Dividend per share
Payout ratio, % =----------------------------------x 100
Earnings per share
Dividend per share
Effective dividend yield, % =----------------------------------x 100
Closing quotation of the period
Closing quotation of the period
Price/earnings ratio (P/E) =----------------------------------
Earnings per share
Total EUR value of shares traded
Average share price, EUR =----------------------------------
Average number of traded shares
during the period
Market capitalisation, EUR million = Number of shares at the end of
the period × Closing quotation
of the period
Publisher:
Orion Corporation
http://www.orion.fi/
http://www.twitter.com/OrionCorpIR
Orion is a globally operating Finnish company developing pharmaceuticals and
diagnostic tests - a builder of well-being. Orion develops, manufactures and
markets human and veterinary pharmaceuticals, active pharmaceutical ingredients
and diagnostic tests. The company is continuously developing new drugs and
treatment methods. The core therapy areas of Orion's pharmaceutical R&D are
central nervous system (CNS) disorders, oncology and respiratory for which Orion
developes inhaled Easyhaler® pulmonary drugs.
Orion's net sales in 2014 amounted to EUR 1,015 million and the Company had
about 3,500 employees. Orion's A and B shares are listed on NASDAQ Helsinki.
[HUG#1891474]
