The Board has also handled the outlook estimates for the rest of 2006 for the new Orion Corporation and Oriola-KD Corporation. In the listing prospectuses, which will be published on or about 21 June 2006, the outlooks will be given as follows, if no reason appears to change them before that.
The new Orion Corporation and Oriola-KD Corporation will not be incorporated until after the demerger comes into effect, on or about 1 July 2006, prior to which neither of them have administrative bodies or a line management that could provide future earnings estimates. Therefore the outlooks for the rest of 2006 provided in this release are given by the Board of Directors of the demerging Orion.
Outlook estimate for new Orion Corporation for the rest of 2006
In the Pharmaceuticals business, net sales are estimated to increase, thanks to the entacapone product franchise especially. The strong net sales growth in the first months of the year will slow down clearly in the further course of the year. In the first months of the year, the deliveries to the marketing partner Novartis were exceptionally high, and clearly lower levels are anticipated for the remaining part of the year. The changes in the Finnish pharmaceuticals act, especially the price cut of reimbursable medicines and the removal of discounts grantable to pharmacies, led to lower domestic net sales in the first quarter. The full-year domestic net sales are, however, anticipated to be at the previous year's level.
The operating profit of the Pharmaceuticals business is estimated to improve somewhat in consequence of the increased net sales. Selling and distribution costs as well as R&D expenses will slightly increase from the previous year.
The Diagnostics business will show increased net sales and a clearly improved operating profit from the previous year.
Due to one-off earnings items, the Group level costs are anticipated to be lower than in the corresponding carve-out figures for 2005.
The Group R&D expenditure is estimated to be about EUR 85 million, of which the Pharmaceuticals business will account for over EUR 80 million. Capital expenditure is estimated to be slightly over EUR 20 million.
The net sales of the new Orion Group are estimated to grow and the consolidated operating profit is estimated to improve somewhat from the corresponding carve-out figures based on the 2005 financial statements of the demerging Orion.
Carve-out financial information on the new Orion for 1-6/2006, based on the financial information for the demerging Orion, will be published on 7 August 2006, together with an updated outlook estimate for the rest of 2006.
Outlook estimate for Oriola-KD Corporation for the rest of 2006
The invoicing of Oriola-KD for 2006 is forecasted to be almost at the level of the comparable figure for 2005. The operating profit for 2006 is forecasted to be lower than the comparable figure for 2005, mainly due to the heavy competitive situation and the low growth of the pharmaceutical market in Finland, as well as one-off items related to the demerger and the operational rearrangements being implemented in the Group.
The full-year costs of the Head Office and Group Administration of Oriola-KD are estimated to be about EUR 3.0 million, while the carve-out figures of 2005 include EUR 1.8 million in Group items allocated to Oriola-KD as its share of the corresponding administrative expenses the demerging Orion.
Carve-out financial information on Oriola-KD for 1-6/2006, based on the financial information for the demerging Orion, will be published on 7 August 2006, together with an updated outlook estimate for the rest of 2006.
Jukka Viinanen Olli Huotari
President and CEO General Counsel
Orionintie 1A, 02200 Espoo