Skip to content

Orion Group Half-Year Financial Report 1–6/2022


This is a summary or Orion’s Half-Year Financial Report 1–6/2022. The complete report is attached to this stock exchange release and is available at

  • Net sales totalled EUR 554 million (EUR 524 million in 2021).
  • Operating profit was EUR 153 (146) million.
  • Profit before taxes was EUR 155 (145) million.
  • Equity ratio was 60% (68%).
  • Return on capital employed before taxes (ROCE) was 34% (36%).
  • Return on equity after taxes (ROE) was 33% (32%).
  • Basic earnings per share were EUR 0.88 (0.82).
  • Cash flow from operating activities per share was EUR 0.59 (0.71).
  • The outlook for 2022 was updated on 13 July 2022. Orion estimates that net sales in 2022 will be clearly higher than in 2021 (net sales in 2021 were EUR 1,041 million). Operating profit is estimated to be clearly higher than in 2021 (operating profit in 2021 was EUR 243 million).


    4-6/22 4-6/21 Change % 1-6/22 1-6/21 Change % 1-12/21
Net sales, EUR million 283.7 254.9 +11.3% 554,3 523.6 +5.9% 1,041.0
EBITDA, EUR million 93.6 82.0 +14.1% 176.5 168.0 +5.1% 289.1
  % of net sales 33.0% 32.2%   31.8% 32.1%   27.8%
Operating profit, EUR million 82.0 71.0 +15.4% 153.4 146.0 +5.1% 243.3
  % of net sales 28.9% 27.9%   27.7% 27.9%   23.4%
Profit before taxes, EUR million 83.1 70.4 +18.1% 155.2 145.2 +6.9% 242.3
  % of net sales 29.3% 27.6%   28.0% 27.7%   23.3%
Profit for the period, EUR million 66.1 56.0 +18.1% 123.4 115.5 +6.8% 193.8
  % of net sales 23.3% 22.0%   22.3% 22.1%   18.6%
Research and development expenses, EUR million 28.6 28.8 -0.8% 60.7 53.9 +12.6% 117.7
  % of net sales 10.1% 11.3%   11.0% 10.3%   11.3%
Capital expenditure, EUR million 19.4 14.4 +34.5% 30.5 26.4 +15.5% 85.4
  % of net sales 6.8% 5.7%   5.5% 5.0%   8.2%
Acquired in business combination, net of cash,
EUR million
81.1     81.1      
Interest-bearing net liabilities, EUR million       167.5 -51.1 -427.7% -108.3
Basic earnings per share, EUR million 0.47 0.40 +18.0% 0.88 0.82 +6.8% 1.38
Cash flow from operating activities per share, EUR 0.35 0.40 -11.9% 0.59 0.71 -17.2% 1.53
Equity ratio, %       59.6% 68.2%   68.1%
Gearing, %       22.3% -7.3%   -14.5%
Return on capital employed (before taxes), %       33.7% 35.6%   28.8%
Return on equity (after taxes), %       33.0% 32.3%   26.2%
Average personnel during the period       3,418 3,362 +1.7% 3,364


President and CEO Timo Lappalainen:
Important news for Orion's future

“The year 2022 has so far held a number of important events for Orion's future. In February, together with Bayer, we announced more detailed positive results of the Phase III ARASENS study on darolutamide and Bayer updated its estimate of the sales potential of darolutamide. In April, Orion's Board of Directors appointed Liisa Hurme as Orion's new Chief Executive Officer with effect from 1 November 2022.

During the spring, we decided to focus our research and development activities for new proprietary products on cancer and pain. At the same time, we decided to discontinue the development of the indacaterol-glycopyrronium combination product for COPD. Other ongoing clinical development projects will continue as normal. In May, we entered into an agreement with Chinese Jemincare, through which Orion received exclusive global development and commercialisation rights excluding mainland China, Hong Kong, Macau and Taiwan for a potent and selective NaV 1.8 blocker for the treatment of acute and chronic pain. We aim to start the first clinical trial with the molecule later this year.

In June, we acquired Inovet’s animal health business i.e. the animal health company VMD. With the acquisition, Orion Animal Health unit will become a comprehensive animal health company with a broader geographical presence and a broad product portfolio covering both companion animals and livestock. In addition, we now have a production unit specialised in the manufacture of veterinary medicines.

Following the period under review, in July we announced a global development and commercialisation agreement regarding the ODM-208 molecule and a related upfront payment of USD 290 million, of which we will recognise EUR 228 million in the current year's results in the third quarter. The agreement positions Orion to harness the potential of ODM-208 for the benefit of patients while continuing to invest in other projects without compromising our financial targets.

At the same time, Orionees have continued their uncompromising work to ensure production continuity, product availability and patient safety, despite a challenging operating environment, particularly in global supply chains, due to the impact of the COVID-19 pandemic, the war in Ukraine and cost inflation. Supply chain risks have been well managed by Orion and potential challenges during the remainder of the year are likely to be reflected in our operations more in the following years. The impact of cost inflation is expected to start to be felt in late 2022 and more in 2023.

Orion's net sales in January-June 2022 were slightly higher than in the comparative period. Net sales of the Proprietary Products unit increased slightly, driven by strong sales performance of Nubeqa® and the Easyhaler® product portfolio. Sales of Parkinson's medicines also developed favourably. Sales of Dexdor® and Simdax®, on the other hand, declined significantly, as expected. The Specialty Products unit reported higher sales in all main markets and in both product segments. The increase in the Group’s net sales includes the positive impact from exchange rates. The decline in net sales in the Animal Health unit was mainly due to the termination of one distribution agreement in Finland and the timing of partner deliveries. Fermion and Contract Manufacturing sales developed in line with expectations in the first half of the year. Operating profit in January-June 2022 was also slightly higher than in the comparative period. The increase is mainly due to higher sales.

We remain on track to achieve Orion's 2025 growth target. As part of this work, we will continue to evaluate new collaboration opportunities and business and product acquisition targets.”

Outlook for 2022 (provided on 13 July 2022)

Orion estimates that net sales in 2022 will be clearly higher than in 2021
(net sales in 2021 were EUR 1,041 million).

Operating profit is estimated to be clearly higher than in 2021
(operating profit in 2021 was EUR 243 million).

Basis for outlook in more detail

Collaboration agreements with other pharmaceutical companies are an important component of Orion’s business model. Agreements often include payments recorded in net sales and operating profit that vary greatly from year to year. Forecasting the timing and amount of these payments is difficult. In some cases they are conditional on terms such as research outcomes which are not known until studies have been completed, the progress of research projects or the attainment of specified sales levels. On the other hand, neither the outcome nor the schedule of contract negotiations is generally known before the final signing of the agreement.

Milestone payments received by Orion in 2017-2021

Year 2017 2018 2019 2020 2021
EUR Million 12 5 51 42 3

The outlook for 2022 includes EUR 228 million to be recognised for this year from the USD 290 million upfront payment Orion received but not any other material milestones. Orion is currently looking for a partner for further development and commercialisation of its digital therapy software solution for treating chronic pain. The outlook does not contain any potential milestone payments associated with this project, as the company does not yet have assurance of finding any partner or of the financial structure of any agreement to be made. Orion is entitled to receive milestone payments from Bayer for Nubeqa® sales when certain global annual sales thresholds are met for the first time. Such milestone payments are not included in the outlook for 2022, as Orion does not have the ability to accurately estimate or predict the timing when the sales thresholds potentially are met.

The outlook is based on the assumption that Orion’s own production can continue to operate normally despite the COVID-19 pandemic and the challenges in the global supply chains. This requires, among other things, continued success in employee protection so that absence rates do not significantly increase, that personal protective equipment, supplies, equipment and spare parts needed in production as well as starting materials, intermediate products and materials are available and that there are no material disruptions in the logistics chains.

The outlook includes the impact of the acquisition of animal health company VMD on the Group's net sales and operating profit.

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

Net sales

Regarding Proprietary Products, the outlook anticipates that the net sales of Nubeqa® booked by Orion will clearly increase in 2022. Orion’s estimate is based on forecasts received from its partner Bayer. The sales of the Easyhaler® product portfolio is estimated to increase slightly. The sales of Orion’s branded Parkinson’s drugs (Comtess®, Comtan® and Stalevo®) are estimated to remain at the same level as in the previous year, even though significant mandatory price reductions of Stalevo® and Comtan® have taken effect in Japan at the beginning of 2022.

The COVID-19 pandemic significantly increased the demand for the intensive care sedative Dexdor® in 2020 and 2021, as a result of which the impact of generic competition on its sales did not fully materialise. Although the demand for intensive care sedatives remains elevated due to the pandemic, a clear decline in the net sales of the Dexdor® product is expected to continue in 2022. However, uncertainty prevails in this respect due to the pandemic.

Net sales of Simdax® are estimated to clearly decrease due to generic competition. Nevertheless, uncertainty still prevails as to when direct generic competition begins and how significantly the prices will drop.

The Specialty Products unit, meaning generic drugs and self-care products, accounts for a significant share of Orion's total sales. The outlook assumes that the COVID-19 pandemic will no longer materially affect the demand for generic drugs in 2022, although some customers may start using the stockpiles they had accumulated earlier in the pandemic. The outlook assumes that Orion will be able to increase its generic drugs sales volume, but foresees a simultaneous continued decline in generic drug prices. Visibility of the business development in Russia and Ukraine is currently very low due to the war. However, Orion assumes that the sales development in these countries will not have material impact on the Group’s net sales in 2022. For example, the outlook does not assume significant write-downs of the value of the trade receivables in Russian roubles which at the end of June 2022 were EUR 10 million. Due to the above-mentioned reasons, net sales of the Specialty Products unit are expected to be at a similar level as in 2021. The estimate does not include any impact of material supply disruptions or product shortages.

Net sales of Orion's Animal Health unit are expected to be clearly higher than in 2021 due to the acquisition of animal health company VMD.

Fermion has been operating at very near full capacity over the past few years. The share of manufacturing of the active pharmaceutical ingredients of Orion's own proprietary drugs is estimated to increase, and consequently Fermion's external net sales reported by Orion are estimated to slightly decline in 2022.

Operating profit

Orion's operating profit in 2022 will be clearly higher than in 2021 due to an upfront payment of USD 290 million received by Orion, of which EUR 228 million will be recognised in profit this year. Orion's operating profit will also be positively impacted by growing products such as Nubeqa® and the Easyhaler® portfolio.

The falling sales of proprietary drugs Dexdor® and Simdax® due to generic competition will have a negative impact on Orion’s operating profit in 2022. The price cuts of Stalevo® and Comtan® in Japan are also having a negative impact on operating profit. Relative gross margin of some products is estimated to decline, as production costs, including wages, and the prices of raw materials, goods and services rise, and these price increases cannot be passed through to Orion's product prices. On the contrary, the prices of generic drugs are estimated to continue on a downward path despite rising costs. Also, cost inflation will have a negative impact on Orion's operating profit in 2022. The acquisition of animal health company VMD is not expected to have a material impact on the Group's operating profit in 2022.

The Russian rouble has fluctuated strongly during the year. Revaluation of the receivables in Russian rouble at the end of Q1 had a EUR 3 million negative impact on operating profit. The revaluation at the end of the second quarter, in turn, had a positive impact of EUR 12 million on operating profit. However, the outlook assumes that the fluctuation of the Russian rouble will not have material impact on Orion’s receivables and that Orion is capable of collecting those receivables.

Operating expenses are estimated to increase from 2021. The impact of the COVID-19 pandemic kept operating expenses below normal in 2020–2021. The outlook presupposes that the pandemic will no longer affect costs with equal force in the second half of 2022. At the same time, increasing investments are made in the sales and marketing of products that are experiencing growth as well as new products, such as ganaxolone. Research and development expenses are estimated to be on par with or slightly higher than in 2021

Capital expenditure

The Group’s total capital expenditure in 2022 is expected to be clearly higher than in 2021, when capital expenditure was EUR 85 million. Investments in 2021 included the EUR 25 million signing fee paid to Marinus for the sales and marketing rights to ganaxolone. In 2022, the grand total of investments will be raised by the the acquisition of VMD, the revamping of Orion's Enterprise Resource Planning (ERP) system and renovation of the company's head office in Espoo, both scheduled for 2021-23.

Near-term risks and uncertainties

The outlook is based on the assumption that Orion’s own production can continue to operate normally despite the COVID-19 pandemic and the challenges in the global supply chains. The sales of Orion-manufactured products depend on the ability of production and the entire supply chain to operate at the planned level. This involves numerous risks that may cause even material production disruptions. Such risks include the infection of employees, the availability of supplies, equipment and spare parts, deteriorating availability of starting materials and intermediate products as well as logistics chain disruptions. The logistics challenges especially in China and also globally are currently increasing. Also, the availability of natural gas and raw materials from Russia and Ukraine could cause potential risks to global supply chains.

The basic patents for Dexdor® and Simdax® have expired and generic competition on these products has begun. In 2020–2021, the COVID-19 pandemic strongly increased the demand for intensive care sedatives, and therefore the sales of Dexdor® decreased during the period far less than anticipated. Its sales are estimated to decrease clearly in 2022, but this estimate is subject to uncertainty due to the pandemic situation. Generic competition to Simdax® started in the first markets in 2020 with a different formulation. Direct generic competition with a similar formulation has not yet truly commenced. In 2022, net sales of Simdax® are estimated to decrease clearly, but this estimate is subject to uncertainty. Actual sales will be affected, among other things, by the timing of the beginning of direct generic competition in the various markets and the intensity of this competition.

Sales of individual products and also Orion’s sales in individual markets may vary, for example depending on the extent to which the ever-tougher price and other competition prevailing in pharmaceutical markets in recent years will specifically focus on Orion’s products. Changes in pharmaceutical regulation in individual markets or more broadly, for example at EU level, may affect the sales and profitability of Orion's products. In June 2022, the Finnish government has issued a proposal to cut government spending on pharmaceuticals from 1 January 2023. The proposal is currently in consultation and its final content and impact on Orion will be known during autumn 2022. Product deliveries to key partners are based on timetables that are jointly agreed in advance. Nevertheless, they can change, for example as a consequence of decisions concerning adjustments of stock levels. In addition, changes in market prices and exchange rates affect the value of deliveries. The COVID-19 pandemic significantly increased the demand for some Orion products especially in 2020, partly because customers increased their safety stocks. The dismantling of such safety stocks may have a momentary negative effect on the demand for Orion products. However, Orion is unaware of how much additional safety stocks customers have remaining and when customers might start using inventories that exceed normal stock levels. Due to the pandemic and various pandemic-related restrictions, the prevalence of many seasonal illnesses has been below normal, whereby the numbers of medical appointments and prescriptions issued have also declined. Non-critical procedures have also been postponed due to the pandemic. These phenomena have negatively impacted the development of the entire pharma market. At present, it is difficult to estimate how long the situation will last or to what extent the eventual waning of the pandemic will manifest as a release of any pent-up demand. Due to Russia’s invasion of Ukraine, the visibility of business in these countries is currently very low. Furthermore, it is uncertain whether all the receivables in Russia can be collected. Orion has insured its receivables, but only in part.

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

Orion’s broad product range may cause risks to the delivery reliability and make it challenging to maintain the high quality standard required in production. The impacts of the COVID-19 pandemic and other challenges in the global supply and logistics chains of pharmaceuticals have increased the already elevated risk of supply disruptions. Moreover, the disruptions, production volume changes and logistical challenges experienced in other industries may also have unexpected and sudden ramifications that can manifest as shortages of necessary raw materials, supplies and equipment in the chemical and pharmaceutical industries and as increases in prices. Supply chain risks have been well managed by Orion and potential challenges during the remainder of the year 2022 are likely to be reflected in company’s operations more in the following years. The rise of raw material prices and other supply chain costs deteriorates the profitability of Orion's products, since in the pharmaceuticals industry it is virtually impossible to pass through the cost increases to own product prices, especially in Europe. Cost inflation remains a risk for Orion’s profitability in 2022. The impact of cost inflation is expected to start to be felt in late 2022 and more in 2023.

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

Research projects always entail uncertainty factors that may either increase or decrease estimated costs. The projects may progress more slowly or faster than assumed, or they may be discontinued. Nonetheless, changes that may occur in ongoing clinical studies, for example due to the COVID-19 pandemic, are reflected in costs relatively slowly and are not expected to have a material impact on earnings in the current year. Owing to the nature of the research process, the timetables and costs of new studies that are being started are known well in advance. They therefore typically do not lead to unexpected changes in the estimated cost structure. Orion often undertakes the last, in other words Phase III, clinical trials in collaboration with other pharmaceutical companies. Commencement of these collaboration relationships and their structure also materially affect the schedule and cost level of research projects.

Collaboration arrangements are an important component of Orion’s business model. Possible collaboration and licensing agreements related to these arrangements also often include payments to be recorded in net sales that may materially affect Orion’s financial results. In 2014–2021 the annual payments varied from EUR 3 million to EUR 51 million. The payments may be subject to conditions relating to the progress of research projects or sales or to new contracts to be signed, and whether these conditions or contracts materialise and what their timing is will always entail uncertainties.

News conference and conference call

A webcast and a conference call for analysts, investors and media will be held on Friday, 15 July 2022 at 13.30 EEST. The event will be held only online and by conference call.

A link to the live webcast will be available on Orion's website at A recording of the event will be available on the website later the same day.

To participate the conference call, please dial:

Finland: +358 9 817 103 10

Sweden: +46 8 566 426 51

UK: +44 333 300 0804

USA: +1 631 913 1422

PIN: 29705083#

Upcoming events

Interim Report January-September 2022 Thursday 20 October 2022
Financial Statement Release for 2022 Thursday 9 February 2023
Annual General Meeting 2023 planned to be held on Wednesday 22 March 2023
Interim Report January-March 2023 Thursday 27 April 2023
Half-Year Financial Report January-June 2023 Monday 17 July 2023
Interim Report January-September 2023 Thursday 26 October 2023

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

Espoo, 15 July 2022

Board of Directors of Orion Corporation

Orion Corporation

For additional information about the report:

Jari Karlson, CFO                 tel. +358 50 966 2883

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

Orion Corporation

Orion is a globally operating Finnish pharmaceutical company – a builder of well-being. Orion develops, manufactures and markets human and veterinary pharmaceuticals and active pharmaceutical ingredients. The company is continuously developing new drugs and treatment methods. The core therapy areas of Orion's pharmaceutical R&D are oncology and pain. Orion's net sales in 2021 amounted to EUR 1,041 million and the company had about 3,350 employees at the end of the year. Orion's A and B shares are listed on Nasdaq Helsinki.