Orion Oyj Class A · OMXHEX:ORNAV
Orion Oyj Class A — Investor Presentation (October 2017)
54 slides from Orion Oyj Class A's investor presentation, Oct 26, 2017
Slide 1: Orion Investor presentation
Orion Investor presentation Updated on 26 October 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) Highlights of 1-9/2017 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 by business Sales by market area Operating profit 315 MEUR 4% 5% 13% 4% 33% Personnel 3,469 7% 8% 32% R&D investments 118 MEUR 47% 31% 6 production sites in 16% 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 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% 45% 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, 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 9 2017 Investor Presentation © Orion Corporation
Slide 10: Orion has ~50,000 shareholders (September 30, 2017)
Orion has ~50,000 shareholders (September 30, 2017) By number of shares By number of votes Households (Finnish retail) 5% 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 45% corporat
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
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 1-9/2017
Orion highlights 1-9/2017 15 2017 Investor Presentation © Orion Corporation
Slide 16: Centenary year has continued as planned
Centenary year has continued as planned ● Net sales were at previous year’s level. 1-9/2016 1-9/2017 ● Easyhaler product family maintained good growth 794 804 and geographical expansion. Sales of budesonide- formoterol Easyhaler formulation have now commenced also in Germany and the United Kingdom,
Slide 17: Geographical breakdown of net sales
Geographical breakdown of net sales 1-9/2017 Orion’s sales network Finland 15% Scandinavia 30% 7% Other Europe North America 18% 30% ROW 17 2017 Investor Presentation © Orion Corporation
Slide 18: Breakdown of net sales by business division
Breakdown of net sales by business division Net sales, 1-9/ 1-9/ EUR million 2017 2016 Change Proprietary Products Specialty Products 387 372 +4% 3% 5% 5% 32% Specialty Products Proprietary Products 261 269 -3% 7% Animal Health Animal Health 56 54 +4% Fermion Fermion 41 33 +23% Contract Contract man
Slide 19: Best-selling pharmaceuticals 1-9/2017
Best-selling pharmaceuticals 1-9/2017 Net sales, Change vs. Product Indication EUR million 1-9/2016 1. Parkinson’s disease 80 -22% 2. Asthma, COPD 55 +18% 3. Intensive care sedative 47 +16% Rheumatoid arthritis, inflammatory 4. bowel diseases 45 +44% 5. Acute decompensated heart failure 43 +5% 6. An
Slide 20: Proprietary Products
Proprietary Products Breakdown of net sales ● As expected, sales of Stalevo, Comtess and Comtan continued to decline, but growth in Stalevo, Comtess Easyhaler product family, Dexdor and Simdax & Comtan has partly compensated for the decline. 7% Easyhaler 7% ● Budesonide-formoterol Easyhaler product
Slide 21: Parkinson's drugs
Parkinson’s drugs Sales, EUR million Sales of Orion’s 60 branded Parkinson’s drugs 50 by market area MAT6/2017* 40 3% 30 20 Europe 28% 39% 10 Japan 0 ROW Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3 USA 2013 2014 2015 2016 2017 30% Orion sales Deliveries to Novartis *Source: IMS Health sales statistics MAT6
Slide 22: Easyhaler product family
Easyhaler product family ● Easyhaler product family sales grew by 18% Sales, EUR million − driven by budesonide-formoterol Easyhaler, 20 which grew by 44%. 18 16 ● Sales of budesonide-formoterol 14 have commenced in Germany and the United 12 Kingdom, as well as deliveries to Menarini in 10 Southern
Slide 23: Dexdor intensive care sedative
Dexdor intensive care sedative European sedative market Sales, EUR million MAT6/2017* 18 Total market value 16 EUR 536 million (+1%) 14 12 Propofol EUR 345 10 million (-1%) 12% 8 Midazolam EUR 66 6 11% million (-11%) 4 2 65% Dexmedetomidine 12% 0 EUR 59 million (+44%) Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3Q4Q
Slide 24: Specialty Products
Specialty Products Net sales in key markets 1-9/2017 Breakdown of net sales vs. EUR million 1-9/2016 13% Finland Finland 217 0% Scandinavia 72 +19% Scandinavia 12% Eastern Europe and Eastern Europe Russia 47 +13% 56% & Russia 19% ROW ● Sales of biosimilar Remsima developed well, change in pricing sy
Slide 25: Orion strong in home market Finland
Orion strong in home market Finland Finnish human pharmaceuticals market 1-9/2017: Finland’s biggest ● Wholesale EUR 1,731 million pharmaceutical companies 1-9/2017, EUR million ● Orion's market share 13% 250 219 ● Growth of total market +2%, 200 Orion's growth 0% 150 – Changes to the pricing system
Slide 26: Orion Diagnostica
Orion Diagnostica 1-9/2016 1-9/2017 ● QuikRead® tests 41 39 remained the main product. 6.6 6.2 Net sales, Operating profit, EUR million EUR million -7% -6% 26 2017 Investor Presentation © Orion Corporation
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 Operating profit is estimated to be at least EUR 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 56 Q2 237 238 239 259 253 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 B
Slide 32: Key figures
Key figures Change % vs. Orion’s key figures 2013 2014 2015 2016 1-9/2017 1-9/2016 Net sales, EUR million 1,006.9 1,015.3 1015.6 1,073.5 804.3 +1.3% Operating profit, EUR million 267.7 272.4 266.6 314.6 219.9 -14.1% Profit before taxes, EUR million 264.0 267.8 262.3 310.9 214.8 -15.2% R&D expenses,
Slide 33: Income Statement
Income Statement Change % vs. Formation of profits, EUR million 2013 2014 2015 2016 1-9/2017 1-9/2016 Net sales 1,006.9 1,015.3 1015.6 1,073.5 804.3 +1.3% Cost of goods sold -393.5 -401.7 -405.8 -421.7 -329.0 +6.6% Gross profit 613.4 613.6 609.8 651.8 475.3 -2.0% Other operating income and expenses
Slide 34: Financial position
Financial position Change Change EUR million 9/17 9/16 % EUR million 9/17 9/16 % Non-current assets total 395.8 360.5 +9.8% Inventories 218.7 218.4 +0.1% Equity total 594.5 588.9 +1.0% Interest-bearing non-current Trade receivables 187.8 185.5 +1.2% liabilities 150.4 150.1 +0.2% Other receivables 34
Slide 35: Development of capital expenditure
Development of capital expenditure Orion Capex, EUR million 100 80 60 Intangible assets 40 Property, plant and equipment 20 Depreciation, amortisation and impairment 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 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% Repayment of capital 1.50 0.06 0.12 95
Slide 38: Orion B share performance, 3 July 2006 - 30 September 2017
Orion B share performance, 3 July 2006 - 30 September 2017 Index 3 July 2006=100 520 480 440 400 Orion B 360 320 Orion B total return 280 MSCI Europe/ 240 Pharmaceutical 200 OMX Helsinki 160 120 80 40 3/7/06 9/4/08 6/5/09 2/6/10 9/3/12 8/4/13 7/5/14 4/6/15 9/3/17 23/11/07 18/12/08 21/11/12 19/12/13
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 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 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 Europe), China, USA, Japan 40 30 2% 0% • Own sales units in 9 European countries, 20 -2% d
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