CFO s presentation CFO Jari Karlson
Orion s financial objectives Increasing net sales. Achievement of this objective requires continuous investment in development of the product portfolio. Maintaining profitability at a good level. The aim is operating profit that exceeds 20% of net sales. Keeping the equity ratio at least 50%. Distributing an annual dividend that in the next few years will be at least EUR 1.20 per share, and increasing the dividend in the long term. 2 26 May 2015
Orion s financial objectives Increasing net sales. Achievement of this objective requires continuous investment in development of the product portfolio. Maintaining profitability at a good level. The aim is operating profit that exceeds 20% of net sales. Keeping the equity ratio at least 50%. Distributing an annual dividend that in the next few years will be at least EUR 1.20 per share, and increasing the dividend in the long term. 3 26 May 2015
Orion s financial objectives and outlook 2015 Net sales 1 200 12% 1 000 800 600 400 200 10% 8% 6% 4% 2% Net sales, EUR million Growth, % Net sales Net sales will be slightly lower than in 2014 (net sales were EUR 1,015 million in 2014). - 0% Operating profit 300 35% 250 200 150 100 50 0 2010 2011 2012 2013 2014 30% 25% 20% 15% 10% 5% Operating profit, EUR million Operating profit, % of net sales Operating profit target >20% Operating profit Operating profit is estimated to exceed EUR 230 million. 4 26 May 2015
Turning points of Parkinson s franchise Annual in-market sales, EUR million* Orion sales, EUR million 700 300 600 500 400 300 200 100 250 200 150 100 50 0 0 2011 2012 2013 2014 Comtan USA Stalevo USA Comtess/Comtan Europe Comtan Japan Stalevo Europe Stalevo Japan Generic entacapone Stalevo, Comtess & Comtan Comtan ROW Stalevo ROW USA EUROPE JAPAN STALEVO First generics in April 2012 First generics in Q2/2014 COMTESS/COMTAN First generics in October 2012 First generics in Q4/2012 Data protection ended in January 2015 5 26 May 2015 * ) Source: IMS Health
Balancing mid-term building long-term Long-term growth opportunities from R&D pipeline. Milestone payments. Generic competition for Parkinson s franchise and Precedex. Timing of milestone payments. Generic drugs and self-care products. Easyhaler combinations and dexdor for European markets. Global pricing pressure, especially on new products. Operational flexibility and efficiency. 6 26 May 2015
Collaborative networks across the R&D value chain Research Early development Late stage development Target identification and validation 8 24 mth Hit to Lead generation 12 24 mth Lead optimisation 18 36 mth Candidate selection, preclinical dev. 12 24 mth Phase I 12 14 mth Phase II 12 36 mth Phase III 18 48 mth Partnering and moving further and moving earlier Partnering Partnering and outsourcing Generics Development and Product Lifecycle Management 7 26 May 2015
Orion s financial objectives Increasing net sales. Achievement of this objective requires continuous investment in development of the product portfolio. Maintaining profitability at a good level. The aim is operating profit that exceeds 20% of net sales. Keeping the equity ratio at least 50%. Distributing an annual dividend that in the next few years will be at least EUR 1.20 per share, and increasing the dividend in the long term. 8 26 May 2015
Orion s financial objectives and outlook 2015 300 250 200 150 100 50 0 1,40 1,20 1,00 0,80 0,60 0,40 0,20 0,00 Equity ratio and interest-bearing liabilities 2010 2011 2012 2013 2014 Dividend 2010 2011 2012 2013 2014 70% 60% 50% 40% 30% 20% 10% Interest-bearing liabilities, EUR million Equity ratio, % Equity ratio target >50 % Dividend per share Dividend target >EUR 1.20 Group s capital expenditure The Group s capital expenditure will be about EUR 50 million excluding substantial corporate or product acquisitions (The Group s capital expenditure was EUR 57 million in 2014). 9 26 May 2015
Capex normalising after investment program EUR million 80 70 60 50 40 30 20 10 0 2007 2008 2009 2010 2011 2012 2013 2014 2015* Intangible assets Property, plant and equipment Depreciation, amortisation and impairment * ) Estimate for 2015 10 26 May 2015
Development of Net working capital % of net sales 40% 30% 20% 10% 0% -10% -20% EUR million 300 200 100 0-100 -200 Receivables Inventories Short-term non-interest bearing liabilities Net Working Capital Receivables Inventories Short-term non-interest bearing liabilities Net Working Capital 11 26 May 2015
Development of Net working capital (Indexed 12/2012=100) 12/2012 = 100 150 140 130 120 110 100 90 80 12/12 3/13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 Receivables Inventories Liabilities Rolling 12mth Net sales Net Working Capital 12 26 May 2015
Equity structure and Profit distribution 31 Dec 2014 (EUR million) Orion Corporation Orion Group Share capital 92.2 92.2 Reserves 1.4-44.4 Retained earnings Orion Corporation 254.6 254.6 Subsidiaries 75.7 Consolidation and IFRS adjustments 142.2 Translation adjustments -5.4 Non-controlling interests 0.0 Total equity 348.2 514.9 Of these 183 million was distributed in March 2015 left EUR 0,51/share IFRS and consolidation items not available for profit distribution 13 26 May 2015
Funding of dividends EUR/share 2,50 2,25 2,00 1,75 1,50 1,25 1,00 0,75 0,50 0,25 0,00 2015 2016 2017 2018 Minimum dividend target (1,20/share) Repayment of current debt EPS with 230 million EBIT EPS with 230 million EBIT + cash after 2014 dividends EPS to be quite close to free cash flow assuming Capital expenditure is quite close to depreciation Net working capital management is successful 14 26 May 2015