Orion Oyj Class A · OMXHEX:ORNAV
Orion Oyj Class A — Investor Presentation (April 2018)
57 slides from Orion Oyj Class A's investor presentation, Apr 30, 2018
Slide 1: Orion Investor presentation
Orion Investor presentation Updated on 30 April 2018
Slide 2: Disclaimer
Disclaimer This presentation contains forward-looking statements which involve risks and uncertainty factors. These statements are not based on historical facts but relate to the Company’s future activities and performance. They include statements about future strategies and anticipated benefits of
Slide 3: Content
Content 1) Orion in brief 2) Research & development 3) Highlights of 1−3/2018 4) Outlook and financials 5) Business divisions Investor Presentation © Orion Corporation 2018 3
Slide 4: Orion in brief
Orion in brief
Slide 5: Orion today – year 2017 in figures (adjusted)
Orion today – year 2017 in figures (adjusted) Sales by business Sales by market area Net sales 1,034 MEUR Operating profit 284 MEUR 5% 4% 14% Personnel 3,159 7% 34% 7% 32% R&D investments 99 MEUR 50% 30% 6 production sites in 17% Finland Proprietary Products Finland Specialty Products Scandinavia An
Slide 6: Steady development despite patent expiries
Steady development despite patent expiries Net sales Operating profit EUR million EUR million 1,200 10% 350 32% 8% 300 31% 1,000 6% 800 4% 250 30% 2% 200 29% 600 0% -2% 150 28% 400 -4% 100 27% 200 -6% -8% 50 26% 0 -10% 0 25% 2011 2012 2013 2014 2015 2016 ADJ. 2011 2012 2013 2014 2015 2016 ADJ. 2017
Slide 7: Orion's product mix has changed
Orion’s product mix has changed Sales by business 2011 Sales by business 2017 Net sales, EUR million 4% 1,200 3% 5% 5% 5% 1,050 7% 7% 45% 34% 900 750 600 450 300 35% 50% 150 0 Proprietary Products Specialty Products 2012 2013 2014 2015 2016 2017 Animal Health Fermion ADJ. Contract manufacturing & ot
Slide 8: Our businesses
Our businesses Proprietary Products Specialty Products In-house developed drugs and Generic prescription drugs, OTC other drugs with valid product and non-medicinal products, protection biosimilars Animal Health Fermion Medicine and well-being Active pharmaceutical products for animals ingredients (
Slide 9: Orion's strategy – Mission to build well-being
Orion’s strategy – Mission to build well-being Future R&D Investor Presentation © Orion Corporation 2018 9
Slide 10: Orion had ~69,000 shareholders on March 31, 2018
Orion had ~69,000 shareholders on March 31, 2018 By number of shares By number of votes Households (Finnish retail) 7% 1% 5% 4% 7% Non-Finnish holders and 7% nominee-registered 7% 42% Private corporations 14% Public sector 62% Non-profit institutions 8% 35% Financial and insurance corporations Other
Slide 11: Research and development
Research and development
Slide 12: Focus areas of Orion's R&D
Focus areas of Orion’s R&D Proprietary Products Animal Health Fermion • CNS Orion utilises the • APIs to Orion’s • Oncology R&D of proprietary proprietary • Respiratory products to develop products (Easyhaler® new medicines for • Generic APIs product family) animals. • Contract development for pharm
Slide 13: Together we can achieve more in R&D
Together we can achieve more in R&D Late stage Research Early development development Target Hit to Lead Lead Candidate Phase I Phase II Phase III identification generation optimisation selection, and validation preclinical development 8‒24 mo. 12‒24 mo. 18‒36 mo. 12‒24 mo. 12‒14 mo. 12‒36 mo. 18‒48
Slide 14: Key clinical pharmaceutical development projects
Key clinical pharmaceutical development projects Project Indication PHASE Registration Bioequivalence Easyhaler® salmeterol-fluticasone Asthma, COPD Registration study Bioequivalence Easyhaler® tiotropium COPD study Darolutamide (ODM-201) 1) Prostate cancer (nmCRPC) I II III Darolutamide (ODM-201) 1
Slide 15: Darolutamide: An androgen receptor targeted therapy for prostate cancer
Darolutamide: An androgen receptor targeted therapy for prostate cancer Darolutamide (ODM-201) is an androgen receptor antagonist that ● Binds to the androgen receptor with high affinity ● Prevents efficiently androgen receptor signaling ● Low blood–brain barrier (BBB) penetration, potentially resul
Slide 16: Darolutamide: Two trials in phase III proceeding
Darolutamide: Two trials in phase III proceeding ● Patients with non-metastatic, castration- ● Patients with metastatic, hormone-sensitive resistant prostate cancer at high risk for prostate cancer developing metastatic disease ● Treatment: Darolutamide with androgen ● Endpoints: deprivation therapy
Slide 17: ODM-109: Oral levosimendan for ALS
ODM-109: Oral levosimendan for ALS ● ALS (Amyotrophic lateral sclerosis) is a fast progressing and fatal neurodegenerative disease: − Leads to diaphragm and skeletal muscle weakness and eventually paralysis and death typically due to respiratory failure. − An orphan disease with incidence of 1-2 /10
Slide 18: ODM-109: REFALS phase III trial
ODM-109: REFALS phase III trial Levosimendan 1-2mg/day (300 patients) 80-100 450 clinical sites patients in US, Canada, Costs of the trial: Placebo (150 patients) Western Europe, ~ EUR 60 million Australia approximately over three years Primary 12 weeks 48 weeks endpoints: SVC% ALSFRS-R + Survival =
Slide 19: ODM-208: Pan-steroid hormone synthesis inhibitor
ODM-208: Pan-steroid hormone synthesis inhibitor (CYP11A1 inhibitor) for castration-resistant prostate cancer ● Steroid hormones stimulate the growth of hormonally regulated cancers, such as most prostate and breast cancers. ● Hormonal treatments are highly effective, but Steroid producton drug resi
Slide 20: Orion highlights 1-3/2018
1 ical ohvdaad LT 1) th! ol 00) im; S RION ing well-being Build Orion highlights 1-3/2018
Slide 21: A good start for the year
A good start for the year ● Strong cash flow and good profitability, 28% operating profit margin exceeded financial objectives. ● Net sales and profit affected by tightening generic and price 1−3/2017 1−3/2018 competition, smaller milestone payments and exchange rate 265 changes. Comparative period
Slide 22: Development of net sales and operating profit
Development of net sales and operating profit Net sales, EUR million Operating profit, EUR million 265 7 88 7 5 5 3 6 6 3 247 2 2 70 16 10 10 10 1) Product sales without change in margins 2) Change in margin of product sales 1-2) Exchange rates generate about EUR 5 million of the overall decline (ME
Slide 23: Geographical breakdown of net sales
Geographical breakdown of net sales 1−3/2018 Orion’s own sales network 15% 6% 32% 30% 17 % 17% Finland Scandinavia Other Europe North America Other markets Investor Presentation © Orion Corporation 2018 23
Slide 24: Net sales by business division
Net sales by business division 5% 2% 1−3/ 1−3/ 8% Net sales, EUR million 2018 2017 Change 37% Specialty Products 118 122 -3% Proprietary Products 93 98 -6% 48% Animal Health 20 19 +5% Proprietary Products Fermion 12 16 -20% Specialty Products Animal Health Contract manufacturing Fermion & other 4 11
Slide 25: Pharmaceuticals business
Pharmaceuticals business RION Building well-being
Slide 26: Best-selling pharmaceuticals 1−3/2018
Best-selling pharmaceuticals 1−3/2018 Net sales Change vs .Product Indication (EUR million) 1−3/2017 1. Parkinson’s disease 28 -8% 2. Asthma, COPD 22 +20% 3. Intensive care sedative 18 +5% 4. Acute heart failure 14 -7% Rheumatoid arthritis, inflammatory 5. Biosimilars bowel diseases, lymphoma 11 -4%
Slide 27: Proprietary Products
Proprietary Products Breakdown of net sales ● As expected, sales of Stalevo, Comtess and 7% Comtan continued to decline. 6% ● The Easyhaler product family continued to grow. Positive conclusions received for the 30% 15% salmeterol-flucatisone formulation under the decentralised EU marketing authoris
Slide 28: As expected, sales of Parkinson's drugs continued to decline
As expected, sales of Parkinson’s drugs continued to decline Sales, EUR million Sales of Orion’s branded 60 Parkinson’s drugs by 50 market area MAT12/2017 40 3% 30 38% 20 29% 10 0 Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 2013 2014 2015 2016 2017 2018 Europe 30% Deliveries of Parkinson’s drugs (Stale
Slide 29: Easyhaler product family is growing
Easyhaler product family is growing Sales, EUR million ● The product family sales grew by 25 20%, driven by budesonide-formoterol Easyhaler, which grew by 36%. 20 ● Budesonide-formoterol Easyhaler is now launched in all key European markets: 15 – Menarini launched the product in France 10 in Q1/2018
Slide 30: Dexdor intensive care sedative sales continued to grow in most European markets
Dexdor intensive care sedative sales continued to grow in most European markets Total value of the European Sales, EUR million sedatives market 20 MAT12/2017: 18 EUR 542 million (+4%) 16 14 12% 12 10 12% 8 64% 6 4 12% 2 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Propofol EUR 349 m
Slide 31: Specialty Products
Specialty Products Net sales in key vs Net sales Net sales markets, EUR million 1−3/18 1−3/17 by market area by product Finland 68 -6% 11% 9% Scandinavia 21 +6% 58% Eastern Europe and 15 +11% 13% 24% 67% Russia ● The net sales of Specialty Products declined by 3%. 18% ● Sales grew in Scandinavia and
Slide 32: The market of generic and self-care products
Orion is a significant player in the Nordic generic drugs market Generic and self-care product sales 2017 ● Orion's market position in 2017: Orion vs market trend, (figure in brackets includes also biosimilars) Finland #1, Sweden #2, Denmark #2, Norway #3 Sweden Orion ● Biosimilars drive market grow
Slide 33: Orion remains strong in home market Finland
Orion remains strong in home market Finland Human pharmaceuticals market Leading pharmaceutical companies in Finland 1−3/2018 in Finland 1–3/2018 Orion's (medicinal and non-medicinal products) market share 12% ● Total sales of medicinal and non- 90 medicinal products EUR 652 million EUR million 79 S
Slide 34: Discontinued operation: Diagnostics business
Discontinued operation: Diagnostics business
Slide 35: Orion has sold Orion Diagnostica to an investment fund managed by Axcel Management A/S
Orion has sold Orion Diagnostica to an investment fund managed by Axcel Management A/S ● Signed on 21 April 2018, closing on April 30 2018 ”The sale allows 1−3/2017 1−3/2018 Orion to further ● Fixed purchase price ~EUR 163 million focus on growth of 14 14 ● In addition, possible variable component o
Slide 36: Outlook and financials
Outlook and financials
Slide 37: Outlook for 2018
Outlook for 2018 (updated on 21 April 2018) Due to generic and price competition Orion estimates that in 2018 the net sales excluding Orion Diagnostica will be at the same level or slightly lower than in 2017 Net sales (net sales were EUR 1,034 million excluding Orion Diagnostica in 2017). Orion con
Slide 38: Orion's financial objectives
Orion’s financial objectives Growing net sales more rapidly than ≥ growth of the pharmaceuticals market. Achievement of this objective requires continuous investment in Keeping the equity ratio at least 50%. development of the product portfolio. Distributing an annual dividend that > Maintaining p
Slide 39: Financial objectives
Financial objectives Net sales Operating profit Dividend 1,200 12% 30% 1.60 300 27% 1.55 1,000 10% 275 250 24% 1.50 800 8% 225 21% 1.45 200 18% 600 6% 175 1.40 150 15% 12% 1.35 400 4% 125 100 9% 1.30 75 6% 1.25 200 2% 50 25 3% 1.20 0 0% 0 0% 1.15 2012 2013 2014 2015 2016 ADJ. 2017 2012 2013 2014 201
Slide 40: Key figures by quarter
Key figures by quarter Net Netsales, sales,EUR EURmillion million Operating Operating profit, profit, EUREUR million million 1,500 400 Q4 Q4 1,000 300 57 Q3 273 255 262 267 266 Q3 66 55 51 71 200 64 59 90 55 Q2 237 238 239 246 242 67 500 Q2 82 71 248 277 255 260 261 100 61 86 74 Q1 249 245 260 262 2
Slide 41: Key figures
Key figures Orion’s key figures 2013 2014 2015 2016 ADJ. 2017 Net sales, EUR million 1,006.9 1,015.3 1,015.6 1,073.5 1,033.6 Operating profit, EUR million 267.7 272.4 266.6 314.6 284.1 Profit before taxes, EUR million 264.0 267.8 262.3 310.9 277.1 R&D expenses, EUR million 101.9 106.2 108.1 118.2 99
Slide 42: Income statement
Income statement Formation of profits, EUR million 2013 2014 2015 2016 ADJ. 2017 Net sales 1,006.9 1,015.3 1,015.6 1,073.5 1,033.6 Cost of goods sold -393.5 -401.7 -405.8 -421.7 -417.6 Gross profit 613.4 613.6 609.8 651.8 616.0 Other operating income and expenses 5.6 1.7 1.5 24.3 4.9 Sales and marke
Slide 43: Financial position
Financial position 12/ 12/ Change 12/ 12/ Change EUR million 2017 2016 % EUR million 2017 2016 % Non-current assets total 434.7 371.5 +17.0% Inventories 225.4 227.5 -0.9% Equity total 679.7 641.4 +6.0% Interest-bearing non-current Trade receivables 199.0 200.1 -0.6% liabilities 150.3 150.2 Other rec
Slide 44: Development of capital expenditure
Development of capital expenditure Orion Capex, EUR million 90 80 70 60 50 Property, plant and equipment 40 30 Intangible assets 20 Depreciation, amortisation and 10 impairment 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Consolidated statement of financial position includes both continu
Slide 45: Development of net working capital
Development of net working capital % of net sales EUR million 40% 400 30% 300 20% 200 10% 100 0% 0 -10% -100 -20% -200 -30% -300 2012 2013 2014 2015 2016 2017 2018 2012 2013 2014 2015 2016 2017 2018 Receivables Receivables Inventories Inventories Short-term non-interest bearing liabilities Short-ter
Slide 46: Dividend distribution policy
Dividend distribution policy • Orion’s dividend distribution takes into account distributable funds and capital expenditure and other financial requirements in medium and long term to achieve the financial objectives. EUR Dividend distribution history 1.75 100% 1.50 0.06 0.12 95% 1.25 0.10 90% Repay
Slide 47: Orion B share performance, 1/2016-3/2018
Orion B share performance, 1/2016-3/2018 Index 31.12.2015=100 200 190 Orion B 77.79 180 Orion B total return 91.24 170 Europe/Pharmaceutical 81.76 160 OMXH-Portfolio 117.55 150 140 130 120 110 100 90 80 70 31/12/15 31/1/16 29/2/16 31/3/16 30/4/16 31/5/16 30/6/16 31/7/16 31/8/16 30/9/16 31/10/16 30/1
Slide 48: Business units
Business units
Slide 49: Proprietary Products
Proprietary Products Net sales ● Mainly Orion in-house developed prescription EUR million drugs with valid product protection 450 Other 400 ● Global sales and R&D partner networks 350 Simdax Key drivers for business 300 250 Easyhaler Easyhaler, Dexdor, & Simdax 200 Possible milestones from devel
Slide 50: Proprietary human pharmaceuticals developed by Orion
Proprietary human pharmaceuticals developed by Orion Product Indication Year Year Indication Sedative for ICU use 2011 Bufomix Easyhaler® 2014 Parkinson’s disease 2003 Formoterol Easyhaler® 2004 Acute decompensated 2000 Budesonid Easyhaler® 2002 Asthma and COPD heart failure Sedative for ICU use 199
Slide 51: Steady sales growth for Specialty Products
Steady sales growth for Specialty Products Orion Specialty Products = Gx + OTC including also non-medicinal products EUR million Sales split 2017 Net sales in key markets in 2017, 550 22% 500 20% EUR million 450 18% 13% 400 16% Scandinavia Vs. 2016 350 14% 13% 94 +14% 300 12% 250 10% 200 8% Finland
Slide 52: Specialty Products — portfolio of hundreds of different product
Specialty Products — portfolio of hundreds of different product Generic prescription OTC and self-care Biosimilars drugs Investor Presentation © Orion Corporation 2018 52
Slide 53: Animal Health
Animal Health In-house developed EUR million proprietary products 105 12% • Medicinal and non-medicinal 90 10% products for companion animals 75 8% and livestock 60 6% • In-house developed proprietary 4% products sold globally both 45 through own sales network and 2% 30 0% through partners 15 -2% •
Slide 54: Fermion has an important strategic role
Fermion has an important strategic role EUR million 70 50% 60 40% 50 30% 40 20% 30 10% 20 0% Generic APIs for APIs for Orion’s Contract 10 -10% Orion and other proprietary development and pharmaceutical 0 -20% products manufacturing companies 2010 2011 2012 2013 2014 2015 2016 2017 Net sales* Growth
Slide 55: Contract manufacturing & other
Contract manufacturing & other EUR million 50 45% 40 30% 30 15% 20 0% 10 -15% Pharmaceutical Orion has special capacity 0 -30% manufacturing for other e.g. in hormonal products companies 2012 2013 2014 2015 2016 2017 Net sales Growth, % Investor Presentation © Orion Corporation 2018 55
Slide 56: Building well-being
Building well-being GRION Building well-being
Slide 57: Orion Investor Relations
Orion Investor Relations Jari Karlson CFO jari.karlson@orion.fi +358 10 426 2883 Lilli Riikonen Communications Manager lilli.riikonen@orion.fi +358 10 426 2319 Heidi Ahti Executive Assistant (Investor meeting requests) heidi.ahti@orion.fi +358 10 426 2169 www.orion.fi/EN/Investors twitter.com/OrionC