Orion Oyj Class A · OMXHEX:ORNAV
Orion Oyj Class A — Investor Day (May 2019)
16 slides from Orion Oyj Class A's investor day presentation, May 22, 2019
Slide 1: Ambitious growth target with high profitability
Ambitious growth target with high profitability Jari Karlson CFO
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: 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 4: Financial objectives
Financial objectives X Net sales Dividend 1 050 8% 1,60 900 6% 1,50 750 4% 600 2% 1,40 450 0% 1,30 300 -2% 1,20 150 -4% 0 -6% 1,10 2012 2013 2014 2015 2016 2017 2018 2017 2012 2013 2014 2015 2016 2018 Net sales, EUR million Growth, % Target floor Dividend per share, EUR Target Operating profit Equit
Slide 5: Why growth is important
Why growth is important Without growth margins will gradually decrease even with good cost control due to price competition and inflation Larger scale of operations Profits & Easier to carry fixed legacy costs dividends Improved margins & ROCE Growth Larger scale of operations -> Improved capacity t
Slide 6: Growth target made more concrete and easier to communicate
Growth target made more concrete and easier to communicate Growing net sales more rapidly Net sales target than growth of the pharmaceuticals market. in 2025 Achievement of this objective requires continuous investment in 1.5 development of the product portfolio. billion EUR Capital Markets Day of
Slide 7: Growing more rapidly than the growth in the market - Ongoing initiatives
Growing more rapidly than the growth in the market - Ongoing initiatives 1 Net sales target in 2025 Own investments in new clinical trials: Investments in sales and marketing: 1.5 E.g. EUR 60 million E.g. strengthening investment in the Easyhaler Phase III trial on ALS product family (REFALS). sales
Slide 8: Ways to grow
Ways to grow Innovative proprietary R&D programs, Key focus on new innovative 1 internally funded more than earlier products Geographical expansion = capturing larger share of value of R&D than earlier (especially Achieving growth target requires 2 US under consideration) agile use of many approache
Slide 9: Ways to fund growth
Ways to fund growth More spending upfront, i.e. lower than maximum 1 dividends mid-term to fund dividend/value growth in long term 2 Partnering with (Big) pharma Divesting of existing 3 business areas or assets Others, like using financing that is carrying also risk 4 to fund individual R&D (phase I
Slide 10: Elements of partnering
Elements of partnering Cost split Income split Territory split Manufacturing Milestones CASE EXAMPLES: + darolutamide + entacapone Some features of partnering with (Big) pharma + Risk sharing & Funding − Only relatively small share of market sales reported as Orion sales + Global presence and commer
Slide 11: TOP Supply Chain: Continuous development
TOP Supply Chain: Continuous development VISION: Quality and Compliance The most competitive, • Positive trend development with work safety program demand-driven supply chain. • Compliance programs according to plan: serialization Maximization of value for the customer and traceability through optim
Slide 12: Product sales gross profit stable
Product sales gross profit stable - Despite price erosion in Finland, Parkinson’s and Dexdor Share of total by business 1000 65% 800 60% Sales Gross profit 600 55% MEUR 400 50% 200 45% 0 40% Product sales Product sales gross profit Proprietary products Totally over EUR 50 million negative effect of
Slide 13: SG&A expenses in good control
SG&A expenses in good control - Decline in sales in Finland and investments for growth have had an impact since 2016 SG&A expenses Sales & marketing expenses 250 27% 1 200 34% 200 26% 1 000 32% 800 30% 150 25% MEUR MEUR 600 28% 100 24% 400 26% 50 23% 200 24% 0 22% 0 22% Sales&marketing Net Sales out
Slide 14: Ways to mitigate challenges
Ways to mitigate challenges R&D risks Timing Market Risks • Building of broad enough, • Use of proceeds from Orion • Entry only when product but not too large portfolio Diagnostica to maintain portfolio suitable for Orion • Disciplined way to select dividend and to fund growth • Flexible partnering
Slide 15: Summary - Value created by growth with good profitability
Summary - Value created by growth with good profitability Growth EBIT > 25% of net sales Equity ratio ≥ 50% • R&D pipeline development • Sales growth • Good profitability • Geographical expansion • Management of cost structure • Management of with focused sales • Management of product working capita
Slide 16: Thank you!
Thank you! Building well-being