Skip to content

Orion Group Half-Year Financial Report 1–6/2023


This is a summary or Orion’s Half-Year Financial Report 1–6/2022. The complete report is attached to this stock exchange release and is available at

  • Net sales totalled EUR 567.5 (1–6/2022: 554.3) million
  • Operating profit was EUR 102.0 (153.4) million
  • Profit before taxes was EUR 100.9 (155.2) million
  • Equity ratio was 59.2% (59.6%)
  • Return on capital employed before taxes (ROCE) was 20.0% (33.7%)
  • Return on equity after taxes (ROE) was 19.1% (33.0%)
  • Basic earnings per share were EUR 0.57 (0.88)
  • Cash flow from operating activities per share was EUR 0.27 (0.59)
  • The outlook for 2023 has been specified regarding operating profit. Operating profit is estimated to be slightly higher than in 2022 without the EUR 208 net impact from the ODM-208 upfront payment and without the possible transfer of the insurance portfolio of Orion Pension Fund’s B fund (operating profit in 2022 without the net impact of the ODM-208 upfront payment was EUR 232 million). Previously operating profit was estimated to be slightly higher or higher than in 2022 without the EUR 208 million net impact from the ODM-208 upfront payment and without the possible transfer of the insurance portfolio of Orion Pension Fund’s B fund. The full detailed outlook can be found in the "Outlook for 2023" section of this report.


  4-6/234-6/22Change %1-6/231-6/22Change %1-12/22
Net sales, EUR million289.6283.7+2.1%567.5554.3+2.4%1,340.6
EBITDA, EUR million59.293.6-36.7%126.9176.5-28.1%487.1
 % of net sales20.5%33.0% 22.4%31.8% 36.3%
Operating profit, EUR million46.582.0-43.2%102.0153.4-33.5%439.6
 % of net sales16.1%28.9% 18.0%27.7% 32.8%
Profit before taxes, EUR million45.883.1-44.9%100.9155.2-35.0%440.3
 % of net sales15.8%29.3% 17.8%28.0% 32.8%
Profit for the period, EUR million36.466.1-44.9%80.2123.4-35.0%349.5
 % of net sales12.6%23.3% 14.1%22.3% 26.1%
Research and development expenses, EUR million31.328.0+11.8%63.059.5+5.9%133.2
 % of net sales10.8%9.9% 11.1%10.7% 9.9%
Capital expenditure, excluding acquired in business combination, EUR million17.619.4-9.1%35.730.5+17.1%109.6
 % of net sales6.1%6.8% 6.3%5.5% 8.2%
Acquired in business combination, net of cash, EUR million0.181.1-99.9% 0.181.1-99.9% 82.0
Interest-bearing net liabilities, EUR million   132.1167.5-21.1%-118.7
Basic earnings per share, EUR 0.260.47-44.8%0.570.88-34.8%2.49
Cash flow from operating activities per share, EUR0.240.35-32.9%0.270.59-55.1%3.09
Equity ratio, %   59.2%59.6% 60.9%
Gearing, %   17.2%22.3% -13.1%
Return on capital employed (before taxes), %   20.0%33.7% 45.1%
Return on equity (after taxes), %   19.1%33.0% 42.2%
Average personnel during the period   3,5773,418+4.6%3,472

President and CEO Liisa Hurme:
The year has progressed mostly in line with our expectations despite slight headwinds with certain markets and timing of deliveries

"In January-June 2023, our net sales increased by 2.4% to EUR 567.5 million and our operating profit decreased by 33.5% to EUR 102.0 million. The operating profit decline from the comparative period was mainly as expected but, due to discontinuation of Russian business operations, softening demand in animal health market and inventory level adjustments among some of our customers, the full year operating profit is expected to be slightly higher than in 2022 – not slightly higher or higher as we estimated earlier. The estimated operating profit increase during the second half of 2023 is based on assumptions including continued good performance of Nubeqa, growing sales of Easyhaler product portfolio, good performance of generic portfolio, easing of cost inflation in the second half of the year, levelling off of the decline in sales of Simdax and dexmedetomidine products for human use, and a EUR 30 million milestone payment related to the sales of Nubeqa.

The Innovative Medicines business division's revenue increased significantly thanks to the good performance of Nubeqa®. Sales of Nubeqa are expected to grow strongly in the coming years, which is why in June we announced an investment to increase production capacity for darolutamide at Fermion's Hanko plant.

The net sales of the Branded Products business division, on the other hand, decreased. The Easyhaler® product portfolio continued to grow, but lower deliveries of Parkinson's medicines to our partners and lower sales of the Divina® series due to discontinuation of the business in Russia weighed on net sales. At the Capital Markets Day in May, we announced that the Easyhaler® product portfolio has the potential to reach annual sales of more than EUR 200 million. In view of the growth prospects, we decided in June to invest in increasing Easyhaler's production capacity at our pharmaceutical plant in Espoo and to build a new filling line for dry powder inhalers.

In Finland, sales of generics and OTC products increased due to strong volume growth. However, the overall sales of the Generics and Consumer Health division declined due to generic competition and declining prices of Simdax® and dexmedetomidine products for human use, together with the discontinuation of business operations in Russia.

The animal health market as a whole has experienced weakening demand both in companion animal and livestock segments, which is also reflected in Orion’s Animal Health business. Net sales of the Animal Health business division in January–June 2023 include the turnover of the animal health company VMD (Inovet), acquired in June 2022, which explains the strong increase from the comparative period. Excluding VMD, the net sales of the business division would have declined.

The decline in operating profit had several reasons, some of them one-offs like the discontinuation of business in Russia. The total impact of Russia-related items on our operating profit in January–June 2023 was EUR 25 million negative compared to January–June 2022. Declining sales volumes and lower prices of Simdax and dexmedetomidine products for human use as well as clearly lower sales of entacapone products also had significant negative impact. Third major contributor to the decline of operating profit was the increase in fixed cost. Cost inflation also still caused some pressure on margins. On the positive side, growing products and especially Nubeqa royalties had a clear positive impact on operating profit. Nubeqa’s role would have been even more significant without the temporary negative impact on gross profit which was due to a lower than in the comparative period delivery price to Bayer.

Operating costs increased mainly as expected. Sales and marketing expenses increased because in the comparative period COVID-19 still limited promotional activities in some areas. In addition, sales and marketing expenses as well as administrative expenses now also include the expenses of the acquired animal health company VMD (Inovet), which were absent in the comparative period. The role of various information management tools and systems is becoming more important and consequently related costs, which are booked to administrative costs, have increased. In addition, the ongoing revamping of Orion’s Enterprise Resource Planning (ERP) system causes extra temporary costs.

At our Capital Markets Day in May, we announced that Orion plans to initiate a Phase I clinical trial with ODM-212 in the second half of 2023. ODM-212 is a TEAD inhibitor, aimed for the treatment of solid tumours with YAP/TEAD activation. We have also selected insomnia as a target indication for tasipimidine, or ODM-105, and have initiated a Phase II clinical trial with the molecule. The project fits well into our pipeline as insomnia is often associated with pain as a co-morbidity. Our other projects in the clinical phase are also progressing as planned. We look forward to continuing all our R&D projects to develop new treatments for the benefit of patients with unmet need."   

Outlook for 2023 (specified)

Orion estimates that net sales in 2023 will be slightly higher than in 2022 without the EUR 228 million impact from the ODM-208 upfront payment (net sales in 2022 without the impact of the ODM-208 upfront payment were EUR 1,113 million).

Operating profit is estimated to be slightly higher than in 2022 without the EUR 208 million net impact from the ODM-208 upfront payment and without the possible transfer of the insurance portfolio of Orion Pension Fund’s B fund (operating profit in 2022 without the net impact of the ODM-208 upfront payment was EUR 232 million).

Previous outlook for 2023 (provided on 9 February 2023)

Orion estimates that net sales in 2023 will be slightly higher than in 2022 without the EUR 228 million impact from the ODM-208 upfront payment (net sales in 2022 without the impact of the ODM-208 upfront payment were EUR 1,113 million).

Operating profit is estimated to be slightly higher or higher than in 2022 without the EUR 208 million net impact from the ODM-208 upfront payment and without the possible transfer of the insurance portfolio of Orion Pension Fund’s B fund (operating profit in 2022 without the net impact of the ODM-208 upfront payment was EUR 232 million).

Basis for the outlook and an overview of near-term risks and uncertainties are provided on pages 19-21 of this review.

Basis for outlook in more detail

Collaboration agreements with other pharmaceutical companies are an important component 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. On the other hand, neither the outcome nor the schedule of contract negotiations is generally known before the final signing of the agreement. In 2022, Orion received an upfront payment of USD 290 million related to the ODM-208 contract, of which EUR 228 million was recognised in revenue and operating profit. The contract-related expenses amounted to approximately EUR 20 million, resulting in a net impact on operating profit of EUR 208 million.

Milestone payments received by Orion in 2018–2022

EUR Million551423234

Orion is eligible to receive milestone payments from Bayer based on sales of the Nubeqa® product upon meeting certain global annual sales thresholds for the first time. The outlook for 2023 includes one such milestone payment of EUR 30 million. The outlook does not include any other material milestone payments.

The outlook assumes that Orion's own production will be able to operate normally throughout the year. Risks to the continuity of production are discussed under 'Near-term risks and uncertainties'.

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 anticipates that the net sales of Nubeqa® booked by Orion will clearly increase in 2023. Orion’s estimate is based on forecasts received from its partner Bayer. The net sales of the Animal Health business division is also expected to increase due to the acquisition of the animal health company VMD in summer 2022. Milestone payments are expected to increase clearly excluding the impact of the ODM-208 upfront payment. In addition, the Easyhaler® product portfolio is expected to act as one growth driver.

Aggregate net sales of other products are expected to decline from 2022, driven in particular by generic competition with Simdax®, Dexdor®, Precedex® and Parkinson's drugs Stalevo®, Comtess® and Comtan®. Also, the sales of Orion’s own generic dexmedetomidine and entcapone products are expected to decline due to competition. In addition, the outlook assumes that Orion's turnover in Russia will be substantially lower than in 2022 due to discontinuation of business operations in Russia. In 2022, changes in exchange rates and especially in the Russian rouble rate increased net sales. Fermion has been operating at very near full capacity over the past few years. The share of manufacturing of the active pharmaceutical ingredients of Orion's own proprietary drugs is estimated to increase, and consequently there is no capacity available to increase external sales.

Operating profit

Manufacturing costs are expected to increase faster than sales, mainly due to cost inflation, resulting in a lower relative gross margin on product sales than in 2022. Cost inflation is reflected not only in raw material and energy prices, but also in salary costs, among others. The outlook takes into account higher salary increases than in previous years.

Operating expenses are expected to increase slightly from 2022 reported costs (i.e., including ODM-208 agreement-related costs). The increase in R&D expenses will be influenced by the number and timing of projects in the clinical research phase. In addition, there is a plan to increase investment in early-stage research, and hence in building the company's future growth. Sales and marketing expenses will be driven by, among other things, the costs of the acquired veterinary pharmaceutical company Inovet, the planned launch of ganaxolone in Europe and costs related to Nubeqa, including the royalty payable to Endo Pharmaceuticals. Salary increases also push up operating expenses.

The operating profit from growing products, above all the royalty from Nubeqa®, is estimated to grow faster than costs. Also, milestone payments are expected to increase clearly excluding the impact of the ODM-208 upfront payment. These positives are estimated to more than offset the negative impact coming from lower sales and margins of some other products. Due to the factors mentioned above, operating profit for 2023 is estimated to be slightly higher than in 2022, excluding the net impact of the EUR 208 million ODM-208 upfront payment.

Capital expenditure

The Group’s total capital expenditure in 2023 is expected to be clearly lower than in 2022, when capital expenditure was EUR 109 million. Investments in 2022 included EUR 20 million upfront payment for exclusive licence to commercialise Amneal’s generic products in Europe, Australia and New Zealand and EUR 15 million upfront payment for Jemincare’s NaV 1.8 blocker (ODM-111). In 2023, the grand total of investments will be still further increased by the revamping of Orion's Enterprise Resource Planning (ERP) system and renovation of the company's head office in Espoo. The renovation of the head office was completed in April 2023. The outlook of capital expenditure does not include any investments related to any future material product or company acquisition. In 2023–2026, Orion will invest around EUR 30 million to increase production capacity in Finland. These projects have no material impact on Orion’s total capital expenditure in 2023.

Near-term risks and uncertainties

The outlook is based on the assumption that Orion’s own production can continue to operate normally. The sales of Orion-manufactured products depend on the ability of production and the entire supply chain to operate at the planned level. This involves numerous risks that may cause even material production disruptions. Such risks include the infection of employees, the availability of supplies, equipment and spare parts, deteriorating availability of products, energy, starting materials and intermediate products as well as logistics chain disruptions. Current risks to supply and logistics chains include the effects of the COVID-19 pandemic and the war in Ukraine. Any other unforeseen changes in the operating environment could cause disruptions to Orion's production or other operations. Such risks may include natural disasters, significant geopolitical changes, epidemics and pandemics.

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 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, especially in animal health business, may 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. Due to Russia’s invasion of Ukraine, the visibility of business in Ukraine is currently very low. In Russia, Orion has discontinued business operations.

Currently no single currency is posing a material exchange rate risk for Orion. In Orion’s total net sales, the share of invoicing in US dollars has fallen to around ten per cent. At the same time, the value of purchases in dollars has increased. The weight of the US dollar will increase due to increasing sales of Nubeqa®. Other key currencies that carry an exchange rate risk are European currencies other than EUR. 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 exchange rate performance of the Japanese yen is significant due to sales of Parkinson’s drugs in Japan.

Orion’s broad product range may cause risks to the delivery reliability and make it challenging to maintain the high quality standard required in production. The impacts of the COVID-19 pandemic, the war in Ukraine and other challenges in the global supply and logistics chains of pharmaceuticals have increased the already elevated risk of supply disruptions. Moreover, the disruptions, production volume changes and logistical challenges experienced in other industries may also have unexpected and sudden ramifications that can manifest as shortages of necessary raw materials, supplies and equipment in the chemical and pharmaceutical industries and as increases in prices. The rise of raw material prices and other supply chain costs deteriorates the profitability of Orion's products, since in the pharmaceuticals industry it is very difficult to pass on cost increases to the prices of own products, especially prescription medicines, particularly in Europe. Cost inflation will have a negative impact on Orion's profitability in 2023. Due to the inventory turnover rate, the impact of price increases on the cost of goods sold was still limited in 2022 and will be more pronounced in 2023. A continuation of high inflation levels poses 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 production 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. 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 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 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. In 2014–2022 the annual payments varied from EUR 3 million to EUR 234 million. 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.

News conference and conference call

A webcast and a conference call for analysts, investors and media representatives will be held on Monday, 17 July 2023 at 13.30 EEST.

A link to the live webcast is available on Orion's website at A recording of the event will be available on the website later the same day.

Confenrence call can be joined by registering through the following link:

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

Interim Report January–September 2023Thursday 26 October 2023
Financial Statement Release for 2023Tuesday 13 February 2024
Annual General Meeting 2024Planned to be held on 20 March 2024
Interim Report January–March 2024Thursday 25 April 2024
Half-Year Financial Report January–June 2024Thursday 18 July 2024
Interim Report January–September 2024Tuesday 29 October 2024

The Financial Statements and the Report of the Board of Directors for 2023 will be published on the Company's website at the latest in week 9/2024.

Espoo, 17 July 2023

Board of Directors of Orion Corporation

Orion Corporation

For additional information about the report:

Jari Karlson, CFO                 tel. +358 50 966 2883

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

Orion Corporation

Orion is a globally operating Finnish pharmaceutical company – a builder of well-being. We develop, manufacture and market human and veterinary pharmaceuticals and active pharmaceutical ingredients. Orion has an extensive portfolio of proprietary and generic medicines and self-care 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 2022 amounted to EUR 1,341 million and the company had about 3,500 employees at the end of the year. Orion's A and B shares are listed on Nasdaq Helsinki.