Orion Corporation Stock Exchange Release
6 February 2007 at 12.15
Orion Group Financial Review (proforma) 1-12/2006
In this release, the Orion Corporation which was listed as a new
company on the Helsinki Stock Exchange on 3 July 2006 after the
demerger of the old Orion on 1 July 2006, gives a proforma
Financial Review of 1-12/2006, in which is based on figures carved
out from the financial statements of the demerged Orion. The
operations are reviewed according to the post-demerger Group
structure and based on proforma financial figures for 1-12/2006. A
separate stock exchange release is given today on the official
Financial Statements, the Report of the Board of Directors for the
first financial period, 1 July 31 December 2006.
- Group net sales were EUR 641.1 (585.6) million, up by 9.5%.
- Operating profit rose by 26.7% to EUR 196.7 (155.2) million.
- Profit before taxes was EUR 197.3 (154.3) million.
- Earnings per share were EUR 1.03 (0.83).
- Equity ratio was 75.4% (65.6%).
- Return on capital employed (ROCE) was 46.5% (40.7%).
- The proposed dividend is EUR 1.00 per share.
Key carve-out figures on Orion Corporation for the review period
(proforma)
EUR million 10- 10- Chang 1-12/06 1- Change
12/06 12/05 e Profor 12/05 %
Profor % ma Profor
ma ma
Net sales 162.2 147.2 +10.2 641.1 585.6 +9.5%
%
Operating profit (EBIT) 36.6 25.9 +41.0 196.7 155.2 +26.7
% %
% of net sales 22.6% 17.6% 30.7% 26.5%
Profit before taxes 37.1 25.8 +43.7 197.3 154.3 +27.9
% %
% of net sales 22.9% 17.5% 30.8% 26.3%
R&D expenses 24.2 24.3 -0.4% 84.1 80.1 +5.1%
% of net sales 14.9% 16.5% 13.1% 13.7%
Capital expenditure 7.5 7.8 -3.0% 25.5 23.7 +7.7%
% of net sales 4.6% 5.3% 4.0% 4.0%
Balance Sheet total 588.1 605.1 -2.8%
Equity ratio, % 75.4% 65.6%
Gearing, % -22.6% -
28.7%
Interest-bearing 9.8 10.5 -6.9%
liabilities
Non-interest-bearing 134.8 197.8 -
liabilities 31.9%
Cash and cash 110.0 124.5 -
equivalents 11.6%
ROCE (before taxes), % 46.5% 40.7%
ROE (after taxes), % 34.5% 32.9%
Earnings per share, EUR 0.18 0.12 +59.0 1.03 0.83 +24.7
% %
Diluted earnings per 0.12 1.03 0.82 +26.4
share, EUR %
Equity per share, EUR 3.14 2.86 +9.9%
Personnel at the end of 3 061 3 003 +1.9%
the period
The present Orion Corporation was established on 1 July 2006 as one
of the two new listed companies that resulted from the demerger of
the former Orion. The new Orion Corporation comprises the
pharmaceuticals and diagnostics businesses of the demerged Orion.
The wholesale and distribution businesses of the former Orion were
incorporated into Oriola-KD Corporation.
- The figures for the period 1 July 31 December 2006 as well
as the proforma figures have been prepared in accordance with the
IFRS standards. The proforma figures have been carved out from the
financial statements of the demerged Orion Group. The review is
compliant with the same principles and calculation methods as were
applied in the Listing Particulars of Orion Corporation. The
principles and calculation methods are available at the Orion
homepage www.orion.fi/investors.
- The figures have not been audited. Those in the parentheses
are for the comparative period. The per-share ratios for the
comparative periods have been adjusted.
- The figures have been rounded. Therefore, the total sums of
individual figures may differ from the total sums shown.
Orion Corporation
Jukka Viinanen Jari Karlson
President and CEO CFO
Contact persons:
Jukka Viinanen, President and CEO, phone +358 10 426 3710
Jari Karlson, CFO, phone +358 10 426 2883, gsm +358 50 966 2883
Anne Allo, VP, Communications, phone +358 10 426 3735, gsm +358
50 966 3735
Press conference in Finnish
A Finnish press conference for the media and institutional
investors will be held today, Tuesday 6 February 2007, starting at
14.30 p.m. at Orions Head Office in Espoo, address Orionintie 1 A.
The language of the event is Finnish. The Finnish presentation can
be followed on-line via the Internet homepage
www.orion.fi/sijoittajille, or via the Kauppalehti Live web
service, www.kauppalehti.fi/live.
Teleconference in English
A teleconference in English for questions and answers will be
arranged today, Tuesday 6 February 2007, starting at 16.30 p.m.
Finnish time (14.30 GMT). Advice for participating in the
conference is provided on the front page of www.orion.fi/investors.
Webcasting
A webcast presentation of this financial review will become
available in English later in the evening of 6 February on
www.orion.fi/investors and www.kauppalehti.fi/live.
Interim Reports in 2007 will be published as follows:
Interim Report 1-3/2007 Wednesday, 25 April 2007
Interim Report 1-6/2007 Monday, 6 August 2007
Interim Report 1-9/2007 Wednesday, 24 October 2007
The Annual Report for 2006 will be published during week 10/2007.
The Annual General Meeting of the Shareholders is planned to be
held on Monday, 2 April 2007 at 17.00 p.m. in Helsinki. The matters
to be handled are provided in a stock exchange release on 6 Feb.
2007.
Orion Group Financial Review (proforma) 1-12/2006
Orion Group structure
The parent company of the Orion Group is Orion Corporation. The
Group has two businesses and five business divisions:
1) Pharmaceuticals
- Proprietary Products (patented prescription products)
- Specialty Products (off-patent prescription products and self-
medication products)
- Animal Health
- Fermion (active pharmaceutical ingredients)
2) Diagnostics
- Orion Diagnostica.
Net sales
The Group net sales in 1-12/2006 were EUR 641.1 million (EUR 585.6
million in 1-12/2005), up by 9.5% from the comparative period.
Pharmaceuticals business. The net sales of the Pharmaceuticals
business were EUR 601.4 (547.0) million and they grew by 9.9%. No
milestone payments are included in the figures. The products based
on in-house R&D accounted for EUR 274.9 (227.2) million, or 46%
(42%) of the total. The products for Parkinsons Disease, i.e.
Stalevo® and Comtess®/Comtan®, contributed EUR 186.0 (145.3)
million, or 31% (27%) of the total pharmaceutical net sales.
Diagnostics business. Orion Diagnostica generated EUR 41.5 (40.8)
million in net sales, up by 1.8%.
Operating profit (EBIT)
Pharmaceuticals business. The Pharmaceuticals business generated an
operating profit of EUR 189.9 (154.7) million, up by 22.8%. The
favourable development was consequence of the increased sales of
the proprietary products, especially the entacapone franchise, as
well as well managed costs.
Diagnostics business. Orion Diagnosticas operating profit was EUR
6.6 (6.3) million, up by 5.1%. The operational rearrangements and
strategy adjustments that were carried out in 2005 have contributed
positively to the results.
Operating expenses
The consolidated operating expenses were the same as in the
comparative period, EUR 253.0 (252.9) million. Selling and
marketing expenses were EUR 128.9 (129.3) million, almost the same
as in the comparative year. In addition to the costs of sales and
marketing they include the costs of distribution and logistics, as
well as the related salaries and other personnel expenses
Research and development expenses increased by 5.1% to EUR 84.1
(80.1) million, representing 13.1% (13.7%) of the Group net sales.
Pharmaceutical R&D expenses were EUR 79.7 million, or about 95% of
the total. The R&D function is reported in the segment review of
the Pharmaceuticals business.
Other operating income includes EUR 9.8 million in capital gains
from the sale of the rental apartment buildings in August. In the
table Operating profit by business segments the item is included
in the Group items.
Group profit before taxes was EUR 197.3 (154.3) million. The
positive development was mostly consequence of the increased net
sales of Stalevo for Parkinsons Disease and the high volumes
supplied to Novartis, the marketing partner. Earnings per share
were EUR 1.03 (0.83). Equity per share was EUR 3.14 (2.86). Group
ROCE before taxes was 46.5% (40.7%) and ROE after taxes was 34.5%
(32.9%).
Balance Sheet and financial position
The Groups gearing was -22.6% (-28.7%). Equity ratio was 75.4%
(65.6%).
The share subscriptions made in the review period before the
demerger with the options of the demerged Orions stock option plan
that ended in May, induced EUR 21.4 million to the Equity, EUR 17.8
million of which have been recorded in the share premium and the
remainder in the share capital.
In June, EUR 23 million were transferred from the share premium
fund to the expendable fund, based on the decision by the
Extraordinary General Meeting of the demerged Orion held on 19
December 2005.
Total liabilities in the Balance Sheet of 31 December 2006 came to
EUR 144.6 (208.3) million, of which interest bearing liabilities
accounted for EUR 9.8 (10.5) million.
Trade payables at the end of the review period were EUR 29.2
million. They decreased from the year start by EUR 47.9 million,
which included EUR 46.4 million short-term loans that were included
in trade payables and had been repaid to the Oriola-KD companies.
Cash and cash equivalents were EUR 110.0 (124.5) million. The cash
reserves are invested in short-term interest instruments.
Cash flows
The cash flows from operations were EUR 141.4 (133.8) million, and
they grew from the comparative period due to improved profit. The
growth was slowed down by the increase in working capital. The
increase in the working capital was a consequence of increased
sales volumes, enhanced delivery reliability and related
inventories, and decreased trade payables.
The net cash used in investments was improved by the sale of rental
apartment buildings in August.
The share subscriptions made with the stock options 2001 of the
demerged Orion in the first half of the year induced EUR 21.4
million to the cash flows of financing activities. The net cash
used in financing activities
resulted, however, in a negative total of EUR -144.9 million due to
the dividends paid for 2005 and repaid loans. Most of the loans
repaid were short-term receivables of the present Oriola-KD
companies.
Capital expenditure
The capital expenditure of the Group came to EUR 25.5 (23.7)
million, of which machinery and equipment
accounted for EUR 16.6 (16.9) million.
Personnel
The average number of personnel in the Group was 3,063 (2,996) for
the review period. At the end of 2006, the total number of
employees was 3,061 (3,003). Personnel in the Pharmaceuticals
business increased by 77 from the end of 2005, mainly in production
and laboratories. In the Diagnostics business the number of
employees decreased by 15 persons.
Financial objectives
The moderate organic growth of the net sales in the next few years
is accelerated via product, portfolio and company acquisitions.
Operating profit will be increased and Equity ratio is maintained
at the level of at least 50%.
Dividend policy
In the dividend distribution Orion takes into account the
distributable funds as well as the medium-long and long-term needs
of capital expenditure and other financial needs required for the
achievement of the financial objectives.
Proposed dividend 1.00 EUR per share
The Board of Directors proposes that a dividend of EUR 1.00 per
share be distributed on the altogether 141.3 million shares, total
EUR 141.3 million. The payout ratio for 2006 would be 97.1%. The
dividend is paid on 16 April 2007 to the shareholders being
recorded in the companys shareholder register on 5 April 2007.
Outlook for 2007 (proforma)
Net sales will grow somewhat from those of 2006. Sales of
pharmaceuticals via Orions own marketing organisation are
anticipated to start showing moderate growth in Finland and to go
on showing growth in the markets outside Finland. In-market sales
of the entacapone product franchise will continue showing steady,
although slower growth than in the previous years. Deliveries to
Novartis are anticipated to be at the same level as in 2006, in
which they increased considerably, partly because of higher reserve
stockpile levels of Novartis.
Operating profit, one-off earnings excluded, is estimated to grow
somewhat from 2006, despite increased investments in marketing and
pharmaceutical research. Marketing expenses will grow especially
due to investments in product launches by Orions own European
marketing units outside Finland. The higher R&D expenditure is
mainly caused by the new clinical research programmes being started
in 2007.
Research and development expenditure will be about EUR 95 million,
of which pharmaceutical R&D will account for about EUR 90 million.
Capital expenditure will be about EUR 35 million.
REVIEW OF THE SEGMENTS (PROFORMA)
Pharmaceuticals business
Key figures
EUR million 10- 10- Chang 1-12/06 1- Change
12/06 12/05 e Proform 12/05 %
Proform % a Proform
a a
Net sales 152.1 137.2 +10.9 601.4 547.0 +9.9%
%
Operating profit 39.5 27.7 +42.6 189.9 154.7 +22.8
% %
% of net sales 26.0% 20.2% 31.6% 28.3%
Capital 6.7 6.9 -3.7% 23.1 21.1 +9.5%
expenditure
Net sales from 68.3 50.5 +35.3 274.9 227.2 +21.0
proprietary % %
products
R&D expenditure 22.8 23.2 -1.6% 79.7 76.5 +4.3%
Personnel at the 2 742 2 665 +2.9%
end of the period
Breakdown of pharmaceutical net sales by business areas
EUR million 10- 10- Change 1-12/06 1- Change
12/06 12/05 % Proform 12/05 %
Proform a Proform
a a
Proprietary 65.6 48.9 +34.2% 256.6 214.9 +19.4%
Products
Specialty 55.3 62.2 -11.2% 218.7 224.3 -2.5%
Products
Animal Health 15.4 14.7 +4.5% 63.3 59.5 +6.3%
Fermion 9.9 11.1 -10.8% 38.5 38.4 +0.4%
Others 6.0 0.4 +1508.8 24.2 9.9 +145.0
% %
Group total 152.1 137.3 +10.9% 601.4 547.0 +9.9%
Positive profitability development continued in the Pharmaceuticals
business. Operating profit increased by 22.8% from the comparative
year. No milestone payments were received in the review period or
the comparative one.
The combined net sales of Orions proprietary products for
Parkinsons Disease, Stalevo (levodopa, entacapone, carbidopa) and
Comtess/Comtan (entacapone) grew by 28% and they contributed EUR
186.0 (145.3) million or about 31% (27%) of the total
pharmaceutical net sales. Shipments of Stalevo and Comtan to
Novartis, the marketing partner, amounted to EUR 112.1 (78.8)
million. They increased by about 42% from the comparative year,
clearly more in relation to the about 21% by which the partners
net sales of Comtan and Stalevo grew from those for 2005. The net
sales generated from Stalevo and Comtess by Orions own sales
organisation were EUR 73.9 (66.5) million, up by 11.2%. The
emphasis of the entacapone marketing efforts is dominantly on
Stalevo. Particularly strong geographic growth areas have been
Germany and the UK. In Scandinavia, the performance of Orions own
sales organisation is hampered by large-scale parallel imports.
In the IMS sales statistics for November 2006, the combined market
share of Stalevo and Comtess/Comtan of the total wholesales of
Parkinsons Disease medicines in the USA was about 16%, in Germany
about 17%, Sweden 18%, and in Finland 31%.
A Japanese marketing authorisation was granted for Comtan in late
January 2007. The time of the launch is subject to local
negotiations on pricing and reimbursement.
Net sales from the 10 best-selling pharmaceutical brands of Orion
EUR million 10- 10- Chang 1- 1- Chang
12/06 12/05 e 12/06 12/05 e
Profo % Profo Profo %
rma rma rma
Stalevo (Parkinsons 31.1 16.6 +87.5 111.3 74.7 +49.
disease) % 1%
Comtess / Comtan 17.7 15.9 +11.5 74.7 70.6 +5.8
(Parkinsons) % %
Domitor, Domosedan, 5.8 5.8 +0.9% 26.0 26.0 -
Antisedan (animal 0.0%
sedatives)
Divina series 3.8 3.4 +9.6% 16.2 16.2 -
(menopausal symptoms) 0.1%
Easyhaler (asthma) 3.6 3.0 +19.3 15.9 10.9 +45.
% 1%
Enanton (prostate 3.3 3.3 -1.3% 13.3 13.6 -
cancer) 2.0%
Simdax (heart failure) 2.8 3.6 - 13.2 13.7 -
21.8% 4.2%
Burana (inflammatory 3.6 6.1 - 12.0 17.4 -
pain) 40.7% 30.6
%
Calcimagon 1.8 2.7 - 11.7 10.2 +14.
(osteoporosis) 34.9% 3%
Fareston (breast 1.7 1.3 +35.7 10.3 10.7 -
cancer) % 3.6%
Total 75.3 61.8 +21.8 304.5 264.0 +15.
% 4%
Share of total 49% 45% 51% 48%
pharmaceutical
net sales
The net sales from the 10 best-selling brands grew by 15.4% and
they accounted for about 51% (48%) of the total pharmaceutical net
sales. Net sales from the proprietary product franchise were EUR
274.9 (227.2) million. They grew by 21.0% from the comparative
period and contributed 46% (42%) to the total pharmaceutical net
sales. The figures include also the animal sedatives, which belong
to the Animal Health business, and Easyhaler®, which belongs to the
Specialty Products business. The net sales from the Easyhaler
franchise grew by 45.1% from the comparative period, thanks to new
product launches and expanded market area.
In Finland, the wholesales of Orions products were about EUR 152.4
million, and although they were down by close to 11% from the
comparative period, Orion rose to the position of the market leader
with a market share of 8.8% of the total Finnish wholesales for 1-
12/2006. In terms of volumes sold, Orion was the clearly leading
provider, with a market share of 27.2%. The declined domestic
sales were consequence of the impacts of the 5% price cut imposed
on the wholesale prices of all reimbursed prescription drugs at the
start of the year, the tightened regulations concerning discounts
grantable to pharmacies, as well as price competition in the group
of substitutable prescription products. In this product category,
the number of product packages purchased by pharmacies grew by
about 3%, whereas the corresponding value decreased by almost 10%
from the comparative period. The number of sold packages of non-
substitutable products decreased by over 3% from the comparative
period but the corresponding wholesale value grew by almost 8%. In
self-care products, the volumes purchased by pharmacies were down
by over 24%, corresponding to a drop of almost 18% in euros. In
self-care products Orion continued to have the highest market
share, which was 23.4% of the wholesale value and 32.9% of the
volume. The products marketed by Orion in Finland belong dominantly
to the Specialty Products business.
Orions own foreign sales organisation has increased sales
successfully, contributing already about EUR 145 million of the
total net sales from human pharmaceuticals. Outstandingly positive
were the German and UK operations as well as those in the eastern
EU and Russia, the markets emphasised by the strategy as primary
geographic growth areas. Strategic means of growth are also product
acquisitions, an enhanced activity whose achievements will allow
Orion to sell an increasingly broad and renewed selection of
products in the years to come.
Animal Healths net sales rose by 6.3% and accounted for about 11%
(11%) of the total pharmaceutical net sales. The growth came from
Orions own Scandinavian-based marketing organization, whereas the
contribution of marketing partners remained on the previous years
level. The net sales of the animal sedatives Domitor®, Domosedan®
and Antisedan® remained on the level of the comparative year and
accounted for about 41% (44%) of the total net sales of animal
health products. The marketing efforts are being increased
especially in eastern European countries. The rights for marketing
Domitor and Antisedan in Japan were transferred to ZENOAQ - Nippon
Zenyaku Kogyo Co., Ltd. as of February 2007.
Fermions net sales were EUR 38.5 million, almost the same as in
the comparative year. The impact of intra-Group transactions has
been eliminated from Fermions net sales. Deliveries for Orions
own use have kept on growing in the wake of the continued
favourable sales of Stalevo and Comtess/Comtan.
Pharmaceutical research and development
Pharmaceutical R&D expenses were EUR 79.7 (76.5) million for the
review period, and they represented 13.3% (14.0%) of the
pharmaceutical net sales.
The largest ongoing study, STRIDE-PD, is a major Phase 3 study on
Parkinsons Disease, seeking to investigate if Stalevo medication
can delay the onset of motor complications, i.e. dyskinesias. In
the study, Stalevo is compared with conventional levodopa/carbidopa
medication. The study, under way since late 2004, is being carried
out in collaboration with Novartis in 14 countries. It involves
altogether 740 patients, each being treated at least two years.
Results are anticipated in the first half of 2008.
The results presented at the turn of October-November from a Phase
4 study made in four Asian Pacific countries demonstrate for their
part that early started treatment with Stalevo significantly
improves quality of life in patients with Parkinsons Disease when
compared to traditional levodopa therapy.
The research programme for the development of a more efficient COMT
inhibitor than entacapone has progressed to clinical Phase 1 at the
turn of the year.
The clinical Phase 3 is being started with dexmedetomidine
(Precedex®) as a long-term infusion for the sedation of patients in
intensive care, with an objective to have the product registered in
the EU. The product is already available in the USA and Japan as a
sedative for patients in intensive care, administrable for up to 24
hours.
In December 2006, Orion received a New Animal Drug Approval (NADA)
for Dexdomitor® (dexmedetomidine), a new-generation sedative for
small animals.
In a separate stock exchange release published today, 6 February
2007, Orion has informed about the status of the Simdax project as
follows:
Orion Corporation and Abbott are continuing negotiations concerning
a possible additional Phase 3 clinical study with intravenously
administered levosimendan (Simdax), for which Abbott is the license
holder under an agreement with Orion. The two companies are also
discussing on the sharing of the costs of the possible study.
Orion has announced that it considers to contribute by carrying a
total of EUR 20 million of the costs during the study provided that
the prerequisites for conducting the study are reasonable and
acceptable on the basis of the upcoming consultation by Abbott and
Orion with the FDA, tentatively agreed to start in March 2007.
Due to the many still open questions concerning the scope and
timelines of the possible study, the timings of the study and
possible payments as well as the impacts on Orions cash flows can
not be estimated at this stage. Orion emphasises that the
realisation of the study and the agreement between Orion and Abbott
on the study is uncertain.
Orion will inform about the solution of the matter as soon as it
has been reached.
Discussions regarding further registration through the European
mutual recognition procedure will be begun by Abbott in the third
quarter of 2007.
The CLEVET programme, which is studying the efficacy of
levosimendan in the treatment of heart diseases in dogs, is being
taken to the last research phase with an aim to receive marketing
authorisations.
The results received in the summer 2006 of the Persist study have
led to a decision not to continue the research programme in orally
administered levosimendan.
In early research phases, Orion is investigating molecules
affecting alpha 2 receptors in the central nervous system, and
selective androgen receptor modulators (SARM), among others.
Diagnostics business
Key figures
EUR million 10- 10- Chang 1-12/06 1- Change
12/06 12/05 e Proform 12/05 %
Proform % a Proform
a a
Net sales 10.4 10.5 -0.4% 41.5 40.8 +1.8%
Operating profit 0.6 1.1 - 6.6 6.3 +5.1%
42.4%
% of net sales 6.1% 10.5% 15.9% 15.4%
Capital 0.4 0.5 - 1.4 1.8 -
expenditure 18.9% 19.4%
Personnel at the 289 304 -5.1%
end of the
period
Orion Diagnostica showed low full-year net sales growth due to the
flat last quarter compared to that of the previous year., The in-
focus products, such as the QuikRead infection test family and the
UniQue collagen tests, which are used in the follow-up of the
treatment of bone diseases like osteoporosis, performed
particularly well. On the other hand, sales of certain ageing
products continued to decrease
Lower-margin products accounted for a greater than normal part of
the sales in the last quarter. Product development expenses were
also higher in the second half of the year than in the first half.
These factors together with certain one-off expenses led to slower
development of operating profit than in the first half. For the
full year 2006, the overall profitability continued to develop
favourably and operating profit improved slightly from the
comparative year.
TABLES
GROUP INCOME STATEMENT
EUR million 10- 10- Chang 1- 1- Change
12/06 12/05 e 12/06 12/05 %
Profor % Profo Profo
ma rma rma
Net sales 162.2 147.2 +10.2 641.1 585.6 +9.5%
%
Cost of goods sold -54.5 -48.7 +11.9 - - +8.6%
% 205.2 188.9
Gross profit 107.7 98.5 +9.4% 435.8 396.7 +9.9%
Other operating income 1.0 1.6 - 13.8 11.4 +21.2
36.0% %
Selling and marketing -35.7 -35.7 -0.1% - - -0.3%
expenses 128.9 129.3
Research and -24.2 -24.3 -0.4% -84.1 -80.1 +5.1%
development expenses
Administrative expenses -12.3 -14.2 - -39.9 -43.4 -8.1%
13.2%
Operating profit 36.6 25.9 +41.0 196.7 155.2 +26.7
% %
Financial income 1.1 1.0 +7.9% 3.5 3.0 +15.9
%
Financial expenses -0.6 -1.1 - -3.0 -4.0 -
49.6% 26.4%
Profit before taxes 37.1 25.8 +43.7 197.3 154.3 +27.9
% %
Income tax expense -10.8 -9.5 +13.0 -52.2 -40.4 +29.3
% %
Profit for the period 26.3 16.3 +61.8 145.1 113.9 +27.3
% %
of which attributable
to:
Parent company 26.3 16.3 +61.8 145.1 113.9 +27.3
shareholders % %
Minority 0.0 0.0 0.0 0.0
Earnings per share
Basic, EUR 0.18 0.12 +59.0 1.03 0.83 +24.7
% %
Diluted, EUR - 0.12 - 1.03 0.82 +26.4
%
Depreciation and 8.6 9.0 -4.4% 34.7 35.4 -2.0%
amortisation
Employee benefit 42.1 40.2 +4.7% 145.8 140.1 +4.0%
expenses
GROUP BALANCE SHEET:
ASSETS
EUR million 12/200 12/200 Change
6 5 %
Profor
ma
Non-current assets
Property, plant and 187.1 196.4 -4.8%
equipment
Goodwill 13.5 13.5 +0.0%
Other intangible assets 21.9 24.5 -
10.5%
Investments in associates 0.1 0.1 +0.0%
Available-for-sale 1.0 1.0 -1.7%
investments
Pension asset 52.7 46.3 +13.9%
Deferred tax assets 1.4 1.5 -9.8%
Other non-current 3.8 4.2 -
receivables 10.7%
Non-current assets total 281.4 287.5 -2.1%
Current assets
Inventories 107.2 99.4 +7.8%
Trade receivables 75.0 78.7 -4.6%
Other receivables 14.4 14.9 -3.7%
Cash and cash equivalents 110.0 124.5 -
11.6%
Current assets total 306.6 317.5 -3.4%
Assets total 588.1 605.1 -2.8%
BALANCE SHEET:
EQUITY AND LIABILITIES
EUR million 12/200 12/200 Change
6 5 %
Profor
ma
Equity
Share capital 92.2 88.2 +4.6%
Share issue - 0.3 -
Share premium 17.8 23.2 -23.3%
Expendable fund 23.0 - -
Other reserves 0.5 0.7 -33.5%
Retained earnings 309.9 284.3 +9.0%
Equity of the parent 443.5 396.7 +11.8%
company shareholders
Minority interest 0.0 0.0 -8.9%
Equity total 443.5 396.8 +11.8%
Non-current liabilities
Deferred tax 51.5 51.3 +0.4%
liabilities
Pension liability 0.9 0.7 +21.1%
Provisions 0.6 2.4 -74.3%
Interest-bearing non- 7.5 8.3 -9.0%
current liabilities
Other non-current 1.8 1.2 +46.3%
liabilities
Non-current liabilities 62.3 63.9 -2.5%
total
Current liabilities
Trade payables 29.2 77.1 -62.1%
Other current 49.9 64.7 -23.0%
liabilities
Provisions 0.9 0.3 +191.0%
Interest-bearing 2.3 2.2 +0.8%
current liabilities
Current liabilities 82.3 144.4 -43.0%
total
Equity and liabilities 588.1 605.1 -2.8%
total
CASH FLOW STATEMENT
EUR million 1- 1-
12/200 12/200
6 5
Profor Profor
ma ma
Cash flow from operating
activities
Operating profit 196.7 155.2
Adjustments 16.0 22.3
Change in working capital -18.6 -5.1
Interest paid -3.8 -4.5
Interest received 3.5 5.0
Income taxes paid -52.5 -39.1
Net cash from operating 141.4 133.8
activities
Cash flow from investing
activities
Purchases of property, plant and -22.8 -21.7
equipment and intangible assets
Acquisition of subsidiary, net -1.2 -
of cash
Proceeds from sale of property, 13.0 7.9
plant and equipment, intangible
assets and available-for-sale
investments
Net cash used in investing -10.9 -13.8
activities
Cash flow from financing
activities
Share issue and share capital 21.4 43.4
increase based on the use of
stock options
Change in short-term loans -47.5 -17.7
Change in long-term loans -0.6 -32.3
Dividends paid to parent company -118.2 -56.7
and minority shareholders
Net cash used in financing -144.9 -63.3
activities
Net change in cash and cash -14.4 56.7
equivalents
Cash and cash equivalents at the 124.5 68.4
beginning
of the period
Foreign exchange adjustments -0.1 -0.6
Net change in cash and cash -14.4 56.7
equivalents
Cash and cash equivalents at the 110.0 124.5
end of the period
CHANGES IN PROPERTY, PLANT AND EQUIPMENT
EUR million 1- 1-
12/200 12/2005
6 Proform
Profor a
ma
Carrying amount at the beginning 196.4 204.0
of the period
Additions 19.0 20.7
Disposals -2.7 -2.0
Depreciation -25.6 -26.2
Carrying amount at the end of 187.1 196.4
the period
CONTINGENT LIABILITIES
EUR million 12/200 12/200
6 5
Profor
ma
Contingent for own liabilities:
Mortgages on land and buildings 25.5 27.9
of which those on behalf of the 9.0 11.9
Orion
Pension Fund
Guarantees 1.8 2.0
Contingent for liabilities of
other parties:
Mortgages on land and buildings - 9.9
Guarantees - 7.2
Leasing liabilities (excl. 5.2 3.8
finance leasing contracts)
Other liabilities 0.3 0.3
Currency forward contracts:
- fair value 0.3 -0.3
- nominal value 58.5 80.0
RELATED-PARTY TRANSACTIONS
EUR million 1- 1-
12/200 12/2005
6 Proform
Profor a
ma
Management benefits 2.1 1.9
Non-current liabilities to the 6.0 20.1
pension fund
at the end of the period
NET SALES BY BUSINESS SEGMENTS
EUR million 10- 10- Chang 1-12/06 1- Change
12/06 12/05 e Proform 12/05 %
Proform % a Proform
a a
Pharmaceuticals 152.1 137.2 +10.9 601.4 547.0 +9.9%
%
Diagnostics 10.4 10.5 -0.4% 41.5 40.8 +1.8%
Group items -0.4 -0.5 - -1.8 -2.1 -
28.5% 14.8%
Group total 162.2 147.2 +10.2 641.1 585.6 +9.5%
%
OPERATING PROFIT BY BUSINESS SEGMENTS
EUR million 10- 10- Chang 1-12/06 1- Change
12/06 12/05 e Proform 12/05 %
Proform % a Proform
a a
Pharmaceuticals 39.5 27.7 +42.6 189.9 154.7 +22.8
% %
Diagnostics 0.6 1.1 - 6.6 6.3 +5.1%
42.4%
Group items -3.5 -2.9 +23.9 0.2 -5.7 -
% 103.5
%
Group total 36.6 25.9 +41.0 196.7 155.2 +26.7
% %
REVIEW BY ANNUAL QUARTERS
Net sales by business segments by annual quarters
EUR million 1-3/05 4-6/05 7-9/05 10- 1-3/06 4-6/06 7- 10-
Proform Proform Proform 12/05 Proform Profor 9/06 12/06
a a a Proform a ma
a
Pharmaceutica 135.9 140.0 133.8 137.2 162.9 146.4 139. 152.
ls 9 1
Diagnostics 10.5 10.3 9.5 10.5 11.2 10.4 9.5 10.4
Group items -0.5 -0.6 -0.4 -0.5 -0.5 -0.5 -0.4 -0.4
Group total 145.9 149.7 142.8 147.2 173.5 156.3 149. 162.
0 2
Operating profit by business segments by annual quarters
EUR million 1-3/05 4-6/05 7-9/05 10- 1-3/06 4-6/06 7- 10-
Proform Proform Proform 12/05 Proform Profor 9/0 12/0
a a a Proform a ma 6 6
a
Pharmaceutica 45.2 39.1 42.7 27.7 62.0 43.3 45. 39.5
ls 1
Diagnostics 1.7 2.0 1.4 1.1 2.8 1.7 1.5 0.6
Group items -1.6 -3.0 1.8 -2.9 -1.9 -2.1 7.7 -3.5
Group total 45.3 38.1 45.9 25.9 62.9 42.9 54. 36.6
3
Net sales by geographic segments by annual quarters
EUR 1-3/05 4-6/05 7-9/05 10- 1-3/06 4-6/06 7- 10-
million Proform Proform Proform 12/05 Proform Profor 9/06 12/06
a a a Proform a ma
a
Finland 48.0 46.9 44.8 52.6 44.8 45.4 45.2 49.0
Scandinav 20.6 22.7 21.3 22.4 22.5 24.2 21.2 23.4
ia
Other 42.7 44.7 51.4 46.1 69.6 52.7 52.8 58.4
Europe
North 21.3 21.8 14.2 15.6 20.4 20.5 20.1 22.0
America
Other 13.4 13.6 11.2 10.4 16.2 13.4 9.7 9.4
markets
Group 145.9 149.7 142.8 147.2 173.5 156.3 149. 162.
total 0 2
ORION GROUP FINANCIAL DEVELOPMENT IN 20042006 (PROFORMA)
EUR million and % 2004 2005 2006
NET SALES AND PROFIT
Net sales 553.0 585.6 641.1
International operations 364.1 393.3 456.6
% of net sales 65.8% 67.2% 71.2%
Depreciation and 42.7 35.4 34.7
amortisation
Operating profit 105.3 155.2 196.7
% of net sales 19.0% 26.5% 30.7%
Financial income and -1.2 -1.0 0.6
expenses
% of net sales -0.2% -0.2% 0.1%
Profit before taxes 104.1 154.3 197.3
% of net sales 18.8% 26.3% 30.8%
Income taxes 30.8 40.4 52.2
Profit available for 73.3 113.9 145.1
parent company
shareholders
Earnings per share, EUR 0.55 0.83 1.03
Return on capital 24.8% 40.7% 46.5%
employed (ROCE)
Return on equity (ROE) 19.7% 32.9% 34.5%
BALANCE SHEET
Non-current assets 301.9 287.5 281.4
Current assets 249.4 317.5 306.6
Equity of the parent 296.4 396.7 443.5
company shareholders
Non-current provisions 5.0 2.4 0.6
Liabilities total 254.9 208.3 144.6
Interest-bearing 75.0 10.5 9.8
liabilities
Non-interest-bearing 179.9 197.8 134.8
liabilities
Total assets 551.3 605.1 588.1
Equity ratio 54.1% 65.6% 75.4%
Gearing 2.2% - -
28.7% 22.6%
CAPITAL EXPENDITURE
Capital expenditure 19.6 23.7 25.5
% of net sales 3.5% 4.0% 4.0%
RESEARCH AND DEVELOPMENT
EXPENDITURE
Research and development 78.4 80.1 84.1
expenditure
% of net sales 14.2% 13.7% 13.1%
PERSONNEL
Wages and salaries 116.3 118.7 123.7
Average number of 3 036 2 996 3 063
employees
FACTS ABOUT ORION CORPORATION SHARES AS ON 31 DECEMBER 2006
Class A Class B A and B total
Share capital 36.3 MEUR 55.9 MEUR 92.2 MEUR
Total number of 55 554 pcs 85 703 pcs 141 257 pcs
shares 240 588 828
Minimum share 50 MEUR
capital
Maximum share 2 000 MEUR
capital
Share of total 39 % 61 % 100.0 %
share stock
Counter book value about EUR about EUR
of share 0.65 0.65
Votes per share 20 vote 1 vote
s
Trading code on ORNAV ORNBV
the Helsinki Stock
Exchange
Both share classes provide equal rights to the company assets and
dividends.
TRADING IN ORION CORPORATION SHARES 1 JULY - 31 DECEMBER 2006
Class A Class B A and B total
Total number of shares 1 651 pcs 37 250 pcs 38 901 kpcs
traded 018 954 972
Share of total stock 2.9 % 43.8 % 27.5 %
Lowest quotation 11.45 EUR 11.51 EUR
Highest quotation 16.44 EUR 16.53 EUR
Closing quotation on 3 13.35 EUR 13.90 EUR
July 2006
Closing quotation on 16.42 EUR 16.45 EUR
29 Dec. 2006
Market capitalisation 912.2 1 409.8 2 322.0
on MEUR MEUR MEUR
31 Dec. 2006
PERFORMANCE PER SHARE
2006 2005 Change
Proforma Profor %
ma
Earnings per share 1.03 EUR 0.83 EUR +24.7%
Diluted earnings per 1.03 EUR 0.82 EUR +26.4%
share
Equity per share 3.14 EUR 2.86 EUR +9.9%
Dividend per share *) 1.00 EUR - EUR
Payout ratio *) 97.1 % - %
Total dividends*) 141.3 MEUR - MEUR
Dividend yield *) A- 6.1 % - %
share
Dividend yield *) B- 6.1 % - %
share
P/E ratio, A-share 15.94 -
P/E ratio, B-share 15.97 -
Average number of shares 140 561 1 000 137 1 000
pcs 670 pcs
*) Proposed
Distribution:
Helsinki Exchanges
Media
Publisher:
Orion Corporation
Orionintie 1 A, 02200 Espoo
Homepage: www.orion.fi