Slide 1: Orion Investor Presentation
Orion Investor Presentation Updated on 26 April 2017
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) Financial Review 1/1/-31/3/2017 4) Outlook and financials 5) Business units 6) 100 years of Orion 3 2017 Investor Presentation © Orion Corporation
Slide 4: Orion in brief
Orion in brief 4 2017 Investor Presentation © Orion Corporation
Slide 5: Orion today – year 2016 in figures
Orion today – year 2016 in figures Net sales 1,074 MEUR Sales split by business Sales split by market area Operating profit 315 MEUR 4% 5% 4% 13% Personnel 3 469 8% 7% 32% 33% R&D investments 31% 118 MEUR 16% 47% 6 production sites in Proprietary Products Finland Finland Specialty Products Animal He
Slide 6: Steady development despite patent expiries
Steady development despite patent expiries Net sales Operating profit EUR million EUR million 1200 10% 350 32% 1000 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 2011 2012 2013 2014 2015 2016 Parkinson franchise + Precedex Ope
Slide 7: Orion's product mix has changed
Orion’s product mix has changed Sales by business 2011 Sales by business 2016 Net sales, EUR million 1,200 3% 5% 4% 5% 5% 4% 1,000 7% 33% 800 7% 44% 600 400 35% 47% 200 0 Proprietary Products Specialty Products 2012 2013 2014 2015 2016 Animal Health Fermion Contract manufacturing & other Orion Diagn
Slide 8: Our businesses
Our businesses Proprietary Products Specialty Products In-house developed drugs and Generic prescription drugs, other drugs with valid product OTC and non-medicinal protection products Animal Health Fermion Medicine and well-being Active pharmaceutical products for animals ingredients (APIs) Contrac
Slide 9: Orion's strategy — Mission to build well-being
Orion’s strategy — Mission to build well-being 9 2017 Investor Presentation © Orion Corporation
Slide 10: Orion has ~50,000 shareholders
Orion has ~50,000 shareholders By number of shares By number of votes Households (Finnish retail) 7% 1% 0% 5% 1% 0% 5% 7% 6% Non-Finnish holders and nominee-registered 39% Private corporations 14% Public sector Non-profit institutions 61% 10% Financial and insurance 44% corporations Other 10 2017 In
Slide 11: Research and development
Research and development 11 2017 Investor Presentation © Orion Corporation
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 Candidate Phase I Phase II Phase III Hit to Lead Lead identification selection, generation optimisation and validation preclinical development 12–24 mo 18–36 mo 8–24 mo 12–24 mo 12–14 mo 12–36 mo 18–48 mo Co
Slide 14: Key clinical pharmaceutical development projects 1/2
Key clinical pharmaceutical development projects 1/2 Project Indication PHASE Registration Bioequivalence Easyhaler® salmeterol-fluticasone Asthma, COPD Registration study Darolutamide (ODM-201) 1) Prostate cancer (nmCRPC) I II III Darolutamide (ODM-201) 1) Prostate cancer (mHSPC) I II III Levosimen
Slide 15: Key clinical pharmaceutical development projects 2/2
Key clinical pharmaceutical development projects 2/2 Project Indication PHASE Registration ODM-109 (oral levosimendan) ALS I II ORM-12741 (alpha-2c adrenoceptor antagonist) 3) Alzheimer’s disease I IIa ODM-104 (more effective COMT inhibitor) Parkinson’s disease I II ODM-203 (targeted FGFR+VEGFR inhi
Slide 16: Orion Highlights 1/1/2017-31/3/2017
Orion Highlights1/1/2017-31/3/2017 16 2017 Investor Presentation © Orion Corporation
Slide 17: Orion's centenary year started well
Orion’s centenary year started well • Net sales and operating profit increased • Operating profit boosted by higher milestone 3M 2016 3M 2017 payments than in previous year 279 262 • Christer Nordstedt became Senior Vice President for Research and Development in February • Marketing authorisation ap
Slide 18: Geographical breakdown of net sales
Geographical breakdown of net sales By market area Orion’s sales network 18% Finland 29% Scandinavia 7% Other Europe North America ROW 16% 30% 18 2017 Investor Presentation © Orion Corporation
Slide 19: Breakdown of net sales by business division
Breakdown of net sales by business division 3M 3M 2017 2016 Change Proprietary Products 4% 5% Specialty Products 122 123 -1% 5% Specialty Products Proprietary Products 98 88 +12% 7% 35% Animal Health Animal Health 19 18 +5% Fermion Fermion 16 11 +47% Contract Manufacturing Contract Manufacturing & o
Slide 20: Best-selling pharmaceuticals 3M 2017
Best-selling pharmaceuticals 3M 2017 Net sales Change vs. Product Indication EUR million 3M 2016 1. Parkinson’s disease 30 -7% 2. Asthma, COPD 18 +15% 3. Intensive care sedative 17 +18% 4. Acute decompensated heart failure 15 +12% Rheumatoid arthritis, inflammatory 5. bowel diseases 11 -6% 6. Animal
Slide 21: Proprietary Products
Proprietary Products • As anticipated, sales of Stalevo, Comtess and Breakdown of net sales Comtan continued to decline Stalevo, Comtess • Easyhaler product family, Dexdor and Simdax 11% & Comtan Easyhaler grew strongly 7% 31% • Sales of Precedex grew by 79% mainly due to Dexdor deliveries of the ph
Slide 22: Parkinson's drugs
Parkinson’s drugs 60 Sales of Orion’s branded Parkinson drugs 50 by market area MAT12/2016* 3% EUR million 40 30 20 27% Europe 10 42% Japan 0 ROW Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 USA 2013 2014 2015 2016 17 28% Orion sales Deliveries to Novartis *Source: IMS Health sales statistics MAT12/2016 22 2017
Slide 23: Easyhaler product family
Easyhaler product family • Total Easyhaler product family sales grew by 15% 20 18 • Bufomix Easyhaler sales grew by 38% 16 • Marketing authorisation application for Easyhaler EUR million 14 12 salmeterol-fluticasone combined formulation 10 submitted in Europe 8 6 4 2 0 Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4
Slide 24: Dexdor intensive care sedative
Dexdor intensive care sedative European sedative market MAT12/2016* Dexdor sales Total market value EUR 523 million (-0.5%) 18 16 14 13% EUR million 12 10 9% 8 66% 12% 6 4 2 0 Propofol EUR 342 million (-1%) Midazolam EUR 69 million (-9%) Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1 Dexmedetomidine EUR 48 millio
Slide 25: Specialty Products
Specialty Products Net sales in key markets 3M 2017 Breakdown of net sales vs. 3M EUR million 2016 14% Finland Finland 72 +3% Scandinavia 20 -8% 11% Scandinavia Eastern Europe and Russia 13 +9% • In Finland changes to reference pricing system for 16% 59% Eastern Europe & substitutable prescription d
Slide 26: Orion strong in home market Finland
Orion strong in home market Finland Finland’s biggest pharmaceutical companies 3M 2017 Finnish human pharmaceuticals market 3M 2017 • Wholesale EUR 546 million 80 72 • Growth of total market +1% 60 • Orion's market share 13% EUR million • Orion's growth +4% 40 31 31 – Orion's growth was mainly due t
Slide 27: Orion Diagnostica
Orion Diagnostica • QuikRead tests remained the main product ® 14 3M 2016 14 3M 2017 • Operating profit increased thanks to growth in sales with good margins, among other things 2.6 3.5 Net sales, Operating profit, EUR million EUR million +7% +32% 27 2017 Investor Presentation © Orion Corporation
Slide 28: Outlook and financials
Outlook and financials 28 2017 Investor Presentation © Orion Corporation
Slide 29: Outlook for 2017
Outlook for 2017 Net sales are estimated to be at similar level to 2016 (net sales were EUR 1,074 Net sales million in 2016). Operating profit excluding material capital gains is estimated to be at least EUR Operating profit 280 million (operating profit excluding capital gains was EUR 293 million i
Slide 30: 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 31: Financial objectives
Financial objectives Net sales Operating profit Dividend 1200 12% 400 40% 2.00 1000 10% 1.60 300 30% 800 8% 1.20 600 6% 200 20% 0.80 400 4% 0.40 100 10% 200 2% 0.00 0 0% 0 0% Dividend per share Net sales, EUR million Operating profit, EUR million Dividend target Growth, % Operating profit margin Ope
Slide 32: Key figures by quarter
Key figures by quarter EUR million Net sales EUR million Operating profit 1,200 400 1,000 280 273 255 262 Q4 300 59 Q4 800 55 51 259 66 Q3 600 237 238 239 Q3 200 59 92 67 64 400 248 277 255 273 Q2 61 86 74 84 Q2 100 200 279 74 83 80 92 Q1 249 245 260 262 Q1 67 0 0 13 14 15 16 17 13 14 15 16 17 EUR B
Slide 33: Key figures for 2013─3M 2017
Key figures for 2013─3M 2017 Change % vs. Orion’s key figures 2013 2014 2015 2016 3M 2017 3M 2016 Net sales, EUR million 1,006.9 1,015.3 1015.6 1,073.5 279.2 +6.5% Operating profit, EUR million 267.7 272.4 266.6 314.6 91.7 +14.1% Profit before taxes, EUR million 264.0 267.8 262.3 310.9 88.8 +11.4% R
Slide 34: Income Statement 2011─3M 2017
Income Statement 2011─3M 2017 Formation of profits, Change % vs. EUR million 2013 2014 2015 2016 3M 2017 3M 2016 Net sales 1,006.9 1,015.3 1015.6 1,073.5 279.2 +6.5% Cost of goods sold -393.5 -401.7 -405.8 -421.7 -103.4 +1.1% Gross profit 613.4 613.6 609.8 651.8 175.8 +10.0% Other operating income a
Slide 35: Financial position
Financial position EUR million 3/17 3/16 Change% EUR million 3/17 3/16 Change % Non-current assets total 373.3 370.5 +0.8% Inventories 236.8 207.7 +14.0% Equity total 494.8 475.1 +4.1% Interest-bearing non-current Trade receivables 184.1 184.9 -0.5% liabilities 150.3 175.7 -14.5% Other receivables 5
Slide 36: Development of capital expenditure
Development of capital expenditure EUR million Orion Capex 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Property, plant and equipment Intangible assets Depreciation, amortisation and impairment 36 2017 Investor Presentation © Orion Corporation
Slide 37: Development of Net working capital
Development of Net working capital % of net sales EUR million 35% 300 25% 200 15% 100 5% 0 -5% -100 -15% -200 -25% -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-interest bear
Slide 38: 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. Dividend distribution history 1.75 € 100% 1.50 € 0.12 95% Repayment of capital 0.06
Slide 39: Orion B share performance - 3 July 2006─31 March 2017
Orion B share performance - 3 July 2006─31 March 2017 Index 3 July 2006 = 100 500 450 MSCI Europe 400 350 Pharmaceuticals 300 OMX Helsinki Cap 250 200 150 Orion B 100 50 Orion B total return 39 2017 Investor Presentation © Orion Corporation
Slide 40: Business units
Business units 40 2017 Investor Presentation © Orion Corporation
Slide 41: Proprietary Products
Proprietary Products Net sales, EUR million • Mainly Orion in-house developed prescription 450 drugs with valid product protection 400 Other • Global sales and R&D partner networks 350 Stalevo 300 Key drivers for business Comtan/Comtess 250 Easyhaler, Dexdor, & Simdax 200 Precedex Possible milesto
Slide 42: 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 heart failure Budesonid Easyhaler® 2002 Asthma and COPD Sedative for ICU use 199
Slide 43: Steady sales growth for Specialty Products
Steady sales growth for Specialty Products Orion Specialty Products = Gx + OTC including also non-medicinal products Sales split 2016 Net sales in key markets in 2016, EUR million EUR million 550 22% 500 20% 13% Scandinavia Vs. 2015 450 18% 400 16% 12% 82 +10% 350 14% 300 12% 16% 59% Finland Vs. 201
Slide 44: Specialty Products — portfolio of hundreds of different products
Specialty Products — portfolio of hundreds of different product Generic OTC and self-care Biosimilars prescription drugs 44 2017 Investor Presentation © Orion Corporation
Slide 45: Animal Health
Animal Health In-house developed proprietary products 105 12% • Medicinal and non- 90 10% medicinal products for 75 8% companion animals and EUR million 60 6% livestock 45 4% • In-house developed proprietary products sold 30 2% globally both through 15 0% own sales network and 0 -2% through partners
Slide 46: Fermion has an important strategic role
Fermion has an important strategic role 70 50% 60 40% EUR million 50 30% 40 20% 30 10% 20 0% Generic APIs for 10 -10% APIs for Orion’s Contract Orion and other proprietary development and 0 -20% pharmaceutical products manufacturing companies Net sales* Growth, % *) Excluding supply to Orion 46 2017
Slide 47: Contract manufacturing & other
Contract manufacturing & other 50 45% 40 30% EUR million 30 15% 20 0% 10 -15% Pharmaceutical Orion has special capacity manufacturing for other e.g. in hormonal products 0 -30% companies 2012 2013 2014 2015 2016 Net sales Growth, % 47 2017 Investor Presentation © Orion Corporation
Slide 48: Orion Diagnostica
Orion Diagnostica 90 80 12% 10% •Diagnostic test systems for point-of- care testing in healthcare and hygiene 70 8% testing for industry EUR million 60 6% 50 40 4% 2% •Main market areas: Europe (especially 30 0% northern), China, USA, Japan 20 10 -2% -4% •Own sales units in 9 European countries, dis
Slide 49: 100 years of Orion
100 years of Orion Building well-being. Together. 49 2017 Investor Presentation © Orion Corporation
Slide 50: Orion 100 years
Orion 100 years 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 1930's Finland fights diphtheria. The Vaccination Act of 1936 enables effective vaccination programmes. 1910's Finland gains independence on 6 1934 Orion relocates to larger facilities in Helsinki. December 1917. During The Civil
Slide 51: Orion 100 years
Orion 100 years 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 1948 1955 1960 Oriola and Noiro Orion acquires Orion acquires Lääketehdas Alb. Koponen are established Chymos 1961 Chip board manufacturer Tiwi is established 1968 Orion begins manufacturing diagnostic products 1940's 1960's Hero
Slide 52: Orion 100 years
Orion 100 years 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 1970 1972 1988 1993 Fermion is established Orion establishes Eurocell and divests Tiwi Orion acquires Chymos is divested Orion establishes parent 1974 majority shareholding 1995 company Orion-Yhtymä Oy Orion Diagnostica is establ
Slide 53: Orion 100 years
Orion 100 years 2017 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 2002 2003 2006 Orion acquires majority shareholding Noiro is divested Demerger into Orion Oyj and Oriola-KD Oyj in Kronans Droghandel 2000's 2010's The population of Finland is ageing rapidly. Finns are in better health than
Slide 54: Orion's centenary 2017
Orion’s centenary 2017 Orion is a corporate cooperation partner for SuomiFinland 100 54 2017 Investor Presentation © Orion Corporation
Slide 55: Orion Investor Relations
Orion Investor Relations Jari Karlson CFO jari.karlson@orion.fi +358 10 426 2883 Heidi Ahti Executive Assistant (Investor meeting requests) heidi.ahti@orion.fi +358 10 426 2169 www.orion.fi/EN/Investors twitter.com/OrionCorpIR