Management of Economic Responsibility
In the Orion Group, economic responsibility means that we produce economic value added for both shareholders and other stakeholders, such as staff, customers and suppliers of goods and services. To this end, we develop our operations systematically and utilise our resources efficiently. We are proactive in dealing with this responsibility, with an aim to identify and manage the risks related to our operations and their further development in the best possible way. Good corporate governance required from listed companies is also part of our economic responsibility, as well as open and regular communication about the development of our financial performance and the factors affecting it.
Good financial performance is also necessary to enable us to attend to the other areas of corporate responsibility as a corporate citizen and to ensure sustained operational continuity in the future. The better we manage our finances and are able to provide employment, the more society will benefit from our economic added value.
Most of the key figures related to our economic responsibility are presented in our consolidated financial statements and interim reports, which are prepared in accordance with the International Financial Reporting Standards (IFRS). In the sustainability reports, we present some economic indicators, in addition to which selected additional key figures from the consolidated financial statements are provided in the Tables section of the report.
Management of economic responsibility
The management of our economic responsibility follows the general guidelines established in our Corporate Governance Manual. This involves responsibilities being clearly defined, objectives being set and monitored and internal control systems being organised appropriately. The administration of the Group’s financial affairs is a headquarter function headed by the Chief Financial Officer, who is a member of the Group’s Executive Management Board. The CFO reports to the President and CEO. The centralised financial administration comprises all financial affairs of the Group companies based in Finland, such as bookkeeping, payment transactions, internal and external financial reporting, Group financing, as well as all Group-level reporting and financial control of the business operations. In the Group’s foreign subsidiaries, the financial affairs are mainly administrated locally in each country under the supervision of the Group headquarters.
Monitoring the financial development of the Company and supervising the financial reporting process are among the key duties of the Board of Directors and its Audit Committee.
Detailed descriptions of our corporate governance principles, risk management and internal control are presented in our regular financial statements and Corporate Governance Statements, which are accessible on the Corporate Governance pages in section “Orion Group” of our corporate website.
Goals and performance
We aim to ensure the economic sustainability of our operations over the coming years. Our objectives for profit development and financial position have been set to ensure economic stability, to create a solid foundation for long-term profitable growth and to enable operations and profitability even in economically challenging times.
Through the financial objectives, we aim to develop the Group’s shareholder value and ensure financial stability and profitable growth. Our financial objectives are:
- Growing net sales more rapidly than the growth of the pharmaceuticals market. Achieving this objective requires continuous investment in the development of the product portfolio.
- Maintaining profitability at a good level. The aim is operating profit that exceeds 25% of net sales.
- Keeping the equity ratio at least 50%.
- Distributing an annual dividend which will be at least EUR 1.30 per share in the next few years, and increasing the dividend in the long term.
According to our dividend policy, we take into account the distributable funds, the capital expenditure and other financial requirements in the medium and long term to achieve the financial objectives. In the challenging economic situation and the changes that have taken place in our business environment over the recent years, we have been able to grow steadily, operate profitably and pay good dividends to our shareholders.
We have paid the taxes due on the good and stable financial result regularly and on time. We have also always taken care of our pension commitments in full. In the comparison of financial performance, we have consistently been ranked among the best Finnish listed companies.
In our procurement activities, we give preference to goods and service suppliers who share our values regarding corporate responsibility. Their invoices for deliveries that meet the agreed terms are paid according to the agreed schedule. Correspondingly, we aim to minimise our own overdue trade receivables.
Orion is a company whose products are of significant social importance. As a workplace, we offer our employees the chance to develop, manufacture and sell products that promote well-being, health and quality of life, and we offer a fair compensation and good employee benefits in return.
Sustained economic success requires us being able to continuously ensure competitiveness and cost-effectiveness with the right strategy decisions and enhancement of procedures and the product portfolio. Our growth is based on a competitive pharmaceutical product portfolio, which the Group builds by actively developing new products in both our own R&D organisation and through wide-ranging cooperation with external parties.
Our shareholder base is quite diverse. The largest shareholder group consists of private Finnish households. At the end of 2017, Finnish shareholders held about 60% of the total shares and 91% of the total votes. Detailed information on the shareholder base is presented and updated on a monthly basis in the “Investors” section of our corporate website.
As a public listed company, we fulfil our disclosure obligations diligently. We also actively develop our corporate communications and aim to utilise different communication channels and tools in a versatile, yet purposeful manner. Our focus is on the good quality of the contents of our financial statements and our website to provide capital markets and shareholders with up-to-date information about the Group’s operations and performance. We also organise regular meetings with investors in various locations in Finland and abroad. A calendar can be seen under the “Investors” section of our corporate website containing both past and upcoming investor events and roadshows.
Principles concerning donations
Most of the annual donations made by the Orion Group for purposes of public interest are based on the decision by the Annual General Meeting to donate part of the distributable assets of Orion Corporation to medical research and other purposes of public interest. The Board of Directors decides on the allocation of the donations.
Donations are granted to non-profit organisations pursuant to principles determined in the Group’s donation policy. The focus of our support is on medical research, patient organisations and other non-profit organisations promoting healthcare, defence and veterans, environmental protection, children and youth, education and culture. As a main rule, the donations shall be made through Orion Corporation, the parent company. The evaluation of applications and the decisions on grants are centralised into the Board of Directors and the Group administration.
At Group level, the prioritised charitable organisation receiving financial support from us is Plan, which works to improve the living circumstances and quality of life of children in developing countries. As a corporate partner and sponsor of Plan, we support early childhood education of children in developing countries.
Information about our collaboration with patient organisations is reported on an annual basis in the Sustainability section of our corporate website. The reports provide details of each case of collaboration, and they comprise all the countries in which we have our own marketing organisation for pharmaceuticals.