Orion Group Financial Statement Release 2022

9 FEBRUARY 2023 at 12:00 EET

Orion Group Financial Statement Release 2022

This is a summary or Orion’s Financial Statement Release for 2022. The complete report is attached to this stock exchange release and is available at https://www.orion.fi/en/Orion-group/investors/financial-reviews-and-presentations/

  • Net sales totalled EUR 1,341 million (EUR 1,041 million in 2021)
  • Operating profit was EUR 440 (243) million
  • Profit before taxes was EUR 440 (242) million
  • Equity ratio was 61% (68%)
  • Return on capital employed before taxes (ROCE) was 45% (29%)
  • Return on equity after taxes (ROE) was 42% (26%)
  • Basic earnings per share were EUR 2.49 (1.38)
  • Cash flow from operating activities per share was EUR 3.09 (1.53)
  • The Board of Directors proposes payment of a dividend of EUR 1.60 (1.50) per share
  • 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 or higher than in 2022 without the EUR 208 million net impact from the ODM-208 upfront payment (operating profit in 2022 without the net impact of the ODM-208 upfront payment was EUR 232 million).


    10-12/22 10-12/21 Change % 1-12/22 1-12/21 Change %
Net sales, EUR million 294.5 276.5 +6.5% 1,340.6 1,041.0 +28.8%
EBITDA, EUR million 53.2 52.6 +1.1% 487.1 289.1 +68.5%
  % of net sales 18.1% 19.0%   36.3% 27.8%  
Operating profit, EUR million 40.7 39.9 +1.9% 439.6 243.3 +80.7%
  % of net sales 13.8% 14.4%   32.8% 23.4%  
Profit before taxes, EUR million 40.5 39.8 +1.7% 440.3 242.3 +81.7%
  % of net sales 13.7% 14.4%   32.8% 23.3%  
Profit for the period, EUR million 31.7 32.8 -3.5% 349.5 193.8 +80.4%
  % of net sales 10.7% 11.9%   26.1% 18.6%  
Research and development expenses, EUR million 38.8 41.0 -5.3% 135.8 117.7 +15.4%
  % of net sales 13.2% 14.8%   10.1% 11.3%  
Capital expenditure, excluding acquired in business combinations, EUR million 60.4 19.5 +209.7% 109.6 85.4 +28.5%
  % of net sales 20.5% 7.0%   8.2% 8.2%  
Acquired in business combination, net of cash, EUR million -0.3     82.0    
Interest-bearing net liabilities, EUR million       -118.7 -108.3 +9.6%
Basic earnings per share, EUR million 0.23 0.23 -2.9% 2.49 1.38 +80.4%
Cash flow from operating activities per share, EUR 0.04 0.54 -92.8% 3.09 1.53 +101.4%
Equity ratio, %       60.9% 68.1%  
Gearing, %       13.1% -14.5%  
Return on capital employed (before taxes), %       45.1% 28.8%  
Return on equity (after taxes), %       42.2% 26.2%  
Average personnel during the period       3,472 3,364 +3.2%

President and CEO Liisa Hurme:
Orion’s eventful year laid foundation for future growth

“Orion’s year 2022 was exceptionally good both in terms of net sales and operating profit. The main growth driver was the upfront payment of USD 290 million related to the ODM-208 agreement in July, for which we recorded EUR 228 million in revenue and operating profit. Excluding the upfront payment, net sales increased slightly from the previous year. Operating profit excluding the ODM-208 agreement-related upfront payment and expenses (net impact EUR 208 million) was slightly lower than in 2021. The decline is explained by increased costs which are mainly due to cost inflation and increased investments in research and development as well as sales and marketing. These investments lay foundation for the company’s future growth in the short and long term.

Sales of our major products developed broadly in line with our expectations during 2022. Nubeqa® was the spearhead of growth and the Easyhaler® product portfolio continued its long growth trajectory. Sales of Parkinson’s medicines were on a par with the previous year, while Simdax® and Dexdor® declined clearly as a result of generic competition. Sales of the Specialty Products business unit, i.e. generic medicines and self-care products, were higher than in the previous year, although generic prices have continued to fall, particularly in the main market in Finland. We were able to offset the impact of the price decrease with volume growth. After the preceding couple of years, the incidence of common respiratory infections was back to more normal levels, which increased the demand for generics and self-care products. The strong net sales growth in the Animal Health business unit is explained by the business acquisition in June.

2022 was an eventful year for Orion, with many events paving the way for the company’s future growth, including the publication of positive new data on darolutamide, which has already led to the approval of Nubeqa® for a new indication in the US. In addition, our partner Bayer raised its estimate of Nubeqa’s peak sales potential, and the product is Orion’s main growth driver for the coming years. In May, we took a major decision to focus Orion’s own early-stage research on oncology and pain. By focusing our resources on these two therapeutic areas, we believe we will achieve the best value for our research and development investments. We also acquired broad exclusivity for the development and commercialisation of a potent and selective NaV 1.8 blocker for the treatment of acute and chronic pain. The need for new effective and safe non-addictive pain treatment options is great. We therefore look forward to news of the ongoing Phase I clinical trial and the opportunity to take this drug candidate to the next stages of development.

In June, we made Orion’s first company acquisition in many years with the acquisition of the Belgian animal health company VMD (Inovet). The acquisition expanded the product offering and geographic presence of Orion’s Animal Health unit. Through the transaction, Orion also gained a production unit that specialises in the manufacturing of veterinary medicines. In July, we signed a significant development and commercialisation agreement with MSD for Orion’s ODM-208 molecule. The agreement will allow Orion to harness the potential of ODM-208 for the benefit of patients, while continuing to invest in other projects. In October, we announced a new organisational structure which came into force at the beginning of this year. The new organisational structure is clear and gives business units a better ability to focus on their strengths, their markets and their customers. This will support Orion’s strategy and the development and growth in line with that strategy.

2022 was also a challenging year in many ways. Simdax® and Dexdor® declined as expected and the decline steepened towards the end of the year. Also, cost inflation had a negative impact on our profitability, and the increase in our manufacturing costs accelerated in the latter part of the year. The effect of exchange rates on our profit varied greatly within the year. During the first and fourth quarters the effect was negative, while during the second and third quarters it was positive. In the year ahead, all these factors can continue to pose challenges to us. Also, global supply chains can continue to face pressure from the consequences of the COVID-19 pandemic and the war in Ukraine, among others. At Orion, we are focused on the issues we can influence and are working hard with our partners to ensure continuity of production, product availability, patient safety and to manage risks in global supply chains.

I have worked for Orion since 1999 in various positions and as CEO since November 2022. During the first months in my new role, I have had discussions with a great number of Orion people as well as our collaboration partners. These encounters have reinforced my view that Orion has very capable and committed employees and partners. Orion is also in a strong financial position. These are the foundations on which we can build Orion’s future together. The road is open!”

Outlook for 2023

Orion estimates that net sales in 2023 will be slightly higher than in 2022 without the EUR 228 million impact from 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 or higher than in 2022 without the EUR 208 million net impact from the ODM-208 upfront payment
(operating profit in 2022 without the net impact of the ODM-208 upfront payment was EUR 232 million).

Basis for outlook in more detail

Collaboration agreements with other pharmaceutical companies are an important component of Orion’s business model. Agreements often include payments recorded in net sales and operating profit that vary greatly from year to year. Forecasting the timing and amount of these payments is difficult. In some cases they are conditional on terms such as R&D outcomes which are not known until studies have been completed, the progress of R&D projects or the attainment of specified sales levels. On the other hand, neither the outcome nor the schedule of contract negotiations is generally known before the final signing of the agreement. In 2022, Orion received an upfront payment of USD 290 million related to the ODM-208 contract, of which EUR 228 million was recognised in revenue and operating profit. The contract-related expenses amounted to approximately EUR 20 million, resulting in a net impact on operating profit of EUR 208 million.

Milestone payments received by Orion in 2018–2022

Year 2018 2019 2020 2021 2022
EUR Million 5 51 42 3 234

Orion is eligible to receive milestone payments from Bayer based on sales of the Nubeqa® product upon meeting certain global annual sales thresholds for the first time. The outlook for 2023 includes one such milestone payment of EUR 30 million. The outlook does not include any other material milestone payments.

The outlook assumes that Orion’s own production will be able to operate normally throughout the year. Risks to the continuity of production are discussed under ‘Near-term risks and uncertainties’.

The outlook does not include income, expenses or other impacts related to any future material product or company acquisition or divestment.

Net sales

The outlook anticipates that the net sales of Nubeqa® booked by Orion will clearly increase in 2023. Orion’s estimate is based on forecasts received from its partner Bayer. The net sales of the Animal Health business division is also expected to increase clearly due to the acquisition of the animal health company VMD in summer 2022. Milestone payments are expected to increase clearly excluding the impact of the ODM-208 upfront payment. In addition, the Easyhaler® product portfolio is expected to act as one growth driver.

Aggregate net sales of other products are expected to decline from 2022, driven in particular by generic competition from Simdax®, dexdor®, Precedex® and Parkinson’s drugs Stalevo®, Comtess® and Comtan®. Also, the sales of Orion’s own generic dexmedetomidine and entcapone products are expected to decline due to competition. The expected decline in sales of other generic medicines is mainly explained by lower prices in Orion’s main markets. In addition, the outlook assumes that Orion’s turnover in Russia will be substantially lower than in 2022. In 2022, changes in exchange rates and especially in the Russian rouble rate increased net sales. Fermion has been operating at very near full capacity over the past few years. The share of manufacturing of the active pharmaceutical ingredients of Orion’s own proprietary drugs is estimated to increase, and consequently Fermion’s external net sales reported by Orion are estimated to slightly decline in 2023.

Operating profit

Manufacturing costs are expected to increase faster than sales, mainly due to cost inflation, resulting in a lower relative gross margin on product sales than in 2022. Cost inflation is reflected not only in raw material and energy prices, but also in salary costs, among others. The outlook takes into account higher salary increases than in previous years.

Operating expenses are expected to increase slightly from 2022 reported costs (i.e. including ODM-208 agreement-related costs). The increase in R&D expenses will be influenced by the number and timing of projects in the clinical research phase. In addition, there is a plan to increase investment in early-stage research, and hence in building the company’s future growth. Sales and marketing expenses will be driven by, among other things, the costs of the acquired veterinary pharmaceutical company Inovet, the planned launch of ganaxolone in Europe and costs related to Nubeqa, including the royalty payable to Endo Pharmaceuticals. Salary increases also push up operating expenses.

The operating profit from growing products, above all the royalty from Nubeqa®, is estimated to grow faster than costs. Also, milestone payments are expected to increase clearly excluding the impact of the ODM-208 upfront payment. Due to the factors mentioned above, operating profit for 2023 is estimated to be slightly higher or higher than in 2022, excluding the net impact of the EUR 208 million ODM-208 upfront payment.

Capital expenditure

The Group’s total capital expenditure in 2023 is expected to be clearly lower than in 2022, when capital expenditure was EUR 109 million. Investments in 2022 included EUR 20 million upfront payment for exclusive licence to commercialise Amneal’s generic products in Europe, Australia and New Zealand and EUR 15 million upfront payment for Jemincare’s NaV 1.8 blocker (ODM-111). In 2023, the grand total of investments will be still further increased by the revamping of Orion’s Enterprise Resource Planning (ERP) system and renovation of the company’s head office in Espoo, both scheduled for 2021-23. The outlook of capital expenditure does not include any investments related to any future material product or company acquisition.

Near-term risks and uncertainties

The outlook is based on the assumption that Orion’s own production can continue to operate normally. The sales of Orion-manufactured products depend on the ability of production and the entire supply chain to operate at the planned level. This involves numerous risks that may cause even material production disruptions. Such risks include the infection of employees, the availability of supplies, equipment and spare parts, deteriorating availability of products, energy, starting materials and intermediate products as well as logistics chain disruptions. Current risks to supply and logistics chains include the effects of the COVID-19 pandemic and the war in Ukraine. Any other unforeseen changes in the operating environment could cause disruptions to Orion’s production or other operations. Such risks may include natural disasters, significant geopolitical changes, epidemics and pandemics.

In the current labour market situation, strikes and other industrial actions are also risks that may affect Orion’s production and other operations directly or indirectly.

Sales of individual products and also Orion’s sales in individual markets may vary, for example depending on the extent to which the ever-tougher price and other competition prevailing in pharmaceutical markets in recent years will specifically focus on Orion’s products. Changes in pharmaceutical regulation in individual markets or more broadly, for example at EU level, may affect the sales and profitability of Orion’s products.

Product deliveries to key partners are based on timetables that are jointly agreed in advance. Nevertheless, they can change, for example as a consequence of decisions concerning adjustments of stock levels. In addition, changes in market prices and exchange rates affect the value of deliveries. Due to Russia’s invasion of Ukraine, the visibility of business in these countries is currently very low. Furthermore, it is uncertain whether all the receivables in Russia can be collected. However, this is not considered to be a significant risk for the Group. Orion has insured its receivables, but only in part. So far, Orion has been able to recover its receivables in Russia normally.

Currently no single currency is posing a material exchange rate risk for Orion. In Orion’s total net sales, the share of invoicing in US dollars has fallen to around ten per cent. At the same time, the value of purchases in dollars has increased. The weight of the US dollar will increase due to increasing sales of Nubeqa®. Other key currencies that carry an exchange rate risk are European currencies other than EUR. However, the overall effect of the risk arising from currencies of European countries will be abated by the fact that Orion has organisations of its own in most European countries, which means that in addition to sales income there are also costs in these currencies. The exchange rate performance of the Japanese yen is significant due to sales of Parkinson’s drugs in Japan. The exchange rate effect related to the Russian rouble arises in particular due to the strong volatility of the currency. Russian sales do not represent a significant portion of Orion’s total net sales.

Orion’s broad product range may cause risks to the delivery reliability and make it challenging to maintain the high quality standard required in production. The impacts of the COVID-19 pandemic, the war in Ukraine and other challenges in the global supply and logistics chains of pharmaceuticals have increased the already elevated risk of supply disruptions. Moreover, the disruptions, production volume changes and logistical challenges experienced in other industries may also have unexpected and sudden ramifications that can manifest as shortages of necessary raw materials, supplies and equipment in the chemical and pharmaceutical industries and as increases in prices. The rise of raw material prices and other supply chain costs deteriorates the profitability of Orion’s products, since in the pharmaceuticals industry it is very difficult to pass on cost increases to the prices of own products, especially prescription medicines, particularly in Europe. Cost inflation will have a negative impact on Orion’s profitability in 2023. Due to the inventory turnover rate, the impact of price increases on the cost of goods sold was still limited in 2022 and will be more pronounced in 2023. A continuation of high inflation levels poses a risk to Orion’s profitability.

Authorities and key customers in different countries carry out regular and detailed inspections of drug development and manufacturing at Orion’s production sites. Any remedial actions that may be required may at least temporarily have effects that decrease delivery reliability and increase costs. Orion’s product range also contains products manufactured by other pharmaceutical companies and products that Orion manufactures on its own but for which other companies supply active pharmaceutical or other ingredients and components or parts (among these the Easyhaler® products). Possible problems related to the delivery reliability or quality of the products of those manufacturers may cause a risk to Orion’s delivery reliability. The single-channel system used for pharmaceuticals distribution in Finland, in which Orion’s products have been delivered to customers through only one wholesaler, may also cause risks to delivery reliability.

Research projects always entail uncertainty factors that may either increase or decrease estimated costs. The projects may progress more slowly or faster than assumed, or they may be discontinued. Nonetheless, changes that may occur in ongoing clinical studies are reflected in costs relatively slowly and are not expected to have a material impact on earnings in the current year. Owing to the nature of the research process, the timetables and costs of new studies that are being started are known well in advance. They therefore typically do not lead to unexpected changes in the estimated cost structure. Orion often undertakes the last, in other words Phase III, clinical trials in collaboration with other pharmaceutical companies. Commencement of these collaboration relationships and their structure also materially affect the schedule and cost level of research projects.

Collaboration arrangements are an important component of Orion’s business model. Possible collaboration and licensing agreements related to these arrangements also often include payments to be recorded in net sales that may materially affect Orion’s financial results. In 2014–2022 the annual payments varied from EUR 3 million to EUR 234 million. The payments may be subject to conditions relating to the progress of research projects or sales or to new contracts to be signed, and whether these conditions or contracts materialise and what their timing is will always entail uncertainties.

Proposal by the Board of Directors: dividend EUR 1.60 per share

The parent company’s distributable funds are EUR 590,316,773.93, or EUR 4.21 per share. This includes EUR 348,926,255.92, or EUR 2.49 per share, of profit for the financial year. These per share amounts are calculated excluding treasury shares held by the Company. The Board of Directors proposes payment of a dividend of EUR 1.60 (1.50) per share from the parent company’s distributable funds.

No dividend shall be paid on treasury shares held by the Company on the dividend distribution record date. On the day when the profit distribution was proposed, the number of shares conferring entitlement to receive dividend totalled 140,201,507, on which the total dividend payment would be EUR 224,322,411.20. The Group’s payout ratio for the financial year 2022 would be 64.3% (108.8%). The dividend payment date would be 31 March 2023, and shareholders registered in the Company’s shareholder register on 24 March 2023 would be entitled to the dividend payment.

The Board of Directors further proposes that EUR 350,000 (350,000) be donated to medical research and other purposes of public interest in accordance with a separate decision by the Board and that EUR 365,644,362.73 remain in equity.

News conference and conference call

A webcast and a conference call for analysts, investors and media representatives will be held on Thursday, 9 February 2023 at 13.30 EET.

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:


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

Annual General Meeting 2023 planned to be held on Wednesday 22 March 2023
Interim Report January-March 2023 Thursday 27 April 2023
Half-Year Financial Report January-June 2023 Monday 17 July 2023
Interim Report January-September 2023 Thursday 26 October 2023

The Financial Statements and the Report of the Board of Directors for 2022 will be published on the Company’s website at the latest in week 9/2023.

Espoo, 9 February 2023

Board of Directors of Orion Corporation

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


Orion Corporation

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.


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