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Orion Group Interim Report January–March 2024

  • Net sales totalled EUR 308.5 (January–March 2023: 277.9) million
  • Operating profit was EUR 56.0 (55.5) million
  • Basic earnings per share were EUR 0.31 (0.31)
  • Cash flow from operating activities per share was EUR 0.78 (0.03)
  • The outlook for 2024 has been specified regarding operating profit: Operating profit is estimated to be EUR 280 million to EUR 310 million. Previously operating profit was estimated to be EUR 270 million to EUR 310 million.

Key figures

  1-3/24 1-3/23 Change % 1-12/23
Net sales, EUR million 308.5 277.9         +11.0% 1,189.7
EBITDA, EUR million 68.5 67.7         1.2% 326.4
% of net sales         22.2%         24.4%           27.4%
Operating profit, EUR million 56.0 55.5         +1.0% 274.9
% of net sales         18.2%         20.0%           23.1%
Profit before taxes, EUR million 54.9 55.1         -0.4% 271.9
% of net sales         17.8%         19.8%           22.9%
Profit for the period, EUR million 43.8 43.8         -0.1% 216.8
% of net sales         14.2%         15.8%           18.2%
Research and development expenses, EUR million 36.8 31.7         +16.1% 126.9
% of net sales 11.9%         11.4%           10.7%
Capital expenditure, excluding acquired in business combinations, EUR million 13.1 18.1         -27.6% 92.7
% of net sales         4.2%         6.5%           7.8%
Acquired in business combination, net of cash, EUR million   0.0   0.1
Interest-bearing net liabilities, EUR million 6.4 110.8         -94.2% 93.3
Basic earnings per share, EUR 0.31 0.31         -0.2% 1.54
Cash flow from operating activities per share, EUR 0.78 0.03 > 100% 0.85
Equity ratio, % 48.8% 56.9%   62.3%
Gearing, % 0.9% 15.2%   10.5%
Return on capital employed (before taxes), % 22.8% 22.0%   25.3%
Return on equity (after taxes), % 21.9% 21.4%   24.1%
Average personnel during the period 3,673 3,546         +3.6% 3,599


President and CEO Liisa Hurme:
Year started well with strong topline growth

"In January–March 2024, our net sales increased by 11 percent to EUR 308.5 (277.9) million and operating profit was EUR 56.0 (55.5) million. All our business divisions contributed to the solid growth of net sales and the formation of operating profit. Nubeqa® and the Easyhaler® product portfolio continued to be the largest drivers of growth, but delightfully also many other sources contributed to the growth. Generics and Consumer Health business division's reported net sales were slightly down from the comparative period, but if we exclude dexmedetomidine products and Simdax®, which are facing increasing generic competition, and Russia, where in the comparative period we cleared our remaining inventories before withdrawing from the market, the net sales trend was positive.

Operating profit was at the level of the comparative period, due to a planned increase in expenses. Many ongoing research and development phase projects are progressing which explains the increase in research and development expenditure in the first quarter. Later this year, R&D expenditure growth is expected to accelerate as we enter planned Phase II studies with our pain molecule ODM-111. It is also worth noting that the bulk of R&D costs are allocated to the development of new innovative medicines and clearly lower share is allocated to the development of other products such as generics and animal health products. Nubeqa's royalty structure, with royalty levels starting at the lowest tier each calendar year, means that in the coming years a larger proportion of Orion's annual earnings will always likely to be made in the second half of the year. In addition, the EUR 70 million milestone payment related to the sale of Nubeqa®, included in our outlook this year, is expected to be realised towards the end of the year.

Cash flow from operating activities was strong as expected in January–March 2024. The cash flow includes, among other things, the EUR 30 million milestone payment related to Nubeqa® recognised last year and the majority of the cash flow impact of the transfer of the insurance portfolio of Orion Pension Fund's B Fund. In addition, the cash flow generated by Nubeqa's product sales and royalties, for example, was clearly better than in the comparative period.

In line with our refined strategy announced earlier this year, and with positive growth prospects, we want to allocate more capital to building Orion's future, and in particular to advancing and growing Orion's own R&D pipeline. However, we will increase our spending in a controlled manner, guided by our financial objectives. Over the period 2024–2028, we want to grow net sales by an average of at least 8% per year, grow operating profit faster than net sales and pay an increasing annual dividend to shareholders, with an annual dividend payout ratio of 50–100%. These objectives provide us with a financial framework within which we can increase our prudent growth efforts.

Of the projects in clinical development, the Phase I study with ODM-111 was completed during the period and we are now preparing to start Phase II studies with the molecule, first in acute pain and later in chronic pain. The expected news flow also includes the completion of the phase III ARANOTE study with darolutamide later this year.

The political strikes in Finland at the beginning of the year have added to the challenges facing Orion's supply chains, which have already been affected by geopolitical tensions in the Middle East, among others. The strikes did not have a material impact on Orion in the first quarter of the year, thanks to good inventory levels and Orion's agility in finding alternative supply routes.

All in all, the year has started well and even slightly better than we expected. As a result, we have also slightly specified our outlook for operating profit for 2024."

Outlook for 2024 (specified)

Net sales are estimated to be EUR 1,340 million to EUR 1,410 million.

Operating profit is estimated to be EUR 280 million to EUR 310 million.

Previous outlook for 2024 (provided on 13 February 2024)

Net sales are estimated to be EUR 1,340 million to EUR 1,410 million.

Operating profit is estimated to be EUR 270 million to EUR 310 million.

Basis for outlook in more detail

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

Orion is eligible to receive milestone payments from Bayer based on sales of the Nubeqa® product upon meeting certain global annual sales thresholds for the first time. In 2023 Orion received one such milestone payment of EUR 30 million. The outlook for 2024 includes one Nubeqa® sales-related milestone payment of EUR 70 million which is included in both the net sales outlook and the operating profit outlook. The outlook does not include any other material milestone payments or one-offs.

The outlook assumes that Orion's own production and other operations will be able to operate normally throughout the year, and the supply chains of raw materials or ready-made products are not facing significant disruptions. These and other risks are discussed in more detail under 'Near-term risks and uncertainties'.

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

Milestone payments received by Orion in 2019–2023

Year 2019 2020 2021 2022 2023
EUR million 51 42 3 234 32

Net sales

The outlook assumes that the net sales of Nubeqa® booked by Orion, and thus the net sales of the Innovative Medicines business division, will clearly increase in 2024. Orion’s assumption is based on forecasts received from its partner Bayer. However, it is difficult to predict the exact level of product sales and royalties for the whole year of a strongly growing product. In addition, the EUR 70 million Nubeqa®-related milestone is expected to increase the net sales of the Innovative Medicines business division.

Branded Products and Animal Health business divisions are also estimated to improve their net sales in 2024. Branded Products growth is anticipated to be driven by the Easyhaler® product portfolio. The sales of entacapone products are assumed to recover somewhat after challenging year 2023. At the same time, however, the market conditions for the entacapone products continue to be tough with increasing competition and declining prices in many markets, and as a result, the sales of the entacapone products are anticipated to be flat in 2024. Animal Health growth is anticipated to be driven by sedatives portfolio, products in launch phase and improving market conditions.

Generics and Consumer Health business division continues to suffer from the decline of Simdax® and dexmedetomidine products due to generic competition and falling prices, but less than in the recent years. Overall volume of generic products are expected to grow but at the same time prices are expected to decline. Due to the aforementioned reasons, the net sales of the Generic and Consumer Health business division is assumed to decrease slightly in 2024.

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, which may restrict capacity allocated to external business.

Operating profit

Gross profit is expected to increase clearly driven by growing Nubeqa® royalties and the anticipated EUR 70 million Nubeqa®-related sales milestone.

The range in the operating profit estimate is mainly due to Nubeqa's sales booked by Orion and the development of R&D costs. It is difficult to predict the exact level of royalties for the whole year of a strongly growing product. Any variance from the predicted level can have notable impact on Orion's operating profit. Also, the mechanism by which each quarter's product deliveries are always fully deducted from the next quarter's royalty payments, is causing variance to operating profit. Even though this impact on operating profit is only temporary, the timing of product deliveries may have notable impact on Orion's operating profit in one calendar year.

Over the past few years, Orion has been determined to increase its investment in early-stage research in line with its growth strategy. This work is now starting to bear fruit and several projects are approaching the clinical development phase. Progressing these projects will also require significantly higher R&D expenditure than in the past. At the same time, projects in the clinical development phase have advanced and will advance during 2024, which will increase project costs. However, there are uncertainties related to the progress and timing of projects, which may mean that not all the costs projected for 2024 will materialise. Currently Orion is not booking any costs related to the development of ODM-208 and thus the outlook does not include any ODM-208 related R&D costs.

Sales and marketing expenses are expected to increase mainly due to growing investments to the Easyhaler® sales and increasing Nubeqa® royalty payable due to an agreement with Endo Pharmaceuticals.

Capital expenditure

The Group’s total capital expenditure in 2024 is expected to be at a similar level as in 2023, when capital expenditure was EUR 93 million. The estimate of capital expenditure does not include any investments related to any future material product or company acquisition.

Near-term risks and uncertainties

The outlook assumes that Orion's own production and other operations will be able to operate normally. The realisation of sales of Orion-manufactured products requires that production and the related supply chains and other operations are able to operate at the planned level. There are a number of risks that could even materially disrupt Orion's production or other operations. Such risks include, for example, accidents, strikes, employee illness, poor availability of supplies, equipment, spare parts, products, energy, starting materials or semi-finished products, and the failure of logistics chains or serious disruptions to information or communication systems. Current risks to supply and logistics chains include geopolitical conflicts and unrest around the world. In addition to conflicts and unrest, any other unforeseen changes in the operating environment could cause disruptions to Orion's production, supply chains or other operations. Such risks may include accidents, strikes, natural disasters, epidemics and pandemics, wars, terrorism, cyber-attacks or hybrid influencing.

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. Changes in overall market demand may also have negative impact on sales.

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.

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 current geopolitical conflicts and unrest, and other challenges in the global supply and logistics chains of pharmaceuticals have increased the already elevated risk of supply disruptions. Moreover, the disruptions, production volume changes and logistical challenges experienced in other industries may also have unexpected and sudden ramifications that can manifest as shortages of necessary raw materials, supplies and equipment in the chemical and pharmaceutical industries and as increases in prices. The possible rise of raw material prices and other supply chain costs deteriorates the profitability of Orion's products, since in the pharmaceuticals industry it is very difficult to pass on cost increases to the prices of own products, especially prescription medicines, particularly in Europe. If high cost inflation occurs, it will pose a risk to Orion's profitability.

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

Research projects always entail uncertainty factors that may either increase or decrease estimated costs. The projects may progress more slowly or faster than assumed, or they may be discontinued. Nonetheless, changes that may occur in ongoing clinical studies are reflected in costs relatively slowly and are not expected to have a material impact on earnings in the current year. Owing to the nature of the research process, the size and costs of new studies that are being started are known relatively well in advance. However, there are uncertainties in the timing and progression of any individual study. Any changes in the timing of new research or development phases that are being launched may have a material impact on the projected cost structure within a single year. 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. 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. The upfront and milestone payments paid by Orion to its collaborators, which are recorded as investments in intangible assets in balance sheet, include write-down risk that may be realised if, for example, a collaborative research project fails or otherwise has to be discontinued.

Webcast and Conference Call

A webcast and a conference call for analysts, investors and media representatives will be held on Thursday, 25 April 2024 at 13.30 EEST.

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

Conference call can be joined by registering through the following link:  

Phone numbers and the conference ID to access the conference will be provided after the registration. In case you would like to ask a question during the conference, please dial *5 on your telephone keypad to enter the question queue.

Questions can also be presented in writing through the question form of the webcast.

Upcoming events

Half-Year Financial Report January–June 2024 Thursday 8 August 2024
Interim Report January–September 2024 Tuesday 29 October 2024


Espoo, 25 April 2024

Board of Directors of Orion Corporation


For additional information about the report:

Jari Karlson, CFO, tel. +358 50 966 2883

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


Orion Corporation

Orion is a globally operating Finnish pharmaceutical company – a builder of well-being. We develop, manufacture and market human and veterinary pharmaceuticals and active pharmaceutical ingredients. Orion has an extensive portfolio of proprietary and generic medicines and self-care products. The core therapy areas of our pharmaceutical R&D are oncology and pain. Medicines developed by Orion are used to treat cancer, neurological diseases and respiratory diseases, among others. Orion's net sales in 2023 amounted to EUR 1,190 million and the company had about 3,600 employees at the end of the year. Orion's A and B shares are listed on Nasdaq Helsinki.