Slide 1: Orion Investor presentation
Orion Investor presentation Updated on 7 February 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 1-12/2017 4) Outlook and financials 5) Business units Investor Presentation © Orion Corporation 2018 3
Slide 4: Orion in brief
Orion in brief
Slide 5: Orion today – year 2017 in figures
Orion today – year 2017 in figures Sales by business Sales by market area Net sales 1,085 MEUR Operating profit 293 MEUR 3% 5% 15% 5% 32% Personnel 3,464 7% 31% 7% R&D investments 105 MEUR 48% 30% 6 production sites in 17% Finland Proprietary Products Finland Specialty Products Scandinavia Animal He
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% 1,000 8% 300 31% 800 6% 250 30% 200 29% 600 4% 150 28% 400 2% 100 27% 200 0% 50 26% 0 -2% 0 25% 2011 2012 2013 2014 2015 2016 2017 2011 2012 2013 2014 2015 2016 2017 Parkinson franchise +
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 3% 5% 1,200 3% 5% 5% 5% 1,000 7% 45% 7% 32% 800 600 400 35% 48% 200 Proprietary Products Specialty Products 0 Animal Health Fermion 2012 2013 2014 2015 2016 2017 Contract manufacturing & other Orion
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 has ~57,000 shareholders (December 31, 2017)
Orion has ~57,000 shareholders (December 31, 2017) By number of shares By number of votes Households (Finnish retail) 5% 3% 0% 7% 1% 0% 6% Non-Finnish holders and 7% nominee-registered 6% 40% Private corporations 14% Public sector Non-profit institutions 9% 62% 40% Financial and insurance corporatio
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 Orion Diagnostica • CNS Orion utilises the • APIs to Orion’s • QuikRead test • Oncology R&D of proprietary proprietary system • Respiratory products to develop products • GenRead test (Easyhaler® new medicines for • Generic APIs s
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: Orion highlights 1-12/2017
1 ical ohvdaad LT 1) th! ol 00) im; S RION ing well-being Build Orion highlights 1-12/2017
Slide 16: Orion had a good centenary year
Orion had a good centenary year ● Net sales were at previous year’s level. 1-12/2016 1-12/2017 ● The operating profit in comparative period included 1,074 1,085 EUR 22 million of capital gains. ● Dexdor and Easyhaler product family continued to grow. ● Growth in sales of biosimilar Remsima generated
Slide 17: Geographical breakdown of net sales
Geographical breakdown of net sales 1-12/2017 Orion’s own sales network 15% 7% 31% 30% 1 17% Finland Scandinavia Other Europe North America ROW Investor Presentation © Orion Corporation 2018 17
Slide 18: Breakdown of net sales by business division
Breakdown of net sales by business division 3% 5% Net sales, 1-12/ 1-12/ 5% EUR million 2017 2016 Change 7% 32% Specialty Products 519 508 +2% Proprietary Products 351 350 0% 48% Animal Health 76 77 -2% Fermion 51 48 +7% Proprietary Products Specialty Products Contract Animal Health manufacturing &
Slide 19: Best-selling pharmaceuticals 1-12/2017
Best-selling pharmaceuticals 1-12/2017 Net sales, Change vs. Product Indication EUR million 1-12/16 1. Parkinson’s disease 104 -16% 2. Asthma, COPD 77 +20% 3. Intensive care sedative 64 +13% 4. Acute decompensated heart failure 57 +2% Rheumatoid arthritis, inflammatory 5. bowel diseases 57 +34% 6. A
Slide 20: Proprietary Products
Proprietary Products ● As expected, sales of Stalevo, Comtess and Comtan Breakdown of net sales continued to decline, but growth in other products 7% compensated for the decline. 7% ● Budesonide-formoterol Easyhaler product has been 30% launched in all key European markets. 16% ● Sales of Dexdor gre
Slide 21: Parkinson's drugs
Parkinson’s drugs Sales, EUR million Sales of Orion’s branded 60 Parkinson’s drugs by 50 market area* 40 3% 30 38% 29% 20 10 0 Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4 2013 2014 2015 2016 2017 30% Europe Japan Orion sales Deliveries to Novartis ROW USA *Source: IMS Health sales statistics MAT9/2017 In
Slide 22: Easyhaler product family
Easyhaler product family Sales, EUR million ● Easyhaler product family sales grew by 20%, driven 25 by budesonide-formoterol Easyhaler, which grew by 46%. 20 ● Budesonide-formoterol Easyhaler has been launched 15 in all key European markets. 10 – Menarini is marketing budesonide-formoterol in Southe
Slide 23: Dexdor intensive care sedative
Dexdor intensive care sedative European sedative market Sales, EUR million MAT9/2017* 20 Total market value 18 EUR 537 million (+2%) 16 14 12% 12 10 12% 8 6 64% 4 12% 2 0 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Propofol EUR 345 million (-1%) 2013 2014 2015 2016 2017 Midazolam EUR 64
Slide 24: Specialty Products
Specialty Products Breakdown of net sales Net sales in key markets EUR vs. by market area 1-12/2017 million 1-12/2016 Finland 292 -2% 13% Scandinavia 94 +14% 13% Eastern Europe and Russia 65 +10% 56% ● Specialty Products net sales at similar level to previous year. ● 34% growth in sales of Remsima®
Slide 25: Orion strong in home market Finland
Orion strong in home market Finland Finnish human pharmaceuticals market 1-12/2017: Finland’s biggest pharmaceutical companies 1-12/2017, EUR million ● Wholesale EUR 2,378 million 350 294 300 ● Orion's market share 12% 250 ● Growth of total market was 2%, 200 Orion's sales decreased by 2% 143 150 11
Slide 26: Orion Diagnostica
Orion Diagnostica ● Orion has decided to investigate the 1-12/2016 1-12/2017 possible sale of Orion Diagnostica or other transaction that would result in 55 54 transfer of Orion Diagnostica outside the Orion Group. ● Orion Diagnostica manufactures in vitro diagnostic tests and testing systems suitab
Slide 27: Outlook and financials
Outlook and financials
Slide 28: Outlook for 2018
Outlook for 2018 Due to generic and price competition we estimate that in 2018 net sales will be at the same level or slightly lower than in 2017 (net sales were Net sales EUR 1,085 million in 2017). Orion continues persistent actions to generate growth. Due to the estimated sales development and th
Slide 29: 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 30: Financial objectives
Financial objectives Net sales Operating profit Dividend 1,200 12% 350 35% 1.60 1,000 10% 300 30% 1.55 1.50 800 8% 250 25% 1.45 600 6% 200 20% 1.40 150 15% 1.35 400 4% 1.30 100 10% 200 2% 1.25 50 5% 1.20 0 0% 0 0% 1.15 2012 2013 2014 2015 2016 2017 2017** 2016* 2012 2013 2014 2015 2012 2013 2014 201
Slide 31: 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 59 Q3 273 255 262 280 280 Q3 66 55 51 73 200 64 59 92 56 Q2 237 238 239 259 253 67 500 Q2 84 72 248 277 255 273 272 100 61 86 74 Q1 249 245 260 262 2
Slide 32: Key figures
Key figures Change % vs. Orion’s key figures 2013 2014 2015 2016 2017 2016 Net sales, EUR million 1,006.9 1,015.3 1,015.6 1,073.5 1,084.6 +1.0% Operating profit, EUR million 267.7 272.4 266.6 314.6 293.0 -6.9% Profit before taxes, EUR million 264.0 267.8 262.3 310.9 286.5 -7.9% R&D expenses, EUR mil
Slide 33: Income Statement
Income Statement Change % vs. Formation of profits, EUR million 2013 2014 2015 2016 2017 2016 Net sales 1,006.9 1,015.3 1,015.6 1,073.5 1,084.6 +1.0% Cost of goods sold -393.5 -401.7 -405.8 -421.7 -440.6 +4.5% Gross profit 613.4 613.6 609.8 651.8 664.0 -1.2% Other operating income and expenses 5.6 1
Slide 34: 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 35: 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 Investor Presentation © Orion Corporation 2018 35
Slide 36: 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 2012 2013 2014 2015 2016 2017 Receivables Receivables Inventories Inventories Short-term non-interest bearing liabilities Short-term non-inte
Slide 37: 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 38: Orion B share performance, 1/2016-12/2017
Orion B share performance, 1/2016-12/2017 Index 31.12.2015=100 200 Orion B 102.66 190 Orion B total return 108.70 180 Europe/Pharmaceutical 88.43 170 OMXH 119.39 160 150 140 130 120 110 100 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 30.11.16 31
Slide 39: Business units
Business units
Slide 40: 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 41: 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 42: 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 43: Specialty Products — portfolio of hundreds of different products
Specialty Products — portfolio of hundreds of different product Generic prescription OTC and self-care Biosimilars drugs Investor Presentation © Orion Corporation 2018 43
Slide 44: Animal Health
Animal Health In-house developed EUR million proprietary products 105 12% • Medicinal and non- 90 10% medicinal products for 75 8% companion animals and 6% livestock 60 4% • In-house developed 45 proprietary products sold 2% 30 0% globally both through own 15 -2% sales network and through partners 0
Slide 45: 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 46: 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 46
Slide 47: Orion Diagnostica
Orion Diagnostica EUR million ● Develops and manufactures point-of-care 90 12% 80 10% diagnostics test and test systems for health-care 70 8% professionals and hygiene testing for industry. 60 6% 50 4% ● Main market areas: Europe (especially Northern 40 2% 30 0% Europe), China, USA, Japan 20 -2% 10
Slide 48: QuikRead test systems for point-of-care diagnostics
Orion Diagostica’s flagship product: QuikRead® test systems for point-of-care diagnostics ● The QuikRead go® portfolio currently includes the following tests: – CRP (C-reactive protein) – CRP+Hb (C-reactive protein and hemoglobin) – Strep A (Streptococcus pyogenes in throat samples) – iFOBT (immunoc
Slide 49: Building well-being
Building well-being GRION Building well-being
Slide 50: 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