Orion Group Interim Report January-June 2009
(Thomson Reuters ONE) - ORION CORPORATION INTERIM REPORT JANUARY-JUNE 2009 7AUGUST at 12:00 EESTOrion Group Interim Report January-June 2009Orion's net sales for January-June 2009 totalled EUR 386.4 million(360.7 million for the first half of 2008), up by 7.1% on thecomparative period. * Operating profit came to EUR 107.3 (108.6) million. * Profit before taxes was EUR 105.6 (108.9) million. * Equity ratio stood at 55.5% (63.0%). * ROCE before taxes was 40.4% (50.0%). * ROE after taxes was 39.9% (40.1%). * Earnings per share were EUR 0.55 (0.57). * Cash flow per share before financial items were EUR 0.35 (0.25).ORION'S KEY FIGURES FOR THE REVIEW PERIOD Change Change Q2/09 Q2/08 % Q1-Q2/09 Q1-Q2/08 % 2008Net sales, EURmillion 196.4 180.5 +8.8% 386.4 360.7 +7.1% 710.7Internationaloperations, EURmillion 141.4 127.0 +11.3% 277.9 251.6 +10.5% 493.6 % of net sales 72.0% 70.4% 71.9% 69.7% 69.4%Operating profit,EUR million 50.4 45.2 +11.5% 107.3 108.6 -1.2% 185.0 % of net sales 25.7% 25.1% 27.8% 30.1% 26.0%Profit before taxes,EUR million 49.0 44.9 +9.3% 105.6 108.9 -3.0% 184.2 % of net sales 25.0% 24.8% 27.3% 30.2% 25.9%Income tax expense,EUR million 12.8 12.1 +6.2% 27.6 29.1 -5.0% 47.8R&D expenses, EURmillion 25.0 23.7 +5.3% 49.1 44.2 +11.2% 90.0 % of net sales 12.7% 13.1% 12.7% 12.2% 12.7%Capital expenditure,EUR million 34.3 21.9 +56.4% 40.0 31.3 +27.6% 56.8 % of net sales 17.5% 12.2% 10.3% 8.7% 8.0%Assets total, EURmillion 655.9 581.3 +12.8% 695.5Equity ratio, % 55.5% 63.0% 60.2%Gearing, % 14.7% 6.8% -7.1%Interest-bearingliabilities, EURmillion 164.1 87.0 +88.7% 146.3Non-interest-bearingliabilities, EURmillion 127.5 128.4 -0.7% 130.6Cash and cashequivalents, EURmillion 110.7 62.2 +77.9% 176.1ROCE (before taxes),% 40.4% 50.0% 38.5%ROE (after taxes), % 39.9% 40.1% 32.1%Earnings per share,EUR 0.26 0.23 +10.3% 0.55 0.57 -2.2% 0.97Cash flow per sharebefore financialitems, EUR 0.11 0.18 -40.4% 0.35 0.25 +42.3% 0.66Equity per share,EUR 2.58 2.60 -0.5% 2.97Personnel at the endof the period 3,284 3,351 -2.0% 3,309Average personnelduring the period 3,232 3,237 -0.2% 3,270Personnel expenses,EUR million 86.4 83.9 +2.9% 170.9The Orion Group changed its accounting policy regarding productdevelopment costs as of 1 January 2009. Costs relating to thepromotion of products already on the market (mainly generic products)are now recognised in Cost of goods sold instead of Research anddevelopment costs in the Income Statement. This change has no effecton reported key figures, Operating profit and Balance Sheet, but itreduces the R&D costs previously reported for 2008 by EUR 13.4million and correspondingly increases the cost of goods sold.On 1 January 2009, Easyhaler® business was transferred from SpecialtyProducts to Proprietary Products. At the same time hormonereplacement products, such as the Divina® product range, andtoremifene products, such as Fareston®, were transferred to SpecialtyProducts.The key figures for comparative periods have been adjusted inaccordance with these reporting changes. Furthermore, the adjustedkey figures for previous periods are presented in the table "Adjustedkey figures", which can be found at the end of this release.CEO Timo Lappalainen's review"Repurchase of Simdax rights helps Orion build its European presence""The key event for Orion in the first half of the year was therepurchase of the rights to Simdax, a heart failure drug, from Abbottin May for EUR 26 million. Simdax is a proprietary drug developed byOrion, and it has previously been part of our product portfolio. Ithas been on the market for several years in, for example, SouthernEurope, and together with the prostate cancer drug Vantas, which iscurrently in the launching phase, it makes us well-placed to expandinto new countries in Europe in line with our strategy. During thefirst half of the year, we set up operations already in Spain, Italy,Austria, Greece and Portugal.""Orion's first-half net sales were favourable, showing a growth ofapproximately 7%. The deliveries of the Parkinson's disease drugsStalevo and Comtan to Novartis were clearly up year-on-year, and thesales of Easyhaler pulmonary drugs, Simdax and Precedex (sedative forpatients in intensive care) also increased considerably.""Despite excellent sales, our operating profit remained below lastyear's level due to slightly lower margins and an increase in fixedcosts. The costs rose mainly as a result of the launching of salesand marketing operations for Simdax in a number of new countries,outsourced research projects and the patent litigations underway inthe United States.""Our strategy was reviewed in June, and it remained essentially thesame. The key patents for the Stalevo and Comtess/Comtan drugs, whichgenerate approximately one-third of Orion's sales, will expire in ourmain markets in 2012-13. We are continuously bringing new products tothe market to replace the estimated drop in the sales of ourParkinson's drugs. Our revised financial objectives are ensuringfinancial stability and creating a foundation for long-termprofitable growth. Our strategy will continue to be built aroundthree key themes: a competitive product portfolio, strengthening ourmarket position in Europe and efficient and competitive operations.""Our current estimate of the Group's outlook for the full year 2009remains unchanged from the one published earlier in the FinancialStatements and the previous Interim report. We are expecting our netsales and operating profit to grow slightly from 2008. The outlookestimate and the related preamble can be found on pages 5-6 of thisreport."Events during the periodIn April, Orion and the Wockhardt companies reached an agreement inthe dispute where Orion had filed a lawsuit against Wockhardt in theUnited States after Wockhardt had submitted Abbreviated New DrugApplications (ANDA) for generic versions of Orion's Comtan® andStalevo® products.In May, Orion repurchased the rights to intravenous levosimendan(Simdax®). Simdax is Orion's proprietary drug for acute decompensatedheart failure.In June, the distribution of the Sebamed product family in Norway wastransferred to Orion. This change is part of Orion's strategy tostrengthen its self-care product portfolio in Scandinavia.Events after the review periodOrion Corporation has been informed that an Abbreviated New DrugApplication (ANDA) has been filed by Sandoz Inc. with the U.S. Foodand Drug Administration (FDA), seeking authorisation to produce andmarket, in the United States, generic versions of Precedex®(dexmedetomidine hydrochloride 100 µg base/ml), a product originatedby Orion and marketed in the United States by its exclusive licensee,Hospira, Inc. The drug is approved as a sedative for patients inintensive care in the United States. It can be administered bycontinuous infusion for up to 24 hours to patients whose breathing isassisted through intubation as well as to non-intubated patients whorequire a sedative prior to or during surgical or other procedures.News conference and teleconferenceA news conference and teleconference on the H1 results will be heldtoday, on Friday, 7 August 2009 at 14:30 EEST at Hotel Kämp, addressPohjoisesplanadi 29, Helsinki. CEO Timo Lappalainen will give a briefpresentation in English on the Group's results.The event can be followed live as a webcast accessible via the Orionwebsite at www.orion.fi/en/. After the presentation, questions can bepresented in Finnish and English.To participate in the teleconference, please call:From the USA: +1 334 323 6201From other countries +44 (0)20 7162 0025The on-demand recording of the event will be available later the sameday through a link provided on the Orion website.Orion's Interim reports for 2009Interim report January-September 2009 26October 2009Orion's financial reports and related presentation material areavailable on the Group's website at www.orion.fi/en/ promptly afterthe publishing. The website also provides a possibility to registerfor Orion's mailing lists for publications and releases.Additional information:Jari Karlson, CFO, tel. +358 10 426 2883 or mobile +358 50 966 2883www.orion.fi/en/www.orion.fi/en/investors/Financial review Q1-Q2/2009Net salesThe Orion Group's net sales for the first two quarters of 2009totalled EUR 386.4 million (360.7 million for the period Q1-Q2/2008),up by 7.1% on the comparative period. The net effect of currencyexchange rates was EUR 3.7 million positive.The Pharmaceuticals business reported net sales of EUR 364.8 (337.0)million, up by 8.3%. The products based on in-house R&D accounted forEUR 175.7 (156.5) million, i.e., 48% (46%) of the segment's netsales. Net sales from Orion's Parkinson's drugs, Stalevo® (carbidopa,entacapone and levodopa) and Comtess®/Comtan® (entacapone), totalledEUR 123.3 (105.2) million, or about 34% (31%) of the segment's netsales.The Diagnostics business had net sales of EUR 22.6 (24.7) million,down by 8.5%. The sales of QuikRead® infection tests grew, but thesales of older product portfolio slackened from the comparativeperiod.Operating profitThe Pharmaceuticals business posted an operating profit of EUR 108.5(108.8) million. The gross profit rate was slightly lower than in thecomparative period, which led to a smaller increase in theeuro-denominated gross profit than that seen in net sales. There wasa rise in fixed costs.The Diagnostics business had an operating profit of EUR 3.3 (4.9)million, down by 31.9%. A decline in sales reduced the gross profit,and operating profit was lower because of increased investments inproduct development.Operating expensesThe Group's selling and marketing expenses were EUR 75.3 (72.3)million, up by 4.2%. The growth was mainly due to the repurchase ofthe Simdax business and related launching of sales operations inSouthern Europe.Research and development expenditure amounted to EUR 49.1 (44.2)million, up by 11.2%. The growth was the result of increasedoutsourcing of studies, the most significant of which were the PhaseIII clinical studies with dexmedetomidine aimed at marketingauthorisation in Europe, Phase I clinical studies with an alfa2creceptor antagonist and preclinical cooperation with severalpartners. Internal research expenditure was at the same level as inthe comparative period despite major redundancies implemented earlyin the year. These were mainly due to a substantial rise in salariesand social security expenses in Finland as a result of paysettlements made in previous years. R&D expenses made up 12.7%(12.2%) of the Group's net sales. Pharmaceutical R&D expensesamounted to EUR 46.1 (42.0) million. Ongoing research projects arereported in more detail in the business review of the Pharmaceuticalsbusiness segment.Administrative expenses were EUR 27.0 (21.9) million. They increasedfrom the previous year mainly due to the EUR 6.0 (2.1) million costsresulting from the patent infringement lawsuits underway in theUnited States. In the comparative period, the processes were justbeginning. More information on the ongoing proceedings can be foundin the section "Legal proceedings".Other operating income and expenses increased profit by EUR 2.2 (2.5)million. These comprised mainly items from currency rate hedging.Profit before taxesGroup profit before taxes totalled EUR 105.6 (108.9) million.Earnings per share were EUR 0.55 (0.57) and equity per share EUR 2.58(2.60). The return on capital employed before taxes (ROCE) was40.4% (50.0%) and the return on equity after taxes (ROE)39.9% (40.1%).Balance Sheet and financial positionThe Group's gearing was 14.7% (6.8%) and equity ratio 55.5% (63.0%).Liabilities in the Consolidated Balance Sheet at 30 June 2009totalled EUR 291.6 (215.4) million. At the end of the period,interest-bearing liabilities amounted to EUR 164.1 (87.0) million, ofwhich EUR 123.1 (1.2) million consisted of long-term loans. The risein the loans increased the Group's cash and cash equivalents at theend of the period, which stood at EUR 110.7 (62.2) million, but theGroup's equity ratio and ROCE decreased slightly at the same time.The Group's cash and cash equivalents are invested in short-terminterest-bearing instruments issued by financially solid financialinstitutions and corporations.Cash flowsOperating cash flow developed favourably, amounting to EUR 91.3(60.6) million. Operating profit was nearly at the same level as inthe comparative period, and the amount tied to the working capitalduring the first half of the year was EUR 31.0 million less.Cash flow from investing activities was EUR 41.5 (25.5) millionnegative.Cash flow from financing activities was EUR 116.2 (63.1) millionnegative. The change was due to a distinct reduction in loans takenout by the Group compared with the first half of 2008. This wasbecause most of the Group's financial objectives were covered by thelong-term loans taken out at the end of 2008.Capital expenditureThe Group's capital expenditure totalled EUR 40.0 (31.3) million.Property, plant and equipment accounted for EUR 9.2 (15.8) millionand intangible assets for EUR 30.7 (15.5) million. The largestindividual investment was the repurchase of the rights to the Simdaxdrug from Abbott in May for EUR 26 million, including signature andmilestone payments as per the agreement.Outlook for 2009Net sales will increase slightly compared with 2008. The sales ofpharmaceuticals through Orion's own sales network will increase bothin Finland and other European countries. Global in-market sales ofthe Comtess/Comtan and Stalevo drugs will show further growth, but ata slower rate than before. Deliveries of Parkinson's drugs toNovartis are expected to increase slightly.Marketing expenditure will increase due to the launching of sales andmarketing activities for Simdax, which was repurchased from Abbott,in several countries, as well as the launching of other products.Research expenditure will remain at the previous year's level. Thecosts of the patent infringement lawsuits underway in the UnitedStates are estimated to be higher than in 2008.Operating profit is estimated to increase slightly from 2008. Theglobal economic recession is not expected to have a material effecton the results, but it will complicate the assessment ofprofitability.R&D expenses will be about EUR 90 million. Additionally, about EUR 10million will be used to promote products already on the market. Thelatter item is now included in Costs of goods sold in the IncomeStatement, while previously both items were included in Researchexpenditure.The Group's capital expenditure will be about EUR 65 million,including the repurchase of Simdax but excluding other substantialcompany or product acquisitions.PreambleThe reference price system that was implemented in Finland in April2009 is not expected to have a material effect on Orion's business.As expected, the new system has increased price competition in thecategory of substitutable products. However, it has also providedOrion with new business opportunities. As a result of the change,general market growth is expected to slow down in Finland comparedwith 2008. New product launches will support Orion's growth inFinland. On the other hand, the growth will be slowed down by heavyprice competition affecting mainly substitutable prescription drugs,which is an important sector for Orion.As expected, the growth in the in-market sales of the Parkinson'sdrugs, Stalevo and Comtess/Comtan, in 2008 was just over 10%, whichis lower than in previous years. The growth is expected to slow downfurther during 2009. Orion's own sales are anticipated to develop inline with the overall market for Parkinson's drugs. Deliveries toNovartis will depend on the development of Novartis's sales as wellas the change in stock levels. On the basis of current information,Novartis will not continue to cut its stock levels in 2009.The repurchase of the rights to Simdax from Abbott will increasesales in the latter half of the year. Due to the costs from launchingthe sales and marketing operations for the product as well as thetransfer from Abbott to Orion, the purchase will have no materialeffect on Orion's operating profit in 2009 compared to when Abbottwas responsible for the product's sales.Because the registrations and launches of new products are projectsthat take more than a year, the resources and other material inputsrequired for them in 2009 have been planned mostly in the previousyear.Research and development costs can be estimated quite accurately inadvance. Part of the expenses is caused by fixed internal items, suchas salaries and maintenance of the operating infrastructure, whilepart of the expenses result from clinical trials. These are typicallyperformed in clinics located in several countries. The most importantclinical trials scheduled for 2009 either continue from the previousyear or are at an advanced stage of planning, which is why their costlevel can be estimated rather accurately.The estimated costs of the ongoing patent litigations in the UnitedStates are based on the planned timetables and work estimates. Thecosts resulting from the litigations will depend on a number offactors, which at the present stage are difficult to estimateaccurately.Near-term risks and factors of uncertainty relating to the outlookestimatesThe company is not aware of any significant risk factors relating tothe earnings outlook for 2009.The global economic recession is not estimated to have a materialeffect on the short-term development of the pharmaceuticals market,but it increases uncertainty and thus complicates forecasting. Forexample, risks of payment defaults and credit losses relating toindividual countries and customers may increase slightly, andforecasting of currency rate development will be more challenging,particularly in Eastern Europe.The sales of individual products and, on the other hand, Orion'ssales in individual markets may vary slightly depending on the extentto which the ever-tougher price and other competition that hasprevailed in the pharmaceutical markets in recent years specificallyaffect Orion's products. Deliveries to Novartis are based ontimetables that are jointly agreed in advance. Nevertheless, thesecan change, for example, as a consequence of decisions by Novartisconcerning the adjustments of stock levels during the year. It isassumed that the ongoing litigations will not affect the sales ofComtan or Stalevo in the United States in 2009.Most of the exchange rate risk is related to the US dollar.Typically, less than 15% of Orion's net sales come from the UnitedStates. As regards the other most important currencies, such as theBritish pound sterling and the Swedish krona, the overall effect willbe abated by the fact that Orion has organisations of its own in theUnited Kingdom and Sweden, which means that in addition to coststhere will also be income in these currencies. As regards thecurrencies of East European countries, the situation is similar.Research projects always involve factors of uncertainty that mayeither increase or decrease estimated costs. The projects mayprogress more slowly or faster than assumed or they may bediscontinued. Nonetheless, changes that may occur in ongoing clinicalstudies are reflected in costs relatively slowly, and they are notestimated to have a material impact on the earnings in the currentyear. Owing to the nature of the research process, the timetables andcosts of new studies that are being started are known well inadvance. Therefore, they typically do not lead to unexpectedessential changes in the estimated cost structure.Financial objectivesOrion's revised financial objectives are ensuring the Group'sfinancial stability and creating a foundation for long-termprofitable growth.The principal means to achieve these objectives are: * Improving the organic development of net sales and operating profit through product, product portfolio and company acquisitions * Increasing the efficiency of operations and cost control * Maintaining a stable financial position, with the equity ratio remaining at a level of at least 50%.The sales of the Parkinson's disease drugs, Stalevo andComtess/Comtan, currently account for approximately one-third ofOrion's net sales. The key patents for these drugs in Orion's mainmarkets will expire in 2012-13, which is why their sales are expectedto decline over the next few years. Orion will also bring newproducts to the market to replace the estimated drop in net sales.The development of Orion's net sales and profitability within thenext few years will depend on how fast the sales of the Parkinson'sdrugs will decline and, on the other hand, how other products willsell in the future. This creates a point of discontinuity in theGroup's operations.Former financial objectives were to accelerate the moderate organicgrowth of the net sales within the next few years via product,product portfolio and company acquisitions, to increase the operatingprofit and to maintain the equity ratio at the level of 50% at least.StrategyIn June, Orion's Board of Directors confirmed the Group's strategyaccording to the same notions as before. Orion's strategy emphasisesprofitable growth and increased shareholder value, whilst keepingbusiness risks under control.Orion's strategy focuses on three key themes: * Competitive product portfolio * Strengthening the market position in Europe * Efficient and competitive operations.All of Orion's business divisions play a major role in achieving thebusiness objectives. Nevertheless, the main focus is on the twolargest divisions, Proprietary Products and Specialty Products. Orioncontinues to strengthen synergies between patent-protectedproprietary products, off-patent, i.e., generic prescription drugsand self-care products. The Animal Health, Fermion and OrionDiagnostica divisions are also seeking growth.Competitive product portfolioGrowth is based on a competitive product portfolio, which isdeveloped through Orion's in-house R&D activities, researchcooperation and active product acquisition. Potential companyacquisitions are also evaluated continuously.The focus in Orion's R&D operations continues to be on earlyresearch, and partnerships are mainly established for Phase IIIclinical studies at the latest. The Group aims to increase theoverall number of research programmes and balance the risks ofindividual projects in the research pipeline. Furthermore, the Groupseeks to purchase new product candidates to reinforce the researchpipeline based on its own research projects.In the acquisition of generic products, Orion will have amarket-specific focus. For example, Orion aims to grow its portfolioof self-care products in Finland, Scandinavia and Russia.Strengthening the market position in EuropeWith the establishment of new subsidiaries in 2009 and the repurchaseof the rights to Simdax, Orion has continued to strengthen and expandits presence in Europe in line with its strategy. Orion's salesnetwork currently covers the key European pharmaceutical markets,excluding France.Orion aims to remain the market leader in Finland and to makeScandinavia its established home market. In Central and SouthernEurope, the focus is on the Proprietary Products and in EasternEurope on the Specialty Products business. Outside Europe, Orionmainly operates through partners.Efficient and competitive operationsOrion strives to systematically improve its competitivenessthroughout the value chain, which means that increasing theefficiency of operations and cost control are particularly important.This translates into more active networking and partnership building,for instance. At present, Orion's key projects include implementingthe new R&D model, increasing the efficiency of the supply chain andimproving the competitiveness of sales operations.Dividend policyIn dividend distribution, Orion takes into account the distributablefunds as well as the medium-long- and long-term needs of capitalexpenditure and other financial needs required for the achievement ofthe financial objectives.Shares and shareholdersOn 30 June 2009, Orion had a total of 141,257,828 shares, of which51,440,668 were Shares A and 89,817,160 Shares B. The Group's sharecapital was EUR 92,238,541.46. At the end of June 2009, Orion held280,030 Shares B as treasury shares. On 30 June 2009, the aggregatenumber of votes conferred by both share classes was 1,118,305,490excluding treasury shares.Voting rights conferred by sharesEach Share A entitles its holder to twenty (20) votes at GeneralMeetings, whereas each Share B carries one (1) vote. However, ashareholder cannot vote with more than 1/20 of the aggregate numberof votes from the different share classes represented at the GeneralMeeting. In addition, Orion Corporation and Orion Pension Fund do nothave the right to vote at Orion's General Meetings of shareholders.Both share classes, A and B, provide equal rights to the companyassets and dividends.On the basis of the Articles of Association, a shareholder can demandthe conversion of his or her Shares A to Shares B. No shareconversions were carried out during the first half of 2009.Trading in Orion's sharesOrion's Shares A and B are both quoted on the NASDAQ OMX Helsinki inthe Large Cap group under the Healthcare sector heading under thetrading codes ORNAV and ORNBV. Trading in both of the company's shareclasses commenced on 3 July 2006. Information on trading in thecompany's shares has been available since this date. On 30 June 2009,the market capitalisation of the company's shares excluding treasuryshares stood at EUR 1,575.2 million.Authorisations of the Board of Directors to convey sharesOrion's Board of Directors has an authorisation granted by the AnnualGeneral Meeting on 23 March 2009 to transfer the company's own shares(treasury shares). This authorisation is in force up to the closingof the 2010 Annual General Meeting. The Board of Directors does nothave an authorisation to increase the share capital or to issue bondswith warrants or convertible bonds or stock options.Altogether 44,806 Shares B held by the company were conveyed in Marchas a share bonus for 2008 to persons employed by the company andbelonging to the Share-based Incentive Plan of the Orion Group. Thiswas based on the authorisation granted by the Annual General Meetingon 25 March 2008. The transfer price of the shares conveyed was EUR11.97 per share, which was the weighted average price of the Share Bon 5 March 2009. The total transfer price of conveyed shares was EUR536,417.43.After the transfer, Orion holds 280,030 Shares B as treasury shares.Shareholder structureAt the end of June 2009, Orion had a total of 47,239 registeredshareholders, of whom 93.9% were private individuals. They held 49.9%of the entire share stock and had 59.6% of the total votes.Nominee-registered shares totalled 30.83 million, representing 21.8%of all shares and 4.7% of the votes.At the end of June 2009, Orion held 280,030 Shares B as treasuryshares. The proportion of the treasury shares was 0.2% of thecompany's total share stock and 0.03% of the total votes.No new transactions exceeding the flagging limits set in the FinnishSecurities Markets Act were brought to the attention of the companyduring the review period.PersonnelThe average number of employees in the Group during the first half of2009 was 3,232 (3,237). At the end of June, the Group had a total of3,284 (3,351) employees, of whom 2,720 (2,836) worked in Finland and564 (515) outside Finland. The number also includes persons who weremade redundant at the beginning of the year and whose period ofnotice had not ended by the end of June. The increased number ofpersonnel in entities outside Finland was mainly due to thereinforcement of the sales organisation in Eastern Europe during2008.Salaries and other personnel expenses for January-June totalled EUR86.4 (83.9) million.Legal proceedingsAgreement reached in legal proceedings against the WockhardtcompaniesOn 29 April 2009, Orion Corporation and Wockhardt USA, LLC andWockhardt Limited (jointly "Wockhardt") reached a settlementagreement in the dispute where Orion had filed a lawsuit againstWockhardt to enforce its US patents after Wockhardt had filedAbbreviated New Drug Applications (ANDA) for generic versions ofOrion's Comtan® and Stalevo® products.Orion filed its first lawsuit against Wockhardt in the United Statesin 2007 and two more in 2008. The settlement agreement applies to allthree lawsuits. According to the terms of the settlement agreement,Wockhardt may launch the generic versions of Comtan and Stalevo inthe US market on 30 September 2012, or possibly before that ifcertain conditions are met. The parties have agreed that Orion willsupply the said generic products to Wockhardt. Any other terms of theagreement will not be made public by the parties.Due to the settlement, all three lawsuits were terminated and Orion'sUS patents No. 5,446,194; 5,135,950; 6,599,530; 6,797,732; and6,500,867 will remain in force.In accordance with current US legislation, Orion has delivered all ofthe above-mentioned agreements to the U.S. Federal Trade Commissionand the United States Department of Justice.Legal proceedings against the Sun companiesOn 13 November 2007, 7 February 2008 and 12 November 2008, OrionCorporation filed patent infringement lawsuits in the United Statesto enforce U.S. Patents No. 6,500,867 and 5,446,194 against companiesbelonging to the Sun Group.Sun Pharmaceutical Industries Limited seeks to market genericversions of Orion's Stalevo drug (25/100/200 and 37.5/150/200 mgstrengths of carbidopa, levodopa and entacapone) in the UnitedStates. Sun Pharma Global, Inc. seeks to market a generic version ofOrion's proprietary drug Comtan in the United States.Business reviews Q1-Q2/2009PharmaceuticalsMarket review on human pharmaceuticalsFinland is the most important market for Orion, and it generates justunder one-third of Orion's net sales. According to statisticscollected by Finnish Pharmaceutical Data Ltd, Finnish wholesales ofhuman pharmaceuticals in the first half of 2009 totalled EUR 959.9million, which was at the same level as in the comparative periodlast year. In terms of the number of packages, overall sales fell by6.7%. Total pharmacy sales rose by 0.6%, while hospital sales fell by0.9%. The wholesales of prescription drugs grew by 0.1% and thewholesales of self-care products by 1.2%.Orion continued to strengthen its position as the leading marketer ofpharmaceuticals in Finland. According to statistics collected byFinnish Pharmaceutical Data Ltd, Orion's wholesales ofpharmaceuticals in Finland in January-June 2009 amounted to EUR 91.2million, up by 3.0% year-on-year. Orion's sales grew slightly, whilethe overall market remained nearly unchanged from the comparativeperiod. The development of Orion's sales was supported by thecontinuously updated product portfolio. Orion's market share was 9.5%(9.4%), which was 2.4 percentage points higher than that of thesecond largest marketer.Globally, the most important indication for Orion is the treatment ofParkinson's disease. Orion's Parkinson's drugs account forapproximately one-third of the Group's net sales. According to IMSHealth pharmaceutical sales statistics, in the 12-month period endingin March the total sales of Parkinson's drugs to retail distributorsin the United States came to USD 966 million (USD 1,083 million inthe previous 12-month period), down by 11% year-on-year. The rapidchange in market trends was caused by the expiry of the patent forthe leading product, a dopamine agonist, and the resultingcompetition created by the launch of generic products. The fivelargest European markets for Parkinson's drugs were Germany, the UK,France, Spain and Italy. In these countries, the combined sales ofParkinson's drugs to retail distributors in the 12-month periodending in March totalled EUR 877 (818) million, and the averagemarket growth was 7%.The sales of Orion's Parkinson's drugs continued to developfavourably, at a clearly higher rate than the market as a whole.According to IMS Health pharmaceutical sales statistics, in the12-month period ending in March 2009 the sales of Orion's Parkinson'sdrugs to retail distributors totalled EUR 402 million (EUR 359million in the previous 12-month period), up by 12%. In addition, thehospital sales of Orion's Parkinson's drugs came to EUR 56 million,up by 28% compared to the previous 12-month period. In the UnitedStates, the sales of Orion's Parkinson's drugs to retail distributorsin the 12-month period ending in March were USD 163 (144) million, upby 13% year-on-year. The market share of Orion's Parkinson's drugs inthe United States was about 17%. In the five largest Parkinson'sdrugs markets in Europe, the wholesales of Orion's Parkinson's drugsin the 12-month period ending in March totalled EUR 143 (132)million, up by 8% on the comparative period. Orion's Parkinson'sdrugs have an average market share of about 16% in these fivemarkets.Net sales and operating profit of the Pharmaceuticals businessFor January-June 2009, the Pharmaceuticals business reported netsales of EUR 364.8 (337.0) million, up by 8.3% year-on-year. ThePharmaceuticals business had an operating profit of EUR 108.5 (108.8)million, nearly unchanged from the comparative period. The EBITmargin of the Pharmaceuticals business was 29.7% (32.3%) of thesegment's net sales.Proprietary ProductsThe product portfolio of Proprietary Products consists of patentedprescription products. For January-June 2009, the division posted netsales of EUR 165.7 (140.5) million, up by 17.9%.The combined net sales of Orion's Parkinson's drugs in the first halfof 2009 were EUR 123.3 (105.2) million. Sales were up by 17.2% andaccounted for 34% (31%) of the total net sales of the Pharmaceuticalsbusiness. Net sales from deliveries of Stalevo and Comtan to Novartistotalled EUR 76.0 (60.1) million, up by 26.4% year-on-year.Deliveries of Stalevo to Novartis increased by 18.3% and deliveriesof Comtan by 43.0%. Net sales generated by Stalevo and Comtess inOrion's own sales organisation totalled EUR 47.3 (45.1) million, upby 4.9%. Net sales of Stalevo through Orion's own sales organisationamounted to EUR 36.8 (32.1) million, up by 14.6%. Euro-denominatedsales were slackened by the weakening of the British pound sterlingand Scandinavian currencies.Orion has on-going patent litigations in the United States againstthe Sun companies. These companies aim to launch generic versions ofOrion's Comtan and Stalevo drugs in the United States. A settlementagreement was reached in legal proceedings against the Wockhardtcompanies in April.In January-June 2009, the Easyhaler product family had net sales ofEUR 12.6 (10.7) million, up by 17.7%. In addition to Finland, salesdeveloped favourably in Poland, Germany and Turkey, for example.In May, Orion repurchased the rights to the intravenous Simdax drug(levosimendan) from Abbott. Simdax is indicated for acutedecompensated heart failure. After the deal, Orion has worldwiderights to Simdax, excluding Latin American countries where the rightto market the product remained with Abbott. Orion will continue tosell Simdax through its own network and its partners in nearly 40countries where the product has been granted marketing authorisation.The deal supports Orion's growth targets in Europe. Simdax is Orion'sproprietary drug, fits in well with Orion's critical care productportfolio and is targeted at a narrow customer segment ofspecialists.Vantas® (histrelin implant), which is indicated for the treatment ofadvanced prostate cancer, was launched in Germany and the UnitedKingdom in June. Orion purchased the European-wide rights to the drugfrom the US-based Endo Pharmaceuticals Solutions Inc. (formerlyIndevus).Specialty ProductsThe net sales of the Specialty Products business division inJanuary-June 2009 totalled EUR 133.9 (129.6) million, up by 3.3%year-on-year. The product range comprises off-patent, i.e., genericprescription medicines and self-care products.Net sales from Orion's human pharmaceuticals in Finland inJanuary-June 2009 came to EUR 99.7 (96.7) million, up by 3% on thecomparative period. Specialty Products accounted for the majority ofsales in Finland. Despite the deteriorating market conditions, Orionhas managed to improve its market position owing to its continuouslyupdated product portfolio, particularly in prescription drugs. Thereference price system, which was introduced in April, has bothintensified price competition and expanded the range of substitutableproducts. The anti-psychotic drug Ketipinor® (quetiapine), forexample, has been particularly successful.Net sales from Orion's human pharmaceuticals in Eastern Europe in thefirst half of 2009 totalled EUR 18.0 (18.9) million, down by 5%.Specialty Products accounted for the majority of sales in the region.The growth of euro-denominated net sales in Eastern Europe has beenslackened by the heavy weakening of exchange rates in the region aswell as the economic recession.In June, the distribution of the Sebamed product family in Norway wastransferred to Orion. Sebamed skin-care products are distributedthrough pharmacies, so the agreement will enable Orion to boostcollaboration with the Norwegian pharmacy network. The newdistribution agreement supports Orion's growth strategy, aimed atmaking Scandinavia an established home market by strengthening theregion's self-care product portfolio.Animal HealthIn January-June 2009, Animal Health had net sales of EUR 30.4 (34.4)million, down by 11.6% on the comparative period. Animal sedativesaccounted for 28% (41%) of the division's net sales: Dexdomitor®(dexmedetomidine), Domitor® (medetomidine), Domosedan® (detomidine)and Antisedan® (atipamezole), whose sales were down by 39.7%. Thesales of animal sedatives have been slackened by price competition inEurope, due to the expiry of patents.Early in the year, Orion became the Finnish market leader in animaldrugs as well. The Finnish animal health market grew by 6.5% inJanuary-June 2009 compared with the corresponding period in 2008.Respectively, Orion's net sales from veterinary medicines increasedby 10.0% in Finland. Orion's share of the Finnish animal healthmarket was 20.0%. The strong development of sales was mainly due toOrion's extensive product portfolio and long engagement in theFinnish animal health market.FermionThe net sales of Fermion, a manufacturer of active pharmaceuticalingredients, stood at EUR 21.9 (19.4) million in the first half of2009, up by 12.7% on the comparative period. The impact ofintra-Group transactions, that is, deliveries of active ingredientsfor Orion's own use, has been eliminated from Fermion's net sales.Ten best-selling pharmaceutical productsThe net sales of the top ten pharmaceuticals in January-June 2009amounted to EUR 190.9 (172.3) million, up by 10.8%. These productsmade up about 52% (51%) of the total net sales generated by thePharmaceuticals business. The fastest growth rates were achieved withPrecedex® sedative for patients in intensive care (dexmedetomidine),the heart failure drug Simdax, the Easyhaler franchise and theParkinson's drugs.Products from in-house researchThe net sales of products from in-house research totalled EUR 175.7(156.5) million in January-June 2009, up by 12.3% on the comparativeperiod. These products made up about 48% (46%) of the net salesgenerated by the Pharmaceuticals business.Research and developmentOrion's pharmaceutical R&D focuses on the following core therapyareas: central nervous system drugs, cancer and critical care drugsand Easyhaler pulmonary drugs. In addition to in-house research,Orion invests in early-stage R&D cooperation with universities andother pharmaceutical companies. In Phase III clinical studies, Orionprefers to share the costs with other pharmaceutical companies. Inthis way, Orion can ensure an increasing number of new researchprojects and reinforce its ability to continue operating as a companythat provides new drugs and engages in pharmaceutical R&D.The Group's R&D expenses totalled EUR 49.1 (44.2) million, of whichthe Pharmaceuticals business made up EUR 46.1 (42.0) million. TheGroup's R&D expenses were 12.7% (12.2%) of the Group's net sales.Orion has applied for an expanded indication for Stalevo with the aimto extend the indication to the treatment of early-stage Parkinson'sdisease in the United States. The application is based on thepositive results from the FIRST STEP study conducted by Orion'smarketing partner Novartis in eight countries in North America andEurope. Stalevo is currently indicated for the treatment of advancedParkinson's disease.Orion is collaborating with Novartis to launch Stalevo in Japan.Phase III clinical studies are underway with dexmedetomidine inpatients in intensive care as an infusion administered for over 24hours. The programme aims to have the product registered in the EU.Dexmedetomidine is already available, for example, in the US andJapan as a sedative for patients in intensive care, administrable asan infusion for a maximum of 24 hours. The efficacy and safety ofdexmedetomidine is compared with midazolam in the MIDEX study andwith propofol in the PRODEX study. Both studies are planned toinvolve 500 patients. The studies were launched in summer 2007, andpreliminary results are expected in summer 2010.The LEVET programme is studying the efficacy of orally administeredlevosimendan in the treatment of heart diseases in dogs, with the aimof obtaining marketing authorisations in the US and the EU.For the Easyhaler product family, a new formulation is beingdeveloped combining budesonide as an anti-inflammatory agent andformoterol as a long-acting bronchodilator.An alpha 2c receptor antagonist is being studied in clinical Phase I.In early research, this compound has been found to be suitable forthe treatment of the symptoms of schizophrenia or Alzheimer'sdisease, for example.Orion has decided to not to continue the preliminary Phase I clinicalstudies aimed at investigating the potential use of orallyadministered levosimendan for the treatment of stroke in humanpatients.Orion has several projects in early research phase investigatingselective androgen receptor modulators (SARM), prostate cancer,neuropathic pain, Parkinson's disease and other possible indicationswithin intensive care, among others.DiagnosticsFor January-June 2009, the Diagnostics business reported net sales ofEUR 22.6 (24.7) million, down by 8.5% on the comparative period. Thesales of many old product categories fell year-on-year. Theeuro-denominated development of net sales was slackened by theweakening of Nordic currencies, whereas sales to China and the CzechRepublic increased on the comparative period.The main products were the QuikRead® tests, whose sales continued togrow. The tests are used, for example, to detect infection from theCRP concentration of the blood sample and to detect streptococcus Abacteria in the pharyngeal sample. The increasing QuikReadparaphernalia in doctors' offices and clinical laboratories create asolid basis for demand for reagents used in tests in future.Operating profit, which amounted to EUR 3.3 (4.9) million, fell by31.9% as a result of a decline in sales and an increase in productdevelopment expenditure.Espoo, 7 August 2009Board of Directors of Orion CorporationOrion CorporationTimoLappalainenJari KarlsonPresident andCEOCFOTablesCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ChangeEUR million Q2/09 Q2/08 % Q1-Q2/09 Q1-Q2/08 Change % 2008Net sales 196.4 180.5 +8.8% 386.4 360.7 +7.1% 710.7Cost of goodssold -68.1 -62.9 +8.3% -129.9 -116.3 +11.7% -243.4Gross profit 128.3 117.7 +9.0% 256.5 244.5 +4.9% 467.4Other income andexpenses 1.6 0.1 2.2 2.5 -12.0% 3.1Selling andmarketingexpenses -40.3 -37.2 +8.3% -75.3 -72.3 +4.2% -143.9R&D expenses -25.0 -23.7 +5.3% -49.1 -44.2 +11.2% -90.0Administrativeexpenses -14.2 -11.6 +22.2% -27.0 -21.9 +23.2% -51.5Operating profit 50.4 45.2 +11.5% 107.3 108.6 -1.2% 185.0Finance income 1.0 0.9 +8.3% 3.1 2.4 +31.7% 7.6Finance expenses -2.4 -1.3 +89.4% -4.8 -2.0 +137.4% -8.5Profit beforetaxes 49.0 44.9 +9.3% 105.6 108.9 -3.0% 184.2Income taxexpense -12.8 -12.1 +6.2% -27.6 -29.1 -5.0% -47.8PROFIT FOR THEPERIOD 36.2 32.8 +10.4% 78.0 79.9 -2.3% 136.3OthercomprehensiveincomeTranslationdifferences 0.9 0.0 1.1 -0.3 +466.2% -2.8Cash flow hedges 0.5 0.7 -29.2% 0.2 0.7 -68.8% -1.0Othercomprehensiveincome net oftax 1.4 0.8 +86.4% 1.4 0.4 +216.0% -3.9TOTALCOMPREHENSIVEINCOMEFOR THE PERIOD 37.6 33.5 +12.1% 79.4 80.3 -1.1% 132.5of whichattributable to:Parent companyshareholders 36.2 32.8 +10.4% 78.0 79.9 -2.3% 136.3Minority 0.0 0.0 0.0 0.0 0.0Totalcomprehensiveincomeattributable to:Parent companyshareholders 37.6 33.5 +12.1% 79.4 80.3 -1.1% 132.5Minority 0.0 0.0 0.0 0.0 0.0Earnings pershare, EUR 1)) 0.26 0.23 +10.3% 0.55 0.57 -2.2% 0.97Depreciation andamortisation 8.4 7.7 +9.6% 16.4 15.3 +7.7% 31.6Personnelexpenses 44.6 43.9 +1.6 % 86.4 83.9 +2.9% 170.91) The figure has been calculated from the profit attributable tothe parent company shareholders. The company has no items that coulddilute the earnings per share..STATEMENT OF FINANCIAL POSITIONAssetsEUR million 6/09 6/08 Change % 2008Property, plant and equipment 188.6 189.4 -0.4% 192.4Goodwill 13.5 13.5 13.5Intangible rights 63.8 33.3 +91.4% 37.5Other intangible assets 3.6 2.2 +62.5% 2.9Investments in associates 0.1 0.1 -18.6% 0.1Available-for-sale investments 1.0 0.9 +4.7% 0.9Pension asset 32.3 28.0 +15.4% 29.3Deferred tax assets 4.1 3.4 +19.9% 4.2Other non-current assets 1.6 4.6 -65.8% 1.5Non-current assets total 308.4 275.4 +12.0% 282.3Inventories 123.8 140.8 -12.1% 131.7Trade receivables 95.7 87.7 +9.2% 83.1Other receivables 17.4 15.2 +14.7% 22.3Cash and cash equivalents 110.7 62.2 +77.9% 176.1Current assets total 347.5 305.9 +13.6% 413.1Assets total 655.9 581.3 +12.8% 695.5Equity and liabilitiesEUR million 6/09 6/08 Change % 2008Share capital 92.2 92.2 92.2Share premium 17.8 17.8 17.8Expendable fund 23.0 23.0 23.0Other reserves -0.6 0.9 -169.5% -0.9Retained earnings 231.8 231.9 286.3Equity of the parent company shareholders 364.3 365.9 -0.5% 418.5Minority interest 0.0 0.0 -10.9% 0.0Equity total 364.3 366.0 -0.5% 418.6Deferred tax liabilities 41.5 42.3 -1.7% 42.0Pension liability 0.7 1.0 -27.4% 0.8Provisions 0.5 0.5 +12.2% 0.4Interest-bearing non-current liabilities 123.1 1.2 109.9Other non-current liabilities 0.6 2.1 -68.8% 0.9Non-current liabilities total 166.5 47.0 +254.4% 153.9Trade payables 26.4 32.8 -19.5% 30.2Income tax liabilities 1.3 4.2 -68.3% 2.4Other current liabilities 56.4 45.6 +23.6% 54.0Provisions 0.0 0.0 -100.0% 0.0Interest-bearing current liabilities 41.1 85.8 -52.1% 36.4Current liabilities total 125.2 168.4 -25.7% 123.0Liabilities total 291.6 215.4 +35.4% 276.9Equity and liabilities total 655.9 581.3 +12.8% 695.5CONSOLIDATED STATEMENT OF CHANGES IN EQUITYa. Share capitalb. Share premiumc. Expendable fundd. Other reservese. Translation differencesf. Retained earningsg. Totalh. Minority interesti. Equity totalEUR million a. b. c. d. e. f. g. h. i.Equity on 31 Dec2008 92.2 17.8 23.0 -0.9 -6.9 293.3 418.5 0.0 418.6Dividend -133.9 -133.9 -133.9Share-basedincentive plan 0.4 0.4 0.4Comprehensiveincome 0.2 1.1 77.9 79.3 0.0 79.3Equity on 30 Jun2009 92.2 17.8 23.0 -0.6 -5.8 237.6 364.3 0.0 364.3Equity on 31 Dec2007 92.2 17.8 23.0 0.5 -4.1 301.7 431.1 0.0 431.2Dividend -140.9 -140.9 -140.9Repurchase of ownshares -4.8 -4.8 -4.8Share-basedincentive plan 0.3 0.3 0.3Transfer in equity -0.3 0.3Comprehensiveincome 0.7 -0.3 79.9 80.3 0.0 80.3Equity on 30 Jun2008 92.2 17.8 23.0 0.9 -4.4 236.4 365.9 0.0 366.0CONSOLIDATED CASH FLOW STATEMENTEUR million 6/09 6/08 2008Operating profit 107.3 108.6 185.0Adjustments 13.9 14.2 28.7Change in working capital -4.8 -35.8 -15.0Interest paid -5.1 -1.3 -7.0Interest received 3.2 2.6 7.5Income taxes paid -23.3 -27.7 -54.9Total net cash from operating activities 91.3 60.6 144.4Investments in property, plant and equipment -10.3 -10.8 -30.8Investments in intangible assets -31.4 -15.5 -23.0Sales of property, plant and equipmentand available-for-sale investments 0.4 0.8 1.5Sales of intangible assets -0.2 0.0 0.5Total net cash used in investing activities -41.5 -25.5 -51.8Withdrawals of short-term loans 0.6 103.7 121.7Repayments of short-term loans -0.6 -20.7 -105.1Withdrawals of long-term loans 22.8 -0.2 125.0Repayments of long-term loans -5.1 -0.2 -0.5Repurchase of own shares 0.0 -4.8 -4.8Dividends paid and other distribution of profits -133.9 -140.9 -141.1Total net cash used in financing activities -116.2 -63.1 -4.8Net change in cash and cash equivalents -66.4 -28.0 87.7Cash and cash equivalents at the beginning ofthe period 176.1 90.4 90.4Foreign exchange differences 1.0 -0.2 -2.1Net change in cash and cash equivalents -66.4 -28.0 87.7Cash and cash equivalents at the end of theperiod 110.7 62.2 176.1CHANGES IN PROPERTY, PLANT AND EQUIPMENTEUR million 6/09 6/08 2008Carrying amount at the beginning of the period 192.4 186.6 186.6Additions 9.2 15.8 32.8Disposals -0.4 -0.7 -1.8Depreciation -12.6 -12.3 -25.1Carrying amount at the end of the period 188.6 189.4 192.4CHANGES IN INTANGIBLE ASSETS (EXCL. GOODWILL)EUR million 6/09 6/08 2008Carrying amount at the beginning of the period 40.4 23.0 23.0Additions 30.7 15.5 24.0Disposals -0.0 -0.0Depreciation -3.8 -3.0 -6.6Carrying amount at the end of the period 67.3 35.5 40.4In May, Orion repurchased the rights to Simdax from Abbott. Thepurchase price, EUR 26.2 million,was recognised in full under Intangible rights in the ConsolidatedBalance Sheet.COMMITMENTS AND CONTINGENCIESEUR million 6/09 6/08 2008Contingent for own liabilitiesMortgages on land and buildings 45.0 19.0 19.0of which those to Orion Pension Fund 9.0 9.0 9.0Guarantees 1.1 1.4 1.0Other liabilitiesLeasing liabilities (excl. finance lease contracts) 4.0 4.3 4.0Other liabilities 0.3 0.3 0.3DERIVATIVESEUR million 6/09 6/08 2008Fair value of currency forward contracts 1.6 0.7 2.0Nominal values of derivatives 70.2 62.4 64.6Fair value of electricity forward contracts -1.1 0.8 -1.4Nominal values of derivatives 4.8 2.3 5.7RELATED PARTY TRANSACTIONSEUR million Q1-Q2/09 Q1-Q2/08 2008Management's employment benefits 2.4 2.1 3.1Performance by operating segmentNET SALES BY BUSINESS AREA Change ChangeEUR million Q2/09 Q2/08 % Q1-Q2/09 Q1-Q2/08 % 2008Pharmaceuticals 185.9 168.5 +10.4% 364.8 337.0 +8.3% 667.6ProprietaryProducts 84.2 70.1 +20.2% 165.7 140.5 +17.9% 278.1 SpecialtyProducts 67.8 63.1 +7.4% 133.9 129.6 +3.3% 260.5 AnimalHealth 15.2 17.8 -14.7% 30.4 34.4 -11.6% 67.2 Fermion 10.8 10.5 +2.4% 21.9 19.4 +12.7% 36.1 Other 8.0 7.0 +14.2% 13.0 13.0 25.7Diagnostics 11.0 12.6 -12.9% 22.6 24.7 -8.5% 45.0Group items -0.5 -0.5 -2.7% -1.1 -1.0 +6.5% -1.9Group total 196.4 180.5 +8.8% 386.4 360.7 +7.1% 710.7OPERATING PROFIT BY BUSINESS AREAEUR million Q2/09 Q2/08 Change % Q1-Q2/09 Q1-Q2/08 Change % 2008Pharmaceuticals 51.6 45.7 +12.8% 108.5 108.8 -0.3% 188.5Diagnostics 1.1 2.5 -57.1% 3.3 4.9 -31.9% 6.1Group items -2.3 -3.1 -25.9% -4.5 -5.1 -12.8% -9.6Group total 50.4 45.2 +11.5% 107.3 108.6 -1.2% 185.0NET SALES BY ANNUAL QUARTERS 2009 2008 2007EUR million Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3Pharmaceuticals 185.9 178.9 169.6 161.0 168.5 168.5 162.7 153.4Diagnostics 11.0 11.7 10.7 9.5 12.6 12.2 10.5 9.4Group items -0.5 -0.5 -0.5 -0.4 -0.5 -0.5 -0.4 -0.3Group total 196.4 190.1 179.9 170.1 180.5 180.2 172.8 162.5OPERATING PROFIT BY ANNUAL QUARTERS 2009 2008 2007EUR million Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3Pharmaceuticals 51.6 56.9 35.3 44.3 45.7 63.1 41.7 50.1Diagnostics 1.1 2.2 0.2 1.0 2.5 2.3 0.1 1.2Group items -2.3 -2.2 -2.7 -1.8 -3.1 -2.1 -3.1 -2.2Group total 50.4 56.9 32.8 43.6 45.2 63.4 38.6 49.1GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS 2009 2008 2007EUR million Q2 Q1 Q4 Q3 Q2 Q1 Q4 Q3Finland 55.0 53.5 55.2 52.8 53.5 55.7 53.7 48.6Scandinavia 25.8 25.4 23.7 23.3 26.1 28.1 24.3 23.8Other Europe 71.8 61.2 62.0 56.2 61.4 64.4 57.5 56.0North America 18.2 22.6 19.2 21.7 18.5 14.4 15.4 19.1Other markets 25.6 27.4 19.8 16.1 21.1 17.6 21.9 15.0Group total 196.4 190.1 179.9 170.1 180.5 180.2 172.8 162.5Business reviewsKEY FIGURES FOR PHARMACEUTICALS BUSINESS ChangeEUR million Q2/09 Q2/08 Change % Q1-Q2/09 Q1-Q2/08 % 2008Net sales 185.9 168.5 +10.4% 364.8 337.0 +8.3% 667.6Operating profit 51.6 45.7 +12.8% 108.5 108.8 -0.3% 188.5 % of netsales 27.8% 27.2% 29.7% 32.3% 28.2%R&D expenses 23.4 22.6 +3.6% 46.1 42.0 +9.8% 85.4 % of netsales 12.6% 13.4% 12.6% 12.5% 12.8%Capitalexpenditure 33.7 20.5 +64.3% 39.0 29.5 +32.0% 53.3 % of netsales 18.1% 12.2% 10.7% 8.8% 8.0%Sales revenuefrom proprietaryproducts 88.1 78.9 +11.6% 175.7 156.5 +12.3% 307.5Personnel at theend of the period 2,960 3,033 -2.4% 2,995NET SALES OF ORION'S TOP 10 PHARMACEUTICAL PRODUCTS Change ChangeEUR million Q2/09 Q2/08 % Q1-Q2/09 Q1-Q2/08 % 2008Stalevo®(Parkinson'sdisease) 42.2 37.8 +11.7% 84.7 72.6 +16.7% 141.0Comtess® / Comtan®(Parkinson'sdisease) 18.9 15.1 +25.0% 38.6 32.6 +18.3% 67.4Easyhaler® productfamily (asthma,COPD) 6.2 6.2 -0.1% 12.6 10.7 +17.7% 22.2Simdax® (heartfailure) 8.6 4.8 +80.0% 11.4 9.5 +20.3% 17.3Burana®(inflammatory pain) 4.6 4.1 +12.1% 9.1 9.3 -1.6% 19.4Domitor®,Dexdomitor®,Domosedan® andAntisedan® (animalsedatives) 3.5 6.6 -46.7% 8.4 14.0 -39.7% 24.6Divina® range(menopausalsymptoms) 3.6 4.1 -13.3% 7.1 7.5 -5.7% 14.7Precedex® (sedativefor patients inintensive care) 2.7 1.8 +50.2% 6.8 4.3 +58.0% 9.6Fareston® (breastcancer) 2.4 2.5 -2.9% 6.2 5.3 +15.4% 10.5Enanton® (prostatecancer) 3.1 3.3 -4.9% 6.1 6.5 -6.8% 12.7Total 95.8 86.3 +11.0% 190.9 172.3 +10.8% 339.7Share ofpharmaceutical netsales 52% 51% 52% 51% 51%KEY FIGURES FOR DIAGNOSTICS BUSINESS ChangeEUR million Q2/09 Q2/08 Change % Q1-Q2/09 Q1-Q2/08 % 2008Net sales 11.0 12.6 -12.9% 22.6 24.7 -8.5% 45.0Operating profit 1.1 2.5 -57.1% 3.3 4.9 -31.9% 6.1 % of netsales 10.0% 20.2% 14.7% 19.8% 13.6%Capitalexpenditure 0.6 1.3 -52.5% 0.9 1.4 -36.8% 2.8 % of netsales 5.5% 10.0% 4.0% 5.7% 6.2%Personnel at theend of the period 296 290 +2.0% 287Information on Orion's sharesBasic SHARE information30 June 2009 Share A Share B TotalISIN code FI0009014369 FI0009014377Trading code on NASDAQ OMXHelsinki ORNAV ORNBVReuters code ORNAV.HE ORNBV.HEBloomberg code ORNAV.FH ORNBV.FHShare capital, EUR million 33.6 58.6 92.2Counter book value of theshare, EUR 0.65 0.65Total number of shares 51,440,668 89,817,160 141,257,828% of total share stock 36% 64% 100%Number of treasury shares 280,030 280,030Total number of sharesexcluding treasury shares 51,440,668 89,537,130 140,977,798Minimum number of shares 1Maximum number of shares 500,000,000 1,000,000,000 1,000,000,000Votes per share 20 1Number of votes excludingtreasury shares 1,028,813,360 89,537,130 1,118,350,490% of total votes 92% 8% 100%Total number ofshareholders 15,269 31,970 47,239Both Shares, A and B, provide equal rights to the company assets anddividends.INFORMATION ON TRADING1 January-30 June 2009 Share A Share B TotalShares traded 1,102,133 47,300,722 48,402,855% of the total number of shares 2.1% 52.8% 34.3%Trading volume, EUR million 12.9 557.9 570.8Closing quotation on 2 Jan 2009, EUR 12.55 12.63Lowest quotation, EUR (A and B, 30Mar 2009) 10.42 10.35Average quotation, EUR 11.73 11.80Highest quotation, EUR (A and B, 30Jan 2009) 13.95 13.98Closing quotation on 30 Jun 2009, EUR 11.18 11.17Market capitalisation on 30 Jun 2009excluding treasury shares, EURmillion 575.1 1,000.1 1,575.2PERFORMANCE PER SHARE Change Change Q2/09 Q2/08 % Q1-Q2/09 Q1-Q2/08 % 2008Earnings pershare, EUR 0.26 0.23 +10.3% 0.55 0.57 -2.2% 0.97Cash flow pershare beforefinancialitems, EUR 0.11 0.18 -40.4% 0.35 0.25 +42.3% 0.66Equity pershare, EUR 2.58 2.60 -0.5% 2.97Averagenumber ofsharesexcludingtreasuryshares, 1,000shares 140,978 140,933 140,962 141,073 141,003AppendicesOrion Group structureOrion Corporation is the parent company of the Orion Group. The Groupconsists of two operating segments, or operating segments, and fivebusiness divisions:* Pharmaceuticalso Proprietary Products (patented prescription products)o Specialty Products (off-patent, generic prescriptionproducts and self-care products for humans)o Animal Health (veterinary products for pets and productionanimals)o Fermion (active pharmaceutical ingredients)* Diagnosticso Orion Diagnostica (diagnostic tests).Accounting policiesThis Interim Report of the Orion Group has been prepared inaccordance with the accounting policies set out in InternationalAccounting Standard 34 on Interim Financial Reporting and in theGroup's Financial Statements for 2008. Furthermore, the followingstandard amendments have been applied as of 1 January 2009 * IFRS 8, Operating Segments The Group's operating segments are based on the Group's internal organisational structure and intra-Group financial reporting. The monitoring of business by the Executive Management Board is based on products and geographical regions. The amendment to the standard had no effect on the organisation of segments. The operating segments are Pharmaceuticals business and Diagnostics business. The geographical regions for reporting are Finland, Scandinavia, Other Europe, North America and Other Countries. * IAS 1, Presentation of Financial Statements. The Group has implemented Statement of Comprehensive Income, presented as one statement. The amendment to the standard has also been taken into account in the way in which the Statement of Changes in Equity is presented.The following standards and interpretations that came into force in2009 were applied in the financial year. The application of thesestandards and interpreta
Datum: 07.08.2009 - 11:01 Uhr
Sprache: Deutsch
News-ID 4480
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"Orion Group Interim Report January-June 2009"
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