Orion Group Interim Report January-September 2009
(Thomson Reuters ONE) - ORION CORPORATION INTERIM REPORT JANUARY-SEPTEMBER 2009 26 OCTOBERat 12:00 EETOrion's net sales for January-September 2009 totalled EUR 578.2million (EUR 530.9 million for January-September 2008), up by 8.9% onthe comparative period. * Operating profit was EUR 163.1 (152.2) million. * Profit before taxes was EUR 160.6 (152.0) million. * Equity ratio was 57.6% (65.5%). * ROCE before taxes was 39.6% (44.8%). * ROE after taxes was 38.4% (35.9%). * Earnings per share were EUR 0.84 (0.79). * Cash flow per share before financial items was EUR 0.69 (0.43).ORION'S KEY FIGURES FOR THE REVIEW PERIOD Change Change Q3/09 Q3/08 % Q1-Q3/09 Q1-Q3/08 % 2008Net sales, EURmillion 191.8 170.1 +12.8% 578.2 530.9 +8.9% 710.7Internationaloperations, EURmillion 136.2 117.3 +16.1% 414.1 368.9 +12.3% 493.6 % of net sales 71.0% 69.0% 71.6% 69.5% 69.4%Operating profit,EUR million 55.7 43.6 +27.9% 163.1 152.2 +7.1% 185.0 % of net sales 29.0% 25.6% 28.2% 28.7% 26.0%Profit before taxes,EUR million 54.9 43.1 +27.6% 160.6 152.0 +5.6% 184.2 % of net sales 28.6% 25.3% 27.8% 28.6% 25.9%Income tax expense,EUR million 14.6 11.3 +29.0% 42.2 40.4 +4.5% 47.8R&D expenses, EURmillion 20.5 20.3 +0.8% 69.6 64.5 +7.9% 90.0 % of net sales 10.7% 11.9% 12.0% 12.1% 12.7%Capital expenditure,EUR million 11.2 12.7 -11.9% 51.2 44.0 +16.3% 56.8 % of net sales 5.8% 7.5% 8.9% 8.3% 8.0%Assets total, EURmillion 701.6 606.5 +15.7% 695.5Equity ratio,% 57.6% 65.5% 60.2%Gearing,% 1.6% 0.2% -7.1%Interest-bearingliabilities, EURmillion 158.2 95.9 +64.9% 146.3Non-interest-bearingliabilities, EURmillion 139.1 113.5 +22.5% 130.6Cash and cashequivalents, EURmillion 151.5 95.1 +59.3% 176.1ROCE (beforetaxes),% 39.6% 44.8% 38.5%ROE (after taxes),% 38.4% 35.9% 32.1%Earnings per share,EUR 0.29 0.23 +27.0% 0.84 0.79 +6.1% 0.97Cash flow per sharebefore financialitems, EUR 0.33 0.18 +89.4% 0.69 0.43 +61.6% 0.66Equity per share,EUR 2.87 2.82 +1.8% 2.97Personnel at the endof the period 3 125 3 300 -5.3% 3 309Average personnelduring the period 3 210 3 255 -1.4% 3 270Personnel expenses,EUR million 123.9 120.1 +3.2% 170.9The Orion Group changed its accounting policy regarding productdevelopment costs as of 1 January 2009. Costs relating to the supportof products already on the market (mainly generic products) are nowrecognised in cost of goods sold instead of R&D expenses in theStatement of Comprehensive Income. This change has no effect onreported key figures, operating profit and Statement of FinancialPosition, but it reduces the R&D expenses previously reported for2008 by EUR 13.4 million and correspondingly increases the cost ofgoods sold.On 1 January 2009, the Easyhaler® business was transferred from theSpecialty Products to the Proprietary Products division. At the sametime, hormone replacement products, such as the Divina® range, andtoremifene products, such as Fareston®, were transferred to SpecialtyProducts.The key figures for comparative periods have been adjusted inaccordance with these reporting changes. In addition, the adjustedkey figures for previous periods are presented in the table "AdjustedKey Figures" at the end of this report.CEO Timo Lappalainen's review"Strong growth in business""Orion's net sales for the first nine months grew well to about nineper cent higher than in the comparative period last year. Orion'sproducts based on in-house R&D were most successful. Deliveries ofthe Parkinson's disease drugs Stalevo and Comtan to Novartis andsales of Simdax heart failure drug, Easyhaler pulmonary drugs andPrecedex sedative for patients in intensive care were considerablyhigher than in the comparative period."We are also pleased to report good progress for us in the crucialdomestic market in Finland, where we have succeeded in increasing oursales and market share in very challenging market conditions. A newreference price system was implemented in Finland this year that hasfurther intensified price competition, so the domestic pharmaceuticalmarket has not grown during the period under review."Thanks to the strong sales, our operating profit was higher than inthe comparative period despite slightly lower margins and higherfixed costs. Costs were higher mainly due to the launching of salesand marketing operations for Simdax in a number of new countries,outsourced research projects and the ongoing patent litigation in theUnited States."The transfer from Abbott to Orion of the Simdax marketing rightsrepurchased in May has progressed according to plan. In the summerand early autumn, Orion launched its own sales operations in Spain,Italy, Austria, Greece and Portugal."After the period under review, Orion and Pfizer agreed that thedistribution rights for animal sedatives in Europe would revert toOrion. Relating to this arrangement, Pfizer is to pay Orion fourmillion euros this year. Approval from the European Commission isstill required for this agreement to be implemented."Our current forecast for the Group's outlook for the full year 2009excluding non-recurring items remains unchanged from that publishedearlier in the Financial Statements and the previous Interim Reports,in other words we are expecting our net sales and operating profit tobe slightly higher than in 2008. However, the four million euros tobe received from Pfizer later this year would lift the operatingprofit above this estimate. The outlook forecast and basis for it canbe found on pages 5-6 of this report."Events during the periodIn September, Orion and Hospira, Inc. sued Sandoz companies in theUnited States to enforce their US patents covering the proprietarydrug Precedex®.Events after the review periodIn October, Orion withdrew the application in the United States toextend the indication of its drug Stalevo® for the treatment ofearly-stage Parkinson's disease. This was due to Orion's assessmentof the results from clinical studies with the drug that did not showa consistent risk/benefit profile in patients with early Parkinson'sdisease at the dose used in the studies.In October, Orion and Pfizer Animal Health agreed that the rights inEurope to an animal sedative product family that Orion had developedshall revert to Orion. Pfizer had been marketing Orion's drugsDexdomitor®, Domitor®, Domosedan® and Antisedan® almost worldwide.Following the merger between Pfizer and Wyeth, the EuropeanCommission has required Pfizer to relinquish some animal healthproducts in Europe, so it returned the rights to distribute theproduct family in Europe to Orion. Pfizer will continue to market theproducts in the rest of the world. Relating to this arrangement,Pfizer is to pay Orion four million euros this year. Approval fromthe European Commission is still required for this agreement to comeinto force.News conference and teleconferenceA news conference and teleconference on the January-September 2009results will be held today, Monday 26 October 2009, at 14:30 EET atHotel Kämp, address: Pohjoisesplanadi 29, Helsinki. CEO TimoLappalainen will give a brief presentation in English on the Group'sresults.The event can be followed live as a webcast accessible via the Orionwebsite at www.orion.fi/en/. After the presentation, questions can beasked also by telephone in Finnish and English.To participate in the teleconference, please call:from the USA: +1 334 323 6203from other countries: +44 (0)20 7162 0125News conference recordingsA recording of the webcast of the event will be available later thesame day via a link on the Orion website.A recording of the CEO's presentation in Finnish will be available onthe Orion website on the following day.Financial report materialOrion's financial reports and related presentation material areavailable on the Group's website at www.orion.fi/en/ promptly afterpublication. The website also has a form for subscribing to Orion'spublications and releases.Dates in Orion Calendar 2009 and 2010Orion Capital Markets Day (CMD) 2009Tuesday 1 December 2009 in HelsinkiFinancial Statements Review for 2009Tuesday 9 February 2010Annual Report 2009 will be published In weekbeginning 1 March 2010Annual General MeetingWednesday 24 March 2010 in HelsinkiInterim Report January-March 2010Tuesday 27 April 2010Interim Report January-June 2010Tuesday 10 August 2010Interim Report January-September 2010Tuesday 26 October 2010Additional information:Jari Karlson, CFO, tel. +358 10 426 2883www.orion.fi/en/www.orion.fi/en/investors/Financial review Q1-Q3/2009Net salesThe Orion Group's net sales for January-September 2009 totalled EUR578.2 million (EUR 530.9 million in Q1-Q3/2008), up by 8.9% on thecomparative period. The net effect of currency exchange rates wasplus EUR 3.2 million.The Pharmaceuticals business's net sales were up by 9.8% at EUR 546.6(498.0) million. The products based on in-house R&D accounted for EUR263.2 (230.0) million, or 48% (46%) of the operating segment's netsales. Net sales of Orion's Parkinson's drugs Stalevo® (carbidopa,levodopa and entacapone) and Comtess®/Comtan® (entacapone) totalledEUR 182.2 (155.7) million, or about 33% (31%) of the segment's sales.The Diagnostics business's net sales were EUR 33.2 (34.3) million,down by 3.2% on the comparative period. Sales of QuikRead® infectiontests grew, but sales of the older product portfolio were lower thanin the comparative period.Operating profitThe Orion Group's operating profit for January-September 2009 was upby 7.1% at EUR 163.1 (152.2) million.The Pharmaceuticals business's operating profit was EUR 165.1 (153.1)million. Although fixed costs increased, operating profit grew by7.8% due to good sales.The Diagnostics business's operating profit was down by 27.1% at EUR4.3 (5.9) million due to the slight decline in sales and clearlyincreased investment in product development.Operating expensesThe Group's sales and marketing expenses were up by 8.5% at EUR 113.5(104.6) million. The increase was mainly due to the repurchase of theSimdax business and related launching of sales operations in SouthernEurope.R&D expenses were up by 7.9% at EUR 69.6 (64.5) million and accountedfor 12.0% (12.1%) of the Group's net sales. Pharmaceutical R&Dexpenses amounted to EUR 65.4 (61.3) million. Ongoing researchprojects are reported in more detail under Pharmaceuticals in theBusiness Reviews.Administrative expenses were EUR 38.2 (32.7) million, which is higherthan in the previous year mainly because of the EUR 7.6 (4.4) millioncosts resulting from the ongoing patent litigation in the UnitedStates. There is more information on the ongoing legal proceedings inthe section "Legal proceedings".Other operating income and expenses increased profit by EUR 2.2 (0.9)million, mainly due to exchange rate hedging.Profit before taxesGroup profit before taxes totalled EUR 160.6 (152.0) million.Earnings per share were EUR 0.84 (0.79) and equity per share EUR 2.87(2.82). The return on capital employed before taxes (ROCE) was 39.6%(44.8%) and the return on equity after taxes (ROE) 38.4% (35.9%).Financial positionThe Group's gearing was 1.6% (0.2%) and the equity ratio 57.6%(65.5%).Total liabilities at 30 September 2009 were EUR 297.2 (209.4)million. At the end of the period, interest-bearing liabilitiesamounted to EUR 158.2 (95.9) million, including EUR 117.2 (41.5)million of long-term loans. The rise in the loans increased theGroup's cash and cash equivalents, which were EUR 151.5 (95.1)million at the end of the period, but the Group's equity ratio andROCE 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 flowOperating cash flow increased to EUR 147.9 (101.8) million. Operatingprofit was slightly higher than in the comparative period, and theamount tied up in working capital was EUR 38.3 million less than forthe comparative period.Cash flow from investing activities was EUR -51.1 (-41.9) million.Cash flow from financing activities was EUR -122.2 (- 54.9) million,as the Group took out markedly less in loans in the current year thanthe comparative period. This was because most of the Group'sfinancing requirement was covered by the long-term loans taken out atthe end of 2008.Capital expenditureThe Group's capital expenditure totalled EUR 51.2 (44.0) million.This comprised EUR 17.9 (25.4) million on property, plant andequipment and EUR 33.3 (18.6) million on intangible assets. Thelargest individual investment was the repurchase of the Simdaxmarketing rights from Abbott in May for EUR 26 million, includingsignature and milestone payments as per the agreement.Outlook for 2009Net sales will increase slightly compared with 2008. Sales ofpharmaceuticals through Orion's own sales network will continue toincrease in Finland and other European countries. Global in-marketsales of Comtess/Comtan and Stalevo drugs will show further growth,but at a slower rate than before. Deliveries of Parkinson's drugs toNovartis are expected to increase.Marketing expenditure will increase due to the launching of sales andmarketing activities in several countries for Simdax, which wasrepurchased from Abbott, as well as the launching of other products.Research expenditure will be slightly higher than in 2008. The costsof ongoing patent litigation in the United States are estimated to behigher than in 2008.Operating profit excluding non-recurring items is forecast to beslightly higher than in 2008. In addition, a non-recurring payment ofEUR 4 million to be received from Pfizer later this year wouldincrease the operating profit. A prerequisite for the payment is thatthe European Commission approves the agreement between Orion andPfizer concerning reversion of animal sedative marketing rights inEurope to Orion.R&D expenses will be about EUR 95 million. In addition, about EUR 10million will be used to support products already on the market. Thelatter item is now included in costs of goods sold in the Statementof Comprehensive Income, while previously both items were included inR&D expenses.The Group's capital expenditure will be about EUR 65 million,including the repurchase of Simdax but excluding other newsubstantial company or product acquisitions.Basis for outlookThe reference price system that was implemented in Finland in April2009 has as expected increased price competition in the category ofsubstitutable products. However, it has also provided new businessopportunities for Orion. Following the change, general market growthin Finland has been slower than in 2008. Launches of new productswill support Orion's growth in Finland. On the other hand, growthwill be slowed by intense price competition especially affectingsubstitutable prescription drugs, which are important products forOrion.As anticipated, in-market sales of the Parkinson's drugs Stalevo andComtess/Comtan grew by just over 10% in 2008, which was slower thanin previous years. Further slight slowing in growth is expectedduring 2009. Orion's own sales are expected to grow in line with theoverall market for Parkinson's drugs. Deliveries to Novartis willdepend on Novartis's sales and any change in its stock levels.Current information indicates that Novartis will not continue toreduce its stock levels in 2009.Repurchasing of the marketing rights to Simdax from Abbott willincrease sales in the latter part of the year. However, because ofthe costs of launching the sales and marketing operations for theproduct and the transfer from Abbott to Orion, the purchase will haveno material effect on Orion's operating profit in 2009 compared withwhen Abbott was responsible for sales of the product.Because the registrations and launches of new products are projectsthat take more than a year, the increase in resources and otherinputs required for them in 2009 were planned mainly in the previousyear.Research and development costs can be estimated quite accurately inadvance. They are partly the Company's internal fixed cost items,such as salaries and maintenance of the operating infrastructure, andpartly the costs of long-term clinical trials, which are typicallyperformed in clinics located in several countries. The most importantclinical trials scheduled for 2009 are either ongoing from theprevious year or at an advanced stage of planning, so their costlevel can be estimated rather accurately.The estimated costs of the ongoing patent litigation in the UnitedStates are based on the planned timetables and work estimates. Thecosts due to the litigation will depend on a number of factors, whichat present are difficult to estimate accurately.Near-term risks and uncertainties relating to the outlookThe Company is not aware of any significant risk factors relating tothe earnings outlook for 2009.The global economic recession is not expected to have a materialeffect on the short-term development of the pharmaceuticals market,but it increases uncertainty and makes forecasting more difficult.For example, risks of payment defaults and credit losses relating toindividual countries and customers may increase slightly, andforecasting exchange rate trends will be more challenging,particularly in Eastern Europe.The sales of individual products and also Orion's sales in individualmarkets may vary slightly depending on the extent to which theever-tougher price and other competition prevailing in thepharmaceutical markets in recent years will specifically affectOrion's products. Deliveries to Novartis are based on timetables thatare jointly agreed in advance. Nevertheless, they can change, forexample as a consequence of decisions by Novartis concerningadjustments of stock levels during the year. It is assumed that theongoing litigation will not affect the sales of Comtan or Stalevo inthe United States in 2009.Most of the exchange rate risk relates to the US dollar. Typically,only less than 15% of Orion's net sales come from the United States.As regards the other most important currencies, such as the Britishpound and the Swedish krona, the overall effect will be abated by thefact that Orion has organisations of its own in the United Kingdomand Sweden, which means that in addition to sales income, there arealso costs in these currencies. As regards the currencies of EastEuropean countries, the situation is similar.Research projects always entail uncertainty factors that may eitherincrease or decrease estimated costs. The projects may progress moreslowly or faster than assumed, or they may be discontinued.Nonetheless, changes that may occur in ongoing clinical studies arereflected in costs relatively slowly, and they are not expected tohave a material impact on earnings in the current year. Owing to thenature of the research process, the timetables and costs of newstudies that are being started are known well in advance. Theytherefore typically do not lead to unexpected changes in theestimated cost structure.Financial objectivesOrion's financial objectives are ensuring the Group's financialstability and creating a foundation for long-term profitable growth.The principal means of achieving 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 at least 50%Sales of the Parkinson's disease drugs Stalevo and Comtess/Comtancurrently account for approximately one-third of Orion's net sales.The key patents for these drugs in Orion's main markets will expirein 2012-13, which is why their sales are expected to decline over thenext few years. Orion will also bring new products to the market toreplace this drop in net sales.The development of Orion's net sales and profitability in the nextfew years will depend on how fast the sales of Parkinson's drugs willdecline and, on the other hand, how the sales of other products willincrease in the future. This creates a point of discontinuity in theGroup's operations.Dividend policyOrion's dividend distribution takes into account the distributablefunds and the capital expenditure and other financial requirements inthe medium and long term to achieve the financial objectives.Shares and shareholdersOn 30 September 2009, Orion had a total of 141,257,828 shares, ofwhich 51,440,668 were A shares and 89,817,160 B shares. The Group'sshare capital is EUR 92,238,541.46. At the end of September 2009,Orion held 280,030 B shares as treasury shares. On 30 September 2009,the aggregate number of votes conferred by both share classes was1,118,350,490, excluding treasury shares.Voting rights conferred by sharesEach A share entitles its holder to twenty (20) votes at GeneralMeetings of Shareholders and each B share one (1) vote. However, ashareholder cannot vote more than 1/20 of the aggregate number ofvotes from the different share classes represented at the GeneralMeetings of Shareholders. In addition, Orion and Orion Pension Funddo not have the right to vote at Orion Corporation's General Meetingsof Shareholders.Both share classes, A and B, confer equal rights to the Company'sassets and dividends.The Articles of Association entitle shareholders to demand theconversion of their A shares to B shares. No shares were convertedduring January-September 2009.Trading in Orion's sharesOrion's A shares and B shares are quoted on 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 September2009, the market capitalisation of the Company's shares excludingtreasury shares was EUR 1 781.5 million.Authorisation of the Board of Directors to dispose of sharesOrion's Board of Directors was authorised by the Annual GeneralMeeting on 23 March 2009 to dispose of shares held by the Company(treasury shares). This authorisation is valid until the close of the2010 Annual General Meeting. The Board of Directors is not authorisedto increase the share capital or to issue bonds with warrants orconvertible bonds or stock options.Altogether 44,806 B shares held by the Company were transferred inMarch as a share bonus for 2008 to persons employed by the Companyand belonging to the Share-based Incentive Plan of the Orion Group.This was based on the authorisation granted by the Annual GeneralMeeting on 25 March 2008. The transfer price of the sharestransferred was EUR 11.97 per share, which was the weighted averageprice of the B shares on 5 March 2009. The total transfer price ofthe shares transferred was EUR 536,417.43.Following the transfer, Orion holds 280,030 B shares as treasuryshares.Share ownershipAt the end of September 2009, Orion had a total of 50,870 registeredshareholders, of whom 94.0% were private individuals holding 51.1% ofthe entire share stock and 60.0% of the total votes. There werealtogether 29.45 million nominee-registered shares (20.8% of allshares) with entitlement to 4.5% of the votes.At the end of September 2009, Orion held 280,030 B shares as treasuryshares, which represent 0.2% of the Company's total share stock and0.03% of the total votes.No new transactions exceeding the notification threshold set in theFinnish Securities Markets Act were brought to the attention of theCompany during the period under review.PersonnelThe average number of employees in the Group in January-September2009 was 3,210 (3,255). At the end of September, the Group had atotal of 3,125 (3,300) employees, of whom 2,532 (2,716) worked inFinland and 593 (584) outside Finland.Salaries and other personnel expenses in January-September totalledEUR 123.9 (120.1) million.Legal proceedingsLegal 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 US 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.Legal proceedings against the Sandoz companiesOn 4 September 2009, Orion Corporation and Hospira, Inc. filedtogether a patent infringement lawsuit in the United States againstSandoz International Gmbh and Sandoz Inc. to enforce their patentsvalid in the United States. The legal proceedings concern Orion's USPatent No. 4,910,214 and Orion's and Hospira's commonly owned USPatent No. 6,716,867.Sandoz Inc. has sought authorisation to produce and market in theUnited States a generic version of Orion's proprietary drug Precedex®(dexmedetomidine hydrochloride 100 microgram base/ml), which ismarketed in the United States by Orion's licensee Hospira.Orion expects the costs of the legal proceedings against the Sandozcompanies to be substantially less than the costs of the ongoingentacapone patent litigation in the United States.Business ReviewsPharmaceuticalsReview of human pharmaceuticals marketFinland is the most important market for Orion, generating just underone-third of Orion's net sales. According to statistics collected byFinnish Pharmaceutical Data Ltd, Finnish wholesale of humanpharmaceuticals in January-September 2009 totalled EUR 1 433.9million, down by 0.2% on the comparative period. In terms of thenumber of packages, overall sales were down by 2.5%. Total pharmacysales were similar to the comparative period, while hospital saleswere up by 0.8%. The wholesale of prescription drugs in the wholemarket was down by 0.1% and wholesale of self-care products up by2.7%.Orion continued to strengthen its position as leader in marketingpharmaceuticals in Finland. According to statistics collected byFinnish Pharmaceutical Data Ltd, Orion's wholesale of pharmaceuticalsin Finland in January-September 2009 amounted to EUR 137.2 million,up by 4.0% on the comparative period. Orion's sales clearly grew,even though the overall market remained almost unchanged on thecomparative period. Orion's market share was 9.6% (9.4%), which was2.6 percentage points higher than the second-largest company's marketshare.Globally, the most important individual therapy area for Orion is thetreatment of Parkinson's disease. Orion's Parkinson's drugs accountfor approximately one-third of the Group's net sales. According toIMS Health pharmaceutical sales statistics, in the 12-month periodending in June 2009 the total sales of Parkinson's drugs to retaildistributors in the United States came to USD 945 million (USD 1,096million in the previous 12-month period), which is 14% less than inthe comparative period. The rapid change in the market trend wascaused by the expiry of the patent for the leading product, adopamine agonist, and the resulting competition created by the launchof generic products. The five largest European markets forParkinson's drugs were Germany, the United Kingdom, France, Spain andItaly. In these countries, the combined sales of Parkinson's drugs toretail distributors in the 12-month period ending in June totalledEUR 885 (834) million, and the average market growth was 6%.Sales of Orion's Parkinson's drugs continued to grow clearly fasterthan the market as a whole. According to IMS Health pharmaceuticalsales statistics, in the 12-month period ending in June 2009, salesof Orion's Parkinson's drugs to retail distributors were up by 13% atEUR 415 million (EUR 367 million in the previous 12-month period). Inaddition, hospital sales of Orion's Parkinson's drugs amounted to EUR59 million. In the United States, sales of Orion's Parkinson's drugsto retail distributors in the 12-month period ending in June were USD166 (149) million, up by 11% on the comparative period. The marketshare of Orion's Parkinson's drugs in the United States was about17%. In the five largest Parkinson's drugs markets in Europe, salesof Orion's Parkinson's drugs to retail distributors in the 12-monthperiod ending in June totalled EUR 145 (135) million, up by 7% on thecomparative period. Orion's Parkinson's drugs have an average marketshare of about 16% in these five markets.Net sales and operating profit of the Pharmaceuticals businessNet sales of the Pharmaceuticals business in January-September 2009were EUR 546.6 (498.0) million, up by 9.8% on the comparative period.The Pharmaceuticals business operating profit was up by 7.8% at EUR165.1 (153.1) million. The EBIT margin of the Pharmaceuticalsbusiness was 30.2% (30.8%) of the segment's net sales.Proprietary ProductsThe product portfolio of Proprietary Products consists of patentedprescription products. Net sales of the division in January-September2009 were up by 18.3% at EUR 246.8 (208.7) million.Net sales of Orion's Parkinson's drugs in January-September 2009totalled EUR 182.2 (155.7) million. The net sales were up by 17.0%and accounted for 33% (31%) of the total net sales of thePharmaceuticals business. Net sales from deliveries of Stalevo andComtan to Novartis totalled EUR 111.4 (88.3) million, up by 26.1% onthe comparative period. Deliveries of Stalevo to Novartis increasedby 26.5%, and deliveries of Comtan by 25.4%. Total net salesgenerated by Stalevo and Comtess in Orion's own sales organisationwere up by 5.0% at EUR 70.8 (67.4) million. Net sales of Stalevothrough Orion's own sales organisation were up by 13.4% at EUR 55.3(48.8) million. The weak British pound and Scandinavian currencieshave slowed euro-denominated sales.Orion has ongoing patent litigation in the United States against theSun companies and Sandoz companies. The Sun companies aim to launchgeneric versions of Orion's Comtan and Stalevo, and the Sandozcompanies a generic version of Orion's Precedex in the United States.Sales of Simdax, a drug for acute decompensated heart failure,developed well and the transfer of the rights to the product fromAbbott to Orion has progressed according to plan.Net sales of the Easyhaler® product family for the treatment ofasthma and chronic obstructive pulmonary disease in January-September2009 were up by 13.6% at EUR 18.5 (16.3) million. Sales grewespecially well in Germany. The rights to Easyhaler products inHungary were transferred back to Orion in July.Specialty ProductsNet sales of the Specialty Products business division's off-patent,i.e. generic, prescription drugs and self-care products were up by4.9% in January-September 2009 at EUR 201.8 (192.4) million.Net sales of Orion's human pharmaceuticals in Finland inJanuary-September 2009 were up by 4% at EUR 150.4 (143.9) million.Specialty Products accounted for the majority of sales in Finland.Although market conditions deteriorated, Orion managed to improve itsmarket position owing to continuous updating of its broad productportfolio, particularly in substitutable prescription drugs. Thereference price system, which was introduced in April, has furtherintensified price competition, but also expanded the range ofsubstitutable products. For example, the anti-psychotic drugKetipinor® (quetiapine) and the cholesterol-lowering drugAtorvastatin Orion® (atorvastatin) have been particularly successful.Net sales of Orion's human pharmaceuticals in Eastern Europe inJanuary-September 2009 were down by 3% at EUR 28.1 (28.9) million.Specialty Products accounted for the majority of sales in the region.The growth of euro-denominated net sales in Eastern Europe has beenslowed by the severe depreciation of currencies in the region and theeconomic recession.Animal HealthNet sales of the Animal Health business division were down by 9.2% inJanuary-September 2009 at EUR 46.0 (50.7) million. Net sales of theanimal sedatives Dexdomitor® (dexmedetomidine), Domitor®(medetomidine), Domosedan® (detomidine) and Antisedan® (atipamezole)were down by nearly 30% and accounted for 29% (38%) of the division'snet sales. Sales of animal sedatives decreased due to pricecompetition in Europe following the expiry of patents.Orion is the Finnish market leader in veterinary drugs. ComparingJanuary-September 2009 with the corresponding period in 2008, theFinnish animal health market grew by 7.2% while Orion's net sales ofveterinary medicines in Finland grew by 8.7%. Orion's share of theFinnish animal health market was 20.6%. The strong growth in saleswas mainly due to Orion's extensive product portfolio and itsoperations in the Finnish animal health market over a long time.In July, Orion signed a distribution agreement with the US companySentrX Animal Care, Inc. concerning distribution of wound care andother animal health products in eight European countries.FermionNet sales of Fermion, a manufacturer of active pharmaceuticalingredients, were up by 23.2% in January-September 2009 at EUR 32.4(26.3) million. The effect of intra-Group transactions (deliveries ofactive ingredients for Orion's own use) has been eliminated fromFermion's net sales. Sales to other pharmaceutical companiesincreased despite intense price competition, and orders for some keyproducts are at a high level.Ten best-selling pharmaceutical productsNet sales of the top ten pharmaceuticals were up by 12.8% inJanuary-September 2009 at EUR 286.3 (253.8) million. These productsaccounted for 52% (51%) of the total net sales of the Pharmaceuticalsbusiness. The heart failure drug Simdax, the Precedex sedative forpatients in intensive care, the Parkinson's drug Stalevo and theEasyhaler pulmonary drugs had the fastest growth rates among thebest-sellers.Products from in-house researchNet sales of products from in-house research were up by 14.4% inJanuary-September 2009 at EUR 263.2 (230.0) million. These productsaccounted for about 48% (46%) of the net sales of the Pharmaceuticalsbusiness.Research and developmentOrion's pharmaceutical R&D focuses on the following core therapyareas: central nervous system drugs, oncology and critical caredrugs, and Easyhaler pulmonary drugs. In addition to in-houseresearch, Orion invests in early-stage R&D jointly with universitiesand other pharmaceutical companies. In late stage clinical studies,Orion prefers to share the costs with other pharmaceutical companies.In this way, Orion can ensure an increasing number of new researchprojects and reinforce its capability to continue operating as acompany that provides new drugs and engages in pharmaceutical R&D.The Group's R&D expenses totalled EUR 69.6 (64.5) million, of whichthe Pharmaceuticals business accounted for EUR 65.4 (61.3) million.The Group's R&D expenses accounted for 12.0% (12.1%) of the Group'snet sales.In October, Orion withdrew the application in the United States toextend the indication of its drug Stalevo for the treatment ofearly-stage Parkinson's disease. This was due to Orion's assessmentof the results from clinical studies with the drug that did not showa consistent risk/benefit profile in patients with early Parkinson'sdisease at the dose used in the studies. Stalevo is currentlyapproved for treatment of advanced Parkinson's disease.Phase III clinical studies with the sedative dexmedetomidine are inprogress in patients in intensive care as a prolonged infusionadministered for over 24 hours. The programme aims to have the drugregistered in the EU. The drug is already available in, for example,the United States and Japan as a sedative for patients in intensivecare, administrable as an infusion for a maximum of 24 hours. Theefficacy and safety of dexmedetomidine is compared with midazolam inthe MIDEX study and with propofol in the PRODEX study. It is plannedto recruit 500 patients for both studies. All 500 patients havealready been recruited for the MIDEX study, the recruitment ofpatients for the PRODEX study continues. Results from the wholeresearch programme are expected at the latest in summer 2010.To expand the Easyhaler product family, Orion has an ongoing researchprogramme to develop a new budesonide-formoterol formulationcombining budesonide as an anti-inflammatory agent and formoterol asa long-acting bronchodilator. Orion's aim is to utilise Easyhalertechnology not just in current products and development projects, butalso to develop new products.Orion is collaborating with Novartis to develop Stalevo for theJapanese market.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 United States andEurope.An alpha 2c receptor antagonist is being studied in clinical Phase I.In early research, this compound has been found to be possiblysuitable for the treatment of the symptoms of schizophrenia orAlzheimer's disease.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.DiagnosticsNet sales of the Diagnostics business in January-September 2009 wereEUR 33.2 (34.3) million, down by 3.2% on the comparative period.Sales of several older product lines continued to decline further onthe comparative period. In contrast, sales of QuikRead® instrumentsand tests continued to grow. Euro-denominated net sales were slowedby weakening of Nordic currencies, whereas sales to China and theCzech Republic increased on the comparative period.Operating profit at EUR 4.3 (5.9) million was 27.1% down on thecomparative period due to a decline in sales and planned increasedinvestments in product development.Espoo, 26 October 2009Board of Directors of Orion CorporationOrion CorporationTimoLappalainenJari KarlsonPresident andCEOCFOTablesCONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME ChangeEUR million Q3/09 Q3/08 Change % Q1-Q3/09 Q1-Q3/08 % 2008Net sales 191.8 170.1 +12.8% 578.2 530.9 +8.9% 710.7Cost of goodssold -66.3 -61.5 +7.8% -196.1 -177.8 +10.3% -243.4Gross profit 125.6 108.6 +15.6% 382.1 353.1 +8.2% 467.4Other incomeand expenses 0.0 -1.6 -100.9% 2.2 0.9 +147.1% 3.1Selling andmarketingexpenses -38.2 -32.3 +18.2% -113.5 -104.6 +8.5% -143.9R&D expenses -20.5 -20.3 +0.8% -69.6 -64.5 +7.9% -90.0Administrativeexpenses -11.2 -10.8 +3.5% -38.2 -32.7 +16.7% -51.5Operatingprofit 55.7 43.6 +27.9% 163.1 152.2 +7.1% 185.0Finance income 1.2 1.5 -24.6% 4.3 3.9 +9.6% 7.6Financeexpenses -1.9 -2.0 -5.2% -6.8 -4.1 +65.9% -8.5Profit beforetaxes 54.9 43.1 +27.6% 160.6 152.0 +5.6% 184.2Income taxexpense -14.6 -11.3 +29.0% -42.2 -40.4 +4.5% -47.8PROFIT FOR THEPERIOD 40.3 31.7 +27.1% 118.4 111.6 +6.0% 136.3OthercomprehensiveincomeTranslationdifferences -0.2 -0.3 -15.1% 0.9 -0.6 +263.5% -2.8Cash flowhedges -0.2 -0.5 -65.6% 0.1 0.3 -75.0% -1.0Othercomprehensiveincome net oftax -0.4 -0.7 -48.4% 1.0 -0.3 +417.2% -3.9TOTALCOMPREHENSIVEINCOMEFOR THE PERIOD 40.0 31.0 +28.9% 119.4 111.3 +7.2% 132.5of whichattributableto:Parent companyshareholders 40.3 31.7 +27.1% 118.4 111.6 +6.0% 136.3Minorityinterest 0.0 0.0 0.0 0.0 0.0Totalcomprehensiveincomeattributableto:Parent companyshareholders 40.0 31.0 +28.9% 119.4 111.3 +7.2% 132.5Minorityinterest 0.0 0.0 0.0 0.0 0.0Earnings pershare, EUR 1)) 0.29 0.23 +27.0% 0.84 0.79 +6.1% 0.97Depreciationandamortisation 8.8 8.0 +10.6% 25.3 23.2 +8.7% 31.6Personnelexpenses 37.5 36.2 +3.8% 123.9 120.1 +3.2% 170.9(1)The figure has been calculated from the profit attributable to theparent company shareholders. The Company has no items that coulddilute the earnings per share.STATEMENT OF FINANCIAL POSITIONAssetsEUR million 9/09 9/08 Change % 2008Property, plant and equipment 190.3 192.4 -1.1% 192.4Goodwill 13.5 13.5 13.5Intangible rights 63.8 34.6 +84.4% 37.5Other intangible assets 3.6 2.3 +57.1% 2.9Investments in associates 0.1 0.1 -18.6% 0.1Available-for-sale investments 1.0 0.9 +4.7% 0.9Pension asset 33.8 25.2 +33.9% 29.3Deferred tax assets 3.8 3.2 +16.5% 4.2Other non-current assets 1.6 4.2 -61.1% 1.5Non-current assets total 311.4 276.4 +12.7% 282.3Inventories 121.9 134.9 -9.6% 131.7Trade receivables 101.3 85.1 +19.0% 83.1Other receivables 15.5 14.9 +3.6% 22.3Cash and cash equivalents 151.5 95.1 +59.3% 176.1Current assets total 390.2 330.1 +18.2% 413.1ASSETS TOTAL 701.6 606.5 +15.7% 695.5Equity and liabilitiesEUR million 9/09 9/08 Change % 2008Share capital 92.2 92.2 92.2Share premium 17.8 17.8 17.8Expendable fund 23.0 23.0 23.0Other reserves -0.8 0.4 -290.3% -0.9Retained earnings 272.1 263.6 +3.2% 286.3Equity of the parent company shareholders 404.4 397.1 +1.8% 418.5Minority interest 0.0 0.0 -15.4% 0.0Equity total 404.4 397.1 +1.8% 418.6Deferred tax liabilities 41.6 41.4 +0.4% 42.0Pension liability 0.7 0.9 -27.3% 0.8Provisions 0.5 0.4 +18.8% 0.4Interest-bearing non-current liabilities 117.2 41.5 +182.7% 109.9Other non-current liabilities 0.7 2.1 -66.3% 0.9Non-current liabilities total 160.6 86.3 +86.2% 153.9Trade payables 35.4 24.2 +46.0% 30.2Income tax liabilities 2.2 2.6 -17.6% 2.4Other current liabilities 58.1 41.8 +38.9% 54.0Provisions 0.0 0.0 -100.0% 0.0Interest-bearing current liabilities 41.0 54.4 -24.8% 36.4Current liabilities total 136.6 123.1 +10.9% 123.0Liabilities total 297.2 209.4 +41.9% 276.9EQUITY AND LIABILITIES TOTAL 701.6 606.5 +15.7% 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 0.5 0.5 0.5Comprehensiveincome 0.1 0.9 118.4 119.4 0.0 119.4Equity on 30 Sep2009 92.2 17.8 23.0 -0.8 -6.0 278.2 404.4 0.0 404.4Equity 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 0.5 0.5 0.5Transfer in equity -0.3 0.3Comprehensiveincome 0.3 -0.6 111.6 111.3 0.0 111.3Equity on 30 Sep2008 92.2 17.8 23.0 0.4 -4.7 268.3 397.1 0.0 397.1CONSOLIDATED CASH FLOW STATEMENTEUR million Q1-Q3/09 Q1-Q3/08 2008Operating profit 163.1 152.2 185.0Adjustments 22.8 26.6 28.7Change in working capital 1.0 -37.3 -15.0Interest paid -6.3 -2.3 -7.0Interest received 4.3 4.0 7.5Income taxes paid -36.9 -41.3 -54.9Total net cash from operating activities 147.9 101.8 144.4Investments in property, plant and equipment -18.1 -24.4 -30.8Investments in intangible assets -33.6 -18.6 -23.0Sales of property, plant and equipmentand available-for-sale investments 0.8 1.1 1.5Sales of intangible assets -0.2 0.0 0.5Total net cash used in investing activities -51.1 -41.9 -51.8Withdrawals of short-term loans 0.6 51.2 121.7Repayments of short-term loans -0.9 0.0 -105.1Withdrawals of long-term loans 22.8 40.0 125.0Repayments of long-term loans -10.8 -0.4 -0.5Repurchase of own shares 0.0 -4.8 -4.8Dividends paid and other distribution ofprofits -133.9 -140.9 -141.1Total net cash used in financing activities -122.2 -54.9 -4.8Net change in cash and cash equivalents -25.3 5.1 87.7Cash and cash equivalents at the beginningof the period 176.1 90.4 90.4Foreign exchange differences 0.7 -0.4 -2.1Net change in cash and cash equivalents -25.3 5.1 87.7Cash and cash equivalents at the end of theperiod 151.5 95.1 176.1CHANGES IN PROPERTY, PLANT AND EQUIPMENTEUR million Q1-Q3/09 Q1-Q3/08 2008Carrying amount at the beginning of theperiod 192.4 186.6 186.6Additions 17.9 25.4 32.8Disposals -0.8 -1.1 -1.8Depreciation -19.2 -18.5 -25.1Carrying amount at the end of the period 190.3 192.4 192.4CHANGES IN INTANGIBLE ASSETS (EXCL. GOODWILL)EUR million Q1-Q3/09 Q1-Q3/08 2008Carrying amount at the beginning of the period 40.4 23.0 23.0Additions 33.3 18.6 24.0Disposals -0.3 -0.0 -0.0Depreciation -6.0 -4.7 -6.6Carrying amount at the end of the period 67.4 36.9 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 Statement ofFinancial Position.COMMITMENTS AND CONTINGENCIESEUR million 9/09 9/08 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 1.0 1.2 1.0Other liabilitiesLeasing liabilities (excl. finance lease contracts) 4.0 3.9 4.0Other liabilities 0.3 0.3 0.3DERIVATIVESEUR million 9/09 9/08 2008Fair value of currency forward contracts -0.0 -1.2 2.0Nominal values of derivatives 67.7 63.9 64.6Fair value of electricity forward contracts -1.3 0.3 -1.4Nominal values of derivatives 7.0 4.9 5.7RELATED PARTY TRANSACTIONSEUR million Q1-Q3/09 Q1-Q3/08 2008Management's employment benefits 2.9 2.5 3.1Performance by operating segmentNET SALES BY BUSINESS AREA Change ChangeEUR million Q3/09 Q3/08 % Q1-Q3/09 Q1-Q3/08 % 2008Pharmaceuticals 181.8 161.0 +12.9% 546.6 498.0 +9.8% 667.6ProprietaryProducts 81.1 68.1 +19.1% 246.8 208.7 +18.3% 278.1 SpecialtyProducts 67.9 62.8 +8.2% 201.8 192.4 +4.9% 260.5 AnimalHealth 15.6 16.3 -4.2% 46.0 50.7 -9.2% 67.2 Fermion 10.4 6.8 +53.0% 32.4 26.3 +23.2% 36.1 Other 6.6 6.9 -4.2% 19.6 19.9 -1.5% 25.7Diagnostics 10.5 9.5 +10.4% 33.2 34.3 -3.2% 45.0Group items -0.5 -0.4 +22.7% -1.5 -1.4 +11.1% -1.9Group total 191.8 170.1 +12.8% 578.2 530.9 +8.9% 710.7OPERATING PROFIT BY BUSINESS AREAEUR million Q3/09 Q3/08 Change % Q1-Q3/09 Q1-Q3/08 Change % 2008Pharmaceuticals 56.6 44.3 +27.9% 165.1 153.1 +7.8% 188.5Diagnostics 1.0 1.0 -4.5% 4.3 5.9 -27.1% 6.1Group items -1.9 -1.8 +9.0% -6.4 -6.9 -7.2% -9.6Group total 55.7 43.6 +27.9% 163.1 152.2 +7.1% 185.0NET SALES BY ANNUAL QUARTERS 2009 2008 2007EUR million Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4Pharmaceuticals 181.8 185.9 178.9 169.6 161.0 168.5 168.5 162.7Diagnostics 10.5 11.0 11.7 10.7 9.5 12.6 12.2 10.5Group items -0.5 -0.5 -0.5 -0.5 -0.4 -0.5 -0.5 -0.4Group total 191.8 196.4 190.1 179.9 170.1 180.5 180.2 172.8OPERATING PROFIT BY ANNUAL QUARTERS 2009 2008 2007EUR million Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4Pharmaceuticals 56.6 51.6 56.9 35.3 44.3 45.7 63.1 41.7Diagnostics 1.0 1.1 2.2 0.2 1.0 2.5 2.3 0.1Group items -1.9 -2.3 -2.2 -2.7 -1.8 -3.1 -2.1 -3.1Group total 55.7 50.4 56.9 32.8 43.6 45.2 63.4 38.6GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS 2009 2008 2007EUR million Q3 Q2 Q1 Q4 Q3 Q2 Q1 Q4Finland 55.6 55.0 53.5 55.2 52.8 53.5 55.7 53.7Scandinavia 24.5 25.8 25.4 23.7 23.3 26.1 28.1 24.3Other Europe 68.9 71.8 61.2 62.0 56.2 61.4 64.4 57.5North America 18.1 18.2 22.6 19.2 21.7 18.5 14.4 15.4Other markets 24.7 25.6 27.4 19.8 16.1 21.1 17.6 21.9Group total 191.8 196.4 190.1 179.9 170.1 180.5 180.2 172.8Business reviewsKEY FIGURES FOR PHARMACEUTICALS BUSINESS ChangeEUR million Q3/09 Q3/08 Change % Q1-Q3/09 Q1-Q3/08 % 2008Net sales 181.8 161.0 +12.9% 546.6 498.0 +9.8% 667.6Operating profit 56.6 44.3 +27.9% 165.1 153.1 +7.8% 188.5 % of netsales 31.2% 27.5% 30.2% 30.8% 28.2%R&D expenses 19.3 19.3 -0.1% 65.4 61.3 +6.7% 85.4 % of netsales 10.6% 12.0% 12.0% 12.3% 12.8%Capitalexpenditure 10.2 12.0 -14.9% 49.2 41.5 +18.5% 53.3 % of netsales 5.6% 7.5% 9.0% 8.3% 8.0%Sales revenuefrom in-housedevelopedproducts 87.5 73.6 +18.9% 263.2 230.0 +14.4% 307.5Personnel at theend of the period 2 806 2 985 -6.0% 2 995NET SALES OF ORION'S TOP 10 PHARMACEUTICAL PRODUCTS ChangeEUR million Q3/09 Q3/08 Change % Q1-Q3/09 Q1-Q3/08 % 2008Stalevo®(Parkinson'sdisease) 43.0 33.4 +28.6% 127.7 106.0 +20.5% 141.0Comtess® /Comtan®(Parkinson'sdisease) 15.9 17.1 -7.1% 54.5 49.7 +9.6% 67.4Simdax® (heartfailure) 8.9 3.5 +154.7% 20.3 13.0 +56.6% 17.3Easyhaler®product family(asthma, COPD) 5.9 5.6 +5.9% 18.5 16.3 +13.6% 22.2Burana®(inflammatorypain) 5.0 4.8 +4.8% 14.2 14.1 +0.5% 19.4Domitor®,Dexdomitor®,Domosedan® andAntisedan®(animalsedatives) 5.0 5.2 -2.3% 13.5 19.2 -29.6% 24.6Precedex®(sedative forpatients inintensive care) 3.4 2.8 +18.2% 10.1 7.1 +42.2% 9.6Divina® range(menopausalsymptoms) 3.0 3.7 -19.1% 10.1 11.2 -10.1% 14.7Enanton®(prostate cancer) 2.8 3.2 -10.7% 8.9 9.7 -8.1% 12.7Fareston® (breastcancer) 2.3 2.2 +6.0% 8.5 7.5 +12.7% 10.5Total 95.3 81.5 +16.9% 286.3 253.8 +12.8% 339.7Share ofpharmaceuticalnet sales 52% 51% 52% 51% 51%KEY FIGURES FOR DIAGNOSTICS BUSINESSEUR million Q3/09 Q3/08 Change % Q1-Q3/09 Q1-Q3/08 Change % 2008Net sales 10.5 9.5 +10.4% 33.2 34.3 -3.2% 45.0Operatingprofit 1.0 1.0 -4.5% 4.3 5.9 -27.1% 6.1 % of netsales 9.4% 10.8% 13.0% 17.3% 13.6%Capitalexpenditure 1.0 0.3 +187.9% 1.9 1.8 +6.6% 2.8 % of netsales 9.3% 3.6% 5.7% 5.1% 6.2%Personnel atthe end of theperiod 292 288 +1.0% 287Information on Orion's sharesBasic SHARE information 30 September 2009 A shares B shares 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 16 268 34 602 50 870A shares and B shares confer equal rights to the Company assets anddividends.INFORMATION ON TRADING 1 JAN-30 SEP 2009 A shares B shares TotalShares traded 2 321 005 67 163 442 69 484 447% of the total number of shares 4.5% 75.0% 49.3%Trading volume, EUR million 27.8 797.5 825.3Closing quotation on 2 Jan 2009, EUR 12.55 12.63Lowest quotation, EUR (A and B, 30Mar 2009) 10.42 10.35Average quotation, EUR 11.97 11.87Highest quotation, EUR (A and B, 30Jan 2009) 13.95 13.98Closing quotation on 30 Sep 2009, EUR 12.70 12.60Market capitalisation on 30 Sep 2009excluding treasury shares, EURmillion 653.3 1 128.2 1 781.5PERFORMANCE PER SHARE Change Change Q3/09 Q3/08 % Q1-Q3/09 Q1-Q3/08 % 2008Earnings pershare, EUR 0.29 0.23 +27.0% 0.84 0.79 +6.1% 0.97Cash flow pershare beforefinancialitems, EUR 0.33 0.18 +89.4% 0.69 0.43 +61.6% 0.66Equity pershare, EUR 2.87 2.82 +1.8% 2.97Averagenumber ofsharesexcludingtreasuryshares, 1,000shares 140 978 140 933 140 967 141 026 141 003AppendicesOrion Group structureOrion Corporation is the parent company of the Orion Group. The Groupconsists of two business areas, or operating segments, and fivebusiness divisions:* Pharmaceuticals businesso Proprietary Products (patented prescription products)o Specialty Products (off-patent, generic prescriptionproducts and self-care products)o Animal Health (veterinary products for pets and productionanimals)o Fermion (active pharmaceutical ingredients)* Diagnostics businesso 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. In addition, 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 division into segments. The operating segments are the Pharmaceuticals business and the 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 adopted 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 period. The adoption of thesestandards and interpretations had no material effect on theconsolidated financial statements: * IAS 23 (Amendment), Borrowing Costs. Borrowing costs relating to assets that meet the criteria are capitalised as part of the acquisition cost of the asset. * IFRS 2, Share-based Payments. * IFRIC 11, IFRS 2, Group and Treasury Share Transactions.The policies and calculation methods applied during the period areavailable on the Orion website at www.orion.fi/en/investors/.The figures in this Interim Report have not been audited.The figures in parentheses are for the comparative period, i.e. thecorresponding period in the previous year. The per-share ratios havebeen adjusted. All the figures have been rounded, which is why thetotal sums of individual figures may differ from the total sumsshown.CALCULATION OF THE KEY FIGURES Profit before taxes + Interest andReturn on capital other finance expensesemployed (ROCE),% = Total assets - Non-interest-bearing x 100 liabilities (average during the period) Profit for the periodReturn on equity (ROE),% = Equity total (average during the x 100 period)Equity ratio,% = Equity x 100 Total assets - Advances received Interest-bearing liabilities - CashGearing,% = and cash equivalents x 100 Equity Profit available for the parentEarnings per share, EUR = company shareholders Average number of shares during the period, excluding treasury shares Cash flow from operating activitiesCash flow per share + Cash flow from investingbefore financial items, = activitiesEUR Average number of shares during the period, excluding treasury shares Equity of the parent companyEquity per share, EUR = shareholders Number of shares at the end of the period, excluding treasury shares Total EUR value of shares tradedAverage share price, EUR = Average number of traded shares during the period Number of shares ClosingMarket capitalisation, = at the end of x quotation ofEUR million the period the periodADJUSTED KEY FIGURES Q3/08 Q3/08 Q1-Q3/08 Q1-Q3/08 2008 2008 Earlier Adjusted Earlier Adjusted Earlier Adjusted reported reported reportedGross profit,EUR million 109.1 108.6 361.8 353.1 480.8 467.4R&D expenses,EUR million 23.1 20.3 74.0 64.5 103.4 90.0 % of netsales 13.8% 11.9% 14.0% 12.1% 14.5% 12.7%Net salesProprietaryProducts, EURmillion 69.5 68.1 213.8 208.7 284.7 278.1Net salesSpecialtyProducts, EURmillion 61.4 62.8 187.4 192.4 254.0 260.5 Pro forma Pro forma 2008 2008 2007 2007 2006 2006 Earlier Adjusted Earlier Adjusted Earlier Adjusted reported reported reportedGross profit,EUR million 480.8 467.4 460.7 447.2 434.9 422.3R&D expenses,EUR million 103.4 90.0 98.5 85.0 85.7 73.1 % ofnet sales 14.5% 12.7% 14.5% 12.5% 13.4% 11.4%Net salesProprietaryProducts, EURmillion 284.7 278.1 270.8 259.6 256.6 242.0Net salesSpecialtyProducts, EURmillion 254.0 260.5 241.5 252.5 218.7 233.3Publisher:Orion Corporationwww.orion.fi/en/Orion is an innovative European R&D-based pharmaceutical anddiagnostic company with a special emphasis on developing medicinaltreatments and diagnostic tests for global markets. Orion develops,manufactures and markets human and veterinary pharmaceuticals, activepharmaceutical ingredients and diagnostic tests. Orion'spharmaceutical R&D focuses on the following core therapy areas:central nervous system drugs, cancer and critical care drugs, andEasyhaler® pulmonary drugs.The Group's net sales in 2008 amounted to EUR 711 million. TheCompany invested EUR 90 million in research and development. At theend of 2008, the Group had a total of 3,300 employees, of whom 2,700worked in Finland and 600 in other European countries. Orion's A andB shares are listed on NASDAQ OMX Helsinki.http://hugin.info/3079/R/1350043/325583.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 26.10.2009 - 11:01 Uhr
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