Orion Group Financial Statement Release January–December 2024

ORION CORPORATION 
FINANCIAL STATEMENT RELEASE 1–12/2024
25 FEBRUARY 2025 at 12:00 EET

Orion Group Financial Statement Release January–December 2024

• Net sales totalled EUR 1,542.4 (January–December 2023: 1,189.7) million
• Operating profit was EUR 416.6 (274.9) million
• Basic earnings per share were EUR 2.35 (1.54)
• Cash flow from operating activities per share was EUR 2.09 (0.85)
• The Board of Directors proposes a dividend of EUR 1.64 (1.62) to be paid for 2024. The dividend is proposed to be paid in two instalments.
• Outlook for 2025: Net sales are estimated to be EUR 1,550 million to EUR 1,650 million. Operating profit is estimated to be EUR 350 million to EUR 450 million.
  
  

Key figures

	10–12/24	10–12/23	Change %	1–12/24	1–12/23	Change %
Net sales, EUR million	434.4	321.1	+35.3%	1,542.4	1,189.7	+29.6%
EBITDA, EUR million	147.1	106.0	+38.8%	509.4	326.4	+56.0%
% of net sales	33.9%	33.0%		33.0%	27.4%
Operating profit, EUR million	92.7	92.9	-0.2%	416.6	274.9	+51.5%
% of net sales	21.3%	28.9%		27.0%	23.1%
Profit before taxes, EUR million	91.7	92.4	-0.8%	413.1	271.9	+52.0%
% of net sales	21.1%	28.8%		26.8%	22.9%
Profit for the period, EUR million	73.4	75.1	-2.3%	329.9	216.8	+52.2%
% of net sales	16.9%	23.4%		21.4%	18.2%
Research and development expenses, EUR million	62.5	36.6	+70.6%	179.6	126.9	+41.5%
% of net sales	14.4%	11.4%		11.6%	10.7%
Capital expenditure, excluding acquired in business combinations, EUR million	29.8	26.0	+14.6%	86.1	92.7	-7.1%
% of net sales	6.9%	8.1%		5.6%	7.8%
Acquired in business combination, net of cash, EUR million					0.1
Interest-bearing net liabilities, EUR million				121.7	93.3	+30.4%
Basic earnings per share, EUR	0.52	0.54	-2.5%	2.35	1.54	+52.0%
Cash flow from operating activities per share, EUR	0.63	0.35	+81.5%	2.09	0.85	> 100%
Equity ratio, %				61.9%	62.3%
Gearing, %				12.1%	10.5%
Return on capital employed (before taxes), %				34.9%	25.3%
Return on equity (after taxes), %				34.8%	24.1%
Average number of personnel during the period				3,712	3,710	0.0%

President and CEO Liisa Hurme:
2024 was a year of strong growth for Orion

"In January–December 2024, our net sales increased by 29.6 percent to EUR 1,542.4 (1,189.7) million and operating profit increased by 51.5 percent to EUR 416.6 (274.9) million.

Year 2024 was a period of strong growth for Orion. I am particularly pleased that the underlying net sales and operating profit increased clearly. Net sales without significant milestone payments increased by more than 20 percent from the previous year. Operating profit increased by more than 30 percent, excluding significant milestone payments as well as the positive item related to the transfer of the insurance portfolio of Orion Pension Fund's B during the comparison period. Thanks to a strong year, we reached ahead of schedule the ambitious target we set ourselves in 2019 to reach EUR 1.5 billion in net sales by the end of 2025.

Four of our five business divisions increased their net sales in 2024. The Group's growth was driven by the Innovative Medicines business division led by Nubeqa®. We are very pleased with the faster than expected growth, as well as the achievements of our partner Bayer in the market. Nubeqa's in-market sales during the calendar year exceeded EUR 1 billion in September 2024, which was a great milestone for both companies.

The strong pull of the Easyhaler® product portfolio continued throughout the year, driving the growth of the Branded Products business division. The Generics and Consumer Health business division improved its development throughout the year and the growth of a couple of percent in the competitive generic market was a great performance. The Animal Health business division grew strongly, although a large part of the growth can be explained by a return to normal after a weaker year in 2023. Fermion's net sales were at the previous year's level, which is also a good performance, considering that at the same time the demand for the active ingredients of Orion's own innovative medicines has increased.

At the beginning of 2024, we specified our strategy, which was implemented as planned in 2024. Our various businesses developed in line with the strategy and, among other things, the long-lasting gradual expansion of Orion's geographical footprint was continued when we opened our own sales office in Japan. In addition, we continued to expand our product portfolio with new licensing agreements and expand our research network with new cooperation agreements. We also increased investments in research and development, and sales and marketing as planned. These determined investments aim at Orion's growth in both the short and long term. After the reporting period in January 2025, we completed a huge project that started already in 2021, and successfully launched our new enterprise resource planning (ERP) system.

In terms of development projects, we experienced two highlights in July 2024. Together with MSD, we converted the co-development and co-commercialisation agreement for opevesostat and other candidates targeting CYP11A1 to an exclusive global license for MSD. The conversion of this collaboration into a license agreement allows Orion to

focus our resources to progress our other promising research, development and growth programs. In addition, together with our partner Bayer, we reported that the ARANOTE trial had met its primary endpoint. Based on the results, Bayer has already submitted applications to extend the marketing authorisation for darolutamide in the US, the EU and China. In 2024, we decided to end the ODM-111 development program because the therapeutic window of the molecule turned out to be too narrow. Other of our earlier clinical phase projects progressed as planned.

The year 2024 was eventful and we achieved many great things together. Thank you to all Orionees and our great partners for this. The road is open for growth also in 2025!”

Proposal by the Board of Directors of Orion Corporation to the Annual General Meeting 2025 on the resolution on the use of the profit shown on the Balance Sheet and the distribution of dividend

Orion Corporation’s distributable funds at 31 December 2024 are EUR 601,482,478.08, of which the profit for the financial year is EUR 232,653,163.99. The Board of Directors proposes to the Annual General Meeting of Orion Corporation to be held on 3 April 2025 that a dividend of EUR 1.64 per share be paid on the basis of the Balance Sheet confirmed for the financial year that ended on 31 December 2024. No dividend shall be paid on treasury shares held by the Company on the record date for dividend payment.

According to the proposal, the dividend would be paid in two instalments. The first instalment of EUR 0.82 per share would be paid to a shareholder who is on the record date for the payment of the dividend, 7 April 2025, registered in the Company’s shareholders’ register maintained by Euroclear Finland Oy. The Board of Directors proposes that the first instalment would be paid on 14 April 2025. The second instalment of EUR 0.82 per share would be paid to a shareholder who is on the record date for the payment of the dividend, 16 October 2025, registered in the Company’s shareholders’ register maintained by Euroclear Finland Oy. The Board of Directors proposes that the second instalment would be paid on 23 October 2025.

The Board of Directors proposes that the Annual General Meeting would authorise the Board of Directors to resolve, if necessary, on a new record date for payment and payment date for the second instalment of the dividend in case of changes in the rules of Euroclear Finland Oy or the regulations regarding the Finnish book-entry system or if other rules binding the Company so require.

In addition, the Board of Directors proposes to the Annual General Meeting that EUR 450,000 of the Company’s distributable funds be donated to medical research and other purposes of public interest as decided by the Board of Directors. Any remaining distributable funds would be allocated to retained earnings.

There have been no material changes in the Company’s financial position since the end of the financial year. The liquidity of the Company is good and, in the opinion of the Board of Directors, the proposed profit distribution would not compromise the liquidity of the Company.

Outlook for 2025

Net sales are estimated to be EUR 1,550 million to EUR 1,650 million.

Operating profit is estimated to be EUR 350 million to EUR 450 million.

Basis for outlook

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.

In 2024, Orion booked two material milestones totalling EUR 130 million. The outlook for 2025 does not include any material milestone payments or one-offs.

Milestone payments received by Orion in 2020–2024

Year	2020	2021	2022	2023	2024
EUR million	42	3	234	32	134

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

Net sales

The outlook assumes that the Nubeqa® royalties and product sales booked by Orion will clearly increase in 2025. 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 of a strongly growing product for the whole year.

The Branded Products business division is estimated to grow in 2025. Growth is anticipated to be driven by the Easyhaler® product portfolio but also other products are expected to support the growth. Entacapone products, for example, benefit from the fact that Orion has taken over the sales of the products in Japan. Animal Health business division is anticipated to grow slightly, with growth coming from various products. The net sales of the Generics and Consumer Health, and Fermion business divisions are estimated to be at a similar level as in 2024.

Operating profit

The underlying operating profit growth, i.e. excluding material milestones, is expected to be driven by Nubeqa® royalties. However, it is difficult to predict the exact level of royalties of a strongly growing product for the whole year. Any variance from the predicted level can have a 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 fluctuation 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. Orion’s income is increasingly coming from the United States and thus changes in the US Dollar exchange rate cause fluctuations in Orion’s operating profit.

Research and development costs, and in particular their timing, can also cause fluctuations in operating profit. Although the future costs of research and development projects are known quite well in advance, there are uncertainties about their timing. The start of projects may be delayed, and projects may progress faster or slower than expected. Projects may also have to be terminated, in which case the anticipated costs will not be fully realised. Orion estimates that R&D costs in 2025 will increase from 2024.

Sales and marketing expenses are expected to be at a similar level as in 2024. In 2024, sales and marketing expenses included EUR 23.5 million write down from ganaxolone. In 2025, the growth of underlying sales and marketing expenses is mainly due to growing investments to the Easyhaler® sales in Europe, ramping up the sales and sales force in Japan, and Nubeqa® royalty payable as per an agreement with Endo Pharmaceuticals.

Capital expenditure

The Group’s total capital expenditure in 2025 is expected to be at a similar level as in 2024. The estimate of capital expenditure does not include any investments related to any future material product or company acquisition.

Near-term risks and uncertainties

Orion is exposed to risks that may arise from its operations or changes in the operating environment. The most significant risk factors described below can potentially have an adverse effect on Orion’s business operations, financial position or financial results. Other risks, which are currently either unknown or considered immaterial to Orion may, however, become material in the future.

Orion’s own production and other operations are exposed to risks that may materially disrupt their operations or even interrupt them at least temporarily. Such risks include, for example, accidents, damages, natural disasters, strikes, employee illness, conflicts, terrorism, cyber-attacks, hybrid influence, disruption of information or communication systems, disruption of energy supply, and disruption of supply and logistics chains. Orion’s production and business operations are dependent on global supply and logistics chains, the inaction of which may lead to low availability of finished products and raw materials, starting materials, semi-finished products, supplies, equipment and spare parts needed in production.

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 or other 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.

Key currencies that carry an exchange rate risk for Orion are the US dollar, the Swedish krona and the Polish zloty. Other significant currencies are the Danish krone and the Norwegian krone. 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 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. The possible rise of raw material prices and other supply chain costs deteriorates the profitability of Orion’s products, since in the pharmaceutical 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 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. Although the future costs of research and development projects are known quite well in advance, there are uncertainties about their timing. The start of projects may be delayed, and projects may progress faster or slower than expected having an impact on predicted costs within an individual year. Projects may also have to be terminated, in which case the anticipated costs will not be fully realised. 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 Tuesday, 25 February 2025 at 13.30 EET.

A link to the live webcast is available on Orion's website at www.orionpharma.com/investors. 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:
https://palvelu.flik.fi/teleconference/?id=5004660

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

Annual General Meeting 2025	planned to be held on 3 April 2025
Interim Report January–March 2025	Wednesday 23 April 2025
Capital Markets Day 2025	Thursday 22 May 2025
Half-Year Financial Report January–June 2025	Friday 18 July 2025
Interim Report January–September 2025	Tuesday 28 October 2025

The Financial Statements and the Report of the Board of Directors for 2024 will be published on the Company’s website at the latest in week 11/2025.

Espoo, 25 February 2025

Board of Directors of Orion Corporation

For additional information about the report:

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

Publisher:

Orion Corporation

https://www.orionpharma.com

Orion is a globally operating Finnish pharmaceutical company – a builder of well-being for over a hundred years. We develop, manufacture and market human and veterinary pharmaceuticals and active pharmaceutical ingredients. Orion has an extensive portfolio of proprietary and generic medicines and consumer health products. The core therapy areas of our pharmaceutical R&D are oncology and pain. Proprietary products developed by Orion are used to treat cancer, neurological diseases and respiratory diseases, among others. Orion's net sales in 2024 amounted to EUR 1,542 million and the company had about 3,700 employees at the end of the year. Orion's A and B shares are listed on Nasdaq Helsinki.

 

Attachment

• Orion Financial Statement Release 2024