Strategy of the new Orion Group
Orion Corporation's future Board of Directors and management will decide on the strategy to be adopted for Orion and the actions for implementing it. A preliminary description of the strategy is provided below.
Orion is a European, R&D-based, business-driven pharmaceuticals and diagnostics company with a special emphasis on developing innovative medicinal treatments and diagnostic tests for global markets. The focus is on profitable growth that increases shareholder value while keeping risks under control. Orion is active in five distinct businesses:
Pharmaceuticals
- Proprietary Products (patented prescription products)
- Specialty Products (off-patent prescription products and self-care products)
- Animal Health
- Fermion (Active Pharmaceutical Ingredients)
Diagnostic tests
- Orion Diagnostica
Orion will strengthen its European presence.
The company will step up growth especially in the Specialty Products and Proprietary Products businesses. In the territories where Orion has its own sales organisations, this will be achieved via product and portfolio acquisitions, and in new territories via alliances. The sales of the current product portfolio will be maximised European-wide and in-licensing of products and developmental molecules will be enhanced. The Proprietary Products business is judged to have the best future growth potential. Growth will also be sought within Animal Health and Orion Diagnostica.
In the Proprietary Products business, research and development activity concentrating on selected therapy areas is in the focus. In R&D, Orion will reinforce the discovery and early development of new chemical entities. As a general rule, Orion will not take the lead in global phase III development but will share the costs and risks of phase III development with partners. Partnerships and networking are important throughout the value chain, both in research and development and in reaching global markets. In-licensing and networking in R&D will be expanded. Furthermore, R&D risk will be managed by a balanced engagement in the development of new chemical entities and the life cycle management of the proprietary products. Fermion has an important role as the developer of active pharmaceutical ingredients and producer of Orion's proprietary products.
Within Specialty Products, Orion is currently strong in the Finnish home market, and is seeking to become the market leader. The introduction of new products via in-licensing both in the Nordic markets and Central and Eastern Europe as well as in the rest of the EU will be enhanced further. Growth in current territories where Orion has its own sales organisations will be sought via product and portfolio acquisitions. Growth in new territories will be managed via alliances in order to achieve full European coverage for Orion's products.
In the Animal Health business, Orion is currently the second-largest company in the Nordic market. Here Orion sells its own and its partners' products. Orion's innovative animal sedative products are sold by partners globally. Within R&D, maximum use will be made of synergies with the development of human pharmaceuticals. Animal Health development represents a considerable life cycle management option for Orion's innovative new chemical entities. The Animal Health business will seek growth via product and portfolio acquisitions.
For Orion Diagnostica, Orion's aim is to become a leading company in selected areas of point-of-care diagnostics in primary healthcare. Orion meets needs in the fields of healthcare and industrial hygiene by offering innovative, cost-efficient, easy-to-use and reliable test systems. The flagship product line is QuikRead.
Orion's new management organisation is lean, and the integration of functions has been initiated on all fronts with the aim of maximising synergies between businesses.
Strategy of the Oriola-KD Group
The strategy which Oriola-KD will adopt and the actions for carrying it out will be decided by the company's Board of Directors and management. A preliminary description of the strategy is provided below.
Oriola-KD's strategic objective is to be the leading company in the pharmaceutical trade as well as in the marketing and sale of healthcare equipment and supplies in Finland and Sweden, and to grow selectively in the Baltic countries, Denmark, Poland and Russia.
Both of the company's business segments - Pharmaceutical Trade and Healthcare and Dental Trade - are core businesses. For a number of years now, there has been a major consolidation development involving both customers and competitors in both segments. Oriola-KD will carefully select the market areas and businesses in which it can achieve the critical mass necessary to ensure its long-term development. Oriola-KD is investigating opportunities for expansion primarily in the Baltic countries, Denmark, Poland and Russia, both organically and through acquisitions. In addition, Oriola-KD intends to expand its business to the retail trade in pharmaceuticals and healthcare products in selected markets. Oriola-KD's goal is to be financially strong enough to be able to grow according to its strategy and to respond flexibly to changes in the operating environment.
For both Pharmaceutical Trade and Healthcare and Dental Trade, good customer service and efficient logistics are key success factors. Both areas are Oriola-KD's strengths, but in a constantly changing operating environment, the company will increase its efforts to further develop and improve the efficiency of its operations, based on the feedback from customers and principals. Additionally the prevailing competitive situation, particularly within pharmaceuticals distribution in Finland and Sweden, will call for continuous evaluation and development of logistics structures.
Oriola-KD has a long history and solid experience in pharmaceutical distribution and the marketing of healthcare products. Oriola has been in the pharmaceutical wholesaling business since 1948 and KD since 1907. Oriola-KD has well-established, profitable operations and good recognition in its home markets Finland, Sweden, the Baltic countries and Denmark. The company's good performance derives from its in-depth knowledge of the businesses and markets, the high quality of its operations and efficient logistics solutions.
An important competitive advantage for Oriola-KD is its high market share in pharmaceutical distribution and wholesale in Finland and Sweden, where cost-effective operations call for high volumes. The cost-effectiveness and the reliability of logistics systems are further developed by applying Oriola-KD's best practices and by better leveraging the synergies across within the company. The service concept for healthcare logistics can be utilised for the products of both of the company's divisions.
Oriola-KD focuses on the topics that are key to its strategy and creates for the company optimal ways of working supported by the best suited corporate governance and management model. The company's management can focus on developing operations and services that produce added value, whilst exploiting the growth potential in the healthcare sector through organic growth and acquisitions. The company's experience of integrating businesses will further enhance its ability to actively participate in consolidation development in its businesses.
The comprehensive spectrum of Oriola-KD's services extends across the entire supply chain: from import forwarding and warehousing to deliveries to customers including the cash and information flows.
In different countries there are expectations of changes in the structures and legislation of pharmaceutical wholesale and distribution. If these changes are realised it will have a major impact in the operating environment and Oriola-KD is prepared to respond swiftly to these changes. As an independent listed company with a strong balance sheet, it will have more freedom and alternatives to develop its own structure and business concepts.
Orion Corporation
Jukka Viinanen Jari Karlson
President and CEO CFO
Contact persons:
Jukka Viinanen
President and CEO, Orion Corporation
phone +358 10 429 3710
Jari Karlson, CFO, Orion Corporation
phone +358 10 429 2883, gsm +358 50 429 2883
Eero Hautaniemi, President, Wholesale and Distribution, phone +358 10 429 2109, gsm +358 50 429 2109
---------------------------------------
Disclaimer
The combined carve-out financial statement information presented here has been prepared solely for illustrative purposes.
The data should be read in conjunction with the combined carve-out financial statement information from the demerging Orion's consolidated financial statements to be presented in Appendix 3 of the Listing Particulars, presented in Appendix 9 of the Demerger Prospectus and presented in Orion's financial statements and Interim Reports published earlier.
The combined carve-out financial information from the demerging Orion's consolidated financial statements does not as such necessarily give an accurate view of the future results, financing position, changes in equity and cash flows of the new Groups, nor does it present a view of what they would have been if the new Groups had operated as separate legal entities during the periods represented.
The data should be read in conjunction with the combined carve-out financial statement information from the demerging Orion's consolidated financial statements to be presented in Appendix 3 of the Listing Particulars, presented in Appendix 9 of the Demerger Prospectus and presented in Orion's financial statements and Interim Reports published earlier.
The combined carve-out financial information from the demerging Orion's consolidated financial statements does not as such necessarily give an accurate view of the future results, financing position, changes in equity and cash flows of the new Groups, nor does it present a view of what they would have been if the new Groups had operated as separate legal entities during the periods represented.
---------------------------------------
Distribution:
Helsinki Exchanges
Media
Publisher:
Orion Corporation
Corporate Administration
Orionintie 1A. 02200 Espoo
Homepage: www.orion.fi