Orion Oyj Class A · OMXHEX:ORNAV
Orion Oyj Class A — Investor Presentation (July 2017)
54 slides from Orion Oyj Class A's investor presentation, Jul 19, 2017
Slide 1: Orion Investor presentation
Orion Investor presentation Updated on 19 July 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/-30/6/2017 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 13% 4% 5% 4% 33% 8% 32% Personnel 3,469 7% R&D investments 118 MEUR 47% 31% 16% 6 production sites in Proprietary Products Finland Finland Specialty Products Scandinav
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 2011 2012 2013 2014 2015 2016 Parkinson franchise + Precedex O
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 4% 5% 1,200 3% 5% 4% 5% 1,000 7% 33% 7% 44% 800 600 400 35% 47% 200 Proprietary Products Specialty Products 0 Animal Health Fermion 2012 2013 2014 2015 2016 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 (June 30, 2017)
Orion has ~50,000 shareholders (June 30, 2017) By number of shares By number of votes Households (Finnish retail) 4% 1% 0% 7% 1% 0% 5% Non-Finnish holders and 7% 6% nominee-registered Private corporations 38% 14% Public sector Non-profit institutions 61% 10% Financial and insurance 46% corporations
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 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 mo Co
Slide 14: Key clinical pharmaceutical development projects
Key clinical pharmaceutical development projects 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 ODM-109 (oral
Slide 15: Orion highlights 1-6/2017
Orion highlights 1-6/2017 15 2017 Investor Presentation © Orion Corporation
Slide 16: Year has progressed as planned
Year has progressed as planned H1 2016 H1 2017 • Net sales grew slightly from the comparative 535 552 period. • Operating profit at similar level to previous year. • Easyhaler product family maintained good growth. Dexdor, biosimilar Remsima, Fermion and Animal 164 164 Health also increased sales. •
Slide 17: Geographical breakdown of net sales
Geographical breakdown of net sales H1 2017 Orion’s sales network Finland 17% Scandinavia 30% 6% Other Europe North America 30% 17% ROW 17 12017 Investor Presentation © Orion Corporation
Slide 18: Breakdown of net sales by business division
Breakdown of net sales by business division Net sales, H1 H1 EUR million 2017 2016 Change Proprietary Products Specialty Products 255 246 +4% 3% 5% Specialty Products Proprietary Products 186 185 +0% 5% 34% 7% Animal Health Animal Health 41 38 +7% Fermion Fermion 28 20 +39% Contract Contract manufac
Slide 19: Best-selling pharmaceuticals H1 2017
Best-selling pharmaceuticals H1 2017 Net sales, Change vs. Product Indication EUR million H1 2016 1. Parkinson’s disease 58 -19% 2. Asthma, COPD 37 +16% 3. Intensive care sedative 34 +22% 4. Acute decompensated heart failure 30 +8% Rheumatoid arthritis, inflammatory 5. bowel diseases 28 +28% 6. Anim
Slide 20: Proprietary Products
Proprietary Products • As expected, sales of Stalevo, Comtess and Breakdown of net sales Comtan continued to decline, but good Stalevo, Comtess growth of other products compensated for & Comtan the decrease. Easyhaler 8% • Easyhaler product family, Dexdor and Simdax 7% sales increased. 31% Dexdor •
Slide 21: Parkinson’s drugs
Parkinson’s drugs Sales, EUR million Sales of Orion’s 60 branded Parkinson’s drugs 50 by market area MAT3/2017 3% 40 30 20 27% Europe 41% 10 Japan 0 ROW Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 USA 2013 2014 2015 2016 2017 29% Orion sales Deliveries to Novartis Source: IMS Health sales sta
Slide 22: Easyhaler product family
Easyhaler product family Sales, EUR million 20 18 • Total Easyhaler product family sales grew by 16%. 16 • Bufomix Easyhaler sales grew by 31%. 14 12 • Marketing authorisation application for Easyhaler 10 salmeterol-fluticasone combined formulation 8 submitted in Europe. 6 4 • Easyhaler budesonide-f
Slide 23: Dexdor intensive care sedative
Dexdor intensive care sedative Sales, EUR million European sedative market 18 MAT3/2017, 16 total market value Propofol EUR 346 14 EUR 530 million (+1%) million (-0%) 12 10 Midazolam EUR 67 8 13% million (-9%) 6 4 10% Dexmedetomidine 2 65% EUR 53 million 0 12% (+39%) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Slide 24: Specialty Products
Specialty Products Net sales in key markets H1 2017 Breakdown of net sales vs. H1 EUR million 2016 Finland Finland 145 +2% 13% Scandinavia 47 +12% 12% Scandinavia Eastern Europe and Russia 30 +15% • Sales of self-care products and biosimilar Remsima developed well. Growth in net sales of Remsima was
Slide 25: Orion strong in home market Finland
Orion strong in home market Finland Finnish human pharmaceuticals market H1 2017: Finland’s biggest pharmaceutical companies H1 2017, EUR million 200 • Wholesale EUR 1,131 million 147 • Orion's market share 13% 150 • Growth of total market +1% 100 • Orion's growth +2% 50 52 53 61 67 – Orion's growth
Slide 26: Orion Diagnostica
Orion Diagnostica H1 2016 H1 2017 • QuikRead tests remained the main product. ® 28 27 • Net sales decreased due to, among other things, periodisation of purchases by significant collaboration partner. 4.4 4.8 Net sales, Operating profit, EUR million EUR million -4% +8% 26 2017 Investor Presentation
Slide 27: Outlook and financials
Outlook and financials 27 2017 Investor Presentation © Orion Corporation
Slide 28: Outlook for 2017
Outlook for 2017 Net sales are estimated to be at similar level to 2016 Net sales (net sales were EUR 1,074 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 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% 400 40% 2.00 1,000 10% 1.60 300 30% 800 8% 1.20 600 6% 200 20% 0.80 400 4% 100 10% 0.40 200 2% 0 0% 0 0% 0.00 Net sales, EUR million Operating profit, EUR million Dividend per share Growth, % Operating profit margin Dividend target O
Slide 31: Key figures by quarter
Key figures by quarter Net sales, EUR million Operating profit, EUR million 1,500 400 Q4 Q4 300 59 Q3 1,000 280 Q3 273 255 262 66 55 51 200 64 59 92 Q2 237 238 239 259 67 500 Q2 74 84 72 248 277 255 273 272 100 61 86 Q1 249 245 260 262 279 Q1 74 67 83 80 92 0 0 13 14 15 16 17 13 14 15 16 17 Basic ea
Slide 32: Key figures for 2013-H1/2017
Key figures for 2013-H1/2017 Change % vs. Orion’s key figures 2013 2014 2015 2016 H1/2017 H1/2016 Net sales, EUR million 1,006.9 1,015.3 1015.6 1,073.5 551.6 +3.1% Operating profit, EUR million 267.7 272.4 266.6 314.6 163.5 -0.2% Profit before taxes, EUR million 264.0 267.8 262.3 310.9 159.5 -1.7% R
Slide 33: Income Statement 2011-H1/2017
Income Statement 2011-H1/2017 Change % vs. Formation of profits, EUR million 2013 2014 2015 2016 H1/2017 H1/2016 Net sales 1,006.9 1,015.3 1015.6 1,073.5 551.6 +3.1% Cost of goods sold -393.5 -401.7 -405.8 -421.7 -211.4 +4.8% Gross profit 613.4 613.6 609.8 651.8 340.1 +2.0% Other operating income an
Slide 34: Financial position
Financial position EUR million 6/17 6/16 Change% EUR million 6/17 6/16 Change % Non-current assets total 385.3 371.4 +3.7% Inventories 238.4 213.6 +11.6% Equity total 550.3 523.0 +5.2% Interest-bearing non-current Trade receivables 208.1 186.9 +11.3% liabilities 150.3 175.7 -14.5% Other receivables
Slide 35: Development of capital expenditure
Development of capital expenditure Orion Capex, EUR million 100 80 60 40 20 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Intangible assets Property, plant and equipment Depreciation, amortisation and impairment 35 2017 Investor Presentation © Orion Corporation
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% 0.12 Repayment of capital 1.50 0.06 95%
Slide 38: Orion B share performance, 3 July 2006 - 30 June 2017
38 100 200 250 300 350 400 450 500 550 150 50 0 3.7.2006 22.9.2006 14.12.2006 2017 12.3.2007 4.6.2007 24.8.2007 15.11.2007 14.2.2008 12.5.2008 01/08/2008 23/10/2008 22/01/2009 17/04/2009 14/07/2009 05/10/2009 29/12/2009 25/03/2010 Index July 3 2006=100 21/06/2010 13/09/2010 03/12/2010 02/03/2011 26/
Slide 39: Business units
Business units 39 2017 Investor Presentation © Orion Corporation
Slide 40: 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 300 250 Comtan/Comtess Key drivers for business: 200 Precedex Easyhaler, Dexdor, & Simdax 150 Simdax Poss
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 heart failure Budesonid Easyhaler® 2002 Asthma and COPD 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 2016 Net sales in key markets in 2016, 550 22% EUR million 500 20% Scandinavia Vs. 2015 450 18% 400 16% 13% 82 +10% 350 14% 300 12% 12% Finland Vs. 2014 250 10
Slide 43: Specialty Products — portfolio of hundreds of different products
Specialty Products — portfolio of hundreds of different product Generic OTC and self-care Biosimilars prescription drugs 43 2017 Investor Presentation © Orion Corporation
Slide 44: Animal Health
Animal Health EUR million In-house developed proprietary 105 90 12% 10% products • Medicinal and non- medicinal products for 75 8% companion animals and 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 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% Generic APIs for 20 0% APIs for Orion’s Contract Orion and other proprietary development and 10 -10% pharmaceutical products manufacturing companies 0 -20% 2010 2011 2012 2013 2014 2015 2016 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 Net sales Growth, % 46 2017 Investor Presentation © Orion Corporation
Slide 47: Orion Diagnostica
Orion Diagnostica 90 EUR million 12% • Diagnostic test systems for point-of-care 80 10% testing in healthcare and hygiene testing for 70 8% industry 60 6% • Main market areas: Europe (especially 50 4% northern), China, USA, Japan 40 30 2% 0% • Own sales units in 9 European countries, 20 -2% distribu
Slide 48: 100 years of Orion
100 years of Orion Building well-being. Together. 48 2017 Investor Presentation © Orion Corporation
Slide 49: 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 50: 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 51: 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 52: 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 53: Orion’s centenary 2017
Orion’s centenary 2017 Orion is a corporate cooperation partner for SuomiFinland 100 53 2017 Investor Presentation © Orion Corporation
Slide 54: 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