Financial Statement
documents
2021
For more than a century, Orion has been building well-being by
providing eective medical treatments. Our drugs have been
used to eliminate national diseases, prevent heart attacks, cure
everyday headaches and save lives in intensive care units. We
have developed from a shop founded by three pharmacists into
an international company that carries out medical research
at the top international level. We develop and produce
new, unprecedented treatments that can improve the
quality of life for people with cancer, neurological
disorders, asthma or chronic obstructive
pulmonary disease, among others. Our self-
care products that support well-being help
people take care of themselves every
day. Orion’s products are available
in more than 100 countries.
Contents
All the gures in the nancial statements have been rounded,
which is why the total sums of individual gures may dier
from the total sums shown.
Orion in brief .....................................................................4
Financial statements and report by the Board of
Directors ........................................................................... 6
Report by the Board of Directors
for the nancial year 2021................................................ 6
Group’s key gures ..................................................... 29
Basic information on Orion’s shares ..........................36
Calculation of the key gures ...................................... 37
Consolidated nancial statements (IFRS) .....................38
Consolidated income statement ................................. 38
Consolidated statement of compherensive income ..38
Consolidated statement of nancial position ............39
Consolidated statement of changes in equity ........... 40
Consolidated statement of cash ows .......................41
Financial statements ...................................................43
1 Basis of presentation of the consolidated
nancial statements ................................................. 43
2 Business performance ............................................ 46
2.1 Revenue froms contracts with customers ....... 46
2.2 Other operating expense and income ............... 50
2.3 Finance income and expenses ...........................52
2.4 Earnings and dividend per share ....................... 53
3 Invested capital .........................................................54
3.1 Property, plant and equipment .......................... 54
3.2 Intangible assets.................................................59
3.3 Joint arrangements ............................................ 62
3.4 Investments in associates and aliates ...........63
3.5 Inventories ..........................................................63
3.6 Trade and other receivables .............................. 64
3.7 Provisions ...........................................................65
3.8 Trade payables and other liabilities .................. 66
4 Personnel ..................................................................67
4.1 Employee benets ..............................................67
4.2 Pension assets and pension liabilities ............. 70
5 Income taxes and deferred tax asset and
liabilities ....................................................................74
5.1 Income taxes ....................................................... 74
5.2 Deferred tax assets and liabilities ...................... 75
6 Financing and capital structure ...............................76
6.1 Financial assets and liabilites by category ........76
6.2 Financial risk management................................79
6.3 Equity ...................................................................82
6.4 Interest-bearing liabilities ................................. 84
6.5 Cash and cash equivalents ............................... 84
6.6 Other investments ............................................. 84
6.7 Derivatives ..........................................................85
6.8 Contingent liabilities and contingencies ...........85
7 Other notes .............................................................. 86
7.1 Related party transactions ................................ 86
7.2 Auditor’s remuneration ..................................... 86
7.3 Group companies ...............................................87
7.4 Events after the end of the reporting period .....87
Parent Company Orion Corporation’s
nancial statements (FAS) ..............................................88
Income Statement .......................................................88
Balance Sheet .............................................................. 89
Cash ow statement ................................................... 90
Parent company notes to the nancial statements ...91
Proposal by the Orion Corporation Board of Directors
on use of prot funds from the nancial year .............106
Auditor’s report .............................................................108
Independent auditor’s reasonable
Assurance report on ESEF reporting.............................113
Key events in 2021 .......................................................... 115
ORION | Financial Statement documents 2021 |
Orion in brief
Orion is a globally operating Finnish pharmaceutical company − a builder of well-being.
Orion develops, manufactures and markets human and veterinary pharmaceuticals and active
pharmaceutical ingredients. The company is continuously developing new drugs and treatment
methods. The core therapy areas of Orion’s pharmaceutical R&D are neurological disorders,
oncology and respiratory diseases for which Orion develops inhaled pulmonary medication.
Orion’s A and B shares are listed on Nasdaq Helsinki.
Business areas
Net sales in 2021 (2020)
, MEUR (,)
Operating prot
MEUR ()
R&D expenses
MEUR ()
production sites in Finland
Shareholders (on 31 December 2021)
, (,)
Personnel (on 31 December 2021)
, (,)
Operating prot margin
% (%)
PROPRIETARY PRODUCTS
Drugs developed in-house
and other drugs with product
protection
ANIMAL HEALTH
Medicine and well-being
products for animals
SPECIALTY PRODUCTS
Generic prescription drugs
(incl. biosimilars) and self-
care products
FERMION AND CONTRACT
MANUFACTURING
Active pharmaceutical
ingredient (API) production
for Orion and API and
pharmaceutical production
for other pharmaceutical
companies
ORION | Financial Statement documents 2021 |
Customer
complaints
(pharmaceuticals)
Ppm (76)
Code of Conduct
training, no. of
participants
(3,410)
GxP* audits
by Orion
(141)
Greenhouse
gas emissions
(scope 1 & 2)
,
tCO
2
e (18,611)
Energy savings
target set for
2025 achieved
%
(53%)
Injury rate
LTIF 1
.
(3.6)
The key themes of Orion’s corporate responsibility are ensuring patient safety and
reliable supply of medications, in addition to which the Company has responsibility
for the environment, its employees, business ethics and transparency.
Head oce in Finland
R&D: Finland and UK
Production sites in Finland
Support functions in India
Orion’s products are available in over one hundred countries
Own sales organisation
Global sales partner network
7%
7%
49%
37%
Proprietary products
37
Specialty Products
49
Animal Health
7
Fermion and Contract manufacturing
7
Net sales by business
Proprietary products
Specialty Products
Animal Health
Fermion and Contract manufacturing
1
13%
9%
34%
14%
30%
Finland
30
Scandinavia
14
Other Europe
34
North America
9
Rest of the World
13
Net sales by market area
Finland
Scandinavia
Other Europe
North America
Rest of the World
2
*Good Practices
ORION | Financial Statement documents 2021 |
Report by the Board of Directors
for the nancial year 2021
Group’s key gures
Key gures relating to nancial performance
Net sales, EUR million ,. ,. ,.
EBITDA, EUR million . . .
% of net sales .% .% .%
Operating prot, EUR million . . .
% of net sales .% .% .%
Prot before taxes, EUR million . . .
% of net sales .% .% .%
Prot for the period, EUR million . . .
% of net sales .% .% .%
R&D expenses, EUR million . . .
% of net sales .% .% .%
Capital expenditure, EUR million . . .
% of net sales .% .% .%
Interest-bearing net liabilities, EUR million -. -. -.
Basic earnings per share, EUR . . .
Cash ow per share before nancial items, EUR . . .
Equity ratio, % .% .% .%
Gearing, % -.% -.% -.%
ROCE (before taxes), % .% .% .%
ROE (after taxes), % .% .% .%
Average personnel during the period , , ,
ORION | Financial Statement documents 2021
|
Events during the period
18 Jan 2021 Orion Animal Health and Vetoquinol announced that they are expanding collaboration.
8 Feb 2021 Orion and Bayer announced that they are initiating a new phase III ARANOTE trial with darolutamide.
25 Mar 2021 Orion Corporation’s Annual General Meeting was held in Espoo.
17 May 2021 Orion Animal Health’s Bonqat
®
(pregabalin) received positive opinion from EMA’s Committee for
Medical Products for Veterinary Use (CVMP).
25 May 2021 Orion announced that the company is investigating possible sale of its pharmaceutical
manufacturing plant in Kuopio.
8 Jun 2021 Orion and the Finnish Red Cross Blood Service announced collaboration to develop new CAR T-cell therapy.
9 Jun 2021 Orion reported that in its clinical trial, patients suering from chronic pain had found substantial relief in
digital therapy that utilises virtual reality.
21 Jun 2021 Orion Animal Health’s Tessie
®
(tasipimidine) received positive opinion from EMA’s Committee for
Medical Products for Veterinary Use (CVMP).
3 Aug 2021 Orion signed European wide marketing and distribution agreement with Marinus Pharmaceuticals
for ganaxolone.
17 Aug 2021 Orion announced that it will remain as the owner of pharmaceutical manufacturing plant in Kuopio, Finland.
18 Aug 2021 Orion and Alligator Bioscience announced immuno-oncology research collaboration and license agreement.
17 Sep 2021 Orion announced successor plan of the President and CEO.
3 Dec 2021 Orion announced that the ARASENS trial met its endpoint.
Events after the period
There were no key events after the reporting period.
Financial review
Change in reporting
Orion Group revised its accounting practice as of 1 January 2021 by re-assigning some expenses associated with manufacturing
and purchasing, previously reported as administrative expenses, to the cost of goods sold. The change does not aect reported
key gures, operating prot or balance sheet, but it reduces previously reported administrative expenses for 2020 by EUR 7.3
million and correspondingly raises the cost of goods sold.
Net sales
Orion Group’s net sales in January–December 2021 totalled EUR 1,041 (1,078) million, a decrease of 3%. Exchange rate
uctuations impacted net sales positively by EUR 2 million during the period. Net sales of Orion’s top ten pharmaceuticals
amounted to EUR 476 (459) million. They accounted for 46% (43%) of the total net sales.
Operating prot
The Orion Group’s operating prot was down by 13% at EUR 243 (280) million. EBITDA was down by 14% at EUR 289 (337) million.
Gross prot from sales in local currencies remained on par with the comparative period. Price, cost and product portfolio
changes had a negative impact of EUR 20 million and currency rate changes a positive impact of EUR 3 million. With the joint
impact of these items, the gross prot from product and service sales was EUR 17 million less than in the comparative period.
Milestone payments accounted for EUR 3 (42) million and royalties for EUR 24 (19) million of net sales and operating prot.
Other operating income accounted for EUR 6 million of operating prot.
ORION | Financial Statement documents 2021
|
Pension expenses in the fourth quarter of 2021 were EUR 6 million higher than in the fourth quarter of 2020 due to the once-
a-year updates of the actuarial calculations at the end of each year. Throughout 2021, pension expenses increased by a total of
EUR 4 million, mainly due to an increase in dened benet pension expenses.
Operating expenses decreased by EUR 12 million.
Other operating income and expenses amounted to EUR 6 (5) million (positive).
Operating expenses
The Group’s sales and marketing expenses were down by 7% and totalled EUR 191 (204) million. Approximately EUR 12 million
of the decrease is due to the fact that the depreciation of distribution rights acquired for Parkinson’s drugs was carried out to
completion by 2020.
Research and development expenses were reduced by 4% and totalled EUR 118 (123) million. They accounted for 11% (11%) of
the Group’s net sales. At the end of the year, Orion made the choice between two novel selective hormone synthesis inhibitors
(CYP11A1 inhibitors), ODM-208 and ODM-209, and decided to focus on developing ODM-208 further. In this context, Orion
decided to allocate the remaining ODM-209 project costs due to arise in 2022 and 2023, EUR 3 million in total, to the fourth
quarter of 2021.
Administrative expenses were EUR 48 (42) million. The change was mostly due to an increase in pension costs.
Group’s prot
Prot for the period was EUR 194 (220) million.
Basic earnings per share were EUR 1.38 (1.56). Equity per share was EUR 5.32 (5.21).
The return on capital employed before taxes (ROCE) was 29% (35%) and the return on equity after taxes (ROE) 26% (29%).
Financial position
The Group’s gearing was -14% (-25%) and the equity ratio 68% (67%).
The Group’s total liabilities at 31 December 2021 were EUR 366 (384) million. At the end of the period, interest-bearing liabilities
amounted to EUR 108 (109) million, including EUR 105 (105) million of long-term liabilities.
The Group had EUR 217 (294) million of cash at the end of the review period.
In December 2021, Orion signed new EUR 100 million loan agreement with European Investment Bank. The loan has not yet
been withdrawn.
Cash ow
Cash ow from operating activities was EUR 216 (299) million. Contributing factors to the decline in cash ow are a smaller
prot than in the comparison period as well as an increase in working capital, mostly attributable to increased sales receivables
owing to good sales late in the year. In the period, EUR 36 million was tied up in working capital, whereas in the comparative
period EUR 27 million was released from working capital. In the comparative period, the decrease in working capital was
particularly due to an exceptionally large amount of non-interest bearing liabilities at the end of 2020, the reduction of which
also contributed to an increase in working capital in 2021.
The cash ow from investing activities was EUR -80 (-40) million.
The cash ow from nancing activities was EUR -215 (-115) million. In the comparative period net borrowing increased by EUR
100 million.
Capital expenditure
The Group’s capital expenditure totalled EUR 85 (49) million. This comprised EUR 52 (37) million on property, plant and
equipment and EUR 33 (12) million on intangible assets. Contributing factors to the increase in intangible assets include a EUR
25 million signing fee by Orion to Marinus Pharmaceuticals in the context of the European-wide marketing and distribution
agreement for ganaxolone.
ORION | Financial Statement documents 2021
|
Key business targets for 2021
TARGET Status on 31/12/2021
Nubeqa
®
Supporting sales growth and co-promotion in Europe with Bayer Target reached
Positive outcome from Phase III ARASENS trial Target reached
Taking phase III ARANOTE trial forward together with Bayer Target reached
Easyhaler
®
product portfolio Sales growth Target partly reached
ODM-208 Taking the development program forward according to plan Target reached
Finland Maintenance and strengthening of market position Target reached
Scandinavia Reinforcing Orion’s position in generic prescription drugs Target partly reached
Future growth enablement In-licensing of new products Target reached
Portfolio enhancement through product acquisitions and M&A Target not reached
Key business targets and key performance indicators in 2022
TARGET KPI’s in 2022
Increasing the sales of the
current product portfolio
Signicant increase in sales of Nubeqa
®
booked by Orion
Easyhaler
®
product portfolio sales increase by more than 5%
Building up long-term
growth
In-licensing of new products
Portfolio enhancement through product acquisitions and M&A
Partner for ODM-208 development and commercialisation
Launch of Phase III clinical trial on ODM-208
At least one new project proceeds to clinical development
Solidifying the R&D portfolio with new collaboration agreements
Orion regularly monitors the progress of these goals in its nancial reviews.
ORION | Financial Statement documents 2021
|
Business review
Review of the Finnish human pharmaceuticals market
Finland is the most important individual market for Orion, generating more than a quarter of the Group’s net sales. According
to Pharmarket statistics (1–12/2021), the total sales of Orion’s human pharmaceuticals in January-December 2021, including
both medicinal and non-medicinal products, grew by 3 per cent from the previous year, like the market. The incidence of
seasonal illnesses, such as common respiratory tract infections, was below normal especially in the rst half of the year,
resulting in lower full-year market sales in self-care products.
Orion’s biggest product group in Finland are reference-priced prescription drugs in the pharmacy channel. The sales of Orion’s
reference-priced prescription drugs increased by 5 per cent due to strong volume growth while the total market fell by 4 per cent
from the comparison period. The average price of reference-priced drugs in the market declined by approximately 9% from the
comparative period (Source: Pharmarket). The impact of constant price competition on Orion has been signicant due to the
Company’s broad product range and signicant market share in Finland.
Despite the challenging operating environment, Orion has maintained its position as leader in marketing pharmaceuticals in
Finland. Orion has a particularly strong position in reference-priced prescription drugs and self-care products, with its market
share being a quarter of the market in each.
SALES OF HUMAN PHARMACEUTICALS IN FINLAND MEDICINAL AND NONMEDICINAL PRODUCTS:
EUR million –/ –/ Change %
Total sales of human pharmaceuticals (hospital and pharmacy channel)
Market , , +%
Orion +%
Prescription drugs total (pharmacy channel)
Market , , +%
Orion +%
Reference priced prescription drugs (pharmacy channel)*
Market -%
Orion +%
Self-care products (pharmacy channel)
Market -%
Orion -%
* The reference-priced prescription drugs group metric counts in products that were reference-priced prescription drugs at the time the statistics
were compiled. For this reason, sales and market share gures in the comparative period may deviate from previously published data.
Source: Pharmarket sales statistics 1–12/2021
ORION’S MARKET SHARE IN THE SALES OF HUMAN PHARMACEUTICALS IN FINLAND
MEDICINAL AND NONMEDICINAL PRODUCTS:
Orion’s market share, % –/ –/
Human pharmaceuticals in total (hospital and pharmacy channel) % %
Prescription drugs total (pharmacy channel) % %
Reference priced prescription drugs (pharmacy channel)* % %
Self-care products (pharmacy channel) % %
* The reference-priced prescription drugs group metric counts in products that were reference-priced prescription drugs at the time the statistics
were compiled. For this reason, sales and market share gures in the comparative period may deviate from previously published data.
Source: Pharmarket sales statistics 1–12/2021
ORION | Financial Statement documents 2021 |
Orion’s sales network
Orion’s products are sold globally in over one hundred countries through Orion’s own sales network and by partners. Orion
has its own sales network in Europe and ve Asia-Pacic countries. Elsewhere in the world, Orion’s human pharmaceuticals
are sold mainly by the company’s partners. Orion is engaged in the sale of veterinary drugs in the Nordic countries and in parts
of Eastern Europe. Elsewhere, these products are sold by partners. The company is also engaged in the sale of Fermion and
contract manufacturing products and services globally.
Proprietary Products
The product portfolio of the Proprietary Products unit consists of prescription products in three therapy areas: neurological
disorders, oncology and critical care, and inhaled pulmonary drugs under Easyhaler
®
product portfolio.
Net sales of the unit in January–December 2021 were down by 8% and totalled EUR 388 (420) million. A substantial part of the
decline is attributable to milestone payments that were smaller than in the comparative period, amounting to EUR 3 (42) million
in the review period.
NET SALES BY PRODUCT
EUR million −/ −/ Change %
Easyhaler
®
product portfolio +%
Stalevo
®
, Comtess
®
and Comtan
®
-%
Simdax
®
-%
Nubeqa
®
* +%
Dexdor
®
-%
Other** -%
Total -%
* includes product sales to Bayer and royalties booked by Orion
** includes service sales, milestone payments and products such as Enanton
®
, Precedex
®
and pharmaceuticals sold for use in clinical trials.
In January–December 2021, net sales of darolutamide sold for use in clinical trials were EUR 12 (12) million.
In January-December 2021, Orion booked a total of EUR 39 (17) million of product sales for deliveries of Nubeqa
®
(darolutamide) to Bayer and in royalties from the same product. Nubeqa
®
is indicated for the treatment of non-metastatic
castration-resistant prostate cancer.
Bayer holds global commercial rights to darolutamide. In Europe, however, Orion and Bayer are co-promoting. In addition,
Orion will manufacture the product for global markets. Besides milestone payments, Orion will also receive tiered royalties on
global darolutamide sales, which will be approximately 20% including product sales to Bayer. Initially the royalty will be slightly
lower, and as sales increase, royalties may increase slightly. Orion also has the possibility to receive one-o payments from
Bayer when certain global annual sales targets are met for the rst time.
Orion’s Easyhaler
®
is a dry-powder inhaler developed in-house, for which Orion has developed Easyhaler
®
-adapted dry powder
formulations of several well-known generic active pharmaceutical ingredients (salbutamol, beclometasone, budesonide,
formoterol, salmeterol and uticasone). Total net sales of the Easyhaler
®
product portfolio for treatment of asthma and
chronic obstructive pulmonary disease increased by 2% and amounted to EUR 117 (115) million in January–December 2021. In
the rst half of the year, the market for dry-powder pulmonary drugs and the demand for Easyhaler
®
products suered from
the reduced rate of doctors’ appointments due to the COVID-19 pandemic. After summer, the development was better and
demand picked up. The strong development in the end of the year was also partly due to timing of partner deliveries. Sales of
the budesonide-formoterol combined formulation increased by 3% and was EUR 74 (72) million. The sales of other Easyhaler
®
products (beclometasone, budesonide, formoterol, salbutamol and salmeterol-uticasone combined formulation) was EUR 43
(43) million.
Menarini, an Italian pharmaceuticals company, has exclusive marketing rights to Orion’s budesonide-formoterol combined
formulation in France and also serves as a co-marketing partner in a few Southern European countries. In addition, Menarini
is responsible for the sales of the budesonide-formoterol combined formulation in the Asia–Pacic region. Another company,
Hikma Pharmaceuticals PLC, is responsible of selling the budesonide-formoterol combined formulation in the Middle East and
North Africa. Hikma has started product launches in some of the countries.
ORION | Financial Statement documents 2021
|
Orion’s drugs for treatment of Parkinson’s disease are Stalevo
®
(active pharmaceutical ingredients carbidopa, levodopa and
entacapone) and Comtess
®
/Comtan
®
(entacapone). Their total net sales in January–December 2021 declined by 3% and
amounted to EUR 95 (99) million. Orion markets its own Parkinson’s drugs in Europe and some countries in the Asia-Pacic
area. Elsewhere, the products are sold by partners. The most important single market for Orion’s Parkinson’s drugs is currently
Japan, where Orion has a distribution agreement with Novartis.
Net sales of Orion’s Dexdor
®
intensive care sedative (dexmedetomidine), a product sold in Europe, were EUR 37 (55) million,
down 33%. The expected decline in sales was due to generic competition and an extremely strong comparative period despite
the launch of generic competition, owing to increased demand caused by the COVID-19 pandemic as well as shortages in some
competing products in the markets. The demand for intensive care sedatives remains high due to the pandemic, and this has
moderated the fall of Dexdor
®
sales. The sales of Precedex
®
(dexmedetomidine), a product sold outside Europe, in January–
December 2021 amounted to EUR 11 (12) million.
Simdax
®
(levosimendan), a drug for treatment of acute decompensated heart failure is sold in some 60 countries worldwide.
Net sales of the product in January-December 2021 were down by 9% at EUR 57 (62) million. The sales declined from the
comparative period mainly due to falling prices in some markets. Simdax
®
is a liquid infusion concentrate, and its formulation
patent in key markets expired in September 2020. However, direct generic competition for the product, i.e. with a similar
formulation, did not commence yet in most markets during 2021.
In August, Orion and Marinus Pharmaceuticals signed a European wide marketing and distribution agreement for ganaxolone,
a GABAA receptor modulator being investigated in multiple rare seizure disorders. Under the terms of the agreement, Orion
will have the right to sell and market ganaxolone in Europe. Orion has made an upfront payment of EUR 25 million to Marinus
as a signing fee. Marinus is also eligible to receive tiered royalty ranging from low double-digits to low twenties on Orion’s
future sales. In addition, Marinus is eligible to receive milestone payments upon achievement of certain development and
commercialisation milestones.
Marinus will be the marketing authorisation holder and responsible for current and future clinical trials of ganaxolone. Orion
will be responsible for market access in all 30 countries comprising the European Economic Area (EEA) as well as in the United
Kingdom and Switzerland. Marinus has applied for marketing authorisation for ganaxolone for the rst indication in Europe
i.e. for the treatment of seizures in children and young adults with cyclin-dependent kinase-like 5 (CDKL5) deciency disorder
(CDD). After the review period in February 2022, Marinus announced that the processing of the marketing authorisation
application is converted from accelerated assessment to standard review.
Specialty Products
The net sales of the Specialty Products unit, comprising generic (o-patent) prescription drugs (including biosimilars) and self-
care products, in January-December 2021 amounted to EUR 503 (498) million. Prices of reference priced prescription drugs have
continued to decline especially in Finland but Orion has been able to compensate the impact of decreasing prices by increased
sales volumes. Owing to the coronavirus pandemic and related restrictions implemented in various countries, the prevalence
of seasonal illnesses, such as common respiratory tract infections, was lower than normal in the rst half of the year, and there
was a decline in non-critical medical appointments and thereby in the number of prescriptions issued. In the second half of the
year, clear recovery was evident in the markets. Of the net sales of Specialty Products, generic prescription drugs accounted for
75% (75%) and self-care products for 25% (25%).
BREAKDOWN OF SPECIALTY PRODUCTS’ NET SALES BY PRODUCT GROUP /:
EUR million −/ −/ Change %
Share of unit’s
net sales –/
Share of unit’s
net sales –/
Generic prescription drugs +% % %
Self-care products +% % %
Total +%
The Specialty Products unit’s most important market areas are Finland, Scandinavia and Eastern Europe and Russia. The unit’s
sales in Finland in January–December 2021 amounted to EUR 278 (280) million. The small decline came mostly from self-care
products. The general decline in the prices of reference-priced generic drugs due to price competition continued but Orion was
able to compensate this impact with strong volume development.
ORION | Financial Statement documents 2021
|
In Scandinavia, the sales of Specialty Products totalled EUR 76 (78) million, down by 2%. In Eastern Europe and Russia,
Specialty Products’ sales were up by 16% and amounted to EUR 81 (70) million. The growth was boosted by the timing of
the deliveries of certain products, but the business in Eastern Europe and Russia developed favourably in other respects as
well. Specialty Products’ sales in regions other than Finland, Scandinavia and Eastern Europe and Russia stood at EUR 67 (71)
million.
Orion and CuraTeQ Biologics have expanded their biosimilar distribution agreement to the Baltic countries. The original
marketing and distribution agreement signed in 2020 covered the Nordics, Austria, Hungary and Slovenia. Under the
agreement, Orion will have the right to sell and market CuraTeQ’s biosimilars in these territories. All the products under the
agreement are still in development or regulatory phases and the launches in Orion territories are estimated to take place in
2023–2026 depending on the success of the development and regulatory approvals.
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 other companies.
Net sales of the Animal Health unit in January–December 2021 were down by 18% and amounted to EUR 73 (89) million. The
unit’s business developed vigorously in all markets, due to new product launches and distribution agreements, among other
things. This favourable development mitigated the decrease in total net sales, which was mainly due to the expiration of a major
distribution agreement in Scandinavia on 31 December 2020. The sales of other products, excluding the EUR 28 million loss of
net sales caused by the said agreement expiration, increased by around 20%. Sales of animal sedative products accounted for
53% (39%), or EUR 39 (35) million, of the unit’s total net sales. The animal sedative product family comprises Orion’s animal
sedatives Dexdomitor
®
(dexmedetomidine), Domitor
®
(medetomidine) and Domosedan
®
(detomidine), and antagonist
Antisedan
®
(atipamezole), which reverses the eects of the sedatives.
In 2021, the European Commission granted a marketing authorisation to Orion’s Bonqat
®
(pregabalin) and Tessie
®
(tasipimidine) products. Bonqat
®
is indicated for alleviation of acute anxiety and fear associated with transportation and
veterinary visits in cats. Tessie
®
is indicated for short term alleviation of situational anxiety and fear in dogs triggered by noise or
the owner’s departure.
Fermion and contract manufacturing
Fermion manufactures active pharmaceutical ingredients for Orion and other pharmaceutical companies. Its product range
comprises nearly 30 pharmaceutical ingredients. Fermion produces the active pharmaceutical ingredients for Orion’s in-house
developed proprietary drugs. For other pharmaceutical companies Fermion manufactures generic pharmaceutical ingredients
and oers contract manufacturing services for development and manufacturing of new active pharmaceutical ingredients.
Net sales of Fermion and contract manufacturing excluding deliveries for Orion’s own use totalled EUR 75 (75) million. In recent
years order cycles in the trade in pharmaceutical raw materials have become ever shorter, and this has led to clearly greater
uctuation in business volume than before within each year and between dierent years. Demand for Fermion products has
been good, and production capacity has been nearly fully utilised.
ORION | Financial Statement documents 2021
|
Research and development
The Group’s R&D expenses in January–December 2021 totalled EUR 118 (123) million, down by 4%. They accounted for 11%
(11%) of the Group’s net sales. R&D expenses also include expenses related to development of the current portfolio. The core
therapy areas of Orion’s pharmaceutical R&D are neurological disorders, oncology and respiratory diseases, for which Orion
develops inhaled pulmonary drugs. Orion also develops veterinary drugs and selected generic drugs.
Orion has focused on managing the safety and continued treatment of patients involved in clinical trials during the COVID-19
pandemic. However, the exceptional circumstances may cause delays in ongoing projects for example due to slower than
anticipated patient recruitment.
Key clinical development projects
Project Indication PHASE Registration
Darolutamide ARASENS
1
Prostate cancer (mHSPC) I II IIIIII
Darolutamide ARANOTE
1
Prostate cancer (mHSPC) I II III
ODM-208 (CYP11A1 inhibitor) Prostate cancer (CRPC) I II
ODM-105 (tasipimidine) Treatment of psychiatric disorders I
Easyhaler
®
tiotropium COPD Bioequivalence study
Easyhaler
®
indacaterol-glycopyrronium COPD Bioequivalence study
1
In collaboration with Bayer = Phase completed = Status changed
= Phase ongoing
Orion’s and Bayer’s Phase III ARASENS trial investigating the use of the oral androgen receptor inhibitor (ARi) darolutamide in
metastatic hormone-sensitive prostate cancer (mHSPC) has met its primary endpoint. In the ARASENS trial, darolutamide in
combination with docetaxel and androgen deprivation therapy (ADT) signicantly increased overall survival (OS) compared to
placebo, docetaxel and ADT. The overall incidence of reported adverse events was similar between treatment arms. Detailed
results of the study will be published in near-term.
In addition, Orion and Bayer have an ongoing Phase III clinical trial ARANOTE which investigates the ecacy and safety of
darolutamide in combination with androgen deprivation therapy (ADT) versus placebo plus ADT in patients with metastatic
hormone-sensitive prostate cancer (mHSPC).
Orion has carried out ongoing early phase clinical trials on two novel selective hormone synthesis inhibitors (CYP11A1
inhibitors). Based on research data obtained so far, the ODM-208 and ODM-209 molecules do not radically dier from one
another. On this basis, Orion has made the decision to terminate development of the ODM-209 molecule and to focus on
further developing the more evolved ODM-208 molecule. Orion has an ongoing Phase II clinical trial on ODM-208, and the
company is preparing to launch a Phase III clinical trial with prostate cancer patients. Orion is also looking for a collaboration
partner for the development and commercialisation of the molecule. In preclinical studies, the ODM-208 has shown antitumor
activity. It has potential ecacy also for those cancers that have become resistant to the standard hormonal treatments. Orion
is the rst pharmaceutical company to develop a drug that works with this mechanism.
Orion has launched a Phase I clinical trial on ODM-105 molecule (tasipimidine) that is based on its alpha 2 research,
investigating the tolerability and safety of the drug candidate in healthy volunteers. The molecule is intended for the treatment
of psychiatric disorders.
Orion is working on projects to expand the Easyhaler
®
product portfolio for the treatment of asthma and COPD. Orion is
developing a tiotropium formulation for European markets and the bioequivalence study with the formulation is ongoing.
Tiotropium is a long-acting anticholinergic bronchodilator used in the treatment of chronic obstructive pulmonary disease.
In addition, Orion is developing an indacaterol-glycopyrronium combined formulation indicated for the treatment of COPD.
Glycopyrronium and indacaterol are long-acting bronchodilators.
Orion has together with Propeller Health an ongoing development project in which the Easyhaler
®
device is equipped with a
sensor that monitors the use of the device.
Orion has two ongoing clinical projects in the eld of digital therapies. The VIRPI (Pilot Study of a Virtual Reality Software
for Chronic Pain) trial investigated the impacts of using virtual reality software in treating chronic low back pain. The results
of this trial published in June 2021 were positive, and Orion is currently looking for a partner for further development and
ORION | Financial Statement documents 2021
|
commercialisation of a digital therapy software solution for treatment of chronic pain. The ODD-402 project in collaboration
with Healthware Group investigates how the care of Parkinson’s patients could be developed, personalised and improved using
a digital tool that collects data from patients.
Orion has several projects in the early research phase, investigating cancer and various neurological diseases including rare
ones, among others. In the review period, Orion and Swedish Alligator Bioscience signed a research collaboration and license
agreement to discover and develop together new bispecic antibody cancer therapeutics. In the spring, Orion and the Finnish
Red Cross Blood Service announced their research collaboration with the aim of developing CAR T-cell therapy. Additionally,
Orion has projects underway to develop new veterinary drugs and selected generic drugs.
Personnel
The average number of employees in the Orion Group in January–December 2021 was 3,364 (3,337). At the end of December
2021 the Group had a total of 3,355 (3,311) employees, of whom 2,617 (2,615) worked in Finland and 738 (696) outside Finland.
Salaries and other personnel expenses in January–December 2021 totalled EUR 231 (227) million.
Changes in Executive Management
Orion’s President and CEO Timo Lappalainen has informed the Board of Directors that he will exercise his option to retire at the
age of 60. Mr. Lappalainen will turn 60 in October 2022. Orion’s Board of Directors and Mr. Lappalainen have agreed that his
successor should start in the position of President and CEO of Orion in the beginning of 2023 at the latest. After the transition,
Mr. Lappalainen will be at the disposal of the Board of Directors as advisor until the end of March 2023. After that he will retire.
Orion’s Board of Directors has started a recruitment process for the successor of President and CEO.
Signicant legal proceedings
Companies belonging to the Orion Group are parties to various legal disputes, which are not, however, considered to be
signicant legal proceedings for the Group.
Shares and shareholders
On 31 December 2021 Orion had a total of 141,134,278 (141,134,278) shares, of which 34,813,206 (35,122,793) were A shares and
106,321,072 (106,011,485) B shares. The Group’s share capital is EUR 92,238,541.46 (92,238,541.46). At the end of December
2021 Orion held 571,314 (671,082) B shares as treasury shares. On 31 December 2021, the aggregate number of votes conferred
by the A and B shares was 802,013,878 (807,796,263) excluding treasury shares.
At the end of December 2021, Orion had 80,792 (72,003) 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 dierent share classes
represented at a General Meeting of Shareholders. The Company itself and Orion Pension Fund do not have the right to vote at
an Orion Corporation General Meeting 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. A total of 309,587 A shares were converted into B shares in January–December 2021.
Trading in Orion’s shares
Orion’s A shares and B shares are quoted on Nasdaq 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 that date.
ORION | Financial Statement documents 2021
|
On 31 December 2021, the market capitalisation of the Company’s shares, excluding treasury shares, was EUR 5,119 million.
In 2021 a total of 1,620,990 of Orion’s A shares and 84,437,433 B shares were traded on Nasdaq Helsinki. The total value of the
shares traded was EUR 3,087 million. During the year, 4.7% of the A shares and 79.4% of the B shares were traded. The average
turnover in Orion’s shares was 61.0%.
The price of Orion’s A shares decreased by 3.5% and the price of its B shares by 2.7% in 2021. On 31 December 2021 the closing
quotation was EUR 36.10 for the A shares and EUR 36.52 for the B shares. The highest quotation for Orion’s A shares was EUR
41.05 and the lowest quotation was EUR 33.45. The highest quotation for the B shares in 2021 was EUR 39.42 and the lowest
quotation was EUR 32.51.
Orion shares are also traded on various alternative trading platforms in addition to Nasdaq Helsinki. In 2021, 26% of all trading
in Orion’s A share and 65% of all trading in its B share took place outside Nasdaq Helsinki Oy (Source: Fidessa Fragmentation
Index).
Authorisations of the Board of Directors
On 25 March 2021, the Annual General Meeting of Orion Corporation authorised the Board of Directors to decide on issuance
of new shares. On the basis of the authorisation, the Board of Directors shall be entitled to decide on the issuance of no more
than 14,000,000 new Class B shares. The share issue authorisation shall be valid until the next Annual General Meeting of the
Company. The terms are reported in more detail in a stock exchange release on 25 March 2021.
The Board of Directors was authorised by Orion Corporation’s Annual General Meeting on 26 March 2019 to decide on a share
issue in which shares held by the Company can be conveyed. The Board of Directors is authorised to decide on a share issue in
which no more than 850,000 B shares held by the Company can be conveyed. The authorisation to issue shares is valid for ve
years from the decision taken by the Annual General Meeting. The terms and conditions of the authorisations are reported in
more detail in a stock exchange release on 26 March 2019.
The Board of Directors is not authorised to increase the share capital or to issue bonds with warrants or convertible bonds or
stock options.
Share-based incentive plans
The Group has one currently operating share-based incentive plan for key persons of the Group: Orion Group’s Long-Term
Incentive Plan 2019, announced in a stock exchange release published on 6 February 2019.
Share ownership
Orion’s shares are in the book-entry system maintained by Euroclear Finland, and Euroclear Finland maintains Orion’s ocial
shareholder register.
At the end of December 2021, Orion had a total of 80,792 (72,003) registered shareholders, of whom 96% (96%) were private
individuals. They held 40% (39%) of the entire share stock and had 61% (61%) of the total votes. There were 56 (58) million
nominee-registered and foreign-owned shares, which was 40% (41%) of all shares, and they conferred entitlement to 10% (10%)
of the total votes.
At the end of December 2021, Orion held 571,314 (671,082) B shares as treasury shares, which is 0.4% (0.5%) of the Company’s
total share stock and 0.07% (0.08%) of the total votes.
Flagging notications
In January–December 2021 Orion Corporation received altogether 22 notications pursuant to Chapter 9, Section 5 of the
Securities Market Act. According to the notications, the total number of Orion shares owned directly, indirectly or through
nancial instruments by BlackRock, Inc. and its funds either increased above ve (5) per cent or decreased below ve (5) per
cent of Orion Corporation’s total shares.
After the reporting period, Orion Corporation has received from BlackRock, Inc. three notications pursuant to Chapter 9,
Section 5 of the Securities Market Act.
The details of the notications are available at www.orion./en/aggings.
ORION | Financial Statement documents 2021
|
Management’s shareholdings
At the end of 2021, the members of the Board of Directors owned a total of 700,674 of the Company’s shares, of which 634,991
were A shares and 65,683 B shares. At the end of 2021, the President and CEO owned 85,997 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 176,081 of the Company’s shares, which were all B shares. Thus, the Company’s executive management held 0.68% of all of
the Company’s shares and 1.62% of the total votes. These shareholdings include holdings by controlled corporations.
Orion’s dividend distribution policy
Orion’s dividend distribution takes into account the distributable funds and the capital expenditure and other nancial
requirements in the medium and long term to achieve the nancial objectives.
Proposal by the Board of Directors: dividend EUR 1.50 per share
The parent company’s distributable funds are EUR 470,557,071.27, or EUR 3.35 per share. This includes EUR 204,676,467.01, or
EUR 1.46 per share, of prot for the nancial year. These per share amounts are calculated excluding treasury shares held by
the Company. The Board of Directors proposes payment of a dividend of EUR 1.50 (1.50) per share 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 prot distribution was proposed, the number of shares conferring entitlement to receive dividend totalled 140,562,964, on
which the total dividend payment would be EUR 210,844,446.00. The Group’s payout ratio for the nancial year 2021 would be
108.8% (95.9%). The dividend payment date would be 1 April 2022, and shareholders registered in the Company’s shareholder
register on 25 March 2022 would be entitled to the dividend payment.
The Board of Directors further proposes that EUR 350,000 (350,000) be donated to medical research and other purposes of
public interest in accordance with a separate decision by the Board and that EUR 259,362,625.27 remain in equity.
Corporate Governance
The operations and activities of Orion Corporation and its subsidiaries (the Orion Group) are based on compliance with laws
and regulations issued thereunder, as well as with ethically acceptable operating practices. The tasks and duties of the dierent
governance bodies of the Group are determined in accordance with legislation and the corporate governance principles of the
Group.
In its governance, Orion Corporation follows the Finnish Corporate Governance Code 2020 for companies listed on Nasdaq
Helsinki Ltd. Orion Corporation departs from the Code’s recommendation No. 15 concerning the election of members to the
Nomination Committee, which can also include persons other than members of the Board. More detailed information on
compliance with the Corporate Governance Code and departure from it can be found on Orion’s website at www.orion./en.
The management system of the Orion Group consists of the Group level functions and business divisions. In addition, the
system includes the organisation of the administration of the legal entities. For the steering and supervision of operations, the
Group has a control system for all levels.
The parent company of the Group is Orion Corporation, whose shareholders exercise their decision-making power at a General
Meeting of Shareholders in accordance with the Limited Liability Companies Act and the Articles of Association. The General
Meeting of Shareholders elects the Board of Directors and decides on amendments to the Articles of Association, issuance of
shares and repurchase of the Company’s own shares, among other things.
The Board of Directors of Orion Corporation handles and decides all the most important issues relating to the operations of the
whole Group or any units irrespective of whether the issues legally require a decision of the Board of Directors. The Board also
ensures that good corporate governance practices are followed in the Orion Group.
The Board of Directors of the parent company comprises at least ve and at most eight members elected by a General
Meeting of Shareholders. The term of the members of the Board of Directors ends at the end of the Annual General Meeting of
Shareholders following the election. The General Meeting of Shareholders elects the Chairman of the Board of Directors, and
the Board of Directors elects the Vice Chairman of the Board of Directors, both for the same term as the other members.
The President and CEO of the parent company is elected by the Board of Directors. In accordance with the Limited Liability
Companies Act, the President and CEO is in charge of the day-to-day management of the Company in accordance with
ORION | Financial Statement documents 2021
|
instructions and orders issued by the Board of Directors. In addition, the President and CEO ensures that the bookkeeping of
the Company complies with the law and that its asset management is arranged in a reliable way.
If the service contract of the President and CEO is terminated on the Company’s initiative, the notice period is 6 months. If
the service contract is terminated on the initiative of the President and CEO, the notice period is 6 months, unless otherwise
agreed. The service ends at the end of the notice period. If the service contract is terminated either on the Company’s initiative
or on the initiative of the President and CEO because of a breach of contract by the Company, the President and CEO will be
compensated with a total sum corresponding to the monetary salary for 18 months, unless otherwise agreed between the
parties. No such separate compensation will be paid if the President and CEO resigns at his own request for reasons other than
a breach of contract by the Company.
Orion publishes its Corporate Governance Statement and remuneration report for 2021 separately from the Report by the Board
of Directors on the Company’s website at www.orion./en.
Annual General Meeting on 25 March 2021
The Annual General Meeting of Orion Corporation was held on 25 March 2021 under special arrangements in the company’s
head oce in Espoo. In order to limit the spread of the Covid-19 pandemic, the Annual General Meeting was held without
shareholders’ or their proxy representatives’ presence at the meeting venue. In addition to matters in accordance with Section
10 of the Articles of Association and Chapter 5, Section 3 of the Limited Liability Companies Act, the meeting dealt with the
Company’s remuneration policy and a proposal concerning authorisation of the Board of Directors to decide on a share issue.
Distribution of a dividend of EUR 1.50 per share was approved for 2020, in accordance with the Board’s proposal.
The decisions taken by the Annual General Meeting and the organising meeting of the Board of Directors were reported in stock
exchange releases on 25 March 2021.
Annual General Meeting on 23 March 2022
Orion Corporation’s Annual General Meeting is planned to be held on Wednesday 25 March 2022 commencing at 14:00.
Signicant risks and uncertainties
Risk management is an integral part of the day-to-day management processes and the Corporate Governance of the Orion
Group, and it is closely related to the Company’s responsibility structures and principles of operational control. It is part of the
Company’s strategy process, operational planning and monitoring, and internal control system.
The purpose of risk management is to identify, assess and manage by cost-eective measures the risks that may threaten the
Company’s operations and the achievement of the set goals.
The risk management policy is based on Orion Group’s strategies and nancial objectives. The aim is to identify, analyse and
evaluate the risks threatening the implementation of the Company’s strategy and achievement of the Company’s objectives.
Identied risks are responded to, so that the Company can be hedged against losses or opportunities related to potential risks
can be utilised.
Risks are divided into the following main categories:
• Strategic risks
• Operational risks
• Financial risks
• Compliance risks
Agreements referred to in Ministry of Finance decree 1020/2012, Section 8, Paragraph 1,
Subparagraph 11
Orion and its co-operation partner Bayer (Bayer Consumer Care AG) have licensing, commercialisation, manufacturing and
supply agreements in place concerning the Nubeqa
®
drug. These agreements include terms concerning change of control in
the company that entitle a party to terminate the agreement in certain circumstances, as referred to in the Ministry of Finance
Decree 1020/2012, Section 8, Subsection 1, Paragraph 11.
ORION | Financial Statement documents 2021
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Non-nancial reporting
Orion is a globally operating Finnish pharmaceutical company. Orion develops, manufactures and markets human and
veterinary pharmaceuticals and active pharmaceutical ingredients. The company operates in the global pharmaceuticals market
as part of a global supply chain. Orion procures nal products and pharmaceutical ingredients from others, while others
also purchase them from Orion. All Group production facilities and pharmaceutical research centres are in Finland, with the
exception of the Nottingham site. Orion had a total of 3,355 employees at the end of 2021, of them 2,617 in Finland and 738
outside Finland.
Orion is committed to continuously improving its performance in sustainability. In managing matters related to the
environment, occupational health and safety and human resources, and ensuring its operations are ethical, the Company strives
to achieve the high objectives it has set for the above. Based on a materiality assessment the Company has identied material
themes and indicators for its corporate responsibility. They are prioritised in the development of operations, and the Company
also regularly reports on the indicators. The key themes of Orion’s Sustainability Agenda are ensuring patient safety and reliable
supply of medications, in addition to which the Company has a responsibility for the environment, its employees, business
ethics and transparency. In 2021, the Company has advanced its Sustainability Agenda, continued integrating sustainability into
key processes and taken measures to increase awareness of sustainability, such as training and investments in sustainability
communications. A separate, third-party veried Sustainability Report for 2021 will be published in April or May. The non-
nancial reporting key gures have also been veried by a third party.
Environment, social matters and personnel
Policies
Orion’s environmental, health and safety (EHS) policy denes the Group-level commitment on how Orion manages
environmental matters and promotes the well-being of its workforce. The environmental management system, for managing
and developing environmental matters, is built upon the principles set out in the ISO 14001 environmental standard. In the
development of energy eciency Orion applies the principles of the ETJ+ energy management system framework and practices
consistent with the ISO 50001 standard. In management of occupational health and safety, Orion applies the ISO 45001
standard. The Company complies with valid legislation and with other regulations and requirements applicable to its operations.
Orion manufactures human and animal pharmaceuticals and active pharmaceutical ingredients in an environmentally
sustainable way, ensuring ecient use of materials and energy and appropriate wastewater management.
Orion’s human resources policy denes the principles adopted in the Orion Group concerning human resources management
and attending to human resources matters. Compliance with legislation, collective agreements, occupational health and
safety regulations, and other obligations shall be ensured in attending to human resources matters. In its operations, the
Company complies with the principles of non-discrimination, equality and fairness. The aim of the Group’s values, management
principles, ethical guidelines and policies is to ensure that the Company operates in a socially responsible manner concerning
its personnel and working conditions. The human resources policy denes what well-being at work means in Orion, and the
responsibilities for developing the workforce and promoting the working and functional capabilities of its employees.
Risks and risk management
Risks related to the environment, social matters and personnel are identied and managed as part of the Group’s overall
risk assessment and management process. Various organisations’ expertise and co-operation are utilised in assessing and
managing risks with the aim of continuously improving operations. The Group’s environmental, occupational health and
occupational safety guidelines dene procedures and responsibilities for predicting, preventing and identifying deviations and
exceptional situations causing possible harm. In addition, the guidelines dene how to identify, assess, deal with and manage
the risks involved in such situations. Management of EHS matters is monitored through annual internal audits. Operations
are continuously improved by identifying development objectives. The management of sustainability issues is also part of our
supplier and partner selection and management practices.
Orion’s most signicant environmental impacts arise in the consumption of raw materials, energy and water; emissions into
air and wastewater; and waste volumes arising from the operations. Annual development measures are dened for impacted
areas, and the progress of these measures is monitored, for example, by measuring emissions, monitoring the amount of waste
and compiling statistics on the amounts of resources used. All the Group’s production plants are located in Finland, and the
manufacturing plants have the valid environmental permits required for operations.
ORION | Financial Statement documents 2021
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The Company’s objective is to improve safety at work, keeping in mind that incidents and accidents are among the key social
and human resources risks. The Company works continuously to prevent incidents and accidents and to further promote a
safety culture, for example through comprehensive training, regular audits and by encouraging people to make observations
that promote safety.
Risks associated with the environment, social issues and personnel can typically lead to damage to the Company’s reputation.
Besides risk management, the Company communicates in a way that is reliable, transparent, comprehensive and timely to avoid
reputational risk. Systematic communication of both positive and negative matters also makes predictive action and learning
from incidents possible.
Indicators and results
Orion continuously measures and monitors matters related to the environment, social impacts and personnel, and reports on
them annually in its Sustainability Report. The key gures concerning operations relate to energy, greenhouse gas emissions
and the well-being of employees.
Total energy consumption, energy savings and greenhouse gas emissions
Orion systematically reduces its greenhouse gas emissions and engages in energy conservation through an Energy Eciency
Programme. Orion is committed to the joint Energy Eciency Programme for the members of the Confederation of
Finnish Industries (EK) for the years 2017–2025. In the programme period, the savings target for 2025 is 7.5% of the energy
consumption in 2016, which in Orion’s case translates to savings of slightly over 12,000 MWh. In 2021, the company achieved
energy savings by renewing its lighting with LED lamps in Espoo and Oulu, by enhancing the dust extraction system and
demolishing unused premises in Turku, and by changing the operating times of air conditioners in Kuopio. The largest single
energy saving project was implemented in Turku, where a new heat pump plant was commissioned. The plant produces heat
and cooling for the factory from outside air as well as from the factory’s waste heat. Of Energy Eciency Programme target for
2025, 114% is now achieved and Orion continues to advance the programme.
In 2021, the Company updated its climate target to carbon neutrality of its own operations by 2030.The greenhouse gas
emission reductions are mainly achieved by Energy Eciency Programme measures, in addition to which renewable energy
sources are utilised. By the end of 2021 Orion has reduced its greenhouse gas emissions by 54% compared with 2016.
Understanding the greenhouse gas emissions in the value chain is also important. The Company assesses the greenhouse gas
emissions from its value chain (scope 3) and reports these as part of its 2021 sustainability reporting. In 2022, the Company
will start dening roadmap to reduce value chain greenhouse gas emissions. In addition, Orion has conducted a product-
specic life cycle assessment of environmental impacts, based on which product-specic greenhouse gas emissions have been
assessed.
Total energy consumption, energy savings and greenhouse gas emissions
Total absolute energy consumption (MWh)
1
, ,
Energy savings achieved by saving measures and eciency improvements (MWh)
2
,
Energy Eciency Programme targets achieved % %
Greenhouse gas emissions, scope 1 (tCO
2
e) , ,
Greenhouse gas emissions, scope 2 (tCO
2
e) , ,
1
The reported energy consumption, including electricity, heat and fuels, covers the Orion Group’s properties in Finland except for those that do not
contribute signicantly to the total and have no production operations. The Group has no production plants outside Finland. Rented oces abroad
are excluded from this report.
2
Energy savings are estimates calculated in compliance with the guidelines of the Energy Authority.
EU taxonomy: disclosure on environmentally sustainable activities
Orion has been actively following the development of the EU’s classication system for environmentally sustainable activities,
the EU Taxonomy, and its related obligations. The Company has set a carbon neutrality target for its own operations and is
taking steps to achieve this through the measures described above. Orion develops, manufactures and markets human and
veterinary medicines and active pharmaceutical ingredients, creating well-being for people and value for the society.
The activities of the Company’s industry sector are currently not dened in the climate-related part of the EU taxonomy. Orion
has interpreted the Commission Delegated Act on the EU taxonomy and its annexes as dening the company’s activities as
ORION | Financial Statement documents 2021
|
taxonomy-neutral with respect to climate objectives. Consequently, the taxonomy-eligible share of the company’s net sales,
capital expenditure and operating expenses are 0%. Orion monitors the development of the EU taxonomy and is preparing to
develop its reporting in line with the evolution of the taxonomy legislation.
PROPORTION OF TAXONOMYELIGIBLE ACTIVITIES
Economic activity Net sales
Capital
expenditure Operating expenses
Taxonomy-eligible % % %
Taxonomy-non-eligible % % %
Total % % %
1
Indicators include the proportion of taxonomy-eligible activities on environmental objectives related to climate change mitigation and climate change
adaptation.
Occupational well-being of personnel: Workplace injuries and sick leave of the personnel
By taking care of occupational health and well-being at work, Orion aims to ensure that Orion employees are t for work
and healthy at work, and not exposed to occupational diseases. Achievement of this is shown by the occupational well-being
indicators
1
of lost time incident frequency and absence due to illness rate. In 2021, the company continued the Skills to care
trainings and by the end of the year, all employee groups targeted by the training had participated in the training. During the
year, the target group for the training was employees in units outside Finland. In 2021, eorts were made to improve commuting
safety and to ensure better use of the safety tools in place. The Company’s aim is to achieve zero lost time incident frequency by
continuously striving to prevent incidents and accidents and to improve the safety culture. Unfortunately, the lost time incident
frequency in 2021 evolved in the wrong direction and the 2021 target of LTIF 1 ≤3.0 was not achieved. The Company continues
its sustained eorts to achieve the zero incident goal.
As the COVID-19 pandemic continued, Orion monitored the pandemic situation and, where necessary, adapted its operating
guidelines to ensure a safe work environment for personnel. During the year, hybrid working was implemented and the
Company strove to minimise contacts that were not essential for business continuity, for example, through extensive remote
working arrangements and by minimising external visits to production sites. Additionally, hygiene guidelines were updated to
make them appropriate for the current situation. During the year, the Company paid particular attention to the well-being of
employees working remotely, including mental well-being, remote working conditions and work ergonomics.
Occupational well-being of personnel: Workplace injuries and sick leave of the personnel
Lost time incident frequency, LTIF
. .
Absence due to illness (hours of absence due to illness as percentage of total theoretical
working hours)
.% .%
1
The reporting of injuries and sick leave absences covers the Orion Group’s employees in Finland.
2
Indicates the workplace injury rate as injuries causing an absence of at least one day per million total actual working hours.
3
Hours of absence due to illness as percentage of total theoretical working hours of Company personnel.
Respect for human rights and prevention of corruption and bribery
Policies
Orion’s Code of Conduct denes the Group’s ethical practices and commitment to complying with laws, ethically approved
practices and respect for human rights. Orion expects all its personnel to comply with the Code of Conduct and practices
resulting from it. The Code of Conduct is available in 14 languages. Correspondingly, the ethical guidelines of the Third Party
Code of Conduct applying to Orion’s suppliers dene the minimum requirements to which Orion expect its partners to be
committed. In addition to regulatory requirements, they include key principles for business operations concerning sustainability
and ethics.
Orion’s aim is to comply with human rights obligations in all its operations. The Company strives to ensure that there are no
violations in its own or its collaboration partners’ operations. Orion complies with and respects the United Nations Universal
Declaration of Human Rights and the principles in ILO conventions, and expects the same from its partners.
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The principles that are included in the Code of Conduct and the anti-corruption policy require that employees refuse to oer
or take a bribe, or any comparable benet. Orion has zero tolerance of all forms of bribery and corruption in its business
operations.
Risks and risk management
Orion expects the partners in its supply chain to comply with Orion’s requirements and the Third Party Code of Conduct. In
selecting its suppliers, the Company has a critical approach as regards so-called risk countries where there is a risk of human
rights or labour rights violations and/or exploitation of child labour, and where national labour legislation is weak or at least
poorly monitored. Orion manages risks in its supply chain through its due diligence practices. Suppliers’ compliance with
regulations and requirements is monitored through regular or random assessment surveys and by undertaking risk-based
sustainability audits (involving matters such as the environment, occupational health and safety, working conditions and ethics)
of their facilities and operations. Any ndings detected in the sustainability audits will be addressed and followed up. Persons
working for the Orion Group are expected to be familiar and comply with the Code of Conduct. Code of Conduct e-learning is
mandatory for all personnel.
Identifying and assessing risks relating to corruption is part of the comprehensive overall Group Risk Management. Among
other things, assessing bribery risks is a standard part of the preparation of all collaboration agreements. Training and
increasing awareness are the most critical actions to mitigate these risks. The Company regularly and systematically educates
and trains its personnel to internalise the purpose and importance of these principles. The training is mandatory for the
selected personnel.
For reporting any misconduct, Orion has a public whistleblowing channel that complements the usual communications
and reporting channels. The channel promotes good governance and ethical operations, and improves processes after any
reported incident. Orion encourages the personnel to bring to the attention of the Company’s management their experiences,
observations and suspicions about behaviour suggesting violation of human rights, as well as any other activity breaching the
ethical codes. Orion investigates and deals with cases quickly and impartially and, to the extent possible, condentially. The
Company takes appropriate case-specic measures to end the conduct and activity violating the principles.
Indicators and results
In 2021, Orion continued to roll out the Code of Conduct. The majority of employees completed the mandatory Code of
Conduct e-learning in 2020, when the training was published. The Company ensures that the training is completed by all new
employees. During the 2021, 653 employees had completed the training.
In 2021, Orion conducted a Group-wide human rights impact assessment and evaluated salient human rights impacts in its
business operations. The company will report the results of these assessments as part of its sustainability reporting. Orion was
not made aware of any human rights violations in its own operations through the whistleblowing channel in 2021. The Company
takes all such notications seriously and handles them quickly and impartially.
Anti-corruption and bribery training is mandatory for certain personnel groups. We provide regular training, and the last
comprehensive targeted personnel training was arranged in 2017, when the total number of employees attending was 2,808.
The Company ensures that the training is completed by all new employees for whom it is mandatory. The company will organise
the next comprehensive retraining for the targeted personnel in 2022.
Respect for human rights and prevention of corruption and bribery
Code of Conduct training, number of participants
,
Anti-corruption and anti-bribery training, number of participants
1
Participants in training: all individuals who completed the training in the course of the year, including those in part-time, temporary and past
employment.
ORION | Financial Statement documents 2021 |
Product quality and safety
Policies
Patient safety is a basic guiding value in all Orion’s operations, for which the Company works to ensure throughout the product
life cycle. Ensuring the availability of medications by preventing supply disruptions and by communicating through appropriate
channels constitutes part of ensuring patient safety. As a pharmaceutical company, Orion is legally obligated to monitor the
safety and quality of its products. The Company ensures that the drugs developed, manufactured and marketed are proven to
be safe for their users, eective for the indications for which they are approved, and consistent with the quality standards set for
them.
Orion ensures continuous monitoring of the safety of products, manages risks throughout the life cycle of a product and takes
timely and appropriate measures to ensure safe use of products and patient safety. Orion maintains the pharmacovigilance
system required by legislation and regulatory requirements, which compliance with legislation and regulatory requirements is
monitored by internal audits and inspections conducted by authorities.
The quality of Orion’s products is ensured by rigorous management of the entire supply chain irrespective of the location of raw
materials and product manufacture. The Company inspects manufacturing sites regularly to assess the adequacy of the quality
system. Orion analyses each raw material and product batch to ensure that quality requirements set in advance for the product
are met, undertakes process controls and checks that activities have been appropriately documented. In compliance with EU
standards and the Finnish Medicines Act, the dened Qualied Person in the quality assurance organisation decides when a
product batch is released for sale and is responsible for ensuring that the product meets all the conditions set in the marketing
authorisation by the authorities. The shelf life of products and any customer complaints are monitored throughout the entire
product life. Immediate action is taken if any deciency in product quality is detected.
Risks and risk management
The Company ensures that the drugs developed, manufactured and marketed are proven to be safe for their users, eective for
the indications for which they are approved, and consistent with the quality standards set for them. The Company cooperates
with the authorities and reports and communicates on product quality and safety operations in a manner that is appropriate for
its stakeholders.
The launch of a new proprietary product in the market is preceded by extensive phased research that delineate the drug’s
pharmacological properties, such as its ecacy and safety. Clinical trials involving human subjects can only be conducted
with approval of the regulatory drug authorities. The pharmacology and safety of a drug candidate are extensively studied
using preclinical laboratory models and by monitoring tolerability and adverse eects throughout the clinical trials. For the
marketing authorisation application and the summary of products characteristics (SPC), each research phase and its results are
carefully documented for regulatory approval. Marketing authorisation issued by drug authorities is required to start sales and
marketing of a drug. In accordance with the statutory requirements, the drug’s adverse eects continue to be monitored even
after product has been launched. Orion ensures continuous safety monitoring of the safety of products, collects feedback from
customers and carries out benet-risk assessments throughout the product life cycle.
Through the trials and pharmaceutical production methods described above as well as based on safety reports received from
the market, Orion strives to ensure that its products have no such unreasonable adverse eects for patients in relation to the
benets of the drugs that might lead to liability or withdrawal of a product from the market. To cover for the nancial impact
of product liability risk, the Orion Group’s products and operations are insured through operational and product liability
insurance.
The manufacturing of pharmaceutical products is subject to regular inspections by the authorities. Pharmaceutical products
must be safe, ecacious and compliant with all quality requirements. To comply with statutory requirements, in pharmaceutical
production close attention must be paid to various safety and quality risks.
Adequate quality of pharmaceuticals is ensured through systematic, comprehensive management of operations covering all
factors with direct and indirect impact on the quality of the drugs. The operations are managed by comprehensive instructions
and adequate control of materials and products before and after production.
Orion’s broad product range may cause risks to the delivery reliability and make it challenging to maintain the very high-
quality standard required in production. Authorities and key customers in dierent countries undertake regular and detailed
inspections of development and manufacturing of drugs at Orion’s production sites. Carrying out any remedial actions that may
be required may at least temporarily have eects that decrease delivery reliability and increase costs. Orion’s product range also
ORION | Financial Statement documents 2021
|
contains products manufactured by other pharmaceutical companies and products that Orion manufactures on its own but for
which other companies deliver active pharmaceutical or other ingredients. Possible problems related to the delivery reliability or
quality of the products of those manufacturers may cause a risk to Orion’s delivery reliability.
Risks and risk management relating to patient safety in the Orion Group are described in more detail in Orion’s Corporate
Governance Statement.
Indicators and results
The Company carries out annual audits at the facilities and operations of suppliers and partners to ensure compliance with
Good Practices (GxP) specied for the pharmaceutical industry. Key gures for inspections and audits of Orion’s operations and
audits conducted by the Company include GxP inspections and audits and from 2021 onwards ISO 13485 audits.
Because of restrictions in place due to the COVID-19 pandemic, some of the audits on our suppliers and partners in 2021 were
conducted remotely. Similarly, some of the audits of Orion’s operations were conducted remotely.
The COVID-19 pandemic continued to challenge global supply chains. The availability of Orion’s products remained at a good
level throughout 2021 despite the COVID-19 pandemic.
Product quality and safety
Number of GxP inspections/audits of Orion’s operations
1
, total
Inspections by authorities
Audits by collaboration partners
Non-compliances from authority inspections
Number of GxP audits
1
undertaken by Orion
Rejections
Number of customer complaints about the Pharmaceuticals business (ppm
2
)
1
Inspections and audits of Good Practices (GxP). ISO 13485 audits included from 2021 onwards.
2
ppm = parts per million packages sold
Strategy
Orion’s Board of Directors has conrmed the Company’s strategy for 2022–2026.
Operating environment
Orion’s strategy implementation is supported by global healthcare megatrends that have material impact on the consumption
and price level of drugs as well as on pharmaceutical research. These megatrends include:
• Ageing of population: as population ages, the prevalence of various diseases increases, causing increased demand for drugs
and treatments.
• Increasing healthcare cost burden: the share of healthcare costs of available funds continues to increase, both at national and
individual level, creating needs for cost-eective drugs and treatments.
• Advances in science: personalised medicine, increased genetic and epigenetic data and developments in drug dosing and
diagnostics create possibilities and markets for new treatments and therapies.
• Increased personal responsibility for own health and pets’ health: growing awareness and understanding of the factors
aecting personal well-being increase the demand for health-promoting and illness-preventing products and pets’ health
products.
• Sustainability: sustainability and compliance in all business sectors increasingly guide the actions and decisions of
consumers, authorities and investors.
Mission
Orion’s mission is to build well-being. Orion builds well-being by bringing to markets drugs and therapies from which patients
get help for their illnesses. An eective drug or therapy also creates added value for patients by improving their quality of life.
ORION | Financial Statement documents 2021
|
Preconditions for strategic success
Orion has determined the following areas where it must succeed in order for the company to achieve strategic success:
• Quality and safety. High quality and safety of operations and products and regulatory compliance are preconditions for a
company’s existence in the pharmaceutical industry.
• Competitive and dynamic product portfolio. Orion invests in product development and commercialisation and product life
cycle management. Success requires that we constantly develop new products and discontinue unsuccessful ones.
• Strong corporate culture of working together. Our working together is based on work that is valuable and important for the
customer. Orion wants to be an excellent workplace and a responsible and attractive employer that continuously develops the
well-being of its personnel at work and their expertise.
• Building strong partnerships. Orion’s operations are based on utilising global partnerships and networks. Finding the right
partners and managing partnerships with skill give the company a competitive edge.
• Productivity and exibility. Attaining competitiveness and the desired level of protability requires constant productivity
improvements in all business operations. Flexibility to respond rapidly to changes in the operating environment is also
required. Due to its size, Orion can be more agile than large companies and gain a competitive advantage from this.
Strategic targets
The following strategic targets and their achievement are monitored in the Company with clearly dened indicators:
• Growing more rapidly than the growth in the market. The key objective in the coming years is to persistently strive for growing
faster than the markets. The objective is to increase net sales to EUR 1.5 billion by the end of 2025. Growth enables the
Company to develop and take manageable risks. The target of growing faster than the markets should be achieved by the
Company as a whole and in the geographic and product areas in which Orion operates.
Orion’s solid balance sheet supports the Company’s chances to grow and achieve its nancial goals. Orion is currently
working on numerous projects that target growth. The Company continues to invest in its own research and development
activities, for example by investing in new clinical trials, and actively evaluates in-licensing opportunities of products in
the late stage of development. At the same time, the solid balance sheet strengthens Orion’s equity position and ability to
continue achieving its dividend distribution objective.
The single most important growth project in the next few years is the commercialisation of the Nubeqa
®
prostate cancer drug
in partnership with Bayer. Other than this, growth in the near future will be sought especially from the Easyhaler
®
product
portfolio and possibly through product acquisitions.
• Providing patients with new innovative and cost-eective drugs and treatments. Developing and strengthening the product
development pipeline both in early research stages and clinical development phase projects. Besides Orion’s own product
development, we strive to strengthen our product development pipeline by in-licencing development projects.
• Working together to benet the customer. Our objective is to continuously develop our own understanding of customer needs
and of the progress made in therapy areas. We recognise new opportunities by relying on our scientic competence and
customer knowledge.
• Continuous improvement of performance in sustainability. Patient safety is the most vital aspect of Orion’s corporate
responsibility, and managing the environmental responsibilities is an important part of the Company’s sustainability. Orion
is committed to making its own operations carbon neutral by 2030. In addition, Orion aims to continuously develop the well-
being of its personnel, including occupational safety and well-being at work.
• Strong development of protability
Financial objectives
Through the nancial objectives Orion aims to develop the Group’s shareholder value and ensure nancial stability and
protable growth. Orion’s nancial objectives are:
• Growing net sales more rapidly than growth of the pharmaceuticals market. Achievement of this objective requires
continuous investment in development of the product portfolio.
• Maintaining protability at a good level. The aim is operating prot that exceeds 25% 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 1.30 per share, and increasing the dividend in
the long term.
In the short term what actually happens may deviate from the objectives.
ORION | Financial Statement documents 2021
|
Outlook for 2022
Orion estimates that net sales in 2022 will be at a similar level as in 2021
(net sales in 2021 were EUR 1,041 million).
Operating prot is estimated to be at a similar level as in 2021
(operating prot in 2021 was EUR 243 million).
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 prot that vary greatly from year to year. Forecasting
the timing and amount of these payments is dicult. In some cases they are conditional on terms such as research outcomes
which are not known until studies have been completed, the progress of research projects or the attainment of specied sales
levels. On the other hand, neither the outcome nor the schedule of contract negotiations is generally known before the nal
signing of the agreement.
Taulukko 2
2017
12
2018
5
2019
51
2020
42
2021
3
0
10
20
30
40
50
60
2017
2018
2019
2020
2021
Milestone payments received by Orion in 2017–2021
EUR million
12
5
51
42
3
1
The outlook for 2022 does not include any material milestones. Orion is currently looking for a partner for further development
and commercialisation of its ODM-208 molecule research and a digital therapy software solution for treating chronic pain.
The outlook does not contain any potential milestone payments associated with these projects, as the company does not yet
have assurance of nding any partners or of the nancial structure of any agreements to be made. Orion is entitled to receive
milestone payments from Bayer for Nubeqa sales when certain global annual sales thresholds are met for the rst time. Such
milestone payments are not included in the outlook for 2022, as Orion does not have the ability to accurately estimate or predict
the timing when the sales thresholds potentially are met.
The outlook is based on the assumption that Orion’s own production can continue to operate normally despite the COVID-19
pandemic and the challenges in the global supply chains. This requires, among other things, continued success in employee
protection so that absence rates do not signicantly increase, that personal protective equipment, supplies, equipment and
spare parts needed in production as well as starting materials, intermediate products and materials are available and that there
are no material disruptions in the logistics chains.
The outlook does not include any income or expenses associated with possible product or company acquisitions.
Net sales
Regarding Proprietary Products, the outlook anticipates that the net sales of Nubeqa
®
booked by Orion will clearly increase
in 2022. Orion’s estimate is based on forecasts received from its partner Bayer. The sales of the Easyhaler
®
product portfolio
is estimated to increase slightly. The sales of Orion’s branded Parkinson’s drugs (Comtess
®
, Comtan
®
and Stalevo
®
) are
estimated to remain at the same level as in the previous year.
The COVID-19 pandemic signicantly increased the demand for the intensive care sedative Dexdor
®
in 2020 and 2021, as a
result of which the impact of generic competition on its sales did not fully materialise. Although the demand for intensive care
sedatives remains elevated due to the pandemic, a clear decline in the net sales of the Dexdor
®
product is expected to continue
in 2022. However, uncertainty prevails in this respect due to the pandemic.
Net sales of Simdax
®
are estimated to clearly decrease due to generic competition. Nevertheless, uncertainty still prevails as to
when direct generic competition begins and how signicantly the prices will drop.
ORION | Financial Statement documents 2021
|
The Specialty Products unit, meaning generic drugs and self-care products, accounts for a signicant share of Orion’s total
sales. The outlook assumes that the COVID-19 pandemic will no longer materially aect the demand for generic drugs in 2022,
although some customers may start using the stockpiles they had accumulated earlier in the pandemic. The outlook assumes
that Orion will be able to increase its generic drugs sales volume, but foresees a simultaneous continued decline in generic
drug prices. As a consequence, net sales of the Specialty Products unit are expected to be on par with the preceding year. The
estimate does not include any impact of material supply disruptions or product shortages.
Net sales of Orion’s Animal Health unit are expected to be on par with the preceding year. Net sales are weighed down by the
termination of one distribution agreement in Finland, but products whose demand is increasing are expected to counterbalance
the lost 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 Fermion’s external net
sales reported by Orion are estimated to slightly decline in 2022.
Operating prot
Orion’s operating prot will be weighed down in 2022 by the falling sales of proprietary drugs Dexdor
®
and Simdax
®
due to
generic competition. Relative gross margin is estimated to decline, as production costs, including wages, and the prices of
raw materials, goods and services rise, and these price increases cannot be passed through to Orion’s product prices. On the
contrary, the prices of generic drugs are estimated to continue on a downward path despite rising costs. This development will
negatively aect Orion’s operating prot in 2022.
Operating expenses are estimated to increase from 2021. The impact of the COVID-19 pandemic kept operating expenses below
normal in 2020–2021. The outlook presupposes that the pandemic will no longer aect costs with equal force in the second
half of 2022. At the same time, increasing investments are made in the sales and marketing of products that are experiencing
growth as well as new products, such as ganaxolone. Research and development expenses are estimated to be on par with
or slightly higher than in 2021. Products whose demand is increasing, such as Nubeqa
®
, are expected to be able to oset the
decrease in operating prot due to the above reasons; therefore, Orion estimates its operating prot to be at a similar level as in
2021.
Capital expenditure
The Group’s total capital expenditure in 2022 is expected to be on par with 2021 levels, when capital expenditure was EUR
85 million. Investments in 2021 included the EUR 25 million signing fee paid to Marinus for the sales and marketing rights to
ganaxolone. In 2022, the grand total of investments will be raised by the revamping of Orion’s Enterprise Resource Planning
(ERP) system and renovation of the company’s head oce in Espoo, both scheduled for 2021–23.
Near-term risks and uncertainties
The outlook is based on the assumption that Orion’s own production can continue to operate normally despite the COVID-19
pandemic and the challenges in the global supply chains. 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, poor availability of personal protective
equipment, supplies, equipment and spare parts, deteriorating availability of starting materials and intermediate products as
well as logistics chain disruptions.
The outlook assumes that sales of Orion’s Parkinson’s drugs Stalevo
®
and Comtan
®
to its partner Novartis in Japan will
not dier greatly from the preceding year. However, the outlook contains a degree of uncertainty due to potential generic
competition or a decline in prices.
The basic patents for Dexdor
®
and Simdax
®
have expired and generic competition on these products has begun. In 2020–2021,
the COVID-19 pandemic strongly increased the demand for intensive care sedatives, and therefore the sales of Dexdor
®
decreased during the period far less than anticipated. Its sales are estimated to decrease clearly in 2022, but this estimate is
subject to uncertainty due to the pandemic situation. Generic competition to Simdax
®
started in the rst markets in 2020 with
a dierent formulation. Direct generic competition with a similar formulation has not yet commenced. In 2022, net sales of
Simdax
®
are estimated to decrease clearly, but this estimate is subject to uncertainty. Actual sales will be aected, among other
things, by the timing of the beginning of direct generic competition in the various markets and the intensity of this competition.
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 specically focus
ORION | Financial Statement documents 2021
|
on Orion’s products. 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 aect the value of deliveries. The COVID-19 pandemic signicantly increased the demand
for some Orion products especially in 2020, partly because customers increased their safety stocks. The dismantling of such
safety stocks may have a momentary negative eect on the demand of Orion products. However, Orion is unaware of how
much additional safety stocks customers have remaining and when customers might start using inventories that exceed normal
stock levels. Due to the pandemic and various pandemic-related restrictions, the prevalence of many seasonal illnesses has
been below normal, whereby the numbers of medical appointments and prescriptions issued have also declined. Non-critical
procedures have also been postponed due to the pandemic. These phenomena have negatively impacted the development of
the entire pharma market. At present, it is dicult to estimate how long the situation will last or to what extent the eventual
waning of the pandemic will manifest as a release of any pent-up demand.
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, including the Swedish krona and Norwegian krone and the British pound. However, the overall eect 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 signicant due to sales of Parkinson’s drugs in Japan. The exchange rate eect related to
the Russian rouble arises in particular due to the strong volatility of the currency. However, Russian sales do not represent a
signicant portion of Orion’s entire net sales.
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 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 ramications
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 protability
of Orion’s products, since in the pharmaceuticals industry it is virtually impossible to pass through the cost increases to own
product prices, especially in Europe. The impacts of the COVID-19 pandemic on the availability of Orion’s products have not
been signicant in 2021, but the risk of poorer than normal product availability remains elevated also in 2022.
Authorities and key customers in dierent 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 eects
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 deliver active
pharmaceutical or other ingredients. 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, for example due to the COVID-19 pandemic, are reected 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 aect 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 aect
Orion’s nancial results. In 2014–2021 the annual payments varied from EUR 3 million to EUR 51 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.
ORION | Financial Statement documents 2021
|
Group’s key gures
Key gures relating to nancial performance
Net sales, EUR million
¹
,. . ,. ,. ,.
EBITDA, EUR million
1
. . . . .
% of net sales
1
.% .% .% .% .%
Operating prot, EUR million
1
. . . . .
% of net sales
1
.% .% .% .% .%
Prot for the period, EUR million
1
. . . . .
% of net sales
1
.% .% .% .% .%
R&D expenses, EUR million
1
. . . . .
% of net sales
1
.% .% .% .% .%
Capital expenditure, EUR million
1
. . . . .
% of net sales
1
.% .% .% .% .%
Depreciation, amortisation and impairment, EUR million
1
. . . . .
Personnel expenses, EUR million
1
. . . . .
Equity total, EUR million . . . . .
Interest-bearing net liabilities, EUR million -. -. -. -. -.
Assets total, EUR million ,. ,. ,. ,. ,.
Cash ow from operating activities, EUR million . . . . .
Equity ratio, % .% .% .% .% .%
Gearing, % -.% -.% -.% -.% -.%
ROCE (before taxes), % .% .% .% .% .%
ROE (after taxes), % .% .% .% .% .%
Personnel at the end of the period
1
, , , , ,
Average personnel during the period
1
, , , , ,
¹
Contuining operations since 2017
ORION | Financial Statement documents 2021 |
Perfomance per share
Basic earnings per share, EUR . . . . .
Diluted earnings per share, EUR . . . . .
Cash ow per share before nancial items, EUR . . . . .
Equity per share, EUR . . . . .
Dividend per share
¹
, EUR . . . . .
Total dividend
¹
, EUR million . . . . .
Payout ratio
¹
, % .% .% .% .% .%
A share
Number of shares at the end of the period ,, ,, ,, ,, ,,
% of total share stock .% .% .% .% .%
Eective dividend yield
¹
, % .% .% .% .% .%
Price/earnings ratio (P/E) . . . . .
Number of votes excluding treasury shares ,, ,, ,, ,, ,,
% of total votes .% .% .% . % .%
Total number of shareholders , , , , ,
Closing quotation at the end of previous nancial year, EUR . . . . .
Lowest quotation of review period, EUR . . . . .
Average quotation of review period, EUR . . . . .
Highest quotation of review period, EUR . . . . .
Closing quotation at the end of review period, EUR . . . . .
Trading volume, EUR million . . . . .
Shares traded ,, ,, ,, ,, ,,
% of the total number of shares .% .% .% .% .%
¹
The Board of Directors’ proposal for 2021 to the AGM.
ORION | Financial Statement documents 2021 |
B share ,
Number of shares at the end of the period,
including treasury shares ,, ,, ,, ,, ,,
% of total share stock .% .% .% .% .%
Treasury shares , , , , ,
Number of shares at the end of the period,
excluding treasury shares ,, ,, ,, ,, ,,
Eective dividend yield
1
, % .% .% .% .% .%
Price/earnings ratio (P/E) . . . . .
Number of votes excluding treasury shares ,, ,, ,, ,, ,,
% of total votes .% .% .% .% .%
Total number of shareholders , , , , ,
Closing quotation at the end of previous
nancial year, EUR . . . . .
Lowest quotation of review period, EUR . . . . .
Average quotation of review period, EUR . . . . .
Highest quotation of review period, EUR . . . . .
Closing quotation at the end of review period, EUR . . . . .
Trading volume, EUR million ,. ,. ,. ,. ,.
Shares traded ,, ,, ,, ,, ,,
% of the total number of shares .% .% .% .% .%
A and B share total
Number of shares at the end of the period ,, ,, ,, ,, ,,
Average number of shares during the period
excluding treasury shares ,, ,, ,, ,, ,,
Treasury shares ,, ,, ,, ,, ,,
Total number of shareholders , , , , ,
Trading volume, EUR million ,. ,. ,. ,. ,.
Shares traded ,, ,, ,, ,, ,,
Total shares traded, % of total shares .% .% .% .% .%
Market capitalisation at the end of the period
excluding treasury shares, EUR million , . ,. ,. ,. ,.
¹
The Board of Directors’ proposal for 2021 to the AGM.
ORION | Financial Statement documents 2021 |
Largest shareholders by number of shares
31 Dec 2021 A shares B shares Total shares
% of total
shares Total votes
% of total
votes
1. Ilmarinen Mutual Pension Insurance Company ,, ,, ,, .% ,, .%
2. Erkki Etola and companies ,, , ,, .% ,, .%
Etola Erkki , ,, .%
Etola Oy ,, ,, .%
Etola Group Oy , , .%
3. Land and Water Technology Foundation and companies ,, ,, .% ,, .%
Land and Water Technology Foundation ,, ,, .%
Tukinvest Oy ,, ,, .%
4. Elo Mutual Pension Insurance Company , ,, ,, .% ,, .%
5. The Social Security Institution of Finland, Kela ,, ,, .% ,, .%
6. Ylppö Jukka ,, , ,, .% ,, .%
7. OP-Finland Fund ,, ,, .% ,, .%
8. Into Ylppö and commanding votes , , ,, .% ,, .%
Ylppö Into , , ,, .%
Ylppö Eeva , , ,, .%
Ylppö Aurora , , ,, .%
9. The State Pension Fund , , .% , .%
10. Varma Mutual Pension Insurance Company , , .% , .%
10 largest total ,, ,, ,, .% ,, .%
Total ,, ,, ,, .% ,, .%
The list includes the direct holdings and votes of the Company’s major shareholders, corresponding holdings of organisations or foundations
controlled by a shareholder in so far as they are known to the issuer, holdings of a pension foundation or pension fund of a shareholder or an
organisation controlled by a shareholder, and other holdings the use of which the shareholder, alone or together with a third party, may decide on
under a contract or otherwise.
ORION | Financial Statement documents 2021 |
Largest shareholders by number of votes
31 Dec 2021 A shares B shares Total shares
% of total
shares Total votes
% of total
votes
1. Erkki Etola and companies ,, , ,, .% ,, .%
Etola Erkki , ,, .%
Etola Oy ,, ,, .%
Etola Group Oy , , .%
2. Land and Water Technology Foundation and companies ,, ,, .% ,, .%
Land and Water Technology Foundation ,, ,, .%
Tukinvest Oy ,, ,, .%
3. Ilmarinen Mutual Pension Insurance Company ,, ,, ,, .% ,, .%
4. Ylppö Jukka ,, , ,, .% ,, .%
5. Into Ylppö and commanding votes , , ,, .% ,, .%
Ylppö Into , , ,, .%
Ylppö Eeva , , ,, .%
Ylppö Aurora , , ,, .%
6. Aho Group Oy and commanding votes , , , .% ,, .%
Aava Terveyspalvelut Oy , , , .%
Juhani Aho Foundation for Medical Research , ,, .%
Aho Kari Jussi , ,, .%
Lappalainen Annakaija , , ,, .%
Aho Ville Jussi , ,, .%
Porkkala Miia , , .%
Aho Antti Jussi , , , .%
7. Orion Pension Fund² , , , .% ,, .%
8. Saastamoinen Foundation , , .% ,, .%
9. Eija Ronkainen and companies , , , .% ,, .%
EVK-Capital Oy , , ,, .%
Eija Ronkainen , , .%
10. Oy Ingman Finance Ab , , .% ,, .%
10 largest total ,, ,, ,, .% ,, .%
Total ,, ,, ,, .% ,, .%
The list includes the direct holdings and votes of the Company’s major shareholders, corresponding holdings of organisations or foundations
controlled by a shareholder in so far as they are known to the issuer, holdings of a pension foundation or pension fund of a shareholder or an
organisation controlled by a shareholder, and other holdings the use of which the shareholder, alone or together with a third party, may decide on
under a contract or otherwise.
Not entitled to vote at Orion’s General Meetings of shareholders.
ORION | Financial Statement documents 2021 |
Ownership base by type of shareholder
31 Dec 2021 Owners % A shares % B shares % Total shares % Total votes %
Non-nancial
companies ,
. ,, . ,, . ,, . ,, .
Financial and
insurance
institutions
. , . ,, . ,, . ,, .
Public sector
entities
. ,, . ,, . ,, . ,, .
Households ,
. ,, . ,, . ,, . ,, .
Non-prot
organisations
. ,, . ,, . ,, . ,, .
Nominee-registered
and foreign
shareholders
. ,, . ,, . ,, . ,, .
Number of treasury
shares . .
, . , . , .
Total
, . ,, . ,, . ,, . ,, .
Ownership base by number of shares
31 Dec 2021 Owners % A shares % B shares % Total shares % Total votes %
1–100
, . , . ,, . ,, . ,, .
101–1,000
, . ,, . ,, . ,, . ,, .
1,001–10,000
, . ,, . ,, . ,, . ,, .
10,001–100,000
. ,, . ,, . ,, . ,, .
100,001–1000,000
. ,, . ,, . ,, . ,, .
1,000,001–
. ,, . ,, . ,, . ,, .
Total
, . ,, . ,, . ,, . ,, .
of which nominee-
registered
. ,, . ,, . ,, . ,, .
Number of treasury
shares
. .
, . , . , .
Total
, . ,, . ,, . ,, . ,, .
ORION | Financial Statement documents 2021 |
Shareholdings in Orion Corporation of the Members elected to the Board
of Directors on 25 March 2021
1
31 Dec 2021 A shares
Change
from 1 Jan B shares
Change
from 1 Jan A and B total
% of total
shares
% of total
votes
Mikael Silvennoinen, Chairman , , . .
Timo Maasilta, Vice chairman , , , . .
Kari Jussi Aho , , , . .
Pia Kalsta , , . .
Ari Lehtoranta , , . .
Veli-Matti Mattila , , . .
Hilpi Rautelin ,
, , . .
Eija Ronkainen , , , . .
Board of Directors total , , , , , . .
The gures include the shares held by organisations and foundations controlled by the person.
Shareholdings in Orion Corporation of the Members of the Executive
Management Board
1
31 Dec 2021 A shares
Change
from 1 Jan B shares
Change
from 1 Jan A and B total
% of total
shares
% of total
votes
Timo Lappalainen, President and CEO , , , . .
Satu Ahomäki , , , . .
Olli Huotari , , , . .
Liisa Hurme , -, , . .
Jari Karlson , , , . .
Virve Laitinen , , , . .
Outi Vaarala . .
Executive Management Board total , , , . .
The gures include the shares held by organisations and foundations controlled by the person.
ORION | Financial Statement documents 2021 |
31 Dec 2021 A share B share Total
Trading code on Nasdaq Helsinki ORNAV ORNBV
Listing day Jul Jul
ISIN code FI FI
ICB code
Reuters code ORNAV.HE ORNBV.HE
Bloomberg code ORNAV.FH ORNBV.FH
Share capital, EUR million . . .
Counter book value per share, EUR . .
Minimum number of shares
Maximum number of A and B shares, and
maximum number of all shares ,, ,,, ,,,
Votes per share
A shares and B shares confer equal rights to the Company’s assets and dividends.
Basic information on Orion’s shares
ORION | Financial Statement documents 2021 |
EBITDA = Operating prot + Depreciation + Amortisation + Impairment losses
Interest-bearing net liabilities =
Interest-bearing liabilities - Cash and cash equivalents -
Money market investments
Return on capital employed
(ROCE), %
=
Prot before taxes + interest and other nance expenses
x 100
Total assets - Non-interest-bearing liabilities (average during the period)
Return on equity (ROE), %
=
Prot for the period
x 100
Total equity (average during the period)
Equity ratio, %
=
Equity
x 100
Total assets - Advances received
Gearing, %
=
Interest-bearing liabilities - Cash and cash equivalents -
Money market investments
x 100
Equity
Earnings per share, EUR
=
Prot available for the owners of the parent company
Average number of shares during the period, excluding treasury shares
Cash ow per share before
nancial items, EUR
=
Cash ow from operating activities + Cash ow from investing activities
Average number of shares, excluding treasury shares
Equity per share, EUR
=
Equity attributable to owners of the parent company
Number of shares at the end of the period, excluding treasury shares
Dividend per share, EUR
=
Dividend to be distributed for the period
Number of shares at the end of the period, excluding treasury shares
Payout ratio, %
=
Dividend per share
x 100
Earnings per share
Eective dividend yield, %
=
Dividend per share
x 100
Closing quotation of the period
Price/earnings ratio (P/E)
=
Closing quotation of the period
Earnings per share
Average share price, EUR
=
Total EUR value of shares traded
Average number of traded shares during the period
Market capitalisation, EUR million = Number of shares at the end of the period x Closing quotation of the period
Calculation of the key gures
ORION | Financial Statement documents 2021 |
Consolidated nancial statements (IFRS)
Consolidated income statement
EUR million Note
Net sales . 1,041.0 1,078.1
Cost of goods sold -447.5 -434.4
Gross prot 593.5 643.7
Other operating income and expenses . 6.4 5.4
Selling and marketing expenses ., . -191.0 -204.3
R&D expenses ., . -117.7 -123.2
Administrative expenses ., . -47.9 -41.6
Operating prot 243.3 280.1
Finance income and expenses . -1.0 -1.8
Prot before income taxes 242.3 278.3
Income tax expense . -48.5 -58.4
Prot for the period 193.8 219.9
Consolidated statement of comprehensive income
OTHER COMPREHENSIVE INCOME INCLUDING TAX EFFECTS
EUR million Note
Prot for the period 193.8 219.9
Translation dierences 1.6 -1.4
Items that may be reclassied subsequently to prot and loss 1.6 -1.4
Remeasurement of pension plans ., . 29.0 -59.4
Items that will not be reclassied to prot and loss 29.0 -59.4
Other comprehensive income net of tax 30.6 -60.8
Comprehensive income for the period including tax eects 224.4 159.1
PROFIT ATTRIBUTABLE TO
Owners of the parent company 193.8 219.9
COMPREHENSIVE INCOME ATTRIBUTABLE TO
Owners of the parent company 224.4 159.1
Basic earnings per share, EUR¹ . 1.38 1.56
Diluted earnings per share, EUR¹ . 1.38 1.56
Depreciation, amortisation and impairment . -45.8 -56.5
Personnel expenses -231.0 -227.0
Earnings per share has been calculated from the prot attributable to the owners of the parent company.
The notes are an integral part of the consolidated nancial statements.
ORION | Financial Statement documents 2021
|
Consolidated statement of nancial position
ASSETS
EUR million, 31 Dec Note
Property, plant and equipment . 332.6 319.6
Goodwill . 13.5 13.5
Intangible rights . 53.0 26.8
Other intangible assets . 2.5 2.7
Investments in associates . 0.1 0.1
Other investments . 0.2 0.2
Pension asset . 15.0
Deferred tax assets . 6.6 8.4
Other non-current receivables . 0.3 0.5
Non-current assets total 423.7 371.8
Inventories . 265.2 258.1
Trade receivables . 174.8 157.4
Other receivables . 33.6 33.9
Cash and cash equivalents . 216.7 294.4
Current assets total 690.3 743.7
Assets total 1,114.0 1,115.6
EQUITY AND LIABILITIES
EUR million, 31 Dec Note
Share capital 92.2 92.2
Other reserves 3.3 3.4
Retained earnings 652.3 635.7
Equity attributable to owners of the parent company 747.9 731.3
Equity total . 747.9 731.3
Deferred tax liabilities . 34.0 29.3
Pension liability . 4.9 19.9
Non-current provisions . 0.4 0.4
Interest-bearing non-current liabilities . 104.7 105.5
Other non-current liabilities . 13.0 15.0
Non-current liabilities total 156.9 170.1
Trade payables . 89.6 86.7
Current tax liabilities . 6.8 2.5
Other current liabilities . 109.0 121.8
Current provisions . 0.0
Interest-bearing current liabilities . 3.8 3.1
Current liabilities total 209.2 214.1
Liabilities total 366.1 384.2
Equity and liabilities total 1,114.0 1,115.6
The notes are an integral part of the consolidated nancial statements.
ORION | Financial Statement documents 2021
|
Consolidated statement of changes in equity
Equity attributable to owners of the parent company
EUR million Note Share capital Other reserves
Remeasure-
ment of pen-
sion plans
Treasury
shares
Translation
dierences
Retained
earnings Equity total
Equity at 1 January 2020 92.2 3.0 30.5 -24.5 -7.0 685.2 779.4
Prot for the period 219.9 219.9
Other comprehensive income
Translation dierences . -0.9 -0.5 -1.4
Remeasurement of pension plans . -59.4 -59.4
Transactions with owners
Dividends paid . -210.4 -210.4
Share-based incentive plan . 2.9 0.4 3.3
Other adjustments 0.4 -0.6 -0.1
Equity at 31 December 2020 92.2 3.4 -28.9 -21.5 -7.9 694.1 731.3
Equity at 1 January 2021 92.2 3.4 -28.9 -21.5 -7.9 694.1 731.3
Prot for the period 193.8 193.8
Other comprehensive income
Translation dierences . -0.5 2.1 1.6
Remeasurement of pension plans . 29.0 29.0
Transactions with owners
Dividends paid . -211.2 -211.2
Share-based incentive plan . 3.4 0.1 3.5
Other adjustments -0.1 -0.0 -0.1
Equity at 31 December 2021 92.2 3.3 0.0 -18.2 -8.4 678.9 747.9
The notes are an integral part of the consolidated nancial statements.
ORION | Financial Statement documents 2021
|
EUR million Note
Prot before taxes 242.3 278.3
Financial income and expenses . 1.0 1.8
Depreciation, amortisation and impairment . 45.8 56.5
Gains/losses on sales or disposals of property,
plant and equipment and intangible assets -3.9 -0.0
Unrealised foreign exchange gains and losses -0.4 0.7
Change in pension asset and pension obligation . 6.2 -2.0
Change in provisions . 0.1 0.0
Other adjustments 1.4 1.3
Total adjustments to prot before taxes 50.2 58.2
Change in trade and other receivables -21.7 33.0
Change in inventories -6.9 -29.0
Change in trade and other payables -7.7 23.1
Total change in working capital -36.3 27.1
Interest and other nancial expenses paid -2.1 -5.6
Interest and other nancial income received 1.2 3.8
Dividends received 0.0 0.0
Income taxes paid . -39.6 -62.7
Total net cash ow from operating activities 215.7 299.1
Investments in property, plant and equipment . -47.0 -34.0
Investments in intangible assets . -38.0 -6.7
Sales of property, plant and equipment, other investments
and associated companies ., ., . 4.7 1.0
Total net cash ow from investing activities -80.2 -39.7
Proceeds of current loans . 2.9 1.6
Repayments of current loans ., . -6.5 -5.6
Proceeds of non-current loans . 100.0
Dividends paid and other distribution of prots . -211.2 -211.1
Total net cash ow from nancing activities -214.8 -115.1
Net change in cash and cash equivalents -79.3 144.3
Cash and cash equivalents at 1 Jan . 294.4 149.0
Foreign exchange dierences 1.6 1.1
Cash and cash equivalents at 31 Dec . 216.7 294.4
Consolidated statement of cash ows
ORION | Financial Statement documents 2021 |
RECONCILIATION OF CASH AND CASH EQUIVALENTS IN STATEMENT OF FINANCIAL POSITION
EUR million
Cash and cash equivalents in statement of nancial position at the end of the period . .
Money market investments at the end of the period
Cash and cash equivalents in the statement of cash ows . .
The notes are an integral part of the consolidated nancial statements.
ORION | Financial Statement documents 2021
|
Notes to the consolidated nancial statements
1 Basis of presentation of the consolidated nancial statements
General information
FI-02200 Esp oo . Ori on Corp oration an d its subsidiarie s devel op and manuf ac ture human and ve terinar y pharma ceutic als and
The Orion Group’s rst nancial year was 1 July–31 December 2006, because the Group came into being on 1 July
2006 following the demerger of its predecessor Orion Group into the pharmaceuticals and diagnostics business and a
pharmaceutical wholesale and distribution business. Or ion Corp orati on ’s shares are listed on Nasdaq Helsinki. Trading in
Orion’s shares commenced on 3 July 2006.
At its meeting on 10 February 2022, the Company’s Board of Directors approved the publication of these consolidated nancial
statements. Under the Finnish Limited Liability Companies Act, shareholders have the option to accept or reject the nancial
statements at the Annual General Meeting, which is held after the publication of the nancial statements. In addition, the AGM
may amend the nancial statements. The nancial statement documents can be viewed at the website www.orion./en, and
copies of the nancial statements are available from O rion Cor por ation ’s headquarter, O rioninti e 1, FI- 02 20 0 Espo o , Finland .
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 eective at 31
December 2021. International Financial Reporting Standards refer to the standards and their interpretations approved for
application in the EU in accordance with the procedure stipulated in the EU’s regulation (EC) No. 1606/2002 and embodied in
the Finnish Accounting Act and provisions issued under it. The notes to the consolidated nancial statements have also been
prepared in accordance with the requirements in Finnish accounting legislation and Community law that complement the IFRS
regulations.
The information in the consolidated nancial statements is based on historical costs, except for nancial assets separately
recorded at fair value through prot or loss or recorded through other comprehensive income.
Monetary gures in the nancial statements are expressed in millions of euros unless otherwise stated. All gures in the
nancial statement have been rounded, which is why the total sums of individual gures may dier from the total sums shown.
Consolidation principles
The consolidated nancial statements cover the parent company Orion Corporation and all companies directly or indirectly
owned by it and controlled by the Group, as well as associates, joint ventures and joint operations.
Subsidiaries
Subsidiaries are those companies, which are controlled by Orion Corporation. A company is controlled by the Group if the
Group is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to aect those
returns through its power over the entity.
Internal shareholdings have been eliminated using the acquisition method of accounting. In the consolidated nancial
statements, acquired subsidiaries are fully consolidated from the date the Group acquires control, and divested subsidiaries
are deconsolidated from the date control ceases. All intra-Group transactions, receivables and liabilities, distribution of prot
and unrealised internal gains are eliminated in the preparation of the consolidated nancial statements. The consolidated prot
for the nancial year is divided into portions attributable to owners of the parent company and non-controlling interests. The
portion of the equity attributable to the non-controlling interests is included in Group equity and specied in the statement of
changes in equity.
ORION | Financial Statement documents 2021
|
Associates, joint ventures and joint operations
Associates are all companies over which the Group has signicant inuence but not control. Signicant inuence generally
means a shareholding of 20% to 50% of the voting rights.
Joint ventures are joint arrangements in which the parent companies or subsidiaries have joint control of an entity that is not
part of the Group and in which a parent company or subsidiary has rights to the net assets of the arrangement. Associates and
joint ventures are incorporated into the consolidated nancial statements using the equity method of accounting.
Joint operations are joint arrangements that have been implemented without a separate investment instrument or in which the
legal form of the arrangement is such that the parties have direct rights to certain assets or obligations for certain liabilities.
Joint operations are incorporated into the consolidated nancial statements in accordance with the proportional interest in the
joint operation.
If the Group’s share of the losses of an associate or joint venture exceeds the carrying amount, it is not consolidated unless the
Group has made a commitment to full the liabilities of the associate or joint venture.
Foreign currency translation
Functional and presentation currency
Items included in the nancial statements of each of the Group’s companies are measured using the currency of the primary
economic environment in which the company operates (the functional currency). The consolidated nancial statements are
presented in euros, which is the functional currency of the parent company of the Group and the Group’s presentation currency
for the consolidated nancial statements.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the
transactions. Monetary items in foreign currencies at the end of the reporting period in the statement of nancial position are
booked using the exchange rates at the end of the reporting period. Foreign exchange gains and losses from translation of the
items are recognised in the statement of comprehensive income. Exchange rate gains and losses related to business operations
are included in the corresponding items above the operating prot line. Exchange rate dierences resulting from hedges made
for hedging purposes but hedge accounting is applied to net amounts within other operating income or expenses. Exchange
rate gains and losses related to nancial liabilities and receivables in foreign currencies and foreign exchange derivatives related
to them are included in nancial income and expenses. Non-monetary items in foreign currencies in the statement of nancial
position which are not measured at fair value are measured using the exchange rate at the date of the transaction.
Group companies
For all Group companies with a functional currency dierent from the Group’s presentation currency, the income statements
are translated into euros using average exchange rates for the reporting period, and the statements of nancial position are
translated into euros using the exchange rates at the end of the reporting period. Any exchange dierence arising from this
and translation dierences arising from elimination of the acquisition costs of these companies are recognised in equity and
changes are disclosed in the items under other comprehensive income. There are no Group companies operating in a country
with hyperination.
The accumulated translation dierences related to divestment of Group companies, which are recognised in equity, are
recognised as gains or losses in the statement of comprehensive income.
Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the
foreign entity and translated at the exchange rate at the end of the reporting period.
ORION | Financial Statement documents 2021
|
Critical accounting estimates and assumptions, and main related uncertainties
Compiling the consolidated nancial statements in accordance with the IFRS and accounting standards requires that the
Company’s management make certain estimates and assumptions concerning the future that have an impact on the items
included in the nancial statements. These assumptions include climate related factors where applicable. The actual values
may dier from these estimates. The accounting policies relating to areas that call for more than ordinary judgement from
the management and to associated uncertainty factors are presented in the following notes:
• 2.1 Revenue from contracts with customers
• 2.2 Tangible assets
• 3.2 Intangible assets
• 3.7 Provisions
• 4.1 Employee benets
• 4.2 Pension assets and liabilities
• 5.2 Deferred taxes
Judgement is also exercised in applying the accounting policies.
Within the Group, the principal assumptions concerning the future and the main uncertainties relating to estimates at the
end of the reporting period that constitute a signicant risk of causing a material change in the carrying values of assets and
liabilities within the next nancial year are described in the note describing the nancial statement item in question.
New IFRS standards, amendments and IFRIC interpretations applied in nancial
year 2021
New standards or amendments to standards, eective from January 1, 2021, has had no material impacto to Orion
Corporations’ nancial statement. IFIRIC Interpretations Committee gave on April 2021 nal agenda decision on accounting
of cloud computing conguration and customization costs (IAS 38 Intangible assets). In its agenda decision Interpretation
Committee considered if customer recognises intangible assets on conguration and customization costs according on IAS
38 standard, and whether no intangible asset is recognised, how conguration and customization costs are accounted. Orion
Corporation has analyzed impact on agenda decision on cloud computing, and it has had no material impact to Group’s result,
nancial position or presentation of nancial statements.
New IFRS standards, amendments and IFRIC interpretations to be applied in future
nancial periods
New standards, amendments or interpretation that are eective on or after January 1, 2022 are not expected to have a material
eect on Orion Corporations’ consolidated nancial statements.
ORION | Financial Statement documents 2021
|
2 Business performance
2.1 Revenue from contracts with customers
Accounting policies
Revenue recognition principles
The Group’s net sales comprise three dierent revenue ows, which are product sales, revenue from sales rights to products
and revenue from clinical phase research and development work undertaken with collaboration partners. Revenue recognition
principles related to these are described below:
Product sales Consolidated net sales include revenue from sales of goods adjusted for indirect taxes and currency translation
dierences on sales in foreign currencies. A delivery to a customer of one batch of product constitutes one
distinct performance obligation for which the revenue will be recognised in accordance with the delivery
terms when the control is transferred from the Group to the customer. The selling price may include variable
consideration, such as various discounts or incentives, among other things. The consideration is recognised as
net sales that the Group expects to be entitled to taking into account the eects of discounts and incentives.
The Group has consignment stock arrangements in place with distributors and logistics partners operating in
various countries. In these cases the Group owns the products held in the distributor’s and logistics partners’
consignment stock until they are delivered to the customer, at which point the Group recognises their sale in
net sales. In Finland, the arrangement between Orion and Oriola explains a signicant part of the Group’s total
consignment stock arrangements.
Net sales consisting of product sales also comprises royalties, which the Group recognises as revenue based
on agreements signed with cooperation partners. The Group has sold the sales rights of certain products to
cooperation partners and is entitled to royalties determined by the sales of these products achieved by the
partners. The Group recognises the royalties as revenue once the partner has later sold the products to its own
customers and the right to royalties has been established.
Revenue from
sales rights to
products
The Group enters into agreements in which it transfers the sales rights to a product already in the markets to an
external party outside the Group and agrees to manufacture the product for that external party. For transferring
sales rights and manufacturing products, depending on the agreement the Group may receive milestone
payments, revenue from manufacture and sales of the products and royalty income. Typically milestone
payments are xed payments made at the time of signing of an agreement with no restitution obligation and
payments related to the commercialisation of a product.
The Group itself has generally been manufacturing the product before the sale of sales rights to the product,
so the Group would have know-how related to manufacture that would otherwise not be easily attained by
the customer. Two separate performance obligations are constituted at the time of sale of sales rights to
products, which are 1) the transferred sales right and 2) manufacture of products and royalty payments received
from them. Some of the considerations are variable due to conditionality of milestone payments and value
adjustments related to the sales price of the products.
The Group may receive under the agreement milestone payments related to commercialisation. They are
considered as distinct performance obligations if they are satised by a certain volume of sales achieved by
the customer. The accrued sales revenue entails value for the customer, so a performance obligation subject
to sales volume is considered satised when the target for sales has been achieved. Performance obligations
related to commercialisation are treated as performance obligations satised at a single point of time, because
estimating future sales volume entails uncertainty factors.
ORION | Financial Statement documents 2021
|
Revenue from
clinical phase
research and
development
work
undertaken
with
collaboration
partners
The Group has entered into agreements with collaboration partners that relate to clinical phase research and
development projects. Under these agreements milestone payments shall be paid when a certain development
phase has been achieved. Milestone payments normally comprise a single upfront payment for Orion’s past
development work received on signing the agreement, and milestone payments based on the completion of
subsequent phases or research results of the project later on. In addition, payments related to commercial
rights to the nished product such as royalties may be agreed in the agreements. Depending on the content of
the agreement, agreements may consist of performance obligations that are considered separately, or they may
form a single service and product package that consists of performance obligations.
Fixed milestone payments on signing an agreement are considered as distinct performance obligations that are
satised on signing of the agreement. Clinical phase trials may be conducted through many service providers,
and the collaboration partner can then utilise in its own business operations the research results conveyed on
signing. Research and development work performed during the agreement period is considered a separate
performance obligation and milestone payments for this phase are processed as variable considerations
because they are conditional on reaching specic phases or research results. Even though Orion satises the
performance obligations over time, revenue is only recognised on conrmation of the nal research results
because a reliable evaluation of research results in advance would entail uncertainty factors.
The agreements may also include a decision on arranging manufacture of nished product if it can be
commercialised. For each agreement, considerations related to commercialisation are evaluated on the basis of
whether the milestone payments and sales of nished products together constitute a performance obligation or
whether the milestone payments can be identied as performance obligations distinct from sales of the nished
product. Likewise, on the basis of each agreement, it is evaluated whether the performance obligation related
to milestone payments will be satised at a single point of time or over a period of time. Royalty payments are
recognised as revenue when the partner has sold products subject to royalties.
Agreements usually do not include a nancing component, because a signicant portion of the considerations is variable and
their reception will be conrmed in the future.
The Group itemises net sales as follows:
• Proprietary Products (patented prescription products for three therapy areas)
• Specialty Products (o-patent generic prescription products, self-care products and biosimilars)
• Animal Health (veterinary products for pets and production animals)
• Fermion and contract manufacturing (manufacture of active pharmaceutical ingredients for Orion and manufacture of
pharmaceuticals for other companies)
In addition to these, net sales reporting contains one further item, “Other operations”, which mostly comprises the impacts of
exchange rate changes on Orion’s net sales.
Segment reporting
The Group has one reportable operating segment, which is reported in a manner consistent with the internal reporting provided
to the chief operating decision maker. The chief operating decision maker, who is responsible for resources and assessing the
performance, is the President and CEO of Orion Corporation, who makes the Group’s strategic decisions. The Group consists
of one business area, “Pharmaceuticals business”, which comprises ve business divisions. Due to the nature of the business
model and corporate governance, the entire Group is reported as a single operating segment.
Critical accounting estimates and assumptions, and main related uncertainties
concerning revenue from contracts with customers
The Group has contracts with customers that may include transfer of sales rights to products, product manufacturing,
clinical phase research and development work and terms related to commercialisation. The Group exercises judgement
especially regarding the specication of distinct performance obligations, whether the performance obligations are
recognised over time or at a single point of time and regarding the recognition time of variable considerations. The Group
takes into account the limitation to revenue recognition and recognises revenue only to the extent that it is very likely that a
signicant reversal to accrued recognised revenue will not be needed.
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REVENUE BY REVENUE FLOWS
EUR million
Sale of goods ,. ,.
Royalty income . .
Total product sales ,. ,.
Milestone payments . .
Group total ,. ,.
In the nancial year 2021 EUR 0.6 (2020: 0.6) million of the prots from clinical phase R&D falls under Milestone payments
and EUR 11.7 (2020: 11.6) million under Product sales. Prots from clinical phase R&D are reported under Product sales once
the product is commercially available. EUR 2.1 (2020: 2.1) million has been entered as income from performance obligations
delivered to customers. The Group recorded EUR 5.0 (2020: 0.6) million of sales performance obligations satised during
previous nancial periods.
NET SALES BY BUSINESS DIVISION
EUR million
Proprietary products . .
Specialty products . .
Animal Health . .
Fermion and Contract manufacturing . .
Other . -.
Group total ,. ,.
ASSETS AND LIABILITIES BASED ON CONTRACT
EUR million Asset Liability Asset Liability
1 Jan . . . .
Revenue recognised during the nancial period that was included
in liabilities based on contract at the start of the period -. -.
Increase of considerations received less revenue recognised
during the nancial year .
Actual billing during the nancial year -. .
Increase of assets and liabilities based on contract due to new
business operations . . . .
31 Dec . . . .
Assets based on contract consist mainly of products and services transferred to customers, but which are not yet invoiced.
Liabilities based on contract mainly of advance payments received.
Transaction price allocated to remaining performance obligations
The total transaction price allocated to contracts that were partly or entirely unsatised at the end of the nancial year 2021 and
were related to the revenue ows Revenue from sales rights to products and Revenue from clinical phase R&D collaboration
with collaboration partners was EUR 14.0 (2020: 16.1) million. The Group expects to recognise EUR 6.2 million as revenue
for this transaction price allocated to unsatised contracts during the nancial years 2022 to 2024 (2020: EUR 6.2 million
during the nancial years 2021 to 2023). The remaining EUR 7.8 million is expected to be recognised as revenue starting from
the beginning of the nancial year 2025 (2020: EUR 9.9 million starting from the beginning of the nancial year 2024). The
Group applies the practical expedient under IFRS 15 of not reporting the transaction price allocated to remaining performance
obligations for contracts that are in eect for less than 12 months.
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Signicant judgements related to recognition of revenue
The Group’s signicant judgements related to recognition of revenue concern the contract with Bayer on the licensing,
development and commercialisation as well as manufacturing of Nubeqa.
Licensing, development and commercialisation
Darolutamide, developed by Orion in collaboration with Bayer for treatment of patients with prostate cancer, was granted
marketing authorisation by the United States Food and Drug Administration (FDA) under the brand name Nubeqa in July 2019.
The rst Nubeqa product sales in the United States materialised in August 2019. The rst Phase III clinical trial (ARAMIS) on
the product was concluded and primary endpoint reached in 2018. The second Phase III clinical trial (ARASENS) on the product
was concluded and primary endpoint reached in 2021. Signicant judgement was required with regard to recognition of the
sales revenue resulting from the research project and commercialisation of the product; these judgements were related to
specifying performance obligations and the recognition time of variable considerations.
Through the Bayer contract, Orion licensed Nubeqa-related rights to Bayer. In this context the parties agreed on cooperation
related to carrying out the Phase III clinical trial and the commercialisation of the product. The license granted to Bayer is
considered as a separate performance obligation. The consideration for this comprises the single upfront payment for Orion’s
past research work received on signing the agreement, milestone payments to be received in connection with commercialisation
and royalty payments based on sales. The performance obligation will be satised over time, and related considerations are
variable payments by nature. The considerations will be recognised as net sales once it is highly likely that a signicant reversal
to accrued recognised revenue will not be needed.
Milestone payments received in this context of the commercialisation of Nubeqa are recognised in net sales. In the 2021
nancial year no milestone payments were recognised in the context of the commercilisation of Nubeqa. In the 2020 nancial
year, a total of EUR 28 million of milestone payments received in the context of the commercialisation of Nubeqa were
recognised in net sales of which EUR 20 million were attributable to Nubeqa’s rst commercial sale in the EU and EUR 8 million
to its rst commercial sale in Japan. In the 2019 nancial year, EUR 45 million were correspondingly recognised in net sales for
the rst commercial sale of Nubeqa in the United States.
Manufacturing
Orion will manufacture darolutamide for global markets. The manufacturing is a separate performance obligation that
comprises the manufacture, packaging and sales of darolutamide to Bayer as well as building production capacity, which is
preceding beforementioned activities. The consideration related to building the production capacity will be satised over
time. It will be recognised as net sales over the term of the contract, because Bayer will receive the benet from the milestone
payments for building production capacity as it receives nished Nubeqa products manufactured using the production capacity.
Milestone payments related to building production capacity and payments for the manufacture and packaging of Nubeqa are
xed payments by nature.
Orion will additionally receive royalties on Nubeqa sales that will be recognised as net sales once Bayer has sold the products
and the right to royalties has been established.
Other information related to recognition of revenue
The Group applies the practical expedient under IFRS 15 to not adjust consideration amounts by the eect of a nancing
component when a customer pays a product to the Group within a year from the delivery of the product or when a signicant
portion of the consideration promised by the customer is variable and the amount or timing of such consideration varies based
on a future event that is not essentially controlled by the customer.
Information on assets based on customer contracts and expected credit losses are given in note 3.6. Trade and other
receivables. Information on liabilities based on customer contracts are given in note 3.8. Trade payables and other liabilities.
Information on Phase III clinical trials related to darolutamide (ARAMIS, ARASENS and ARANOTE) are given in note 3.3 Joint
arrangements.
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Data relating to geographical regions
These geographical regions correspond to the Group’s main markets. Net sales are presented according to the customer’s
location. Assets and capital expenditure are presented according to their location.
Finland Scandinavia Other Europe North America Other countries Group total
EUR million
Sales to external
customers . . . . . . . . . . ,. ,.
Assets . . . . . . . . . . ,. ,.
Capital expenditure . . . . . . . . . .
TOP TEN BESTSELLING PHARMACEUTICAL PRODUCTS
EUR million
Easyhaler (asthma, COPD) . .
Stalevo, Comtess and Comtan (Parkinson's disease) . .
Simdax (acute decompensated heart failure) . .
Nubeqa (prostate cancer) . .
Dexdomitor, Domitor, Domosedan and Antisedan (animal sedatives) . .
Dexdor (intensive care sedative) . .
Burana (inammatory pain) . .
Divina series (menopausal symptoms) . .
Solomet (inammation) . .
Biosimilars (rheumatoid arthritis, inammatory bowel diseases) . .
Total . .
2.2 Other operating expenses and income
Accounting policies
Group’s function-based consolidated income statement in the cost of goods sold comprises wages and salaries, materials,
procurement and other costs related to manufacturing and procurement. The expenses of selling and marketing operations
comprise costs related to the distribution of products, eld sales, marketing, advertising and other promotional activities,
including the related wages and salaries. R&D expenses comprise wages and salaries on R&D personnel, materials,
procurement of external services and other costs related to R&D function. R&D expenses also include expenses for R&D
projects that are classied as joint operations. The portion of the expenses that corresponds to the Group’s contractual share
of a project is recognised as an expense. Further information on recognition of R&D expenses in Group’s consolidated nancial
statements are given in note 3.2 Intangible assets.
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R&D EXPENSES
EUR million
R&D expenses . .
DEPRECIATION, AMORTISATION AND IMPAIRMENT BY FUNCTION
EUR million
Cost of goods sold . .
Selling and marketing . .
Research and development . .
Administration . .
Total . .
DEPRECIATION, AMORTISATION AND IMPAIRMENT BY ASSET CLASS
EUR million
Buildings and constructions . .
Machinery and equipment . .
Other tangible assets . .
Property, plant and equipment, total . .
Intangible rights . .
Other intangible assets . .
Intangible assets, total . .
During the period, an impairment charge of EUR 0.6 (2020: 1.2) million was recognised in selling and marketing expenses on
intangible rights.
OTHER OPERATING INCOME AND EXPENSES
EUR million
Gains on sales of property, plant and equipment, intangible assets and other investments . .
Rental income . .
Exchange rate gains and losses -. .
Other operating income . .
Other operating expenses - . -.
Total . .
Other operating income EUR 0.9 (2020: 2.0) million comprise small items, which separately are not material.
ORION | Financial Statement documents 2021
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2.3 Finance income and expenses
Accounting policies
Borrowing costs
Borrowing costs are recognised in the consolidated statement of income as an expense in the period in which they are
incurred. Borrowing costs that are directly attributable to the acquisition, construction or production of an asset that requires a
substantial period of time to be made ready are capitalised as a part of the cost of that asset.
FINANCE INCOME AND EXPENSES
EUR million
Interest income on money market investments . .
Dividend income on other investments . .
Other interest income . .
Foreign exchange gains and losses, net .
Other nance income . .
Finance income, total . .
Interest expenses . .
Foreign exchange gains and losses, net .
Other nance expenses . .
Finance expenses, total . .
Finance income and expenses, total -. -.
During the period the Group did not acquire any assets requiring a substantial completion time, and therefore no borrowing
costs have been capitalised during the period.
FOREIGN EXCHANGE GAINS + AND LOSSES INCLUDED IN FINANCE INCOME AND EXPENSES
EUR million
Foreign exchange rate gains . .
Foreign exchange rate losses -. -.
Net . -.
FOREIGN EXCHANGE GAINS + AND LOSSES ABOVE THE OPERATING PROFIT LINE
EUR million
In net sales . -.
In cost of goods sold -. .
In other income and expenses -. .
In functions' expenses -. .
ORION | Financial Statement documents 2021
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2.4 Earnings and dividend per share
Accounting policies
Earnings per share are calculated by dividing the prot for the period attributable to owners by the weighted average number
of shares outstanding during the period. The weighted average number of shares has been adjusted for the number of treasury
shares held by the Group during the period.
Dividend per share is calculated by dividing the dividend distributed during the period by the number of shares outstanding at
31 December.
BASIC EARNINGS PER SHARE
Prot for the period attributable to owners of the parent company, EUR million . .
Weighted average number of shares during the period (1,000 shares) , ,
Basic earnings per share, EUR . .
DILUTED EARNINGS PER SHARE
Prot used to determine diluted earnings per share, EUR million . .
Weighted average number of shares for diluted earnings per share (1,000 shares) , ,
Diluted earnings per share, EUR . .
DIVIDEND PER SHARE
Dividend paid during the period, EUR million . .
Number of shares at 31 Dec, (1,000 shares) , ,
Dividend per share paid during the period, EUR . .
The Group held 571,314 Company’s B shares as treasury shares at 31 December 2021.
For the nancial year 2021 a dividend of EUR 1.50 per share, in total EUR 210.8 million is proposed to the Annual General
Meeting, planned to be held on 23 March 2022. These nancial statements do not reect the proposed dividend.
ORION | Financial Statement documents 2021
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3 Invested capital
3.1 Property, plant and equipment
Accounting policies
Property, plant and equipment
Property, plant and equipment comprise mainly factories, oces and research centres, and machines and equipment
for manufacturing, research and development. Property, plant and equipment are measured at their historical cost, less
accumulated depreciation and impairment, and are depreciated over their useful life using the straight-line method. The
residual value and useful life of property, plant and equipment are reviewed when necessary, but at least at every year end
for the nancial statements, and adjusted to correspond to probable changes in the expectations of economic benets. The
estimated useful lives are as follows:
• Buildings 20–50 years
• Machinery and equipment 5–10 years
• Other tangible assets 10 years
Land is not depreciated. Repair and maintenance costs are recognised as expenses for the reporting period. Improvement
investments are capitalised if they are expected to generate future economic benets. Gains and losses on disposals of
property, plant and equipment are recognised in the consolidated income statement.
Right-of-use assets (leases)
Recognition at the inception of the lease
At the commencement of a lease, the Group recognises a lease liability and a corresponding right-of-use asset. The lease liability
is measured at the present value of the lease payments payable over the lease term that have not yet been paid. The leases are
discounted at the rate implicit in the lease or the Group’s incremental borrowing rate. In practice, the Group discounts the
leases using the Group’s incremental borrowing rate, since the rates implicit in the Group’s leases typically cannot be readily
determined. The incremental borrowing rate is based on market rates plus a country risk associated premium. The right-of-use
asset is initially measured at acquisition cost, which includes the original amount of the lease liability plus any initial direct costs
incurred by the Group, estimated restoration costs and any lease payments made at or prior to commencement, less lease
incentives obtained.
Leases paid by the Group consist of xed payments, variable leases, amounts payable based under residual value guarantees,
purchase option exercise prices, if it is reasonably certain that the option will be exercised as well as of payments associated
with termination sanctions if it has been taken into account in the lease term that the Group will exercise its lease termination
option.
When a variable lease depends on an index or a rate, these are taken into consideration when determining lease liability.
Variable lease payments are initially measured using the index or rate as at the commencement date. Other variable leases, such
as leases to be payable based on asset performance, are not included in the lease liability. Factually xed payments, which are
dependent on the functioning of an asset, for example, are taken into consideration when measuring the lease liability.
Subsequent measuring of a lease
After lease commencement, the Group measures the right-of-use asset using the acquisition cost model. The right-of-use
asset is measured at acquisition cost less accumulated depreciation and accumulated impairment, adjusted by any cost of
remeasurement of the lease liability. Depreciation is recognised in equal installments over the useful life of the asset or a shorter
lease-term. The residual value and useful life of the right-of-use asset is reviewed when necessary, but at least at every year end
for the nancial statements, and an impairment is recognised if expected economic benets change.
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The Group values the lease liability in subsequent periods using the eective interest method. The lease liability is remeasured
if actual lease payments materially dier from lease payments contained in the original measurement and if the change in lease
payments is based on clauses of the lease agreement that were in force at the inception of the lease. The lease is subsequently
remeasured, for example, when there is a change in future lease payments due to a change in the index or rate used to
determine those payments, or if there is a change in the amounts expected to be payable under a residual value guarantee.
Changes in the assessment of a purchase option of an underlying asset or an extension or termination option may also lead to
a remeasurement of the lease liability. The carrying amount of the right-of-use asset is adjusted by the lease liability amount
following a remeasurement, or if the right-of-use asset has a carrying amount of zero, it is recognised through prot or loss.
The Group may re-negotiate leases during the lease term. Changes may lead to a revision of the duration of the lease term or
to changing the underlying asset. The Group processes lease modications in accordance with IFRS 16 as modications of the
scope of the lease or of the consideration payable, which were not part of the original terms agreed at the inception of the lease.
Information on Group leases
The Group has roughly 400 leases involving a right-of-use asset under IFRS 16. The nature of these leases is described below.
Leases of business premises
Outside Finland, the Group typically operates in leased premises. The premises are mainly oce premises with xed-term or
open-end leases. The Group has dened the average duration of its open-end leases for 7–10 years. The estimate is based on
previous experience on the duration of similar leases. The leases do not contain material extension options. Some leases are
subject to annual raises based on an index stated on the lease contract.
Lease of vehicles
Measured by numbers, car leases are the predominant lease type signed by the Group. Cars are mostly leased by Group oces
outside Finland. Vehicles for employees working in the Group’s non-Finnish subsidiaries are typically on lease. The leases
typically run for 3–5 years and are signed without extension or purchase options.
Other leases
The Group’s other leases are mostly associated with factory operations. The Group has contracts with various service providers
involving a lease. The Group does not have such IT contracts that contain a lease contract.
The Group as lessor
The Group has one business facility that it has leased out to a third party. The Group treats this lease as an operational contract,
since it does not grant the lessee any gains or risks essentially associated with the leased facility that arise from the ownership
of an asset. The Group also has other low-value leases in which it operates as the lessor. Rental revenue from operative lease
contracts is recognised in equal installments in the consolidated statement of income.
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Critical accounting estimates and assumptions, and main related uncertainties
concerning recognising right-of-use assets from customer contracts
Determining whether an arrangement contains a lease
The Group will assess at the time of inception whether a contract is, or contains, a lease. A contract contains a lease when
it contains an identied asset and it conveys the right to direct the use of that asset for a specic period of time. The
precondition is that the Group pays a consideration to the contracting party in exchange for this right.
The asset can be identied either explicitly, for example, based on a specic identication code, or implicitly, when the asset
is not specied in the contract but in practice the contract can only be performed using a specic asset. The identied asset
may also be a physically separable part of a larger asset, if it represents a substantial part of the total capacity of the asset.
If the contracting party may substitute the asset with another one and gain nancially in the process, the contract does not
involve an identied asset and thus does not constitute a lease.
A contract conveys control to the Group when the Group gains substantially all the economic benets from using the asset
and has the right to direct the use of the identied asset during its useful life. Determination of the Group’s right to direct the
use of an asset involves considering its right to change things such as:
• mwhat type of output is generated;
• when the output is generated;
• where the output is generated; and
• how much output is generated
Separating components of a contract
In some cases, contracts may contain lease components, which is due to the fact that the contract obligates the contracting
party to provide various obligations to the Group. In such multi-component arrangements, the Group will specify each lease
component and process them separately in accounting. The right to use the underlying asset is a separate lease component
when the Group is able to benet from the use of the asset either as such or jointly with other easily accessible resources and
the asset is not highly dependent on other assets stipulated by the contract or it is not strongly attached to them. The Group
allocates the contractual consideration to each lease component in proportion to their relative individual prices. Group did
not have such material contracts as at December 31, 2021 or as at December 31, 2020 respectively.
Lease term
The lease term is the period during which the lease cannot be cancelled. The lease term is extended by the period covered
by an extension option or termination option, if the Group is reasonably certain to exercise the extension option or not to
exercise the termination option. The Group makes use of practical expedients and does not enter as liabilities leases with a
lease term of 12 months or less, or leases associated with low-value assets. These leases are recognised as a constant expense
over the lease term.
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Owned by Orion
Land and water
Buildings and
constructions
Machinery and
equipment
Other property,
plant and
equipment
Advance
payments and
construction
in progress Total
EUR million
Historical cost at 1 Jan . . . . . . . . . . . .
Additions . . . . . . . . . .
Disposals -. -. -. -. -. -. -. -. -. -. -.
Transfers between statement of
nancial position items . . . . . . -. -. . .
Translation dierences . -. . - . . -.
Historical cost at 31 Dec . . . . . . . . . . . .
Accumulated depreciation and
impairment at 1 Jan
. . -. -. -. -. -. -. -. -.
Accumulated depreciation on
disposals and transfers . . . . . . , .
Depreciation for the year -. -. -. -. -. -. -. -.
Translation dierences - . . -. . -. .
Accumulated depreciations and
impairment at 31 Dec . . -. -. -. -. -. -. -. -.
Carrying amount at 1 Jan . . . . . . . . . . . .
Carrying amount at 31 Dec . . . . . . . . . . . .
Other tangible assets mainly comprise basic improvements to rented apartments, asphalting, environmental works and art objects.
ORION | Financial Statement documents 2021 |
Right-of-use assets
Leased
premises Cars Others Total Owned by Orion Total
EUR million
Historical cost at 1 Jan . . . . . . . . . . . .
Additions . . . . . . . . . . . .
Disposals -. -. -. -. -. -. - . -. -. -. -.
Transfers between statement of
nancial position items . . . .
Translation dierences . -. . -. . -. . -. . -.
Historical cost at 31 Dec . . . . . . . . . . . .
Accumulated depreciation and
impairment at 1 Jan -. -. -. -. -. -. -. -. -. -. -. -.
Accumulated depreciation on
disposals and transfers . . . . . . . . . . .
Depreciation for the year -. -. -. -. -. -. -. -. -. -. -. -.
Translation dierences -. . -. . -. . - . . -. .
Accumulated depreciation and
impairment at 31 Dec -. -. -. -. -. -. -. -. -. -. -. -.
Carrying amount at 1 Jan . . . . . . . . . . . .
Carrying amount at 31 Dec . . . . . . . . . . . .
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Leases
ITEMS ARISING FROM LEASES IN THE CONSOLIDATED INCOME STATEMENT
EUR million
Depreciation from right-of-use assets . .
Interest expense from lease liabilities . .
Expense from short-term lease . .
Expense from leases of low-value assets . .
Lease income from third parties -. -.
Total . .
The Group has one business facility that it has leased out to a third party. The lease agreements is open-ended. The lease
revenue from the facility was in the nancial period EUR 1.7 (2020: 2.2) million.
Lease liabilities
The reconciliation of lease liabilities under current and non-current interest-bearing liabilities on the Group’s consolidated
balance sheet and undiscounted maturity spread of lease liabilities are presented in note 6.2.3 Liquidity risk.
Lease-related items entered in the consolidated cash ow statement
The consolidated cash ow statement item Repayments of current loans contains EUR 4.0 (2020: 3.9) million of lease payments
to lessors.
3.2 Intangible assets
Accounting policies
Research and development costs
Research costs are expensed as incurred to consolidated income statement. Intangible assets generated from development
activities are recognised in the statement of nancial position only if the expenditure of the development phase can be reliably
determined, the product is technically feasible and commercially viable, the product is expected to generate future economic
benets and the Group has the intention and resources to complete the development work. The Group’s view is that until an
authority has granted marketing authorisation, it could not be demonstrated that an intangible asset would generate future
economic benets. The Group has therefore not capitalised its internal development costs. The same principle for recognition
has been applied for externally purchased services. Software, buildings, machinery and equipment used in research and
development activities are depreciated and recognised under research and development costs over their useful life.
Goodwill
Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net assets of the
acquired company at the date of acquisition. Goodwill is measured at cost less accumulated impairment losses. For the purpose
of impairment testing, goodwill is allocated to cash-generating units or groups of cash-generating units that are expected to
benet from the business combination. Cash-generating units have been grouped according to operating segment. The goodwill
in the consolidated statement of nancial position arose prior to the adoption of IFRS, and it corresponds to the carrying
amount according to the previous nancial reporting standards, which was used as the deemed cost on 1 January 2004 when
making the transition to IFRS.
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Intangible rights and other intangible assets
Intangible rights and other intangible assets are measured at their historical cost, less accumulated amortisation and
impairment. They are amortised over their useful life, usually ve to ten years, using the straight-line method. As a rule, acquired
marketing rights are amortised over the remaining term of the contract.
Externally acquired intangible rights, such as product and marketing rights, are recognised in the statement of nancial
position. For a product under development, the cost bases are assessed. The costs of payments for research and development
work undertaken that has not yet generated an intangible right recognisable in the statement of nancial position are recognised
as research and development costs. However, if an intangible right is considered to have been transferred to the Group, the
costs are recognised in the statement of nancial position. Amortisations of marketing authorisations, and product and
marketing rights included in the intangible rights are disclosed under selling and marketing expenses, and recording of an
amortisation expense will commence when an authority has issued authorisation for marketing of the product and selling of it
commences.
The accounting for cloud computing arrangements depends on whether the cloud-based software classies as a software
intangible asset or a service contract. Those arrangements where the Group does not have control over the underlying software
are accounted for as service contracts providing the Company with the right to access the cloud provider’s application software
over the contract period. The ongoing fees to obtain access to the application software, together with related conguration
or customisation costs incurred, are recognised under in the consolidated income statement when the services are received.
Prepayments paid to the cloud vendor for customizing services which are not distinct are recognized as expense over the
contract period.
Government grants
Government grants related to research activities are recognised as decreases in the research expenses incurred in the
corresponding reporting period. If an authority decides to convert an R&D loan into a grant, that is recognised in the
consolidated income statement under other operating income. Government grants related to the acquisition of property, plant
and equipment or intangible assets are recognised as decreases in their acquisition costs. Such grants are recognised as income
in the form of reduced depreciation during the useful life of the asset.
Impairment of property, plant, equipment and intangible assets
At the end of each reporting period, the Group assesses whether there are indications that an asset may be impaired. If there
are any such indications, the respective recoverable amount is assessed. As regards goodwill and an material intangible
asset not yet available for use, the assessment is undertaken annually even if no such indications had become apparent. The
recoverable amount is the higher of the asset’s fair value less selling costs or value in use. The value in use is obtained by
discounting the present value of the future cash ows from that asset. The discount rate is the weighted average cost of capital
(WACC) calculated before tax and using Standard & Poor’s index for the healthcare industry as the debt-to-equity ratio. The
index corresponds to the potential and risks of the asset under review.
An impairment loss is recognised in the consolidated income statement for the amount by which the asset’s carrying amount
exceeds its recoverable amount. An impairment loss other than on goodwill is reversed if there is a change in the circumstances
and the asset’s recoverable amount exceeds its carrying amount. An impairment loss is not reversed to more than what the
carrying amount of the asset would have been had there been no impairment loss.
Impairment of goodwill is recognised in the consolidated income statement under Other operating expenses, which include
expenses not allocable to specic operations. Intangible assets not yet available for use, comprising mainly marketing
authorisations and product rights, are tested for impairment individually for each asset carrying material value in the statement
of nancial position. Impairment charges are recognised as an expense under the appropriate activity, and for marketing
authorisations and product and marketing rights under selling and marketing expenses.
Critical accounting estimates and assumptions, and main related uncertainties
concerning impairment of property, plant and equipment and intangible assets
Actual cash ows can dier from estimated discounted future cash ows because changes in the long-term economic life
of the Company’s assets, the forecast selling prices of products, production costs and the discount rate applied in the
calculations can lead to the recognition of impairment losses.
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Goodwill Intangible rights
¹
Other intangible
assets
2
Total
EUR million
Historical cost at 1 Jan . . . . . . . .
Additions . . . . . .
Disposals -. -. -. -. -. -.
Transfers between statement of nancial position items -. -. . . - . - .
Translation dierences . -. . -. . -.
Historical cost at 31 Dec . . . . . . . .
Accumulated amortisation and impairment at 1 Jan -. -. -. -. -. -.
Accumulated amortisation on disposals . . . . . .
Amortisation for the period -. -. -. -. -. -.
Impairment -. -. -. -.
Accumulated amortisation and impairment at 31 Dec -. -. -. -. -. -.
Carrying amount at 1 Jan . . . . . . . .
Carrying amount at 31 Dec . . . . . . . .
Intangible rights comprise mainly product rights and marketing authorisations with carrying amount EUR 41.7 (2020: 18.7) million, and also
software, trademarks and patents.
²
Other intangible assets include development costs for software paid to external parties and entry fees.
Besides goodwill, the Group has no other intangible assets with indenite useful life. The Group has no internally produced
intangible assets. All intangible assets have been obtained through acquisition.
Impairment testing of goodwill, property, plant and equipment and intangible assets
Goodwill
The goodwill of EUR 13.5 million originated from the acquisition of Farmos-Group Ltd. in 1990. In impairment testing, the
goodwill is allocated to the cash generating units that form the Pharmaceuticals business. The Group does not have any other
cash generating units.
In the impairment tests, the recoverable amount is determined on the basis of the value-in-use calculation. The cash ow
forecasts are based on the detailed ve-year plans adopted by the management. The cash ows beyond the forecast period
adopted by the management have been calculated cautiously assuming zero per cent growth. The management’s forecasts are
based on the growth of global pharmaceutical markets, market shares in sales of pharmaceuticals, and the trends expected in
pharmaceutical markets and sales.
The discount rate used is the weighted average cost of capital (WACC), in which the special risks related to the cash generating unit
have been taken into account. The discount rate is dened before taxes. The discount rate for the period is 4.7% (2020: 4.3%).
Based on impairment testing, there was no need to recognise any impairment of goodwill during the period.
A change in any of the main variables used would, reasonably judged, not lead to a situation in which the recoverable amount of
a group of cash-generating units is lower than its carrying amount.
Intangible assets not yet available for use
Intangible assets not yet available for use are tested for impairment annually. The recoverable amount is based on the value in
use. Cash ow forecasts adopted by the management cover a 5–15 year period from taking asset into use. The use of forecasts
for periods of over ve years is based on the estimated useful life of products. Beyond the ve-year period, the cash ow growth
ORION | Financial Statement documents 2021
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rate does not exceed the average growth rates of markets for the Company’s products and the pharmaceutical industry. The
discount rates for the period varied from 10% to 12%, and they are dened separately for each unit taking into account its risks
The carrying amount of intangible assets not yet available for use was EUR 38.2 (2020: 10.0) million.
Impairment charges recognised in the period
During the period impairment charges totalling EUR 0.6 (2020: 1.2) million were recognised on the intangible rights of
the Pharmaceuticals business. Intangible rights not yet available for use accounted for EUR 0.0 (2020: 1.0) million of the
impairments. The most signicant impairment charges relate to acquired rights to products the development of which has
ceased, and to products that are already in markets, but for which the forecast recoverable cash ows were less than the
carrying amount. The full carrying amount of rights to products the development of which has ceased has been recognised as
an expense.
There were no other indications that the value of intangible assets might have been impaired during the period.
3.3 Joint arrangements
In the 2020 nancial year, total cost of joint operations amounted to EUR 4.4 (2020: 11.3) million. At the end of the nancial
year 2021, Orion had no (2020: had no) of the upfront payments related to the joint operations in the consolidated statement of
nancial position.
Licensing, development and commercialisation agreement between
Orion and Bayer
In year 2014, Orion commenced global collaboration with Bayer in the development and commercialisation of the novel
androgen receptor antagonist darolutamide (brand name Nubeqa).
Darolutamide is in clinical development for the treatment of patients with prostate cancer. The clinical Phase III trial (ARAMIS)
launched in 2014 continued to evaluate the ecacy and safety of darolutamide in patients with non-metastatic castration-
resistant prostate cancer (nmCRPC). The primary endpoint of the ARAMIS trial was reached in October 2018. A second clinical
Phase III trial (ARASENS) began in 2016 and evaluates the safety and ecacy of darolutamide in patients with metastatic
hormone-sensitive prostate cancer (mHSPC). The primary endpoint of the ARASENS trial was reached in December 2021.
Additionally, another clinical Phase III trial (ARANOTE) was launched in 2020 to evaluate the ecacy and safety of the
combined darolutamide and hormonal therapy (androgen deprivation therapy, ADT) vs. combined placebo and hormonal
therapy in patients with metastatic hormone-sensitive prostate cancer (mHSPC).
Orion and Bayer set up a steering group for the darolutamide Phase III clinical trial. They are considered to have joint control
over the project. The agreement does not involve a separate investment instrument, so the project is considered a joint
operation under IFRS 11. Bayer takes main responsibility for the darolutamide research project costs, irrespective of the outcome
of the research.
Under the agreement, Bayer will commercialise the product globally while Orion has the option of co-promoting the product in
Europe. In addition, Orion will manufacture and package the product for global markets. Information on Nubeqa sales revenue
is provided in Note 2.1.
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3.4 Investments in associates, joint ventures and joint operations
EUR million
Carrying amount at 1 Jan . .
Share of associated companies' results
Carrying amount at 31 Dec . .
ASSOCIATES AND JOINT VENTURES OF THE GROUP
Holding at 31 Dec, % Domicile
Hangon Puhdistamo Oy Hanko .% .%
Hangon Puhdistamo Oy engages in wastewater treatment for the companies that own it. The company operates at cost, by
covering its own expenses and without making any prot, so its impact on the consolidated income statement and statement of
nancial position is minor.
SUMMARISED FINANCIAL INFORMATION OF ASSOCIATES
EUR million
Assets . .
Liabilities . .
Revenues . .
Prot (+) or loss (-) for the period . .
The most recent available nancial statements of the associate are for the years 2020 and 2019.
3.5 Inventories
Accounting policies
Inventories are presented in the statement of nancial position using the standard price for self-manufactured products, and
for purchased products the weighted average cost method using the value of the purchase and variable conversion costs, or
if lower, the net realisable or replacement value. Inventories are valued at the cost of the materials consumed plus the cost of
conversion, which comprises costs directly proportional to the amount produced and a systematically allocated share of xed
and variable production overheads.
The net realisable value is the estimated selling price obtainable through normal business, less the estimated expenses incurred
in nalising the product and selling it.
EUR million, 31 Dec
Raw materials and consumables . .
Work in progress . .
Finished products and goods . .
Total . .
The value of inventories has been impaired by EUR 15.5 (2020: 12.3) million during the period to correspond to net realisable value.
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3.6 Trade and other receivables
Carrying amount Fair value Carrying amount Fair value
EUR million, 31 Dec
Trade receivables . . . .
Current tax receivables . . . .
Receivables from associates . . . .
Prepaid expenses and accrued income . . . .
Receivables on derivative contracts . . . .
VAT receivables . . . .
Other receivables . . . .
Total . . . .
The maturities of the money market investments on their acquisition dates were over three months but no more than six
months. The carrying amount of trade receivables and other current receivables is a reasonable estimate of their fair value.
AGEING ANALYSIS OF TRADE RECEIVABLES
Carrying amount Default rate
Expected
credit loss Carrying amount
EUR million, 31 Dec
Not due . .% . .
1 to 30 days past due . .% . .
31 to 60 days past due . .% . .
61 to 90 days past due . .% . .
Over 90 days overdue . .% . .
Total . . .
The total credit losses of trade and other receivables for the period were net EUR -0.0 (2020: 0.0) million.
.
MATERIAL ITEMS INCLUDED IN PREPAID EXPENSES AND ACCRUED INCOME
EUR million, 31 Dec
Assets based on contracts . .
Prepayments for service and maintenance . .
Prepaid sales rights . .
Pending R&D contributions . .
Pending compensations . .
Price dierential payments on purchases . .
Share remunerations for restricted period .
Other prepaid expenses and accrued income . .
Total . .
Due to the short-term character of the prepaid expenses and accrued income, the carrying amounts do not dier from fair
value.
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OTHER NONCURRENT RECEIVABLES
EUR million, 31 Dec
Loan receivables from associates . .
Other loan receivables .
Other non-current receivables . .
Total . .
Loan receivables include interest-bearing receivables. The carrying amounts do not materially dier from fair values.
3.7 Provisions
Accounting policies
A restructuring provision is recognised when the Group has compiled a detailed restructuring plan, launched its
implementation or informed the parties concerned.
Critical accounting estimates and assumptions, and main related uncertainties
concerning recognising of provisions
A provision is recognised when the Group has a present legal or constructive obligation as a result of a past event, and it is
probable that an outow of resources will be required to settle the obligation and a reliable estimate of the amount of the
obligation can be made.
PROVISIONS
EUR million
Pension
provisions
Other
provisions Total
1 Jan 2021 . . .
Translation dierences -. -.
Utilised during the period -. . - .
Additions to provisions . . .
31 Dec 2021 . . .
EUR million, 31 Dec
Non-current provisions . .
Current provisions .
Total . .
Pension, restructuring and other provisions
Pension provisions include provisions for costs of additional days relating to unemployment pension. Other provisions include
provision in Italy, which relates to compensation paid to the employee when leaving the company and management’s pension
insurance provision in Sweden. The provisions are expected to materialise in the next 2–5 years.
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3.8 Trade payables and other liabilities
EUR million, 31 Dec
Trade payables . .
Current tax liabilities . .
Liabilities on derivative contracts . .
Other current liabilities to associates . .
Accrued liabilities and deferred income . .
VAT liabilities . .
Other current liabilities . .
Total . .
MATERIAL ITEMS INCLUDED IN ACCRUED LIABILITIES AND DEFERRED INCOME
EUR million, 31 Dec
Liabilities from share-based incentive plans . .
Liabilities from other incentive plans . .
Other accrued salary, wage and social security payments . .
Liabilites based on contracts . .
Accrued price reductions . .
Accrued R&D expenses . .
Accrued price adjustments on purchases . .
Accrued royalties . .
Accrued expert fees . .
Accrued litigation costs . .
Accrued sales compensation . .
Accrued prepayments of sales rights .
Accrued interest . .
Other accrued liabilities and deferred income . .
Total . .
Due to the short-term character of the trade payables and other current liabilities, the carrying amounts do not materially dier from
fair value.
OTHER NONCURRENT LIABILITIES
EUR million, 31 Dec
Liabilities based on contracts . .
Other liabilities . .
Total . .
Liabilities due to agreements include items from accruals of sales income, which have been described in Note 2.1 Revenue from
contracts with customers.
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4 Personnel
4.1 Employee benets
Accounting policies
The benets under the share-based incentive plan for key employees approved by the Board of Directors are recognised as an
expense in the income statement during the vesting period of the benet. The equity-settled portion is measured at fair value at
the time of granting the benet, and an increase corresponding to the expense entry in the statement of comprehensive income
is recognised in equity. The cash-settled portion is recognised as a liability, which is measured at fair value at the end of the
reporting period. The fair value of shares is the closing quotation for B shares on the day of granting the benet.
Critical accounting estimates and assumptions concerning share-based
incentive plans
Non-market vesting conditions, such as individual goals and result targets, aect the estimate of the nal number of shares
and amount of associated cash payments. The estimate of the nal number of shares and associated cash payments is
updated at the end of each reporting period. Changes in estimates are recognised in the statement of comprehensive income.
Employee benets
EUR million
Wages and salaries . .
Pension costs
Dened contribution plans . .
Dened benet plans . .
Share-based incentive plan
Equity-settled . .
Cash-settled . .
Other social security expenses . .
Total . .
Average number of personnel , ,
Dened benet pension obligations are presented in Note 4.2, Pension assets and pension liabilities. The management’s
employee benets are presented in Note 7.1, Related party transactions.
Share-based incentive plans
The Group has one share-based incentive plan in force for key persons of the Group that commenced in 2019.
The plan than commenced in 2019 includes ve earning periods, which are the calendar years 2019, 2019–2020, 2019–2021,
2020–2022 and 2021–2023. The Board of Directors decides on the earnings criteria and on targets to be established for them
at the beginning of each earning period. Three earning periods, calendar year 2019, calendar years 2019–2020 and 2019–2021,
commenced upon implementation of the plan. One earning period, calendar years 2020–2022, commenced in 2020. One
earning period, calendar years 2021–2023, commenced in 2021. The potential rewards of the plans for the earning periods
commencing in 2019, 2020 and 2021 are based on achieving the Orion Group’s operating prot and net sales targets.
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The target group of the plan consists of approximately 50 people. The total maximum amount of rewards to be paid on the
basis of the plan is 700,000 Orion Corporation B shares and a cash payment corresponding to the value of the shares. The total
maximum amount includes a separate, so called reward for commitment part that the Board of Directors can use by a separate
decision during the years 2019–2023. The maximum amount of the reward for commitment is no more than 100,000 shares
and a cash payment corresponding to the value of the shares. By 31 December 2021, 114,131 B shares had been paid as rewards
under this plan.
Under the plan, shares received based on one-year earning periods cannot be transferred during the restricted period
determined in the plan. There is no restricted period for the three-year earning periods. The Board of Directors may decide to
decrease the rewards to be paid to a key person if the limits set for the Orion Group long-term incentive plan rewards for one
calendar year are exceeded.
The plan that commenced in 2016 ended in 2020. The plan included earning periods and the Board of Directors decided
annually on the beginning and duration of the earning periods in 2016, 2017 and 2018. The Board of Directors decided on the
earning criteria and targets to be established for them at the beginning of each earning period. Two earning periods, calendar
year 2016 and calendar years 2016–2018, commenced upon implementation of the plan. Two earning periods, calendar
year 2017 and calendar years 2017–2019, commenced in 2017. Two earning periods, calendar year 2018 and calendar years
2018–2020, commenced in 2018. The reward under the plan for the earning periods 2016, 2017 and 2018 was based on the
Orion Group’s operating prot and for the earning periods 2016–2018, 2017–2019 and 2018–2020 on the total return on Orion
Corporation B shares.
The target group of the plan consisted of no more than 50 people. The total maximum amount of rewards to be paid based on
the plan is 500,000 Orion Corporation B Shares and a cash payment corresponding to the value of the shares. By 31 December
2021, a total of 260,957 Orion Corporation B shares had been paid as rewards under this plan.
Under the plan, shares received based on one-year and two-year earning periods could not be transferred during the restricted
period determined in the plan. There was no restriction period for the three year earning periods. The value of reward to be paid
based on the plans during one calendar year was a key person’s gross annual salary multiplied by 1.75, in the maximum, at the
date of the reward payment.
The earning and restricted periods of Group’s share-based incentive plan that is in force (LTI 2019) and share-based incentive
plan that ended in 2020 (LTI 2016):
Earning periods
The plan commenced in 2016 2018–2020 ● 1 2 3 ●
The plan commenced in 2019 2019 ● 1● 2 3
2019–2020 ● 1 2 ● 3
2019–2021 ● 1 2 3 ●
2020–2022 ● 1 2 3 ●
2021–2023 ● 1 2 3 ●
● Granting of share rewards | March
Earning period
Restricted period (shares cannot be transferred)
● Reward paid / potential reward to be paid | March
ORION | Financial Statement documents 2021 |
The rewards under the plan shall be paid partly in the form of the Company’s B shares and partly in cash. Rewards under the
plans have been paid and potential future rewards under the plans shall be paid as follows:
Earning period
Reward paid on/potential
reward to be paid in
2018−2020 Mar
2019 Mar
2019–2020 Mar
2019–2021
2020–2022
2021–2023
The costs due to plan are recognised as expenses during the restricted period. The anticipated dividends have not been taken
into account separately as they are taken into account in determining the share-based rewards.
EARNINGS PERIODS CURRENTLY IN EFFECT
– – – –
Start date of earning period Jan Jan Jan Jan Jan
End date of earning period Dec Dec Dec Dec Dec
End date of restricted period Dec Dec
Grant date of share rewards Mar Mar Mar Mar Mar
Fair value of shares at granting, EUR , , , , ,
TRANSFERRED SHARES
Number of shares transferred during period 99,768 , , ,
Price per transferred share, EUR
¹
34.11 . . .
Total price of transferred shares, EUR million 3.4 . . .
End date of restricted period
²
Dec Dec Dec Dec
Average price of B share on tranfer date.
²
Concerns only shares which are granted based on earning period term of one or two calendar years.
ORION | Financial Statement documents 2021 |
4.2 Pension assets and pension liabilities
Accounting policies
The Group has pension plans in accordance with each country’s local regulations and practices. The Group has both dened
contribution and dened benet plans. In the dened contribution plans, the Group pays xed contributions to separate
entities. The Group has no legal or constructive obligations to pay further contributions if the recipient of the contributions is
unable to pay the employee benets. All the plans that do not full these criteria are dened benet plans. The payments to
the dened contribution plans are recognised as expenses in the statement of comprehensive income in accordance with the
contributions payable for the period.
The Orion Group has dened benet pension plans in Finland and Norway. The regulation of these pension plans is quite
similar. The most signicant individual pension plan in Finland is the Orion Pension Fund, through which pension plans
are provided for white-collar sta working in Finland. The Pension Fund includes statutory pension insurance to which
all whitecollar sta are entitled (Department B), only part of which is treated as dened benet based under IAS 19, and
supplementary insurance for some white-collar sta (Department A), which is entirely dened benet based. Assets of the
Orion Pension Fund are invested in accordance with Finnish legislation. The management and Board of Directors of the Pension
Fund are responsible for management of the assets of the Fund. The Group also has dened benet pension plan in Norway for
which a party outside the Group provides asset management. In addition, the Group management has dened benet pension
plans taken out with life assurance companies. The obligations under the dened benet pension plans have been calculated
separately for each plan.
The pension expenses related to the dened benet pension plans have been calculated using the projected unit credit
method. The pension expenses are recognised as expenses by distributing them over the whole estimated period of service
of the personnel. The net dened benet liability to be recorded in the statement of nancial position is the present value of
the dened benet obligation at the end date of the reporting period less the fair value of plan assets. The present value of the
dened benet obligation is the present value of the estimated future pensions payable, and the discount rate applied is the
interest rate of low-risk bonds issued by companies with a maturity that corresponds to that of the dened benet obligation as
closely as possible. The interest rate is derived from bonds issued in the same currency as the benets payable.
Items arising from remeasurement of dened benet plan assets are recognised directly into components of other
comprehensive income during the period when they arise. The most substantial items due to remeasurement in the Group are
due to actuarial gains and losses and return on the plan assets (excluding net interest items).
The Group applies an accounting procedure in which net interest arising from plan assets is recognised functionally above
operating prot as part of dened benet plan pension expense.
Critical accounting estimates and assumptions, and main related uncerntainties
The Group has various pension plans to provide for the retirement of its employees or to provide for when the employment
ends. Various statistical and other actuarial assumptions are applied in calculating the expenses and liabilities of employee
benets, such as the discount rate, estimated changes in the future level of wages and salaries, and employee turnover.
The statistical assumptions made can dier considerably from the actual trend because of, among other things, a changed
general economic situation and the length of the period of service. The gains and losses due to changes in actuarial
assumptions are recorded into components of other comprehensive income during the period in which they arise. The
changes aect the comprehensive income for the period.
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DEFINED BENEFIT PLANS AMOUNTS RECOGNISED IN THE STATEMENT OF FINANCIAL POSITION
Pension fund Other Pension fund Other
EUR million, 31 Dec
Present value of funded obligations . . . .
Fair value of plan assets -. -. -. -.
Surplus (-) / decit (+) -. . . .
Present value of unfunded obligations . .
Net asset (-) / liability (+) recognised
in the statement of nancial position -. . . .
The net pension liability change of EUR 30.0 million is mostly due to return on plans assets, EUR 59.5 million, a change in the
discount rate and the dierence between the assumed and realised pension increase rate in the 2021 nancial year.
The change in discount rate has been reported under the item Prots (-) and losses (+) due to changes in economic
assumptions of the table illustrating the change in the current value of the obligation. The impact of the dierence between
assumed and realised pension increase rates has been reported under the item Empirical prots (-) and losses (+). The capital
value coecient of disability pensions in the Employees Pensions Act will change in the beginning of year 2022. A retrospective
gain has been reported as Gains (-) and losses (+) due to changes in demographic assumptions. These items have been directly
recognised in equity under other comprehensive income.
AMOUNTS IN CONSOLIDATED STATEMENT OF FINANCIAL POSITION
Pension fund Other Pension fund Other
EUR million
Liabilities . . .
Asset -. -.
Net asset (-) / liability (+) recognised in the statement of
nancial position -. . . .
DEFINED BENEFIT PLAN PENSION EXPENSES IN CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Pension fund Other Pension fund Other
EUR million
Current service cost . . . .
Interest expense and income, total . . -. .
Pension expense (+) / income (-) in income statement . . . .
Items due to remeasurement -. . . .
Pension expense (+) / income (-) in statement
of comprehensive income -. . . .
DEFINED BENEFIT PLAN PENSION EXPENSES BY FUNCTION
Pension fund Other Pension fund Other
EUR million
Cost of goods sold . .
Selling and marketing . . . .
Research and development . .
Administration . . . .
Pension expense (+) / income (-) in the income statement . . . .
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CHANGES IN PRESENT VALUE OF OBLIGATION
Pension fund Other Pension fund Other
EUR million
Dened benet plan obligation at 1 Jan . . . .
Current service cost . . . .
Interest expense . . . .
Curtailments -.
Items due to remeasurement:
Gains (-) or losses (+) due to change in
demographic assumptions -.
Gains (-) or losses (+) due to change in
economic assumptions . . . .
Experienced gains (-) or losses (+) . -. . -.
Total . . . .
Translation dierences . -.
Benets paid -. -. -. -.
Obligation at 31 Dec . . . .
CHANGES IN FAIR VALUE OF PLAN ASSETS
Pension fund Other Pension fund Other
EUR million
Fair value of plan assets at 1 Jan . . . .
Interest income . . . .
Items due to remeasurement:
Return on plan assets excluding items in interest
expense and income . -. . .
Total . -. . .
Translation dierences . -.
Employer contributions -. . . .
Benets paid -. -. -. -.
Fair value of plan assets at 31 Dec . . . .
FAIR VALUES OF ASSETS OF BENEFIT PLAN ARRANGED THROUGH THE ORION PENSION FUND BY ASSET CATEGORY
AS PERCENTAGES OF FAIR VALUE OF ALL PLAN ASSETS
%
Equity in developed markets % %
Equity in emerging markets % %
Bonds % %
Cash and money market investments % %
Properties % %
Other % %
Total % %
In other benet plans the insurance companies are responsible for the plan assets, so it is not possible to present a breakdown
of those assets.
The Pension Fund plan assets in 2021 include shares issued by the parent company Orion Corporation with fair value EUR 26.3
(2020: 27.1) million that account for 5.6% (2020: 6.6%) of the plan assets.
The objective of the Orion Pension Fund is a distribution of investments that spreads risk between dierent types of asset over
the long term. Most of the assets are invested in shares and bonds.
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ACTUARIAL ASSUMPTIONS USED BY THE ORION PENSION FUND
%
Discount rate . .
Ination rate . .
Future pension increases .–. .–.
Future salary increases . .
In 2021 the Group expects to contribute EUR 18 million to its pension plans (in period 2020 expected to contribute EUR 17
million in 2021 to its pension plans).
Discount rate is the most signicant assumption, which aects the value of pension liability. The EUR 437.1 (2020: 417.2) million
liability of the Orion Pension Fund has been discounted at a discount rate of 1.0% (2020: 0.5%). The impact on the liability of
a change in the discount rate of +/- 0.50 percentage points would be EUR -40.0/+46.4 (2020: -39.0/+45.3) million, when other
assumptions unchanged.
The weighted average duration of the dened benet liability is 20 (2020: 20) years.
The dened benet plans expose the Group to risks, the most signicant of which are described in more detail below.
Volatility related to assets and liability
The discount rate applied in calculating the net liability due to the plans is based on the return of low-risk bonds issued by
companies. The Group determines the discount rate based on publicly available market information. Discount rate is the most
signicant assumption, which aects the value of pension liability.
The Group’s target over the long-term for dened benet plan assets is to achieve a return exceeding the discount rate because
some of the assets are equity instruments for which the return over the long term is expected to be higher than the return of
bonds on which the discount rate is based. The value of dened benet assets changes as the return rises above or decreases
below the discount rate. This may generate a surplus or decit of plan assets. The solidity of the Orion Pension Fund is good, so
the Orion Pension Fund can withstand quite a heavy fall in stock markets.
Changes in returns of bonds
The Group may have to change the discount rate if the return on bonds changes. That would alter the liabilities of the dened
benet plans and the components relating to dened benet plans to be recorded in the statement of comprehensive income.
However, some of the assets of the plans are invested in bonds, and the change in their value may partly compensate for the
eect of the change in the liability on the value of the net debt.
Ination risk
The liability of the dened benet plans would increase if ination increased. Some of the plan assets are invested in equity
instruments that are aected only a little by ination. Acceleration of ination would therefore increase the decit of the dened
benet plans.
Anticipated life expectancy
Dened benet plan liabilities to a large extent relate to the generation of life-long benets for members. A rise in anticipated
life expectancy would therefore increase the dened benet liability.
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5 Income taxes and deferred taxes
5.1 Income taxes
Accounting policies
The income tax expense in the consolidated income statement income includes taxes based on the prot of the Group
companies for the nancial year, tax adjustments for previous nancial years and deferred tax. For items recognised directly in
equity, the corresponding tax eect is also recognised in equity. Current tax is calculated on the basis of the tax rate in force in
each country.
INCOME TAXES
EUR million
Current taxes . .
Adjustments for current tax of prior periods -. -.
Deferred taxes -. .
Total . .
TAXES RECOGNISED IN OTHER COMPREHENSIVE INCOME
EUR million
Remeasurement of pension plans (income -/ expense +) . -.
RECONCILIATION BETWEEN TAX EXPENSE IN STATEMENT OF COMPREHENSIVE INCOME AND TAXES CALCULATED
FROM GROUP´S .% DOMESTIC TAX RATE
EUR million
Prot before taxes . .
Consolidated income taxes at Group's domestic tax rate . .
Impact of dierent tax rates of foreign subsidiaries . .
Tax-exempt income -. -.
Non-deductible expenses . .
Utilisation of deductible losses . -.
Tax adjustments for previous nancial years -. -.
Withholding tax provision of dividends .
Changes in deferred taxes related to prior years . .
Other items -. .
Income tax expense recognised in consolidated income statement . .
Eective tax rate .% .%
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5.2 Deferred taxes
Accounting policies
Deferred tax is computed on all temporary dierences between the carrying amount and the taxable value. Deferred tax assets
due to conrmed tax losses of Group companies are imputed only to the extent that they can be utilised in the future. Deferred
taxes are computed using the tax rates valid or in practice approved at the end of the reporting period.
Critical accounting estimates and assumptions, and main related uncerntainties
concerning deferred taxes
In preparing the nancial statements, the Group estimates, in particular, the basis for recording deferred tax assets. For this
purpose, an estimate is made of how probable it is that the subsidiaries will generate sucient taxable income against which
unused tax losses or unused tax assets can be utilised. The factors applied in making the forecasts can dier from the actual
gures, and this can lead to expense entries for tax assets in the income statement. .
DEFERRED TAX ASSETS
EUR million, 31 Dec
Revenue recognition . .
Internal inventory margin . .
Pension liability . .
Other deductible temporary dierences . .
Total . .
DEFERRED TAX LIABILITIES
EUR million, 31 Dec
Depreciation dierence and untaxed reserves . .
Pension assets .
Other taxable temporary dierences . .
Capitalised cost of inventory . .
Total . .
CHANGE IN DEFERRED TAX ARISES FROM
EUR million, 31 Dec
Pension assets/liabilities -. .
Internal inventory margin . -.
Capitalised cost of inventory . .
Revenue recognition -. -.
Depreciation dierence and untaxed reserves -. .
Deductible losses and other timing dierences -. -.
Total -. .
During the period, increase of EUR 7.2 (2020: an increase of EUR 14.4) million has been recognised to other comprehensive
income due to income taxes was recognised. The recognised taxes increased at 31 Dec 2021 the equity EUR 3.2 (2020: increased
EUR 10.5) million.
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6 Financing and capital structure
6.1 Financial assets and liabilities by category
Accounting policies
Classication
The Group’s nancial items are recognised and measured at amortised cost or at fair value through prot or loss. The
classication of assets depends on the business models dened by the Company and on the cash ows of the nancial assets
based on contract. The classication may change following a change in business model. Classication per item in statement of
nancial position is found in the note concerning nancial assets and liabilities.
1. Measured at amortised cost
When the target of the business model is to hold nancial assets for the purpose of collecting cash ows based on contract
and the cash ows are based exclusively on the payment of equity and interests, assets are classied at amortised cost. Of
the Group’s nancial assets trade receivables, other receivables and nancial assets are classied at amortised cost. Financial
liabilities except for derivatives are classied at amortised cost.
2. Recognised at fair value through prot or loss
Financial assets are measured at fair value through prot or loss when they are not held for collecting cash ows based on
contract nor for both collecting cash ows and for sale or when they were classied at this class in the initial classication. The
Group’s nancial assets recognised at fair value through prot or loss comprise derivatives, shares and interests and money
market investments. Of nancial liabilities, derivatives are measured at fair value and are recognised through prot and loss.
A nancial asset or liability with maturity over 12 months from the reporting date is included in the non-current assets or
liabilities in the statement of nancial position. If a nancial asset is intended to be held for less than 12 months or its maturity
is less than 12 months from the reporting date, it is included in the current assets in the statement of nancial position. The
credit limits of bank accounts to the extent that they are used and commercial paper issued by the Company are included in
interest-bearing current liabilities, as are any repayments of capital of non-current interest-bearing liabilities due in the next 12
months.
Recognition and measurement
Purchases and sales of nancial assets are recognised in the accounting through settlement date accounting except for
derivatives, which are recognised on the acquisition date. Financial assets measured at amortised cost are also initially
recognised at fair value, but transaction costs are taken into account in the value. After initial measurement, the value of these
nancial assets is measured at amortised cost using the eective interest method less any impairment. Impairment losses are
recognised in the consolidated income statement.
Financial assets at fair value through prot or loss are initially recognised at fair value, and transaction costs are recognised as
expenses in the consolidated income statement. Unrealised and realised gains and losses due to changes in the fair value are
recognised through prot or loss. Fair value is based on the quoted market price on the end date of the reporting period.
Financial liabilities are initially recognised in accounting at fair value less transaction costs. Subsequently, nancial liabilities
except derivative liabilities at fair value through prot or loss are measured at amortised cost using the eective interest
method.
A nancial asset is derecognised in the statement of nancial position when the Group no longer has the contractual rights
to receive the cash ows or when it has substantially transferred the risks and income from the asset to outside the Group.
Liabilities are derecognised in the statement of nancial position once the debt has extinguished.
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Impairment
At the end of each reporting period, it is assessed whether there is any objective evidence of expected credit losses regarding an
item in the Group’s nancial assets.
Impairments are estimated in two dierent ways, either based on the amount of expected credit losses in the next 12 months or
based on the amount of expected credit losses over the entire lifetime of the nancial asset. As a rule, the used time period is
the next 12 months unless there are specic grounds for a signicantly increased credit risk of a nancial asset.
Criteria applied by the Group in stating that there is signicantly increased credit risk:
• issuer’s or debtor’s considerable nancial problems
• breach of contract terms, such as neglecting payments or payments long overdue
• high probability of bankruptcy or other nancial restructuring of debtor
For trade receivables, the Company applies a simplied model based on the amount and due date distribution of overdue
receivables. Trade receivables do not include a signicant nancing component, and thus expected credit losses are recognised
over the entire lifetime of the nancial asset. Historical credit loss experience is used as the basic information in the provision
matrix, and it is adjusted as needed with a future outlook estimate.
Expected credit losses are recognised through prot or loss, with the counter-item reducing the item in nancial assets.
Recognition takes place at the next reporting date.
Cash and cash equivalents
Cash and cash equivalents comprise cash in hand, bank deposits and assets in bank accounts, and liquid debt instruments.
Liquid debt instruments are short-term certicates of deposit and commercial paper with maturities initially of no more than
three months issued by banks and companies.
Money market investments that are fair value through prot or loss instruments with maturities initially of over three months
and no more than twelve months and liquid bond funds are regarded as cash and cash equivalents in the statement of cash
ows. Money market investments are part of the Group’s active cash management.
Derivative instruments
Derivatives are classied as measured at fair value through prot or loss and are initially recognised at fair value on the date the
derivative contract is entered into and are subsequently remeasured at their fair value using the closing market prices on the
end date of the reporting period. Derivatives are recognised under other receivables and liabilities in the statement of nancial
position. The Group does not apply hedge accounting to foreign exchange derivatives that hedge items in foreign currencies
in the statement of nancial position or hedge highly probable forecast cash ows, even though they have been acquired for
hedging purposes in accordance with the Group’s treasury policy.
Both unrealised and realised gains and losses due to changes in the fair value of derivatives recorded through prot or loss are
recognised in the reporting period in which they are incurred through prot or loss under either Other income and expenses or
Finance income and expenses, depending on whether operational revenue or nance items have been hedged.
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FINANCIAL ASSETS AND LIABILITIES BY CATEGORY
EUR million, 31 Dec
Amortised cost
Fair value through
prot and loss
Carrying amount
of nancial items Fair value
Carrying amount
of nancial items
Other investments . . . .
Other non-current receivables . . . .
Non-current assets total . . . . .
Trade receivables . . . .
Other receivables . . . .
Cash and cash equivalents . . . .
Derivatives . . . .
Current assets total . . . . .
Financial assets total . . . . .
Non-current interest-bearing liabilities . . . .
Other non-current liabilities . . . .
Non-current liabilities total . . . .
Trade payables . . . .
Other current liabilities . . . .
Current interest-bearing liabilities . . . .
Derivatives . . . .
Current liabilities total . . . . .
Financial liabilities total . . . . .
Derivative contracts are included in other receivables and other liabilities in the statement of nancial position.
SPECIFICATION OF FINANCIAL LIABILITIES INCLUDED IN CASH FLOW FROM FINANCING ACTIVITIES
EUR million, 31 Dec Cash ows
Other
changes with
no related
payment
Interest-bearing non-current liabilities -. . .
Interest-bearing current liabilities . . .
FAIR VALUE MEASUREMENT AND HIERARCHY
Financial instruments measured at fair value in the statement of nancial position are grouped as follows into three hierarchy
levels depending on the valuation technique
EUR million, 31 Dec 2021 Level Level Level Total
Derivatives
Currency derivatives . .
Other investments
Shares and investments . .
Assets total . . .
Derivatives
Currency derivatives - . - .
Liabilities total -. - .
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EUR million, 31 Dec 2020 Level Level Level Total
Derivatives
Currency derivatives . .
Other investments
Shares and investments . .
Assets total . . .
Derivatives
Currency derivatives -. -.
Liabilities total -. -.
The fair value of level 1 nancial instrument is based on quotations available in active markets. The fair value of level 2
derivatives is based on data feeds available in the markets. The fair value of level 3 nancial instruments cannot be estimated on
the basis of data available in the markets.
The Group applies the principle of recognising transfers between levels of fair value hierarchy on the date on which the event
triggering the transfer occurred.
6.2 Financial risk management
The objective of the Group’s nancial risk management is to decrease the negative eects of market and counterparty risks on
the Group’s prots and cash ows and to ensure sucient liquidity.
The main principles for nancial risk management are dened in the Group Treasury Policy approved by the Board of Directors
of the parent company or CEO of the parent company, and the Group Treasury is responsible for its implementation. Treasury
activities are centralised in the Group Treasury.
6.2.1 Market risk
The Group is exposed to market risks related to foreign currency exchange rate, market interest rate and electricity price.
6.2.1.1 Foreign currency exchange rate risk
The Group’s foreign currency exchange rate risk consists of transaction risk and translation risk.
Transaction risk
Transaction risk arises from operational items (such as sales and purchases) and nancial items (such as loans, deposits and
interest ows) in foreign currency in the statement of nancial position, and from forecast cash ows over the upcoming 12
months. Transaction risk is monitored and hedged actively. In accordance with the Treasury Policy, items based on signicant
currencies in the statement of nancial position are normally hedged 90–105% and the forecast cash ows over the upcoming
12 months 0–50%. Currency derivatives with maturities up to 12 months are used as hedging instruments.
The most signicant currencies for the Group’s operational items are the US dollar, Swedish krona, Polish zloty, Norwegian
krona, Russian rouble, Japanese yen and British pound. As regards these currencies, no individual currency accounts for a
signicant portion of the overall position. The position as regards these currencies is presented below.
EUR million, 31 Dec USD SEK PLN
Other
signicant
currencies
Total
Net position in statement of nancial position . . . . . .
Forecast net position (12 months) . . . . . .
Net position, total . . . . . .
Currency derivatives for hedging -. -. -. -. -. -.
Net open position total . . . . , .
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The Group’s internal loans and deposits are denominated in the local currency of the subsidiary and the most signicant ones
have been fully hedged with currency swaps.
The fair value changes of the currency derivatives are recognised through prot and loss in either other operating income and
expenses or nance income and expenses depending on whether, from an operational perspective, sales revenues or nancial
assets and liabilities have been hedged.
Translation risk
Translation risk arises from the equity of subsidiaries outside the eurozone. At 31 December 2021 the equity in these subsidiaries
totalled EUR 63.2 (2020: 62.2) million. The most signicant translation risk arises from the British pound. This translation
position has not been hedged.
Sensitivity analysis
The eect of changes in foreign currency exchange rates on the Group’s results (before taxes) and equity at the reporting date
is presented below for the signicant currencies. The assumption used in the sensitivity analysis is a +/- 10% change in the
exchange rates (foreign currency depreciates/appreciates by 10%) while other factors remain unchanged. In accordance with
IFRS 7, the sensitivity analysis includes only the nancial assets and liabilities in the statement of nancial position, and so the
analysis does not take into account the forecast upcoming 12-month foreign currency cash ow included in the position. The
potential translation position is not taken into account in the sensitivity analysis. In the case the Group is not adapting hedge
accounting, the changes of exchange rates are recorded directly to prot or loss.
Impact on prot
EUR million, 31 Dec
+/- 10% change in exchange rates -./. -./.
6.2.1.2 Electricity price risk
The price risk refers to the risk resulting from changes in electricity market prices. The market price of electricity uctuates
greatly due to weather conditions, hydrology and emissions trading, for example. The Group obtains its electricity through
deliveries that are partly xed-price contracts and partly tied to the spot price of the price area of Finland, and in the latter case
is therefore exposed to electricity price uctuation. This price risk is not hedged.
6.2.1.3 Interest rate risk
Changes in interest rates aect the Group’s cash ow and results. At 31 December 2021, the Group’s interest-bearing liabilities
totalled EUR 108.4 (2020: 108.5) million, which comprise of long-term loans and lease liabilities. Long-term loan of EUR 100
million has xed interest rate and thus changes in interest levels in markets has no impact to Group’s cash ow or prots.
6.2.2 Counterparty risk
Counterparty risk is realised when a counterparty to the Group does not full its contractual obligations, resulting in non-
payment of funds to the Group. The maximum credit risk exposure at 31 December 2021 is the total of nancial assets less
carrying amounts of derivatives in nancial liabilities, which totalled EUR 393.2 (2020: 454.3) million (Note 6.1). The main risks
relate to trade receivables, cash and cash equivalents, and money market investments.
The Group Treasury Policy denes the requirements for the creditworthiness of the nancial institutions acting as
counterparties to Group companies. Limits have been set for counterparties on the basis of creditworthiness and solidity, and
they are regularly monitored and updated. The duration of money market investments is less than 12 months.
The Group Customer Credit Policy denes the basis for classifying customers and setting limits for them, and the ways through
which the credit risk is managed. Payment performance and the nancial situation of customers are monitored, and eective
collection is regularly undertaken. Credit risk can be reduced by requiring advance payment as a payment term or a letter of
credit or a bank guarantee to secure the payment, or by using credit insurance. In the pharmaceutical industry, trade receivables
are typically generated by distributors representing dierent geographical areas. In certain countries, the Group also sells
directly to local hospitals. The 25 largest customers accounted for 72.3% of the trade receivables at 31 December 2021 (2020:
73.9%). The trade receivables are not considered to involve signicant risk (note 3.6). Credit losses for the period recognised
through prot and loss were EUR -0.0 (2020: 0.0) million.
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6.2.3 Liquidity risk
The Group seeks to maintain a good liquidity position in all conditions.This is ensured by cash ows from operating activities
and cash and cash equivalents and other money market investments. In December 2021, EUR 100 million loan agreement with
European Investment Bank was signed. The loan has not yet been withdrawn. In addition to this, the Group has undrawn bank
overdraft limits and a EUR 100 million unconrmed commercial paper program from which no commercial papers had been
issued on the reporting date.
The Group’s interest-bearing liabilities at 31 December 2020 were EUR 108.4 (2020: 108.5) million, which consisted of loan from
EIB with xed interest rate and lease liabilities. The average maturity for interest-bearing liabilities excluding lease liabilities is
4.2 years (2020: 5.2 years). At 31 December 2020, the Group’s cash and cash equivalents and money market investments, which
decrease liquidity risk, totalled EUR 216.7 (2020: 294.4) million. To ensure the Group’s liquidity, any surplus cash is invested
mainly in short-term euro-denominated interest-bearing instruments with good creditworthiness. An investment-specic limit
is determined for each investment.
FORECAST UNDISCOUNTED CASH FLOWS OF FINANCIAL LIABILITIES, INTEREST PAYMENTS AND DERIVATIVES
EUR million, 31 Dec 2021 – Total
Repayments of loans . . . . . .
Repayments of lease liabilities . . . . . .
Interest payments . . . . . .
Cash ow total, interest-bearing
nancial liabilities . . . . . .
Trade payables . .
Other non-interest-bearing nancial liabilities . . .
Cash ow total, non-interest-bearing nancial
liabilities . . .
Derivative contracts, inow . .
Derivative contracts, outow -. -.
Cash ow total, derivative contracts -. -.
Cash ow total, all . . . . . .
EUR million, 31 Dec 2020 – Total
Repayments of loans . . . . .
Repayments of lease liabilities . . . . . .
Repayments of nance lease liabilities . . . . . .
Cash ow total, interest-bearing
nancial liabilities . . . . . .
Trade payables . .
Other non-interest-bearing nancial liabilities . . .
Cash ow total, non-interest-bearing
nancial liabilities . . .
Derivative contracts, inow . .
Derivative contracts, outow -. -.
Cash ow total, derivative contracts . .
Cash ow total, all . . . . . .
Forward rates or the average reference rate per contract are used for forecasts of interest payments on oating-rate loans.
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6.2.4 Management of capital structure
The nancial objectives of the Group include a capital structure related goal to maintain the equity ratio, i.e. equity in proportion
to total assets, at a level of at least 50%. This equity ratio is not the Company’s opinion of an optimal capital structure, but
rather part of an aggregate consideration of the Company’s growth and protability targets and dividend policy.
The terms of credit limit agreements of the Company include covenants that specify that if the covenants are breached, the
lender optionally has the right to demand early repayment of the loan. The key gures used in calculation of covenants are
calculated in accordance with the formulas given in loan agreements. The following tables show the levels of nancial covenants
specied in the terms of the loans and the corresponding values at 31 December 2021.
FINANCIAL COVENANTS Requirements
Group equity ratio >%
Group interest-bearing net liabilities / EBITDA <.
GROUP EQUITY RATIO
31 Dec
Equity, EUR million . .
Equity and liabilities total minus advances received, EUR million ,. ,.
Equity ratio, % .% .%
GROUP INTERESTBEARING NET LIABILITIES / GROUP EBITDA
EUR million, 31 Dec
Interest-bearing net liabilities -. -.
EBITDA . .
Interest-bearing net liabilities / EBITDA -. -.
6.3 Equity
Accounting policies
Ordinary shares are presented as share capital. Transaction costs directly due to issuance of new shares or options are
presented in equity including tax eects as a decrease in payments received. If a Group company purchases shares in the
Company, the payment and direct costs relating to the acquisition are deducted from the equity.
The expendable fund and reserve for invested unrestricted equity are included in distributable funds under the Finnish Limited
Liability Companies Act. .
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CHANGES IN SHARE CAPITAL
A shares B shares Total
Share capital
EUR million
Total number of shares at 1 Jan 2020 ,, ,, ,, .
Cancellation during the period -, -, -,
Conversions of A shares to B shares in 1 Jan – 31 Dec 2020 -,, ,,
Total number of shares at 31 Dec 2020 ,, ,, ,, .
Conversions of A shares to B shares in 1 Jan – 31 Dec 2021 -, ,
Total number of shares at 31 Dec 2021 ,, ,, ,, .
Number of treasury shares at 31 Dec 2021 , ,
Total number of shares at 31 Dec 2021, excluding treasury shares ,, ,, ,,
Total number of votes at 31 Dec 2021 excluding treasury shares ,, ,, ,,
On 31 December 2021 Orion had a total of 141,134,278 (2020: 141,134,278) shares, of which 34,813,206 (2020: 35,122,793) were A
shares and 106,321,072 (2020: 106,011,485) B shares. The Group’s share capital was EUR 92,238,541.46 (2020: 92,238,541.46). At
the end of 2021 Orion held 571,314 (2020: 671,082) B shares as treasury shares. On 31 December 2021 the aggregate number of
votes conferred by the A and B shares was 802,013,878 (2020: 807,796,263) excluding treasury shares.
All shares issued have been paid in full.
Orion’s shares have no nominal value. The counter book value of the A and B shares is about EUR 0.65 per share.
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 dierent share classes
represented at the General Meetings of Shareholders. In addition, Orion 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.
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 2021 a number of 309,587 A shares were converted to B shares.
According to Orion’s Articles of Association, the minimum number of all shares in the Company is one (1) and the maximum
number is 1,000,000,000. A maximum number of 500,000,000 of the shares shall be A shares and a maximum number of
1,000,000,000 shares shall be B shares.
On 25 March 2021, the Annual General Meeting of Orion Corporation authorised the Board of Directors to decide on issuance
of new shares. On the basis of the authorisation, the Board of Directors shall be entitled to decide on the issuance of no more
than 14,000,000 new Class B shares. The share issue authorisation shall be valid until the next Annual General Meeting of the
Company.
The Board of Directors was authorised by Orion Corporation’s Annual General Meeting on 26 March 2019 to decide on a share
issue in which shares held by the Company can be conveyed. The Board of Directors is authorised to decide on a share issue in
which no more than 850,000 B shares held by the Company can be conveyed. The authorisation to issue shares is valid for ve
years from the decision taken by the Annual General Meeting. The terms and conditions of the authorisations are reported in
more detail in a stock exchange release on 26 March 2019.
The Board of Directors is not authorised to increase the share capital or to issue bonds with warrants or convertible bonds or
stock options.
The Board of Directors proposes that a dividend of EUR 1.50 per share will be paid out, donation of EUR 0.4 million based on
the Consolidated statement of nancial position to be adopted for the nancial year ended December 31, 2021, and that the
remaining part is carried forward in the Retained earnings in unrestricted equity.
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OTHER RESERVES
EUR million
Expendable fund . .
Reserve for invested unrestricted equity . .
Reserve funds . .
Total . .
Translation dierences
Translation dierences include those arising from translation of the nancial statements of foreign entities.
Dividends and other distribution of prots
A dividend of EUR 1.50 (2020: 1.50) per share were distributed in the 2021 nancial year. In addition, donations of EUR 0.4
(2020: 0.3) million were distributed from prot funds.
6.4 Interest-bearing liabilities
Carrying amount Fair value Carrying amount Fair value
EUR million, 31 Dec
Loans from credit institutions . . . .
Lease liabilities . . . .
Non-current liabilities total . . . .
Carrying amount Fair value Carrying amount Fair value
EUR million, 31 Dec
Lease liabilities . . . .
Current liabilities total . . . .
The carrying value of lease liabilities can be considered as the fair value because of the short-term nature of the agreements.
The fair value of the loan was is determined by discounting the esimated cash ows to present value by using the rate that would
be prevailing for Group to withdraw loan at the end of the nancial year. The market interest rate prevailing at the end of the
nancial year is 0% to which a company-specic margin is added in discounting.
6.5 Cash and cash equivalents
Carrying amount Fair value Carrying amount Fair value
EUR million, 31 Dec
Cash and bank balances . . . .
Total . . . .
Money market investments included in cash and cash equivalents are band deposits, certicates of deposit and commercial
paper with maturities of no more than three months on acquisition issued by banks and companies.
6.6 Other investments
Other investments, with asset value of EUR 0.2 (2020: 0.2) million at 31 December 2021, include mainly shares and
investments in unlisted companies. They are stated at cost, because their fair value cannot be determined reliably.
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6.7 Derivatives
NOMINAL VALUES AND MATURITY OF DERIVATIVES
EUR million, 31 Dec
Currency derivatives
Currency forward contracts and currency swaps . .
Currency options . .
All derivatives have a maturity less than one year.
FAIR VALUES OF DERIVATIVES
EUR million, 31 Dec
Positive Negative Net Net
Non-hedge-accounting derivatives
Currency forward contracts and currency swaps . -. -. .
Currency options . -. . .
All derivatives are OTC derivatives, and market quotations at the end of the reporting period have been used for determining
their fair value. Derivatives measured at fair value have been reported in the consolidated statement of nancial position on a
gross basis. Derivative contract terms agreed with banks allow netting in the event of payment default or bankruptcy, among
other things. At the end of the reporting period, after netting the counterparty risk to Orion was EUR 0.0 (2020: 0.5) million and
to counterparties EUR 0.0 (2020: 0.0) million.
6.8 Contingent liabilities and commitments
Accounting policies
A contingent liability is a potential liability based on previous events. It depends on the realisation of an uncertain future event
beyond the Group’s control. Contingent liabilities also include obligations that will most likely not lead to a payment or its size
cannot be reliably determined. Contingent liabilities are disclosed in the Notes.
COMMITMENTS AND CONTINGENCIES
EUR million, 31 Dec
Contingencies for own liabilities
Guarantees . .
Other . .
Commitments
Orion has commitments for the acquisition of property, plant and equipment, which mainly concern existing factories and
premises in Finland.
Signicant legal proceedings
Companies belonging to the Orion Group are parties to various legal disputes, which are not, however, considered to be
signicant legal proceedings for the Group.
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7 Other notes
7.1 Related party transactions
In the Orion Group, the related parties are deemed to include the parent company Orion Corporation, the subsidiaries and
associated and aliated companies, the members of the Board of Directors of Orion Corporation, the members of the Executive
Management Board of the Orion Group, the immediate family members of these persons, the companies controlled by these
persons, and the Orion Pension Fund.
Related party transactions
The Group’s material related party transactions relate to pension contributions paid to the Orion Pension Fund and services
acquired from Lääkärikeskus Aava Oy. Services were purchased from Lääkärikeskus Aava Oy during the nancial year 2021 for
EUR 0.3 (2020: 0.2) million. The Group’s debt to Lääkärikeskus Aava Oy at the end of the nancial year 2021 was EUR 0.0 (2020:
0.0) million.
MANAGEMENT´S EMPLOYMENT BENEFITS
EUR million
Salaries and other short-term employment benets . .
Share-based benets . .
Post-employment benets . .
SALARIES AND REMUNERATION¹
EUR million
Timo Lappalainen, President and CEO . .
Mikael Silvennoinen, Chairman . .
Timo Maasilta, Vice chairman . .
Kari Jussi Aho . .
Pia Kalsta . .
Ari Lehtoranta . .
Veli-Matti Mattila .
Hilpi Rautelin . .
Eija Ronkainen . .
Heikki Westerlund .
Board of Directors, total . .
Exact gures are available in the Corporate Governance Statement, under Remunaration Report 2021.
The retirement age of the parent company’s President and CEO is agreed to be 60 years and the pension level 60% of the
agreed pensionable salary. During the period EUR 0.2 (2020: 0.1) million was recorded as expenses for the statutory pension
and EUR 0.7 (2020: 0.6) million for the supplementary pension of the parent company’s President and CEO.
Loans, guarantees and other commitments to or on behalf of the related parties
Orion Corporation is the lender of an interest-bearing loan of EUR 0.3 million to Hangon Puhdistamo Oy.
7.2 Auditor’s remuneration
EUR million
Auditing . .
Assignments under Auditing Act Section 1 Subsection 1 Paragraph 2 . .
Advice on taxation . .
Total . .
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7.3 Group companies
Group Parent company
31 Dec 2021 Ownership % Share of votes % Ownership % Share of votes %
Pharmaceuticals
Parent company Orion Corporation, Espoo
Fermion Oy, Espoo . . . .
Kiinteistö Oy Tonttuvainio, Espoo . . . .
Orion Export Oy, Espoo
¹
. . . .
Saiph Therapeutics Oy, Espoo
¹
. . . .
FinOrion Pharma India Pvt. Ltd., India . . . .
OOO Orion Pharma, Russia . .
Orion Pharma (AUS) Pty, Ltd., Australia
¹
. . . .
Orion Pharma (Austria) GmbH, Austria . . . .
Orion Pharma (Ireland) Ltd., Ireland . . . .
Orion Pharma (NZ) Ltd., New Zealand
¹
. . . .
Orion Pharma (UK) Ltd., United Kingdom . . . .
Orion Pharma A/S, Denmark . . . .
Orion Pharma AB, Sweden . . . .
Orion Pharma AG, Switzerland . . . .
Orion Pharma AS, Norway . . . .
Orion Pharma BVBA, Belgium . . . .
Orion Pharma d.o.o., Slovenia . . . .
Orion Pharma East LLP, Kazakhstan . . . .
Orion Pharma GmbH, Germany . . . .
Orion Pharma Hellas, Pharmakeftiki Mepe, Greece . . . .
Orion Pharma Kft., Hungary . . . .
Orion Pharma (MY) SDN. BMD., Malaysia . . . .
Orion Pharma Poland Sp. z o.o., Poland . . . .
Orion Pharma Romania S.R.L., Romania . . . .
Orion Pharma (SG) Pte. Ltd., Singapore . . . .
Orion Pharma S.L., Spain . . . .
Orion Pharma S.r.l., Italy . . . .
Orion Pharma s.r.o., Czech Republic . . . .
Orion Pharma s.r.o., Slovakia . . . .
Orion Pharma SA, France . . . .
Orion Pharma Thai Co, Ltd., Thailand . . . .
Orion Pharma, Inc., USA¹ . . . .
Orionn Unipessoal Lda, Portugal . . . .
OÜ Orion Pharma Eesti, Estonia . . . .
TOV Orion Pharma Ukraine, Ukraine . . . .
UAB Orion Pharma, Lithuania . . . .
These companies are not engaged in business activities.
There are no companies in which the Group’s ownership is 1/5 or more that have not been consolidated as associated
companies or subsidiaries. .
7.4 Events after the end of the reporting period
There have been no other events after the reporting period.
ORION | Financial Statement documents 2021
|
Parent company Orion corporation’s
nancial statements (FAS)
EUR million Note
Net sales . .
Other operating income . .
Operating expenses , -. -.
Depreciation, amortisation and impairment -. -.
Operating prot . .
Finance income and expenses . .
Prot before extraordinary items, appropriations and taxes . .
Appropriations . .
Income tax expense -. -.
Prot for the period . .
Income Statement
ORION | Financial Statement documents 2021 |
Balance Sheet
ASSETS
EUR million, 31 Dec Note
Intangible rights . .
Other long-term expenditure . .
Intangible assets total . .
Land areas . .
Buildings and constructions . .
Machinery and equipment . .
Other tangible assets . .
Advance payments and construction in progress . .
Tangible assets total . .
Holdings in Group companies . .
Other investments . .
Investments total . .
Non-current assets total . .
Inventories . .
Non-current receivables . .
Trade receivables . .
Other current receivables . .
Cash and bank . .
Current assets total . .
Assets total . .
LIABILITIES
EUR million, 31 Dec Note
Share capital . .
Expendable fund . .
Reserve for invested unrestricted equity . .
Retained earnings . .
Prot for the period . .
Shareholders' equity . .
Appropriations . .
Provisions . .
Loans from credit institutions . .
Non-current liabilities total . .
Trade payables . .
Other current liabilities . .
Current liabilities total . .
Liabilities total . .
ORION | Financial Statement documents 2021
|
Cash ow statement
EUR million
Operating prot . .
Depreciation, amortisation and impairment . .
Other adjustments -. .
Total adjustments to operating prot . .
Change in non-interest-bearing current receivables -. .
Change in inventories . -.
Change in non-interest-bearing current liabilities -. .
Total change in working capital
¹
-. .
Interest and other nancial expenses paid -. -.
Dividends received
²
. .
Interest and other nancial income received
²
. .
Income tax paid -. -.
Total net cash ow from operating activities . .
Investments in intangible assets -. -.
Investments in tangible assets -. -.
Sales of intangible assets .
Sales of tangible assets . .
Sales of other investments .
Investments in subsidiary shares . -.
Repayments of loan receivables . .
Total net cash ow from investing activities -. -.
Proceeds of non-current loans .
Proceeds of current loans .
Repayments of current loans -. -.
Dividends paid and other distribution of prots -. -.
Group contributions received . .
Total cash ow from nancing activities -. -.
Net change in cash and cash equivalents -. .
Cash and cash equivalents at 1 Jan³ . .
Net change in cash and cash equivalents -. .
Cash and cash equivalents at 31 Dec³ . .
The change of the current loans and receivables between the parent company and the Finnish subsidiaries are recorded in the change of the parent
company’s working capital at their gross value.
²
The dividends and interest paid by the subsidiaries are included in the cash ow from operating activities of the parent company.
³
Cash and cash equivalents include liquid securities with a very low uctuation-in-value risk, as well as cash in hand and at bank.
ORION | Financial Statement documents 2021 |
Parent company notes to the nancial statements for 2021 (FAS)
The parent company of the Orion Group is Orion Corporation, business ID 1999212-6, domiciled in Espoo.
The Orion Group’s rst nancial year was 1 July–31 December 2006, because the Group came into being on 1 July 2006
following the demerger of its predecessor Orion Group into a pharmaceuticals and diagnostics business and a pharmaceutical
wholesale and distribution business. Orion Corporation was listed on the Helsinki stock exchange on 3 July 2006.
Accounting policies
The Financial Statements of Orion Corporation are prepared in accordance with the Finnish Accounting Act, as well as other
provisions and regulations related to compilation of nancial statements.
Non-current assets
The Balance Sheet values of intangible and tangible assets are based on their historical costs, depreciated according to plan.
The depreciation according to plan is based on the economic life of the assets, following the straight-line depreciation method.
The historical cost of the intangible and tangible assets includes assets with remaining economic life, as well as fully
depreciated non-current asset items that are still in operative use. The corresponding policies are applied to the accumulated
depreciation.
The economic lives of various asset categories are as follows:
• intangible rights and other capitalised expenditure 5–10 years
• goodwill 5–20 years
• buildings 20–40 years
• machinery, equipment and furniture 5–10 years
• vehicles 6 years
• other tangible assets 10 years
As a rule, goodwill is amortised over ve years. In certain cases, however, the estimated economic life of the goodwill is longer,
but at maximum twenty years. Other long-term expenditure items that generate or maintain income for three years or longer are
capitalised and are normally depreciated over ve years.
Land areas and revaluations are not depreciated according to plan. The production and oce facilities were revalued in the
Orion Group in the 1970s and 1980s. The revaluations are based on valuation of each asset separately.
Research and development expenses
R&D expenses are entered as expenses during the nancial year in which they are incurred.
Inventories
Inventories are presented in the Balance Sheet using the standard price for self-manufactured products, and for purchased
products the weighted average cost method using the value of the purchase and variable conversion costs, or if lower, the net
realisable or replacement value.
Foreign currency transactions
The valuation of the receivables and liabilities denominated in foreign currencies is based on the exchange rates quoted by the
European Central Bank on the reporting date. The resulting translation gains and losses are recognised through prot or loss.
Translation gains and losses related to business operations are recorded as adjustments of sales and purchases, whereas those
related to nancial items are recognised under nancial income or expenses.
ORION | Financial Statement documents 2021
|
Financial assets and liabilities and derivative nancial instruments
Other investments, derivatives and part of securities are measured at fair value using an alternative treatment allowed under
the Finnish Accounting Act Chapter 5, Section 2a. Other loans and receivables and other nancial liabilities included in nancial
instruments are measured at amortised cost.
Other investments include shares and investments, securities include interest instruments, which are included in current assets.
Other investments are measured at fair value using the price quoted in active markets on the reporting date. Investments in
unquoted shares are measured at acquisition cost because their fair value cannot be measured using the fair value method.
Loans and receivables comprise cash and cash equivalents, loans granted, and trade and other receivables. Other nancial
liabilities include interest-bearing liabilities and trade and other payables.
Foreign exchange derivatives for hedging currency risk are measured at fair value using market prices on the reporting date.
The fair value of foreign exchange derivatives that hedge operative items is recorded in other operating income and expenses,
whereas the fair value of foreign exchange derivatives that hedge loans and receivables denominated in foreign currencies is
recorded in translation dierences in the nancial items.
Provisions
Commitments by the Company to contractual expenses that are unlikely to generate corresponding revenue are deducted from
income as provisions. Similarly, contractual losses that are likely to materialise are deducted from income.
Net sales
Net sales include revenue from sales of goods and services adjusted for indirect taxes, discounts and currency translation
dierences on sales in foreign currencies. Net sales also include milestone payments under contracts with marketing partners,
which are paid by the partner as a contribution to cover the R&D expenses of a product during the development phase and are tied
to certain milestones in research projects. In addition, net sales include royalties from the products licensed out by the Group.
Revenue from sales of goods is recognised when the signicant risks and rewards of ownership of the goods have been transferred
to the buyer. Revenue from services is recognised when the service has been provided. Milestone payments are recognised when
the R&D project has progressed to a phase that, in accordance with an advance agreement with the partner, triggers the partner’s
obligation to pay its share. Royalties are recorded on an accrual basis in accordance with the licensing agreements.
Share-based payment
The share-based incentive plan for key employees approved by the Board of Directors includes the portion to be settled in
shares and the portion to be settled in cash. The portion to be settled in shares does not give rise to any entries aecting
the accounts. The rights relating to the portion to be settled in cash are valued at fair value at the balance sheet date and are
recognised as expense during the vesting period of the right. The estimate of the nal number of shares and associated cash
payments is updated at each reporting date. Further information on share-based payments are given in the note 4. Operating
expenses, depreciation, amortisation and impairment.
Pension arrangements
The pension security of the Company’s employees has been arranged through the Orion Pension Fund and pension insurance
companies. Supplementary pension security has been arranged through the pension fund for employees whose employment
began prior to 25 June 1990 and continues until retirement. Supplementary pensions for some executives have also been
arranged through pension insurance companies. The pension liability of the Orion Pension Fund is covered in full.
Income taxes
Income taxes comprise the taxes based on taxable prot and tax adjustments to previous nancial periods. The nancial
statements do not itemise the deferred tax liabilities and assets, but the notes record the deferred tax liabilities and assets
recognised in the balance sheet. These deferred tax liabilities or assets are calculated from material dierences due to timing
between the tax assessment and the nancial statements, using the tax rate conrmed at the time of the nancial statements
for subsequent years.
ORION | Financial Statement documents 2021
|
1 Net sales
NET SALES BY BUSINESS AREA
EUR million
Pharmaceuticals business . .
Total . .
NET SALES BY MARKET AREA
EUR million
Finland . .
Scandinavia . .
Other Europe . .
North America . .
Other countries . .
Total . .
2 Other operating income
EUR million
Service charges received from Group companies . .
Gains on sales of property, plant and equipment and intangible assets . .
Rental income . .
Returned royalties .
Gains on sales of shares .
Other operating income . .
Total . .
3 Change in provisions
EUR million
Change in provisions . .
Total, increase (-), decrease (+) . .
ORION | Financial Statement documents 2021
|
4 Operating expenses, depreciation, amortisation and impairment
OPERATING EXPENSES
EUR million
Increase (-) or decrease (+) in stocks of nished goods or work in progress . -.
Production for own use -. -.
Raw materials and services
Purchases during the nancial year . .
Increase (-) or decrease (+) in stocks -. -.
External services . .
Total . .
Personnel expenses
Wages and salaries . .
Pension expenses . .
Share-based incentive plan . .
Other social security expenses . .
Total . .
Other operating expenses . .
Total operating expenses . .
The accounting method of expenses of the share-based incentive plan was revised in the 2020 nancial year. In accordance with
the Accounting Board’s statement no. 1998 issued on 15 January 2020, no entries that aect accounting should arise from the
portion of share-based payments that is settled in the form of shares.
Voluntary social security expenses are included in other operating expenses.
AUDITOR’S REMUNERATION
EUR million
Auditing fee , ,
Assignments under Auditing Act Section 1 Subsection 1 Paragraph 2 , ,
Tax advice ,
Total , ,
DEPRECIATION, AMORTISATION AND IMPAIRMENT
EUR million
Impairment . .
Other depreciation and amortisation . .
Total . .
See Balance Sheet Notes 8–9 for depreciation and amortisation by asset class for the nancial year.
See Accounting Policies for the nancial statements of the parent company for basis of provisions according to plan.
AVERAGE NUMBER OF EMPLOYEES
Average number of employees during the nancial year , ,
ORION | Financial Statement documents 2021
|
Share-based payments
The Group has one share-based incentive plan in force for key persons of the Group that commenced in 2019.
The plan than commenced in 2019 includes ve earning periods, which are the calendar years 2019, 2019–2020, 2019–2021,
2020–2022 and 2021–2023. The Board of Directors decides on the earnings criteria and on targets to be established for them
at the beginning of each earning period. Three earning periods, calendar year 2019, calendar years 2019–2020 and 2019–2021,
commenced upon implementation of the plan. One earning period, calendar years 2020–2022, commenced in 2020. One
earning period, calendar years 2021–2023, commenced in 2021. The potential rewards of the plans for the earning periods
commencing in 2019, 2020 and 2021 are based on achieving the Orion Group’s operating prot and net sales targets.
The target group of the plan consists of approximately 50 people. The total maximum amount of rewards to be paid on the
basis of the plan is 700,000 Orion Corporation B shares and a cash payment corresponding to the value of the shares. The total
maximum amount includes a separate, so called reward for commitment part that the Board of Directors can use by a separate
decision during the years 2019–2023. The maximum amount of the reward for commitment is no more than 100,000 shares
and a cash payment corresponding to the value of the shares. By 31 December 2021, a total of 114,131 B shares had been paid as
rewards under this plan.
Under the plan, shares received based on one-year earning periods cannot be transferred during the restricted period
determined in the plan. There is no restricted period for the three-year earning periods. The Board of Directors may decide to
decrease the rewards to be paid to a key person if the limits set for the Orion Group long-term incentive plan rewards for one
calendar year are exceeded.
The plan that commenced in 2016 ended in 2020. The plan included earning periods and the Board of Directors decided
annually on the beginning and duration of the earning periods in 2016, 2017 and 2018. The Board of Directors decided on the
earning criteria and targets to be established for them at the beginning of each earning period. Two earning periods, calendar
year 2016 and calendar years 2016–2018, commenced upon implementation of the plan. Two earning periods, calendar
year 2017 and calendar years 2017–2019, commenced in 2017. Two earning periods, calendar year 2018 and calendar years
2018–2020, commenced in 2018. The reward under the plan for the earning periods 2016, 2017 and 2018 was based on the
Orion Group’s operating prot and for the earning periods 2016–2018, 2017–2019 and 2018–2020 on the total return on Orion
Corporation B shares.
The target group of the plan consisted of no more than 50 people. The total maximum amount of rewards to be paid based on
the plan is 500,000 Orion Corporation B Shares and a cash payment corresponding to the value of the shares. By 31 December
2021, a total of 260,957 Orion Corporation B shares had been paid as rewards under this plan.
Under the plan, shares received based on one-year and two-year earning periods could not be transferred during the restricted
period determined in the plan. There was no restriction period for the three year earning periods. The value of reward to be paid
based on the plans during one calendar year was a key person’s gross annual salary multiplied by 1.75, in the maximum, at the
date of the reward payment.
The rewards under the plan shall be paid partly in the form of the Company’s B shares and partly in cash. Rewards have been
paid and potential future rewards, shall be paid as follows:
Earning period
Reward paid on / potential reward
to be paid in
2018−2020 Mar
2019 Mar
2019–2020 Mar
2019–2021
2020–2022
2021–2023
ORION | Financial Statement documents 2021
|
5 Finance income and expenses
EUR million
Income from Group companies . .
Income from other non-current investments
Dividend income from other shares and equity . .
Interest income from Group companies
Interest income from other companies . .
Other interest and nance income
Interest income from Group companies . .
Interest income from other companies . .
Revaluation result . .
Other nance income . .
Interest expenses and other nance expenses
Interest expenses to Group companies -.
Interest expenses to others -. -.
Other nance expenses -. -.
Total . .
FINANCE INCOME AND EXPENSES INCLUDE
EUR million
Income from equity in other companies . .
Interest income . .
Interest expenses -. -.
6 Appropriations
EUR million
Change in cumulative accelerated depreciation -. .
Group contribution received . .
Total, increase (-), decrease (+) . .
ORION | Financial Statement documents 2021
|
7 Income taxes
EUR million
Income tax on ordinary activities . .
Adjustments for income tax of prior periods -. -.
Total . .
Deferred tax liability and deferred tax asset
No deferred tax liability or deferred tax asset of the Parent company has been recorded in the Company’s Balance sheet.
DEFERRED TAX ASSET
EUR million, 31 Dec
Provisions . .
Total . .
DEFERRED TAX LIABILITY
EUR million, 31 Dec
Appropriations . .
Revaluations . .
Total . .
8 Intangible assets
Intangible
rights Goodwill
Other capitalised
expenditure Total
EUR million
Acquisition cost at 1 Jan
¹
. . . . . . . .
Additions . . . . . .
Disposals -. -. -. -. -. -.
Transfers between Balance Sheet items -. -. . . - . - .
Acquisition cost at 31 Dec . . . . , . . .
Accumulated amortisation and impairment at 1 Jan
¹
-. -. -. -. -. -. -. -.
Accumulated amortisation on disposals . . . . . .
Amortisation for the nancial year -. -. -. -. -. -.
Impairment -. -. -. -.
Accumulated amortisation and impairment at 31 Dec -. -. -. -. -. -. -. -.
Book value at 1 Jan . . . . . .
Book value at 31 Dec . . . . , .
Accumulated dierence between total and planned amortisation
at 1 Jan . . . . . .
Change in cumulative accelerated amortisation, increase (+) /
decrease (-) -. -. -. . -. -.
Accumulated dierence at 31 Dec . . . . . .
Initial values include xed asset items with remaining useful life and fully depreciated asset items still in operational use. Accumulated depreciation
is calculated in the corresponding way.
ORION | Financial Statement documents 2021 |
9 Tangible assets
Land areas
Buildings
and
structures
Machinery
and
equipment
Other
tangible assets
Advance
payments and
construction
in progress Total
EUR million
Acquisition cost at 1 Jan
¹
. . . . . . . . . . . .
Additions . . . . . . . . . .
Disposals -. -. -. -. - . -. -. -. -. -.
Transfers between Balance
Sheet items . . . . . . -. -. . .
Acquisition cost at 31 Dec . . . . . . . . . . . .
Accumulated depreciation
at Jan
¹
-. -. -. -. -. -. -. -.
Accumulated depreciation
on disposals and transfers . . . . . . .
Depreciation for the
nancial year -. -. -. -. -. -. -. -.
Accumulated depreciation
at 31 Dec -. -. -. -. -. -. -. -.
Book value at 1 Jan . . . . . . . . . . . .
Book value at 31 Dec . . . . . . . . . . . .
Accumulated dierence
between total and planned
depreciation at 1 Jan . . . . . . . .
Change in cumulative
accelerated depreciation,
increase (+) / decrease (-) . . . . . . . .
Accumulated dierence
at 31 Dec . . . . . . . .
Initial values include xed asset items with remaining useful life and fully depreciated asset items still in operational use. Accumulated depreciation
is calculated in the corresponding way.
The book value of production machines and equipment at 31 December 2021 was EUR 49.4 (2020: 50.8) million. The revaluation
included in the acquisition cost of land was EUR 0.0 (2020: 0.1) million and in the acquisition cost of buildings EUR 16.5 (2020:
16.5) million.
ORION | Financial Statement documents 2021
|
10 Investments
Shares in
Group companies
Other shares
and equity
Loan
receivables¹ Total
EUR million
Acquisition cost at 1 Jan . . . . . . .
Additions . .
Disposals -. -. - . -. - .
Acquisition cost at 31 Dec . . . . . .
Accumulated impairment at 1 Jan -. -. -. -.
Accumulated impairment at 31 Dec -. -. -. -.
Book value at 1 Jan . . . . . . .
Book value at 31 Dec . . . . . .
Loan receivables are equity loan receivables under the Companies Act.
11 Inventories
EUR million, 31 Dec
Raw materials and consumables . .
Work in progress . .
Finished products/goods . .
Other inventories . .
Total . .
12 Non-current receivables
EUR million, 31 Dec
Other receivables from Group companies . .
Loan receivables from associated companies . .
Other loan receivables .
Total . .
ORION | Financial Statement documents 2021
|
13 Current receivables
EUR million, 31 Dec
Trade receivables . .
Receivables from Group companies
Trade receivables . .
Loan receivables . .
Other receivables . .
Prepaid expenses and accrued income . .
Total . .
Loan receivables from associated companies . .
Other loan receivables . .
Other receivables . .
Prepaid expenses and accrued income . .
Total . .
SPECIFICATION OF PREPAID EXPENSES AND ACCRUED INCOME
EUR million, 31 Dec
Receivables from royalties . .
Prepayments for services and maintenance . .
Price dierences from sales and other sales accruals . .
Prepaid sales rights . .
Pending contributions . .
Pending compensations . .
Pending price dierences . .
Receivables based on derivative contracts . .
Income tax receivable .
Prepaid remunerations under incentive plan .
Other prepaid expenses and accrued income . .
Total . .
14 Shareholder’s equity
RESTRICTED EQUITY
Share capital
EUR million
Share capital at 1 Jan . .
Share capital at 31 Dec . .
Restricted equity total at 31 Dec . .
ORION | Financial Statement documents 2021
|
UNRESTRICTED EQUITY
Expendable fund
EUR million
Expendable fund at 1 Jan . .
Expendable fund at 31 Dec . .
Reserve for invested unrestricted equity
EUR million
Reserve for invested unrestricted equity at 1 Jan . .
Reserve for invested unrestricted equity at 31 Dec . .
Retained earnings
EUR million
Retained earnings at 1 Jan . .
By decision of Annual General Meeting
dividends distributed -. -.
donations made -. -.
share rewards paid .
Cancellation of shares .
Unpaid dividends .
Prot for the period . .
Retained earnings at 31 Dec . .
Unrestricted equity total at Dec 31 . .
PARENT COMPANY SHARE CAPITAL BY SHARE CLASS
31 Dec number EUR number EUR
A shares (20 votes/share) ,, ,,
B shares (1 vote/share) ,, ,,
Total ,, ,,. ,, ,,.
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 2021 a number of 309,587 A shares were converted to B shares.
15 Appropriations
EUR million, 31 Dec
Cumulative accelerated depreciation . .
Total . .
16 Provisions
EUR million, 31 Dec
Pension provisions . .
Total . .
ORION | Financial Statement documents 2021
|
17 Non-current liabilities
EUR million, 31 Dec
Loans from credit institutions . .
Total . .
18 Current liabilities
EUR million, 31 Dec
Advances received . .
Trade payables . .
Liabilites to Group companies
Trade payables . .
Loans . .
Accrued liabilities and deferred income . .
Other liabilities .
Total . .
Other liabilities . .
Accrued liabilities and deferred income . .
Total . .
SPECIFICATION OF ACCRUED LIABILITIES AND DEFERRED INCOME
EUR million, 31 Dec
Liabilities from share-based incentive plan . .
Other accrued salary, wage and social security payments . .
Accrued research and development expenses . .
Accrued price reductions . .
Income tax liability .
Accrued price adjustments related to sales and purchases . .
Accrued sales compensations . .
Accrued royalties and commisions . .
Non-paid compensation on royalty income . .
Accrued expert fees . .
Accrued litigation costs . .
Liabilities on derivative contracts . .
Accrued interest . .
Accrued prepayments of sales rights .
Non-sell part of repurchased inventories .
Withholding tax provision of dividends .
Other accrued liabilities and deferred income . .
Total . .
ORION | Financial Statement documents 2021
|
LIABILITIES INCLUDE
EUR million, 31 Dec
Non-current interest-bearing liabilities . .
Current interest-bearing liabilities . .
Current non-interest-bearing liabilities . .
Total . .
19 Notes relating to members of administrative bodies
SALARIES AND REMUNERATION PAID TO MEMBERS OF ADMINISTRATIVE BODIES OF THE COMPANY
EUR million
President and CEO and members of Board of Directors . .
No partial remuneration has been paid.
No loans have been granted to the members of administrative bodies.
Management pension commitments
The retirement age of the Company’s President and CEO is agreed to be 60 years and the pension level 60% of the agreed
pensionab le salary.
20 Contingencies
CONTINGENCIES FOR OWN LIABILITIES
EUR million, 31 Dec
Guarantees given . .
TOTAL GUARANTEES
EUR million, 31 Dec
Total guarantees . .
21 Liabilities and commitments
LEASE AGREEMENTS
EUR million, 31 Dec
Payments payable under lease agreements
within next 12 months . .
later than 12 months . .
Total . .
The terms of lease agreements are normal.
OTHER LIABILITIES
EUR million, 31 Dec
Drug damage liability . .
ORION | Financial Statement documents 2021
|
VAT liability for real estate investments
The company is liable to review VAT deductions made for real estate investments completed in 2013–2021 if the use subject to
VAT decreases during the review period. The last review year is 2030 and the maximum liability is EUR 14.3 million.
22 Financial risks
The objective of the nancial risk management is to decrease the negative eects of market and counterparty risks on the
Group’s prots and cash ows and to ensure sucient liquidity.
The main principles for nancial risk management are dened in the Group Treasury Policy that is approved by the Board
of Directors of the parent company or by Group’s President and CEO, and the Group Treasury is responsible for its
implementation. Treasury activities are centralised in the Group Treasury.
More information about the nancial risks can be found from the Group’s Financial Statements. The main dierence between
company’s and Group’s risk position is in the reported currency position, because (parent) company centrally hedges the
Group’s currency risk without implementing internal hedges separately with the subsidiaries.
23 Derivatives
NOMINAL VALUES AND MATURITY OF DERIVATIVES
EUR million, 31 Dec
Currency derivatives
Currency forward contracts and currency swaps . .
Currency options . .
All derivatives have a maturity less than one year.
FAIR VALUES OF DERIVATIVES
EUR million, 31 Dec Positive Negative Net Net
Non-hedge-accounting derivatives
Currency forward contracts and currency swaps . -. -. .
Currency options . -. . .
ORION | Financial Statement documents 2021
|
FAIR VALUE MEASUREMENT AND HIERARCHY
Financial instruments measured at fair value in the stament of nancial position are grouped as follows into three hierarchy
levels depending on the valuation technique:
EUR million, 31 Dec 2021 Level Level Level Total
Derivatives
Currency derivatives . .
Other investments
Shares and investments . .
Assets total . . .
Derivatives
Currency derivatives -. - .
Liabilities total - . -.
EUR million, 31 Dec 2021 Level Level Level Total
Derivatives
Currency derivatives . .
Other investments
Shares and investments . .
Assets total . . .
Derivatives
Currency derivatives -. -.
Liabilities total -. -.
The fair value of level 1 nancial instrument is based on quotations available in active markets. The fair value of level 2
derivatives is based on data feeds available in the markets. The fair value of level 3 nancial instruments cannot be estimated on
the basis of data available in the markets.
The Group applies the principle of recognising transfers between levels of fair value hierarchy on the date on which the event
triggering the transfer occurred.
24 Holdings in other companies
See Note 7.3 Group companies in the Notes to the Consolidated nancial statements for the Parent Company’s holdings in
other companies.
ORION | Financial Statement documents 2021
|
Proposal by the Orion Corporation Board
of Directors on use of prot funds from
the nancial year
The parent company’s distributable funds are EUR 470,557,071.27, including EUR 204,676,467.01 of prot for the nancial year.
The Board of Directors proposes that the distributable funds of the parent company be used as follows:
• distribution of EUR 1.50 of dividend per share. No dividend shall be paid on treasury shares
held by the Company on the record date for dividend payment. On the day when the prot
distribution was proposed, the number of shares conferring entitlement to receive dividend
totaled 140,562,964, on which the total dividend would be EUR ,,.
• donations to medical and other purposes of public interest as decided by the Board of Directors EUR ,.
• retention in equity EUR ,,.
EUR ,,.
There have been no material changes in the Company’s nancial position since the end of the nancial year. The liquidity of
the Company is good and, in the opinion of the Board of Directors, the proposed prot distribution would not compromise the
liquidity of the Company.
ORION | Financial Statement documents 2021
|
Signatures for the Financial Statements
and Report by the Board of Directors
The Board of Directors submits these Financial Statements and the Report by the Board
of Directors to the Annual General Meeting of Shareholders for approval.
Espoo,10 February 2022
Mikael Silvennoinen Timo Maasilta Kari Jussi Aho
Chairman Vice Chairman
Pia Kalsta Ari Lehtoranta Veli-Matti Mattila
Hilpi Rautelin Eija Ronkainen
Timo Lappalainen
President and CEO
Our auditor’s report has been issued today.
Espoo, 10 February 2022
KPMG OY AB
Kimmo Antonen
Authorised Public Accountant
ORION | Financial Statement documents 2021
|
Report on the Audit of the Financial Statements
Opinion
We have audited the nancial statements of Orion Corporation (business identity code 1999212-6) for the year ended 31
December, 2021. The nancial statements comprise the consolidated statement of nancial position, income statement,
statement of comprehensive income, statement of changes in equity, statement of cash ows and notes, including a summary
of signicant accounting policies, as well as the parent company’s balance sheet, income statement, cash ow statement and
notes.
In our opinion
• the consolidated nancial statements give a true and fair view of the group’s nancial position, nancial performance and
cash ows in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU
• the nancial statements give a true and fair view of the parent company’s nancial performance and nancial position in
accordance with the laws and regulations governing the preparation of nancial statements in Finland and comply with
statutory requirements.
Our opinion is consistent with the additional report submitted to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with good auditing practice in Finland. Our responsibilities under good auditing practice
are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We are independent of the parent company and of the group companies in accordance with the ethical requirements that are
applicable in Finland and are relevant to our audit, and we have fullled our other ethical responsibilities in accordance with
these requirements.
In our best knowledge and understanding, the non-audit services that we have provided to the parent company and group
companies are in compliance with laws and regulations applicable in Finland regarding these services, and we have not provided
any prohibited non-audit services referred to in Article 5(1) of regulation (EU) 537/2014. The non-audit services that we have
provided have been disclosed in note 7.2 to the consolidated nancial statements.
We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was inuenced by our application of materiality. The materiality is determined based on our professional
judgement and is used to determine the nature, timing and extent of our audit procedures and to evaluate the eect of
identied misstatements on the nancial statements as a whole. The level of materiality we set is based on our assessment
of the magnitude of misstatements that, individually or in aggregate, could reasonably be expected to have inuence on the
economic decisions of the users of the nancial statements. We have also taken into account misstatements and/or possible
misstatements that in our opinion are material for qualitative reasons for the users of the nancial statements.
Auditor’s Report
To the Annual General Meeting of Orion Corporation
ORION | Financial Statement documents 2021
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Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most signicance in our audit of the nancial
statements of the current period. These matters were addressed in the context of our audit of the nancial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The signicant risks of
material misstatement referred to in the EU Regulation No 537/2014 point (c) of Article 10(2) are included in the description of
key audit matters below.
We have also addressed the risk of management override of internal controls. This includes consideration of whether there was
evidence of management bias that represented a risk of material misstatement due to fraud.
The key audit matter How the matter was addressed in the audit
Revenue recognition (refer to no 2.1 Revenue from contracts with customers)
Both parent company’s net sales and consolidated net sales
comprise dierent revenue ows: product sales, revenue
from sales rights to products and revenue from clinical phase
research and development work undertaken with collaboration
Net sales include both xed and variable considerations.
Variable considerations relate to various discounts or
incentives in sales of goods or to conditional milestone
payments in collaboration agreements, among other things.
Thus, revenue recognition involves management judgement.
Due to analyses of dierent contract terms and conditions
associated with the choice of a revenue recognition method
and high level of management judgement involved, revenue
recognition is considered a key audit matter.
Our audit procedures included evaluation of the revenue
recognition principles applied by the Group and assessment
of their appropriateness by reference to IFRS standards.
We assessed the eectiveness of control environment and
application controls in respect of the main sales software and
the related user rights management.
We identied and assessed internal controls over invoicing as
well as tested their eectiveness. In addition we performed
substantive testing and analytical procedures based partly
on data analytics in order to assess the appropriateness
of revenue recognition and the accounting treatment of
recording revenue and the related expenses in the correct
period.
We discussed with the management the revenue recognition
practices applied and decisions involving management
judgement which had a signicant impact on revenue
recognition.
Furthermore, we considered the appropriateness of the
Group’s disclosures in respect of revenue recognition
principles and net sales.
ORION | Financial Statement documents 2021
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Inventories (refer to note 3.5 Inventories)
The inventories account for a signicant amount
(approximately 24 %) of the total consolidated assets.
Pricing of individual inventory items is based on the
functionality of information systems and the accuracy of
product-specic calculations.
Inventories are valued at cost or, if lower, at net realisable or
replacement value.
Management judgement is used in determining the need for
impairment and assessing aged items in the inventories.
Due to the signicance of the inventories and management
judgement relating to the valuation, inventories is considered
a key audit matter.
Our audit procedures included consideration of the valuation
principles applied by the Group and assessment of their
appropriateness based on IFRS standards.
We assessed the eectiveness of control environment
and application controls in respect of the main inventory
management software and the related user rights
management.
We participated in physical stock counts in selected locations
and assessed the appropriateness of stock count processes.
We performed data analysis to test the appropriateness of
pricing and the reliability of valuation calculations.
We assessed the suciency of impairment entries relating to
the inventories.
We considered the suciency of the Group’s disclosures in
respect of inventories and assessed their appropriateness.
ORION | Financial Statement documents 2021
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Responsibilities of the Board of Directors and the Managing Director for
the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation of consolidated nancial statements
that give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and
of nancial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of
nancial statements in Finland and comply with statutory requirements. The Board of Directors and the Managing Director are
also responsible for such internal control as they determine is necessary to enable the preparation of nancial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the nancial statements, the Board of Directors and the Managing Director are responsible for assessing the parent
company’s and the group’s ability to continue as a going concern, disclosing, as applicable, matters relating to going concern
and using the going concern basis of accounting. The nancial statements are prepared using the going concern basis of
accounting unless there is an intention to liquidate the parent company or the group or cease operations, or there is no realistic
alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the nancial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance with good auditing practice will always
detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to inuence the economic decisions of users taken on the
basis of the nancial statements.
As part of an audit in accordance with good auditing practice, we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the nancial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sucient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate
in the circumstances, but not for the purpose of expressing an opinion on the eectiveness of the parent company’s or the
group’s internal control.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of the Board of Directors’ and the Managing Director’s use of the going concern basis of
accounting and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast signicant doubt on the parent company’s or the group’s ability to continue as a going concern. If we conclude
that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the
nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the parent company
or the group to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the nancial statements, including the disclosures, and whether
the nancial statements represent the underlying transactions and events so that the nancial statements give a true and fair
view.
• Obtain sucient appropriate audit evidence regarding the nancial information of the entities or business activities within the
group to express an opinion on the consolidated nancial statements. We are responsible for the direction, supervision and
performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and signicant audit ndings, including any signicant deciencies in internal control that we identify during our audit.
ORION | Financial Statement documents 2021
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We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to
bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
signicance in the audit of the nancial statements of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benets of such communication.
Other Reporting Requirements
Information on our audit engagement
We were rst appointed as auditors by the Annual General Meeting on 20 March 2018, and our appointment represents a total
period of uninterrupted engagement of four years.
Muu informaatio
The Board of Directors and the Managing Director are responsible for the other information. The other information comprises
the report of the Board of Directors. Our opinion on the nancial statements does not cover the other information.
In connection with our audit of the nancial statements, our responsibility is to read the above mentioned other information
and, in doing so, consider whether the other information is materially inconsistent with the nancial statements or our
knowledge obtained in the audit, or otherwise appears to be materially misstated. Our responsibility also includes considering
whether the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
In our opinion, the information in the report of the Board of Directors is consistent with the information in the nancial
statements and the report of the Board of Directors has been prepared in accordance with the applicable laws and regulations.
If, based on the work we have performed, we conclude that there is a material misstatement of the report of the Board of
Directors, we are required to report that fact. We have nothing to report in this regard.
Other statements
We support that the nancial statements should be adopted. The proposal by the Board of Directors regarding the use of the
prot shown in the balance sheet is in compliance with the Limited Liability Companies Act. We support that the Members of
the Board of Directors and the Managing Director should be discharged from liability for the nancial period audited by us.
Espoo 10 February 2022
KPMG OY AB
Kimmo Antonen
Authorised Public Accountant, KHT
ORION | Financial Statement documents 2021
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To the Board of Directors of Orion Corporation
We have undertaken a reasonable assurance engagement on the iXBRL marking up of the consolidated nancial statements for
the year ended 31 December, 2021, included in the Orion Corporation’s digital les [74370029VAHCXDR7B745-2021-12-31-en.zip]
prepared in accordance with the requirements of Article 4 of EU Delegated Regulation 2018/815 (ESEF RTS).
The Responsibility of the Board of Directors and Managing
Director
The Board of Directors and Managing Director are responsible for preparing the report of the Board of Directors and nancial
statements (ESEF nancial statements) that comply with the requirements of ESEF RTS. This responsibility includes:
• preparation of ESEF nancial statements in XHTML format in accordance with Article 3 of the ESEF RTS
• marking up the consolidated nancial statements included in the ESEF nancial statements with iXBRL tags in accordance
with Article 4 of the ESEF RTS; and
• ensuring consistency between ESEF nancial statements and audited nancial statements.
The Board of Directors and the Managing Director are also responsible for such internal control as they deem necessary to
prepare the ESEF nancial statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Control
We are independent of the company in accordance with the ethical requirements applicable in Finland, which apply to the
engagement we have performed, and we have fullled our other ethical obligations in accordance with these requirements.
The auditor applies International Standard on Quality Control 1 and accordingly maintains a comprehensive system of quality
control including documented policies and procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory requirements.
Auditor’s Responsibility
In accordance with the Engagement Letter our responsibility is to express an opinion on whether the marking up of the
consolidated nancial statements included in the ESEF nancial statements comply in all material respects with the Article 4 of
the ESEF RTS. We conducted our reasonable assurance engagement in accordance with International Standard on Assurance
Engagements 3000.
The engagement involves procedures to obtain evidence whether;
• the consolidated nancial statements included in the ESEF nancial statements are, in all material respects, marked up with
iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
• the ESEF nancial statements and the audited nancial statements are consistent with each other.
The nature, timing and the extent of procedures selected depend on practitioner’s judgement. This includes the assessment of
the risks of material departures from the requirements set out in the ESEF RTS, whether due to fraud or error.
We believe that the evidence we have obtained is sucient and appropriate to provide a basis for our opinion.
Independent Auditor’s Reasonable
Assurance Report on Orion Corporation’s
ESEF Financial Statements
ORION | Financial Statement documents 2021 |
Opinion
In our opinion, the consolidated nancial statements included in the ESEF nancial statements of Orion Corporation identied
as [74370029VAHCXDR7B745-2021-12-31-en.zip] for the year ended 31 December, 2021 are marked up, in all material respects, in
compliance with the ESEF Regulatory Technical Standard.
Our audit opinion relating to the consolidated nancial statements of Orion Corporation for the year ended 31 December, 2021
is set out in our Auditor’s Report dated 10 February, 2022. In this report, we do not express an audit opinion, review conclusion
or any other assurance conclusion on the consolidated nancial statements.
Helsinki 25 February, 2022
KPMG OY AB
Kimmo Antonen
Authorised Public Accountant, KHT
ORION | Financial Statement documents 2021
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Key events in 2021
June
Orion and the Finnish Red
Cross Blood Service launch
collaboration to develop new
CAR T-cell cancer therapy
February
Orion and Bayer announce
expansion of the development
program for darolutamide
in prostate cancer with
ARANOTE trial
January
Orion Animal Health
and Vetoquinol announce
expansion of collaboration
– Vetoquinol to distribute
Orion’s Clevor
®
in the USA
June
Orion’s tlinical trial shows
signicant improvement for
chronic pain patients using
virtual reality therapy
April
Orion announced that
the Company aims
to achieve carbon
neutrality by
2030
ORION | Financial Statement documents 2021 |
Marraskuu
Orion ilmoitti 17 miljoonan
euron investoinneista
Turun tuotantolaitoksiinsa
September
Orion and Alligator
Bioscience announce
immuno-oncology research
collaboration and license
agreement
August
Orion Animal Health’s
Tessie
®
receives marketing
authorisation in Europe
September
Successor plan of the
President and CEO of Orion
was announced
December
ARASENS trial met its
primary endpoint
August
Orion signs European wide
marketing and distribution
agreement with Marinus
Pharmaceuticals for
ganaxolone
July
Orion Animal Health’s
Bonqat
®
receives marketing
authorisation in Europe
ORION | Financial Statement documents 2021 |
