Orion Group Interim Report January–September 2023

ORION CORPORATION
INTERIM REPORT 1-9/2023           
26 OCTOBER 2023 at 12:00 EEST

Orion Group Interim Report January–September 2023

• Net sales totalled EUR 868.5 (January–September 2022: 1,046.1) million
• Operating profit was EUR 182.0 (398.9) million
• Basic earnings per share were EUR 1.01 (2.26)
• Cash flow from operating activities per share was EUR 0.50 (3.05)
• EUR 30 million sales milestone from Nubeqa® recorded in Q3
• The outlook for 2023 is unchanged. Orion estimates that net sales in 2023 will be slightly higher than in 2022 without the EUR 228 million impact from the ODM-208 upfront payment (net sales in 2022 without the impact of the ODM-208 upfront payment were EUR 1,113 million). Operating profit is estimated to be slightly higher than in 2022 without the EUR 208 million net impact from the ODM-208 upfront payment and without the possible transfer of the insurance portfolio of Orion Pension Fund's B fund (operating profit in 2022 without the net impact of the ODM-208 upfront payment was EUR 232 million).
  
  

Key figures

	7-9/23	7-9/22	Change %	1-9/23	1-9/22	Change %	1-12/22
Net sales, EUR million	301.1	491.8	-38.8%	868.5	1,046.1	-17.0%	1,340.6
EBITDA, EUR million	93.5	257.4	-63.7%	220.4	433.9	-49.2%	487.1
% of net sales	31.1%	52.3%		25.4%	41.5%		36.3%
Operating profit, EUR million	80.0	245.4	-67.4%	182.0	398.9	-54.4%	439.6
% of net sales	26.6%	49.9%		21.0%	38.1%		32.8%
Profit before taxes, EUR million	78.5	244.6	-67.9%	179.5	399.8	-55.1%	440.3
% of net sales	26.1%	49.7%		20.7%	38.2%		32.8%
Profit for the period, EUR million	61.4	194.5	-68.4%	141.6	317.9	-55.5%	349.5
% of net sales	20.4%	39.5%		16.3%	30.4%		26.1%
Research and development expenses, EUR million	27.2	35.7	-23.6%	90.3	95.2	-5.2%	133.2
% of net sales	9.1%	7.3%		10.4%	9.1%		9.9%
Capital expenditure, excluding acquired in business combinations, EUR million	31.0	18.8	+64.9%	66.7	49.3	+35.3%	109.6
% of net sales	10.3%	3.8%		7.7%	4.7%		8.2%
Acquired in business combination, net of cash, EUR million		1.3		0.1	82.4	-99.8%	82.0
Interest-bearing net liabilities, EUR million				122.5	-152.2	> 100 %	-118.7
Basic earnings per share, EUR million	0.44	1.38	-68.4%	1.01	2.26	-55.4%	2.49
Cash flow from operating activities per share, EUR	0.23	2.46	-90.5%	0.50	3.05	-83.6%	3.09
Equity ratio, %				61.8%	62.5%		60.9%
Gearing, %				14.6%	-15.7%		-13.1%
Return on capital employed (before taxes), %				22.9%	52.7%		45.1%
Return on equity (after taxes), %				21.6%	49.3%		42.2%
Average personnel during the period				3,587	3,451	+3.9%	3,472

President and CEO Liisa Hurme:
Nubeqa® and Easyhaler® continue strong growth – Q3 was strong as expected

"In January–September 2023, our net sales were EUR 868.5 (1,046.1) million and the operating profit was EUR 182.0 (398.9) million. The decline in both reported net sales and operating profit is due to a significant EUR 228 million upfront payment recorded in the comparative period. Excluding this milestone and its net impact of EUR 208 million on result, our net sales increased slightly in January–September 2023 and operating profit was slightly down on last year but is improving as we have been expecting. The most important drivers for this positive development were the increase in Nubeqa® royalties, the increase in sales of the Easyhaler® product portfolio as well as EUR 30 million Nubeqa sales milestone that we have booked in Q3.

The negative impact of certain factors seen in the figures for the first half of 2023, such as Russia-related items, cost inflation and Nubeqa’s changed delivery price, started to ease in the third quarter of 2023, as expected. Overall, 2023 has progressed as anticipated, with the exception of lower than expected deliveries of entacapone products and some Animal Health products to our partners.

The decrease in net sales of the Generics and Consumer Health business division is explained by the decline in sales of Simdax® and dexmedetomidine products for human use, and closure of business in Russia. Overall, the rest of the portfolio performed well in challenging markets.

The development of the Branded Products business division was two-fold. Increased demand for dry-powder inhalers is the main reason for the growing sales and strong performance of the Easyhaler® product portfolio. The revenue from entacapone products declined due to lower deliveries to our partners, intensified competition, and declining prices in some markets. In addition, due to closure of business in Russia, the sales of Divina® Series declined. Thus, the total sales of the business division in January–September declined from the comparative period.

The Animal Health business division’s reported net sales increased because the comparative period’s net sales include the turnover of the animal health company Inovet, acquired in June 2022, only from July to September. However, in the third quarter the net sales of the business division declined from the comparative period due to continuous market softness and lower deliveries to our partners.

There has been one update in our clinical pipeline as we have initiated a Phase I clinical trial with ODM-212, a TEAD inhibitor aimed for the treatment of solid tumours with YAP/TEAD activation. Our other projects in the clinical phase are progressing as planned. We look forward to continuing all our R&D projects to develop new treatments for the benefit of patients with unmet need."

Outlook for 2023 (specified on 17 July 2023)

Orion estimates that net sales in 2023 will be slightly higher than in 2022 without the EUR 228 million impact from the ODM-208 upfront payment (net sales in 2022 without the impact of the ODM-208 upfront payment were EUR 1,113 million).

Operating profit is estimated to be slightly higher than in 2022 without the EUR 208 million net impact from the ODM-208 upfront payment and without the possible transfer of the insurance portfolio of Orion Pension Fund's B fund (operating profit in 2022 without the net impact of the ODM-208 upfront payment was EUR 232 million).

News Conference and Conference Call

A webcast and a conference call for analysts, investors and media representatives will be held on Thursday, 26 October 2023 at 13.30 EEST.

A link to the live webcast is available on Orion's website at www.orion.fi/en/investors. A recording of the event will be available on the website later the same day.

Confenrence call can be joined by registering through the following link:

http://palvelu.flik.fi/teleconference/?id=1009428

Phone numbers and the conference ID to access the conference will be provided after the registration. In case you would like to ask a question during the conference, please dial *5 on your telephone keypad to enter the question queue.

Questions can also be presented in writing through the question form of the webcast.

Upcoming events

Financial Statement Release for 2023	Tuesday 13 February 2024
Annual General Meeting 2024	Planned to be held on 20 March 2024
Interim Report January–March 2024	Thursday 25 April 2024
Half-Year Financial Report January–June 2024	Thursday 8 August 2024
Interim Report January–September 2024	Tuesday 29 October 2024

The Financial Statements and the Report of the Board of Directors for 2023 will be published on the Company's website at the latest in week 9/2024.

Espoo, October 26, 2023

Board of Directors of Orion Corporation

For additional information about the report:

Jari Karlson, CFO, tel. +358 50 966 2883

Tuukka Hirvonen, Investor Relations, tel. +358 10 426 2721 or +358 50 966 2721

www.orion.fi/en/investors

Publisher:

Orion Corporation

http://www.orion.fi/en

http://www.twitter.com/OrionCorpIR

Orion is a globally operating Finnish pharmaceutical company – a builder of well-being. We develop, manufacture and market human and veterinary pharmaceuticals and active pharmaceutical ingredients. Orion has an extensive portfolio of proprietary and generic medicines and self-care products. The core therapy areas of our pharmaceutical R&D are oncology and pain. Proprietary products developed by Orion are used to treat cancer, neurological diseases and respiratory diseases, among others. Orion's net sales in 2022 amounted to EUR 1,341 million and the company had about 3,500 employees at the end of the year. Orion's A and B shares are listed on Nasdaq Helsinki.

Attachment

• Orion Interim Report Q3 2023

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