Orion Group Financial Statement Release for 2013

Orion's net sales in 2013 totalled EUR 1,007 million (EUR 980 million in 2012), up by 3% on the previous year.

• Operating profit was EUR 268 (278) million. 

• Profit before taxes was EUR 264 (277) million. 

• Equity ratio was 54% (61%). 

• ROCE before taxes was 39% (46%). 

• ROE after taxes was 40% (41%). 

• Basic earnings per share were EUR 1.46 (1.47). 

• Cash flow per share before financial items was EUR 1.02 (1.23). 

• Board's proposal for dividend per share is EUR 1.25 (1.30) per share. 

• Orion estimates that in 2014 net sales will be at similar level to 2013 and operating profit will be slightly lower than in 2013. 

• Orion has signed a licensing agreement with Janssen Pharmaceuticals for development and commercialisation of ORM-12741, among others. 

ORION'S KEY FIGURES FOR THE REVIEW PERIOD

President and CEO Timo Lappalainen's review

"Orion's net sales over EUR 1 billion"

"Our net sales exceeded EUR 1 billion for the first time since the demerger in 2006. Our operating profit was as anticipated slightly down on the previous year.

"Deliveries of our Parkinson's drugs to Novartis were lower than a year ago as expected. Total sales generated by Stalevo^® and Comtess^® products in Orion's own sales organisation were also slightly down. Despite the trend in sales of Parkinson's drugs, net sales of the Proprietary Products business division decreased only slightly because sales of other products in the portfolio grew. In particular, the intensive care sedatives Dexdor^® and Precedex^® continued to grow strongly. We are also pleased that all the other business divisions increased net sales during the year. Fermion, which manufactures active pharmaceutical ingredients, increased sales especially strongly. The Specialty Products business division has grown as large as the Proprietary Products business division, balancing the Group's structure.

"In 2013 we received positive news from many of our research projects. In March we took a step in broadening the Easyhaler^® product family into combination products when we submitted an application for marketing authorisation for a budesonide-formoterol formulation product in Europe. In June our partner Novartis submitted a marketing authorisation application for Stalevo in Japan. In December we announced that we had signed a licensing agreement with Janssen Pharmaceuticals, which includes clinical phase trial of an alpha-2c adrenoceptor antagonist (ORM-12741) being developed for the treatment of symptoms of Alzheimer's disease.

"During the year we terminated our collaboration agreement with Endo Pharmaceuticals concerning oncology drug research, development and commercialisation. All rights to the androgen receptor inhibitor (ODM-201) for the treatment of prostate cancer covered by the agreement reverted to Orion. We have started preparations for a Phase III clinical trial with ODM-201 and continue negotiations to find a suitable partner for collaboration on the next phase of worldwide development and commercialisation of the product. We also decided to end development of a more effective levodopa product (ODM-101) into a finished product.

"The significant investment and production reorganisation projects progressed as planned during 2013, and some of the projects are still continuing during the current year. Through the measures being undertaken, we will develop and ensure future growth, delivery reliability and quality standards. However, the projects have been temporarily increasing production costs and decreasing production capacity, and that reduced our margin during the year.

"In Europe data protection of Stalevo expired in October 2013, following which sales of our Parkinson's drugs are forecast to continue to decline as generic competition to Stalevo is expected to commence in Europe in 2014. The basic patent for Precedex has expired and this product may also face generic competitors during the current year. The generic competition to these products will significantly affect Orion, but the precise timing of commencement of competition is difficult to forecast. The rest of the product portfolio will continue to grow, but products with lower margins will account for an increasing proportion of sales. Progress in our research projects will increase our research expenses, and our capital expenditure will still be higher than average. We estimate that our net sales in 2014 will be at similar level to 2013 and our operating profit will be slightly lower than in 2013. More information on the outlook estimate and the basis for it can be found under 'Outlook for 2014' and 'Basis for outlook' in this report."

Events in 2013

On 5 February the Board of Directors of Orion Corporation decided on an incentive plan for key persons.

On 21 March Orion announced that it had submitted a marketing authorisation application for a combined budesonide-formoterol formulation in the Easyhaler^® product family in Europe.

On 10 April Orion Diagnostica gave a negotiation proposal on streamlining operations and reducing the number of personnel in Finland by no more than 80.

On 23 April the Board of Directors of Orion Corporation decided to acquire shares in the Company as authorised by the Annual General Meeting on 19 March 2013 to be used as part of the execution of the long-term Incentive Plan 2013 for key persons of the Orion Group.  

On 3 June Orion Diagnostica's statutory co-operation negotiations were completed.

On 4 June Orion announced that it would be issuing a EUR 150 million domestic bond.

On 11 June the listing prospectus for Orion's bond was published.

On 25 July Orion announced that it had reached agreement with Mylan Pharmaceuticals Inc. in the patent dispute concerning the proprietary drug Stalevo^®.

On 21 October Orion Corporation and Hospira, Inc. announced that they had extended the licensing agreement concerning the sedative agent Precedex^® in the markets outside Europe.

On 22 October Orion Corporation and Phyxius Pharma, Inc. announced that they had entered into an agreement for licensing levosimendan injection rights in the USA and Canada to Phyxius Pharma.

On 19 November Orion announced that Markku Huhta-Koivisto, Senior Vice President responsible for the Specialty Products and Fermion business divisions, and Dr. Liisa Hurme, Senior Vice President responsible for the Proprietary Products business division, would exchange their responsibility areas with effect from 1 January 2014.

On 5 December Orion announced that Orion Corporation and Hospira, Inc. had settled their patent dispute with Sandoz Inc. and Sandoz Canada Inc. over the proprietary drug Precedex^®.

On 11 December Orion announced that it had completed the acquisition of its own shares.

On 19 December Orion announced that it had signed a licensing agreement with Janssen Pharmaceuticals for the development and commercialisation of a new drug for Alzheimer's disease.

Events after the period

There were no significant events after the period.

News conference and teleconference

A news conference and teleconference on the published results will be held today, Tuesday 4 February 2014, at 13:30 EET in Hotel Kämp, address: Pohjoisesplanadi 29, Helsinki. President and CEO Timo Lappalainen will give a brief presentation in English on the financial review.

The event can be followed live as a webcast accessible at Orion's website at www.orion.fi/en. After the presentation, questions can be asked by telephone in Finnish and English.

The teleconference code is 940874 and to participate in the teleconference, please call:

from United States: +1 334 323 6201
from other countries: +44 (0)20 7162 0025

News conference recordings

A recording of the webcast of the event in English and a recording of the presentation by the President and CEO in Finnish will be published on the Orion website during Tuesday 4 February 2014.

Financial report material

Financial reports and related presentation material are available at www.orion.fi/en promptly after publication. The website also has a form for subscribing to Orion's releases.

Dates in Orion Calendar 2014

The Financial Statements for 2013 and Corporate Governance Statement will be published on the Company's website at the latest on 4 March 2014.

For additional information about the financial review:

Jari Karlson, CFO                                 tel. +358 10 426 2883

Tuukka Hirvonen, Communications Manager         tel. +358 10 426 2721 / mobile +358 50 966 2721

www.orion.fi/en

www.orion.fi/en/investors

Financial review 2013

Net sales

The Orion Group's net sales in 2013 were EUR 1,007 million (EUR 980 million in 2012). The net effect of currency exchange rates was EUR -16 million of which about half was due to depreciation of the Japanese yen.

The Pharmaceuticals business's net sales were EUR 953 (929) million. Net sales of Orion's Stalevo^® (carbidopa, levodopa and entacapone) and Comtess^®/Comtan^® (entacapone) Parkinson's drugs were down by 17% at EUR 207 (250) million, which was 22% (27%) of the Pharmaceuticals business's net sales. The net sales of other products in the portfolio were up by 10% at EUR 746 (679) million.

The Diagnostics business's net sales were up by 5% at EUR 57 (54) million.

Operating profit

The Orion Group's operating profit was down by 4% at EUR 268 (278) million.

The Pharmaceuticals business's operating profit was down by 5% at EUR 273 (287) million. The gross profit percentage was lower than in the comparative period due to products with lower margins accounting for an increasing proportion of sales, lower prices and higher production costs. Costs were increased by the extensive investment and production facility modification projects in progress during the year, which temporarily decreased production capacity and at the same time increased costs. Operating expenses were slightly down. The operating profit for the review period includes about EUR 3 million received from Janssen Pharmaceuticals as part of the total payment of EUR 23 million under the licensing agreement. Net sales and operating profit in the comparative period were enhanced by a total of EUR 10 million of long-term compensatory payments related to the pricing of partner deliveries.

The Diagnostics business's operating profit was up by 97% at EUR 4.6 (2.3) million due to good growth in sales. The profit includes EUR 1.4 million of expenses related to contraction of the product portfolio, closure of the Turku manufacturing plant and personnel reductions.

Operating expenses

The Group's sales and marketing expenses were EUR 205 (206) million.

R&D expenses were down by 4% at EUR 102 (106) million and accounted for 10% (11%) of the Group's net sales. Pharmaceutical R&D expenses amounted to EUR 94 (98) million. Research projects are reported in more detail under Pharmaceuticals in the Business Reviews.

Administrative expenses were EUR 45 (46) million.

Other operating income and expenses increased profit by EUR 6 (6) million.

Group's profit

The Group's profit before taxes totalled EUR 264 (277) million. Basic earnings per share were EUR 1.46 (1.47) and diluted earnings per share were EUR 1.46 (1.47). The decline of earnings per share was smaller than the decline of operating profit due to decrease in deferred tax liabilities as a result of a change in tax rate in Finland. Equity per share was EUR 3.66 (3.62). The return on capital employed before taxes (ROCE) was 39% (46%) and the return on equity after taxes (ROE) 40% (41%).

Financial position

The Group's gearing was 8% (-2%) and the equity ratio 54% (61%).

The Group's total liabilities at 31 December 2013 were EUR 465 (326) million. At the end of the period, interest-bearing liabilities amounted to EUR 258 (137) million, including EUR 233 (107) million of long-term loans.

The Group had EUR 215 (145) million of cash and cash equivalents at the end of the period, which are invested in short-term interest-bearing instruments issued by financially solid financial institutions and corporations.

Cash flow

Cash flow from operating activities was slightly lower than in the comparative period at EUR 215 (221) million. The decline was due to the decrease in operating profit. The amount of cash tied up into working capital increased slightly less than in the comparative period. The clear year-on-year increase in inventories was mainly due to ensuring the reliability of deliveries as the product portfolio and supply chain were expanded, and the lower margin of products sold. The higher amount tied up into working capital than in the comparative period was also due to trade receivables and especially other receivables such as advance payments related to licensing agreements. However, the overall increase in working capital was slowed by a clear increase in non-interest bearing liabilities, including EUR 20 million received from Janssen Pharmaceuticals as part of the total payment of EUR 23 million under the licensing agreement and recorded in advance payments.

Cash flow from investing activities was EUR -71 (-47) million.

Cash flow from financing activities was EUR -74 (-152) million. The difference was mainly due to the EUR 150 million bond issued in June 2013. Orion also purchased its own shares to the value of EUR 10 million.

Capital expenditure

The Group's capital expenditure totalled EUR 78 (47) million. This comprised EUR 70 (40) million on property, plant and equipment and EUR 8 (7) million on intangible assets.

Outlook for 2014

Net sales will be at similar level to 2013 (net sales in 2013 were EUR 1,007 million).

Operating profit will be slightly lower than in 2013 (operating profit in 2013 was EUR 268 million).

The Group's capital expenditure will be about EUR 60 million excluding substantial corporate or product acquisitions (the Group's capital expenditure in 2013 was EUR 78 million).

Basis for outlook

Competition in the Finnish market will remain intense in 2014. However, product launches will continue to support Orion's position as market leader.

The generic competition that commenced in April 2012 in the United States has decreased sales of Orion's Parkinson's drugs. US markets accounted for about EUR 60 million of the net sales of Orion's Parkinson's drugs in 2011, about EUR 33 million in 2012 and about EUR 10 million in 2013. In addition, sales of generic entacapone products to the United States amounted to about EUR 9 million in 2013. In 2014 sales are expected to be still slightly lower.

The entacapone molecule patent expired in November 2012 in the main European countries for Orion, and as a result generic competitors to Comtan and Comtess entered these markets in 2013. Data protection of Stalevo expired in the European Union in October 2013, and since then many generic pharmaceutical companies have applied for marketing authorisation for their own products in different European countries. Generic competition is expected to commence in Europe in 2014.

Elsewhere in the world generic competition is not expected to have a material impact on sales volumes of these products in the current year.

Sales of generic products will account for a greater proportion of Orion's total sales and price competition will remain intense in many markets. Investments commenced in 2012 to develop and ensure future growth, delivery reliability and quality standards, and related reorganisations of production are still continuing. Their effects in temporarily decreasing production capacity and increasing production costs will be less than in 2013, but not yet totally eliminated.

Marketing expenditure will be similar to the previous year. Because the registrations and launches of new products are projects that take more than a year, the increases in resources and other inputs required in 2014 were planned mainly during the previous year.

Research and development costs will be slightly higher than in 2013. They are partly the Company's internal fixed cost items, such as salaries and maintenance of the operating infrastructure, and partly external variable costs. External costs arise from, among other things, long-term clinical trials, which are typically performed in clinics located in several countries. The most important clinical trials scheduled for 2014 are either ongoing from the previous year or at an advanced stage of planning, therefore their cost level can be estimated rather accurately. The accrued costs are materially affected by collaboration arrangements and how the costs arising are allocated between Orion and its collaboration partners.

Near-term risks and uncertainties relating to the outlook

Sales of Orion's Parkinson's drugs will decrease in 2014 due to generic competition. The effects of the competition have been taken into account in the outlook estimate. However, the timing of commencement of generic competition to Stalevo in Europe entails uncertainty that may materially affect the accuracy of the estimate made at this stage.

The basic Precedex patent expired in the United States in January. The outlook estimate already includes the estimated effect of the consequent decrease in the royalty payment on the product received by Orion and also the assumption that generic competition will commence during 2014. However, the timing of commencement of generic competition entails uncertainty that may materially affect the accuracy of the estimate made at this stage.

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 affect Orion's products. Deliveries to Novartis are based on timetables that are jointly agreed in advance. Nevertheless, they can change, for example as a consequence of decisions by Novartis concerning among others adjustments of stock levels. In addition, changes in market prices and exchange rates affect the value of deliveries to Novartis.

A significant proportion of the exchange rate risk is related to the US dollar. Typically, only less than 15% of Orion's net sales comes from the United States. As regards currencies in European countries, the overall effect will be abated by the fact that Orion has organisations of its own in most of these countries, which means that in addition to sales income, there are also costs in these currencies. Changes in the Japanese yen exchange rate have become more important as sales of Parkinson's drugs in Japan have increased.

Orion's currently high production capacity utilisation rate and its broad product range may cause risks to the delivery reliability and make it more challenging than before to maintain the very high quality standard required. Authorities and key customers in different countries undertake regular and detailed inspections of development and manufacturing of drugs. Any remedial actions that may be required may at least temporarily reduce 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 they 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 generally 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.

Possible collaboration and licensing agreements may include advance payments recorded in net sales that may materially affect Orion's financial results.

Group's financial objectives

Orion's financial objectives are ensuring the Group's financial stability and profitable growth.

These objectives are achieved through:

• Increasing net sales. Achievement of this objective requires continuous investment in development of the product portfolio. 

• Maintaining profitability at a good level, the aim being operating profit that exceeds 20% of net sales.  

• Keeping the equity ratio at least 50%. 

Orion's dividend distribution policy

Orion's dividend distribution takes into account the distributable funds and the capital expenditure and other financial requirements in the medium and long term to achieve the financial objectives.

Proposal by the Board of Directors for distribution of profit:
dividend per share EUR 1.25

The parent company's distributable funds are EUR 237,391,611.21, including EUR 180,767,350.08 of profit for the financial year.

The Board of Directors proposes that a dividend of EUR 1.25 per share be paid from the parent company's distributable funds. No dividend shall be paid on treasury shares held by the Company on the dividend distribution record date. On the day when the profit distribution was proposed, the number of shares conferring entitlement to receive dividend totalled 140,568,837, on which the total dividend payment would be EUR 175,711,046.25. The Group's payout ratio for the financial year 2013 would be 85.6% (88.4%). The dividend payment date would be 4 April 2014, and shareholders registered in the Company's shareholder register on 28 March 2014 would be entitled to the dividend payment.

The Board of Directors further proposes that EUR 250,000.00 be donated to medical research and other purposes of public interest in accordance with a separate decision by the Board and that EUR 61,430,564.96 remain in equity.

Strategy

In November 2013, Orion's Board of Directors confirmed that the strategic focus remains the same for 2014-2018. Orion's strategic aims are profitable growth and increased shareholder value, whilst keeping business risks under control.

Orion's strategic focus continues to be on:

• growth of business operations through a competitive product portfolio 

• strengthening market position in Europe 

• improving the flexibility and efficiency of operations 

All of Orion's business divisions have a major role in achieving the financial objectives of the Group, but the two largest divisions, Proprietary Products and Specialty Products, are crucial. Orion strives to enhance synergies between patent-protected proprietary drugs, off-patent (i.e. generic) prescription drugs and self-care products.

Competitive product portfolio

Growth is based on a competitive product portfolio developed through Orion's in-house R&D, collaborative research and active product acquisition. Potential product portfolio or corporate acquisitions are evaluated against very strict criteria.

Orion's core therapy areas are central nervous system drugs, oncology and critical care drugs, and inhalable Easyhaler^® pulmonary drugs. Orion's R&D operations concentrate on early-phase development. In addition to in-house research, Orion invests in early-phase research jointly with universities and other pharmaceutical companies. In the late phase of clinical development, Orion aims to share the costs with other pharmaceutical companies. Orion generally seeks partnerships for undertaking at least Phase III clinical trials, which are the final phase, especially for projects oriented towards markets outside Europe. Orion also seeks to acquire new early-phase product candidates and further developed products to reinforce the research pipeline based on its own research projects.

Orion continues work to build up a competitive product portfolio. As regards Proprietary Products customers, the focus is on neurologists, urologists, pulmonary doctors, critical care doctors and other healthcare professionals in these specialised fields. For Specialty Products, important customer groups in Finland, for example, are general practitioners and pharmacy staff. Orion's primary aim is to exploit all business opportunities from the drugs in the current product portfolio, such as Dexdor^®, Stalevo^®, Simdax^® and the Easyhaler^® product family. Orion's next projects in late-phase development and commercialisation are development of inhalable Easyhaler combined formulation products, development of the Parkinson's drug Stalevo for Japanese markets, development of a drug (ORM-12741) for treatment of Alzheimer's disease and development of a drug for treatment of prostate cancer (ODM-201). In early clinical phases Orion is developing drugs for treatment of Parkinson's disease (ODM-103 and ODM-104, new more effective COMT inhibitors). Orion also aims to ensure continuance of clinical trials through active early-phase research.

To be successful in the generic (i.e. off-patent) prescription drug and self-care product sector, it is especially important to have a broad and continually renewed portfolio. Orion seeks to secure a continuous stream of product launches mainly through active product acquisition. Orion determines the product portfolios individually for each market. In Finland Orion strives to maintain a broad range of prescription drugs and self-care products. In other key markets, such as Scandinavia, Eastern Europe and Russia, Orion's product portfolio focuses on generic prescription drugs in certain therapy areas.

Strengthening market position in Europe

In specialised medical care, Orion concentrates on certain customer groups through its own sales network throughout Europe and through partners worldwide. Orion markets generic prescription drugs and self-care products mainly in the Nordic countries and Eastern Europe through its own sales network. Orion aims to strengthen its market leadership in Finland and make the Scandinavian countries a domestic market in which it has a strong presence. Orion's aim in all the Nordic countries is to have a presence with a broad product range. In Central and Southern Europe the emphasis is on proprietary products and in Eastern Europe on generic products. Outside Europe, Orion operates mainly with partners.

Flexible and efficient operations

Because the operating environment changes all the time, the agility and flexibility of operations will in future be as crucial as cost-effectiveness. Orion's key projects to improve operating efficiency have been implementing a new research and development model, building up partnership models for early-phase research, maintaining high delivery reliability in the supply chain cost efficiently, capacity reorganisation, managing diversification, improving the competitiveness of sales operations and general simplification and streamlining of operating practices.

Networking and seeking partners throughout the value chain will facilitate improvements to competitiveness and establishing a foundation for profitable future growth. R&D collaboration and active networking will enable Orion to increase the number of new research projects and balance the risks of projects in the research pipeline. Through partnerships in the supply chain, Orion will improve the efficiency of its operations by determining which products it will manufacture itself and to what extent products or semi-finished products will be acquired through its collaboration network. Partnerships in sales and marketing will ensure a broad network of distribution channels through which proprietary drugs developed by Orion will be distributed worldwide. Moreover, the product portfolio can be expanded by selling the partners' products through Orion's own sales network.

Through these strategic actions, Orion seeks to enhance its capability to continue operating as a pharmaceuticals and diagnostics company that provides new products and engages in R&D.

Shares and shareholders

On 31 December 2013 Orion had a total of 141,257,828 (141,257,828) shares, of which 42,022,816 (43,267,218) were A shares and 99,235,012 (97,990,610) B shares. The Group's share capital was EUR 92,238,541.46 (92,238,541.46). At the end of December 2013 Orion held 688,991 (325,991) B shares as treasury shares. On 31 December 2013 the aggregate number of votes conferred by the A and B shares was 939,002,341 (963,008,979) excluding treasury shares.

At the end of December 2013, Orion had 56,762 (56,519) registered shareholders.

Voting rights conferred by shares

Each A share entitles its holder to twenty (20) votes at General Meetings of Shareholders and each B share one (1) vote. However, a shareholder cannot vote more than 1/20 of the aggregate number of votes from the different share classes represented at the General Meetings of Shareholders. The Company itself and Orion Pension Fund do not have the right to vote at Orion Corporation's General Meetings of Shareholders.

Both share classes, A and B, confer equal rights to the Company's assets and dividends.

Conversion of shares

The Articles of Association entitle shareholders to demand the conversion of their A shares to B shares within the limitation on the maximum number of shares of a class. In 2013 a total of 1,244,402 shares were converted.

Trading in Orion's shares

Orion's A shares and B shares are quoted on NASDAQ OMX Helsinki in the Large Cap group under the Healthcare sector heading under the trading codes ORNAV and ORNBV. Trading in both of the Company's share classes commenced on 3 July 2006, and information on trading in the Company's shares has been available since this date.

On 31 December 2013 the market capitalisation of the Company's shares excluding treasury shares was EUR 2,868 million.

In 2013 a total of 2,736,284 A shares and 76,574,409 B shares were traded on NASDAQ OMX Helsinki. The total value of the shares traded was EUR 1,600 million. During the year, 6% of the A shares and 78% of the B shares were traded. The average turnover in Orion's shares was 56%.

The price of Orion's A shares decreased by 8% and the price of its B shares decreased by 8% during 2013. On 31 December 2013 the closing quotation was EUR 20.35 for the A shares and EUR 20.42 for the B shares. The highest quotation for Orion's A shares in 2013 was EUR 24.42 and the lowest quotation was EUR 17.30. The highest quotation for the B shares in 2013 was EUR 24.58 and the lowest quotation was EUR 17.28.

Orion shares are also traded on various alternative trading platforms in addition to NASDAQ OMX Helsinki. In 2013 NASDAQ OMX Helsinki accounted for about 92% of the entire trading volume in Orion A shares. In 2013 NASDAQ OMX Helsinki accounted for about 50% of the entire trading volume in Orion B shares (source: Fidessa Fragmentation Index).

Authorisations of the Board of Directors

Orion's Board of Directors was authorised by the Annual General Meeting on 19 March 2013 to decide on acquisition of shares in the Company and on a share issue in which shares held by the Company can be conveyed. The authorisation to acquire shares is valid for 18 months and the authorisation to issue shares is valid for five years from the decision taken by the Annual General Meeting. The terms and conditions of the authorisations were reported in more detail in a stock exchange release on 19 March 2013.

On 23 April 2013 Orion's Board of Directors decided to acquire shares in the Company as authorised by the Annual General Meeting. In the period 22 November to 11 December 2013 the Company acquired 500,000 B shares in the Company in accordance with the decision. The shares were acquired for use as part of the 2013 long-term incentive plan for the Orion Group's key persons. Following the acquisition, the Board of Directors does not have any outstanding authorisation to decide to acquire shares in the Company.

The Board of Directors is authorised to decide on conveyance of no more than 600,000 Orion Corporation B shares held by the Company. Such shares held by the Company can be conveyed either against or without payment. Such shares held by the Company can be conveyed by selling them in the regulated market of the Stock Exchange; in a share issue placement to the Company's shareholders in proportion to their holdings at the time of the conveyance regardless of whether they own A or B shares; or in a share issue placement deviating from shareholders' pre-emptive rights if there is a weighty financial reason, such as the development of the capital structure of the Company, using the shares to finance possible corporate acquisitions or other business arrangements of the Company, financing capital expenditure or as part of the Company's incentive plan. The share issue placement can be without payment only if there is an especially weighty financial reason in the view of the Company and to the benefit of all its shareholders. The amounts paid for shares in the Company conveyed shall be recorded in a distributable equity fund. The Board of Directors shall decide on other matters related to the conveyance of shares held by the Company. The decision to authorise the share issue revoked the unexercised portion of the outstanding share issue authorisation approved at Orion Corporation's Annual General Meeting on 24 March 2010.

The Board of Directors is not authorised to increase the share capital or to issue bonds with warrants or convertible bonds or stock options.

Orion Group's 2013 long-term incentive plan

In February 2013 Orion's Board of Directors decided on a new share-based incentive plan for key persons of the Group. The Plan includes earning periods and the Board of Directors will annually decide on the beginning and duration of the earning periods in 2013, 2014 and 2015. The Board of Directors will decide on the earnings criteria and on targets to be established for them at the beginning of each earning period. The target group of the Plan consists of approximately 35 people. The total maximum amount of rewards to be paid on the basis of the Plan is 500,000 Orion Corporation B shares and a cash payment corresponding to the value of the shares. The incentive plan is reported in more detail in a stock exchange release on 5 February 2013.

Share ownership

Orion's shares are in the book-entry system maintained by Euroclear Finland, and Euroclear Finland maintains Orion's official shareholder register.

At the end of December 2013 Orion had a total of 56,762 (56,519) registered shareholders, of whom 95% (95%) were private individuals holding 46% (48%) of the entire share stock and 64% (64%) of the total votes. There were altogether 48 (47) million nominee-registered shares, which was 34% (33%) of all shares, and they conferred entitlement to 7% (7%) of the total votes.

At the end of December 2013 Orion held 688,991 (325,991) B shares as treasury shares, which is 0.5% (0.2%) of the Company's total share stock and 0.07% (0.03%) of the total votes.

Notification threshold

Orion did not receive any threshold notification and no transactions exceeding the threshold regarding shareholdings or votes were brought to the attention of the Company during 2013.

Management's shareholdings

At the end of 2013, the members of the Board of Directors owned a total of 2,166,557 of the Company's shares, of which 1,825,264 were A shares and 341,293 B shares. At the end of 2013, the President and CEO owned 37,250 of the Company's shares, which were all B shares. The members of the Group's Executive Management Board (excluding the President and CEO) owned a total of 143,775 of the Company's shares, which were all B shares. Thus, the Company's executive management held 1.67% of all of the Company's shares and 3.94% of the total votes.

The Company does not have stock option programmes.

Management

Changes in Executive Management Board

Members of Orion's Executive Management Board Liisa Hurme and Markku Huhta-Koivisto exchanged their responsibility areas with effect from 1 January 2014, so since that date Markku Huhta-Koivisto has been Senior Vice President responsible for the Proprietary Products business division and Liisa Hurme Senior Vice President responsible for the Specialty Products and Fermion business divisions.

Corporate Governance Statement

Orion will publish its Financial Statements for 2013, Report by the Board of Directors and Auditor's Report, and a separate Corporate Governance Statement on the Company's website at the latest on 4 March 2014.

Personnel
The average number of employees in the Orion Group in 2013 was 3,540 (3,495). At the end of December 2013 the Group had a total of 3,519 (3,486) employees, of whom 2,816 (2,783) worked in Finland and 703 (703) outside Finland.

Salaries and other personnel expenses in 2013 totalled EUR 218 (215) million.

As a result of co-operation negotiations held in Orion Diagnostica in 2013, notice of termination of employment was given to a total of about 60 employees in Finland. In addition, about 20 employees left their posts through for example retirement or ending of a fixed-term contract.

Significant legal proceedings

Legal proceedings against the Sandoz companies have been settled

On 5 December 2013 Orion announced that Orion and Hospira, Inc. ("Hospira") had executed a settlement agreement with Sandoz Inc. and Sandoz Canada Inc. (hereinafter collectively "Sandoz") in the patent  enforcement lawsuit filed by Orion and Hospira in the United States against Sandoz regarding Sandoz's submission of an abbreviated new drug application ("ANDA") for a generic version of Orion's Precedex^® product. The settlement relates to a lawsuit concerning Orion's patent No. 4,910,214 and Orion's and Hospira's commonly owned patent No. 6,716,867.

Under the terms of the settlement agreement, Sandoz may launch a generic version of Precedex in US markets on 26 December 2014, unless certain conditions relating to launch, if triggered, lead to an earlier Sandoz market entry date.

Legal proceedings against Caraco Pharmaceutical Laboratories, Ltd.

On 12 November 2010 Orion Corporation and Hospira, Inc. jointly filed a patent infringement lawsuit in the United States against Caraco Pharmaceutical Laboratories, Ltd. to enforce Orion's and Hospira's joint patent No. 6,716,867 valid in the United States. Gland Pharma Ltd. has since been added as a defendant in the lawsuit.

Caraco had submitted an application for authorisation to produce and market in the United States a generic version of Orion's proprietary drug Precedex^® (dexmedetomidine hydrochloride 100 µg/ml), which is marketed in the United States by Orion's licensee Hospira.

Orion expects the costs of the legal proceedings against Caraco to be substantially less than the costs of the entacapone patent litigation that had previously been pending in the United States.

Business Reviews

Pharmaceuticals

Review of human pharmaceuticals market

According to IMS Health pharmaceutical sales statistics (previously Finnish Pharmaceutical Data Ltd), Finnish wholesale of human pharmaceuticals in 2013 was up by 2% on the previous year at EUR 2,067 (2,031) million.

Finland is the most important individual market for Orion, generating about one-quarter of the total net sales. Orion was able to increase its sales faster than the markets as a whole and strengthened its position as leader in marketing pharmaceuticals in Finland. According to statistics collected by IMS Health, Orion's wholesale of human pharmaceuticals in Finland in 2013 amounted to EUR 233 (219) million, up by 6% compared with the previous year. Orion's market share of Finnish pharmaceuticals markets grew slightly and was 11% (11%).

According to IMS Health pharmaceutical sales statistics, in the 12-month period ending in September 2013 the total sales of Parkinson's drugs in the United States were up by 5% at USD 791 million (USD 751 million in the previous 12-month period). The five largest European markets for Parkinson's disease drugs were Germany, the United Kingdom, France, Spain and Italy. In these countries, the combined sales of Parkinson's drugs totalled EUR 979 (955) million in the 12-month period ending in September 2013, and the average market growth was 3%. In Japan sales of Parkinson's drugs were down by 11% at EUR 523 (584) million.

According to IMS Health pharmaceutical sales statistics, in the 12-month period ending in September 2013 the total sales of Parkinson's drugs containing entacapone were USD 163 (196) million in the United States and EUR 153 (156) million in the five largest European markets.

The most important individual therapy area for Orion is still the treatment of Parkinson's disease. Orion's branded Parkinson's drugs containing entacapone (Stalevo^®, Comtess^® and Comtan^®) account for about one-fifth of the Group's net sales. Sales of these products clearly decreased in the United States and slightly decreased in Europe. In Japan sales grew slightly better than the market as a whole. According to IMS Health pharmaceutical sales statistics, in the 12-month period ending in September 2013, sales of Orion's branded Parkinson's drugs in the United States were down by 71% at USD 48 (162) million. Sales were down by 3% at EUR 151 (156) million in the five largest markets in Europe, and in Japan sales were EUR 59 (66) million. The market share of Orion's branded Parkinson's drugs was 6% in the United States, on average 16% in the five largest European markets and 11% in Japan.

According to IMS Health pharmaceutical sales statistics, sales of Precedex^® intensive care sedative (dexmedetomidine) were up by 30% at USD 323 million in the 12-month period ending in September 2013 (USD 249 million in the previous 12-month period). About four-fifths of the sales amounting to USD 264 (195) million were in the United States, where Precedex sales grew by 36%.

According to IMS Health pharmaceutical sales statistics, total sales of the most common intravenous anaesthetics and intensive care sedatives (propofol, midazolam, remifentanil and dexmedetomidine) in Europe in the 12-month period ending in September 2013 were EUR 476 (471) million. According to IMS Health pharmaceutical sales statistics, in the 12-month period ending in September 2013 sales of Orion's dexdor^® intensive care sedative (dexmedetomidine) were up by 143% at EUR 20 (8) million in Europe.

Net sales and operating profit of the Pharmaceuticals business

Net sales of the Pharmaceuticals business in 2013 were EUR 953 (929) million, up by 3% compared with the previous year. The operating profit of the Pharmaceuticals business was down by 5% at EUR 273 (287) million. The operating profit of the Pharmaceuticals business was 29% (31%) of the segment's net sales.

Net sales of Orion's top ten pharmaceuticals in 2013 were down by 2% at EUR 458 (468) million. They accounted for 48% (50%) of the total net sales of the Pharmaceuticals business.

Proprietary Products

The product portfolio of Proprietary Products consists of patented prescription products in three therapy areas: central nervous system diseases, oncology and critical care, and Easyhaler^® pulmonary drugs.

Net sales of Proprietary Products in 2013 were down by 3% on the previous year at EUR 390 (404) million.

Orion's drugs for treatment of Parkinson's disease are Stalevo^® (active ingredients carbidopa, levodopa and entacapone) and Comtess^®/Comtan^® (entacapone), and their net sales in 2013 totalled EUR 207 (250) million. Sales of Parkinson's drugs were down by 17% and accounted for 22% (27%) of the total net sales of the Pharmaceuticals business. Net sales from deliveries of Stalevo and Comtan to Novartis were down by 24% at EUR 115 (152) million. Deliveries of Stalevo to Novartis were down by 15% at EUR 81 (95) million and deliveries of Comtan were down by 41% at EUR 34 (56) million. Total net sales generated by Stalevo and Comtess in Orion's own sales organisation were down by 6% at EUR 92 (98) million. Sales of Stalevo through Orion's own sales network were down by 3% at EUR 84 (86) million. Sales of Comtess were down by 32% at EUR 9 (13) million. The entacapone molecule patent expired in October 2013 in the United States, where generic competition had already commenced in April 2012. Orion has delivered generic entacapone products to its partners in the United States and will continue these deliveries after the expiry of the patent. In Europe data protection of Stalevo expired in October 2013, and since then generic competitors have been able to refer to results from Orion's clinical trials in their applications for marketing authorisation.

The US Food and Drug Administration (FDA) has an ongoing safety review of Stalevo, which began in spring 2009. Orion is assisting the FDA in undertaking the safety review. The FDA has requested additional data based on databases concerning the significance of the results of the STRIDE-PD study, and consequently Orion and Novartis have undertaken epidemiological studies and results from them were submitted to authorities for review in the third quarter of 2012.

Net sales of Simdax^®, a drug for treatment of acute decompensated heart failure, in 2013 were up by 6% at EUR 46 (44) million.

Total net sales of the Easyhaler^® product family for treatment of asthma and chronic obstructive pulmonary disease were up by 8% in 2013 at EUR 29 (27) million. Sales of Easyhaler products through Orion's own sales network in Europe continued to grow strongly even though the repatriation of rights to Easyhaler products in 2012, especially in Poland and to some extent in Germany, and the related transitional phase slowed sales growth in 2013.

Net sales of the Precedex^® intensive care sedative (dexmedetomidine) were up by 30% in 2013 at EUR 59 (45) million. In the United States and markets outside Europe the sedative is sold by Orion's partner Hospira. About four-fifths of net sales of Precedex are in US markets, where the Precedex basic patent expired after the review period in January 2014. Generic products have not yet entered US markets. In October Orion and Hospira announced that they had extended their licensing agreement concerning the sedative agent Precedex in the markets outside Europe.

Net sales of Orion's dexdor^® intensive care sedative (dexmedetomidine) in 2013 were up by 95% at EUR 25 (13) million. The launching of the product progressed according to plan in 2013, and it is already available in almost all countries in Europe.

Specialty Products

Net sales of the Specialty Products business division's off-patent, i.e. generic prescription drugs and self-care products in 2013 were up by 5% at EUR 385 (367) million. Sales of generic entacapone products were down by 40% at EUR 10 (17) million. Sales of products from the rest of the portfolio were up by 7%.

Launches of generic prescription drugs and self-care products were weighted more than before towards prescription drugs, consequently the total number of launches was less than in 2012. There were 99
(116) product (product/market) launches in 2013.

Net sales of Orion's human pharmaceuticals in Finland in 2013 were up by 7% at EUR 255 (238) million. Specialty Products accounted for the majority of sales. Orion managed to increase its sales, especially in prescription drugs.

Net sales of Orion's human pharmaceuticals in Eastern Europe and Russia in 2013 were up by 18% at altogether EUR 74 (63) million. Specialty Products account for the majority of sales in the region.

Animal Health

In the Nordic countries and some Eastern European markets Orion itself sells veterinary drugs, and in other markets the Company operates through partners. In addition, in the Nordic countries Orion markets and sells veterinary drugs manufactured by several international companies. Orion's Animal Health business division has a strong market position in the Nordic countries, its home markets.

Net sales of the Animal Health business division in 2013 were EUR 71 (69) million. Sales of the animal sedative product family at EUR 25 (23) million accounted for 35% (33%) of the division's net sales. The product family comprises Orion's animal sedatives Dexdomitor^® (dexmedetomidine), Domitor^® (medetomidine) and Domosedan^® (detomidine), and antagonist Antisedan^® (atipamezole), which reverses the effects of the sedatives.

Fermion

Fermion manufactures active pharmaceutical ingredients for Orion and other pharmaceutical companies. Its product range comprises nearly 30 pharmaceutical ingredients. Fermion's net sales in 2013 excluding pharmaceutical ingredients supplied for Orion's own use were up by 31% at EUR 64 (48) million and accounted for about two-thirds of Fermion's entire net sales. Several key products performed well, even though competition in the markets remained intense. Capacity utilisation at Fermion's plants was very high during the review period. Capacity utilisation was increased by manufacturing active ingredients required for development work on Orion's own proprietary drugs, in addition to the normal product range.

Research and development projects

The Group's R&D expenses in 2013 were down by 4% at EUR 102 (106) million, of which the Pharmaceuticals business accounted for EUR 94 (98) million. The Group's R&D expenses accounted for 10% (11%) of the Group's net sales. R&D expenses also include expenses related to development of the current portfolio.

The Phase II clinical trial of an androgen receptor inhibitor (ODM-201) for the treatment of prostate cancer showed that initial results concerning efficacy were promising, and the product was well tolerated with no significant adverse events detected. Results were presented at the international ECCO oncology congress at the end of September 2013 and at the international ASCO GU oncology congress in January 2014. Orion and Endo Pharmaceuticals, which is part of Endo Health Solutions Inc., terminated their collaboration agreement concerning development of ODM-201 in October 2013. All rights to ODM-201 reverted to Orion, with Orion paying Endo a royalty. Ending collaboration with Endo will not affect progress of the project. Orion has commenced preparations for a Phase III clinical trial and also continues negotiations to find a suitable partner for collaboration on the next phase of worldwide development and commercialisation of the product. The broader collaboration agreement between Orion and Endo concerning oncology drug research, development and commercialisation was also terminated in October 2013. All the drug candidates covered by the agreement and all their rights reverted to the respective originators.

Orion has ongoing projects to broaden the range of the inhalable Easyhaler^® drugs product family. Orion submitted an application for marketing authorisation for a combined budesonide-formoterol formulation in Europe in March 2013, and the application is being processed. While the application was being processed, Orion decided to withdraw the application for marketing authorisation in the United Kingdom, France, Germany, the Netherlands and Austria. In this formulation, budesonide acts as an anti-inflammatory agent and formoterol acts as a long-acting bronchodilator.

In addition, Orion has another Easyhaler research programme in progress to develop a combined fluticasone-salmeterol formulation for European markets. In this formulation fluticasone acts as an anti-inflammatory agent and salmeterol acts as a long-acting bronchodilator.

Orion is collaborating with Novartis to develop Stalevo^® drug for the Japanese markets. Novartis submitted an application for marketing authorisation for the product in June 2013.

Orion has completed Phase II clinical trials with an alpha-2c adrenoceptor antagonist (ORM-12741). The trials investigated the efficacy and safety of the drug candidate in treatment of cognitive and behavioural symptoms related to Alzheimer's disease. Positive results from Phase IIa clinical trials were presented at the annual meeting of the American Academy of Neurology in mid-March 2013. In December 2013 Orion entered into a licensing agreement with Janssen Pharmaceuticals, Inc. for further development and commercialisation of new alpha-2c adrenoceptor antagonists for treatment of symptoms of Alzheimer's disease, including the ORM-12741 molecule, in clinical trials.

Orion has completed Phase I clinical trials with another alpha-2c adrenoceptor antagonist (ODM-102), which was a backup molecule to ORM-12741. It was decided on the basis of the results not to continue development of ODM-102.

Orion has decided not to develop the new more effective levodopa product (ODM-101) into a finished product. ODM-101 does not contain a new chemical molecule, so it cannot get strong product protection. That in turn substantially limits the commercial potential of the product. However, the positive results obtained from trials of ODM-101 and formulations can be utilised in development of new Parkinson's drugs.

Orion has ongoing Phase I clinical safety trials initiated in summer 2012 with a new COMT inhibitor (ODM-103). In addition, Orion has started Phase I clinical safety trials with another new COMT inhibitor (ODM-104). ODM-103 and ODM-104 are new molecules that enhance the therapeutic effects of levodopa used to treat Parkinson's disease by blocking the COMT enzyme. The pre-clinical study results indicated that they are more effective than the COMT inhibitor entacapone, which is already in the markets.

In October Orion and Phyxius Pharma, Inc. agreed on licensing of levosimendan injection rights to Phyxius Pharma. Under the agreement, Phyxius Pharma will develop and commercialise levosimendan in US and Canadian markets for a new cardiovascular indication, prevention of Low Cardiac Output Syndrome in cardiac surgery patients.

In addition, Orion has several projects in the early research phase investigating central nervous system diseases, cancer and neuropathic pain, among others.

Diagnostics

Orion Diagnostica manufactures convenient and quick in vitro diagnostic tests and testing systems suitable for point-of-care testing. Net sales of the Diagnostics business in 2013 were up by 5% at EUR 57 (54) million.

QuikRead^® infection tests remained the main product, with sales continuing strong. Launching of the QuikRead go^® hsCRP+Hb test progressed as planned during the year. Two results, for CRP and haemoglobin, can be obtained from a single sample with the test. Launching of the QuikRead go iFOBT (Faecal Occult Blood) quantitative test also commenced in the last quarter of the year. The new product version is helpful in screening gastrointestinal disorders.

In December 2013 Orion Diagnostica signed a technology licensing agreement with Eurofins Medigenomix GmbH concerning Orion Diagnostica's SIBA^® isothermal nucleic acid detection technology, to which Orion Diagnostica owns global rights in all fields of application.

Through the measures decided following the negotiations in accordance with the Act on Co-operation within Undertakings, in 2013 Orion Diagnostica streamlined its operations and improved profitability by, among other things, simplifying the product portfolio. As a result of the co-operation negotiations, it was decided to give notice of termination of employment to about 60 employees. In addition, about 20 employees left their posts through for example retirement or ending of a fixed-term contract.

The operating profit of the Diagnostics business was up by 97% at EUR 4.6 (2.3) million due to good growth in sales and measures to improve cost efficiency. The profit includes EUR 1.4 million of expenses related to contraction of the product portfolio, closure of the Turku manufacturing plant and personnel reductions.

Espoo, 4 February 2014

Board of Directors of Orion Corporation

Orion Corporation

Tables

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 CONSOLIDATED STATEMENT OF FINANCIAL POSITION

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

"The 2012 comparative period data have been restated according to the requirements of the amended IAS 19 Employee Benefits standard. More information on the effects of the adjustment is in the appendices to this Financial Statement Release."

CONSOLIDATED STATEMENT OF CASH FLOWS

Following adoption of the revised IAS 19 Employee Benefits standard retrospectively, the operating profit for the 2012 comparative period has been adjusted by EUR -2.6 million and the adjustments item by EUR 2.6 million.

CHANGES IN PROPERTY, PLANT AND EQUIPMENT

CHANGES IN INTANGIBLE ASSETS (EXCLUDING GOODWILL)

COMMITMENTS AND CONTINGENCIES

DERIVATIVES

DERIVATIVE CATEGORIES USING FAIR VALUE HIERARCHY

RELATED PARTY TRANSACTIONS

Operating segment performance

NET SALES BY BUSINESS DIVISION

OPERATING PROFIT BY BUSINESS AREA

NET SALES BY ANNUAL QUARTERS

OPERATING PROFIT BY ANNUAL QUARTERS

GEOGRAPHICAL BREAKDOWN OF NET SALES BY ANNUAL QUARTERS

Business reviews

KEY FIGURES FOR PHARMACEUTICALS BUSINESS

TOP TEN BEST-SELLING PHARMACEUTICAL PRODUCTS

KEY FIGURES FOR DIAGNOSTICS BUSINESS

Information on Orion's shares

BASIC SHARE INFORMATION 31 DECEMBER 2013

INFORMATION ON TRADING ON NASDAQ OMX HELSINKI 1 JANUARY - 31 DECEMBER 2013

PERFORMANCE PER SHARE

Appendices

Reporting

Orion Corporation is the parent company of the Orion Group. The Group consists of two business areas, or operating segments, and five business divisions. Orion reports on its operations segmentally.

• Pharmaceuticals business 

  • Proprietary Products (patented prescription products for three therapy areas) 

  • Specialty Products (off-patent, generic prescription products and self-care products) 

  • Animal Health (veterinary products for pets and production animals) 

  • Fermion (active pharmaceutical ingredients for Orion and other companies) 

• Diagnostics business 

  • Orion Diagnostica (diagnostic test systems for point-of-care in healthcare and hygiene tests for industry). 

Contract manufacturing and other, i.e. manufacturing for other companies, is included in the Pharmaceuticals business segment, but it is not a separate business division, it is part of the Group's Supply Chain organisation.

Accounting policies

The Consolidated Financial Statements of the Orion Group have been prepared in accordance with International Financial Reporting Standards (IFRS) applying the IAS and IFRS standards as well as SIC and IFRIC interpretations effective at 31 December 2013.

The following new standards, interpretations and amendments to existing standards endorsed by the EU have been adopted as of 1 January 2013:

·         IFRS 7 (Amendment), Financial Instruments: Financial Statement Disclosures
·        IFRS 13, Fair Value Measurement
·        IAS 1 (Amendment), Presentation of Financial Statements
·        IAS 19 (Revised), Employee Benefits
·        IASB's published annual improvements to the following standards:
°        IAS 1, Presentation of Financial Statements
°        IAS 16, Property, Plant and Equipment
°        IAS 32, Financial Instruments: Presentation
°        IAS 34, Interim Financial Reporting

The effects of the IAS 1 amendment and IAS 19 revision on the Consolidated Financial Statements are described below. The other amendments and improvements to IFRS standards, and the new IFRS 13 had no material effect on the Consolidated Financial Statements.

IAS 1, Presentation of Financial Statements (amendment)

Following the adoption of the amendment to IAS 1, the Group has changed the presentation of components under other comprehensive income. Components in other comprehensive income, which will not be reclassified to profit and loss, will be presented separately from other items under other comprehensive income that may subsequently be reclassified to profit and loss.

IAS 19, Employee Benefits (revised)

Following adoption of the revised IAS 19, the Group has changed its accounting procedure concerning defined benefit plans. The Group has stopped using the corridor approach and, in accordance with the revised standard, recognises all amounts arising from remeasurement of defined benefit plan assets directly into components of other comprehensive income. Service costs and net interest arising from plan assets are recognised functionally above operating profit. When the previous standard was effective, interest expenses and the return anticipated on plan assets were also recorded into the operative components above operating profit. Net interest is calculated on defined benefit plan net debt using a discount rate.

The restated figures in the Orion Group's Consolidated Statement of Comprehensive Income and Statement of Financial Position and key figures for the financial year 2012 are presented by annual quarters in the table appended to this Interim Report. The amendment to the IAS 19 standard decreased the operating profit for the 2012 financial year by EUR 2.6 million. The net effect of the amendment on equity at 31 December 2012 was EUR -1.8 million. The amendment decreased the equity at 1 January 2012 by EUR 25.4 million, but increased the equity during the 2012 financial year by EUR 23.6 million.

The policies and calculation methods applied during the period can be found on the Orion website at www.orion.fi/en/investors/.

Restated figures in Consolidated Statement of Comprehensive Income and Statement of Financial Position and other key figures for 2012

Other matters

The data in this financial review are audited.

The figures in parentheses are for the corresponding period of the previous year. All the figures in this report have been rounded, which is why the total sums of individual figures may differ from the total sums shown.

CALCULATION OF THE KEY FIGURES

Publisher:
Orion Corporation
www.orion.fi/
www.twitter.com/OrionCorpIR

Orion is a globally operating Finnish company developing pharmaceuticals and diagnostic tests - a builder of well-being. Orion develops, manufactures and markets human and veterinary pharmaceuticals, active pharmaceutical ingredients and diagnostic tests. The company is continuously developing new drugs and treatment methods. Pharmaceutical R&D focuses on central nervous system drugs, oncology and critical care drugs, and Easyhaler^® pulmonary drugs.

Orion's net sales in 2013 amounted to EUR 1,007 million and the Company had about 3,500 employees. Orion's A and B shares are listed on NASDAQ OMX Helsinki.