Financial Statement
documents
2022
For more than a century, Orion has been building well-being by providing effective 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.
ORION | Financial Statement documents 2022 | 3
Contents
All the figures in the financial statements have been rounded,
which is why the total sums of individual figures may differ
from the total sums shown.
Orion in brief .......................................................................................... 4
Report by the Board of Directors of Orion Corporation
for the financial year 2022 ............................................................6
Group’s key figures .........................................................................6
Basic information on Orion’s shares ................................... 41
Calculation of the key figures ................................................. 42
Consolidated financial statements (IFRS) ............................ 43
Consolidated income statement ........................................... 43
Consolidated statement of comprehensive income .... 43
Consolidated statement of financial position ................. 44
Consolidated statement of changes in equity ................ 45
Consolidated statement of cash flows ............................... 46
Notes to financial statements ................................................. 47
1 Basis of presentation of the consolidated financial
statements ................................................................................... 47
2 Business performance ........................................................... 50
2.1 Revenue from contracts with customers ................ 50
2.2 Depreciation, amortisation and impairments ...... 54
2.3 Operating expenses ........................................................ 55
2.4 Other operating income and expenses .................. 55
2.5 Finance income and expenses .................................. 56
2.6 Earnings and dividend per share .............................. 57
3 Invested capital ......................................................................... 58
3.1 Property, plant and equipment and intangible
assets ........................................................................................ 58
3.2 Leased assets .................................................................... 62
3.3 Joint arrangements ......................................................... 65
3.4 Business combination .................................................... 66
3.5 Investment in associate ................................................ 68
3.6 Inventories ........................................................................... 68
3.7 Trade and other receivables ........................................ 69
3.8 Provisions ............................................................................. 70
3.9 Trade payables and other liabilities ......................... 70
4 Personnel ...................................................................................... 71
4.1 Employee benefits ............................................................ 71
4.2 Pension assets and pension liabilities .................... 74
5 Income taxes and deferred tax assets and
liabilities ....................................................................................... 78
5.1 Income taxes ..................................................................... 78
5.2 Deferred tax assets and liabilities ............................. 79
6 Financing and capital structure ......................................... 80
6.1 Financial assets and liabilities by category .......... 80
6.2 Financial risk management ......................................... 83
6.3 Equity ..................................................................................... 86
6.4 Interest-bearing liabilities.............................................. 88
6.5 Cash and cash equivalents ......................................... 88
6.6 Other investments ............................................................. 88
6.7 Derivative contracts ......................................................... 88
6.8 Contingent liabilities and commitments ................ 89
7 Other notes .................................................................................. 90
7.1 Related party transactions ........................................... 90
7.2 Auditor’s remuneration ................................................... 91
7.3 Group companies ............................................................ 92
7.4 Events after the end of reporting period ................. 92
Parent company Orion corporation’s financial
statements (FAS) ............................................................................... 93
Income statement ........................................................................ 93
Balance sheet ................................................................................ 94
Cash flow statement ................................................................... 95
Parent company notes to the financial statements
for 2022 (FAS) ................................................................................. 96
Proposal by the Orion Corporation Board of Directors
on use of profit funds from the financial year....................110
Signatures for the Financial Statements and Report
by the Board of Directors ............................................................111
Auditor’s Report ............................................................................... 112
Independent Auditor’s Reasonable Assurance Report
on Orion Corporation’s ESEF Financial Statements ......117
Key events in 2022 .........................................................................119
Translated, non-official version of Orion Corporation’s Financial
statement documents 2022 presented in ESEF format.
ORION | Financial Statement documents 2022 | 4
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 oncology and pain. Orion’s
A and B shares are listed on Nasdaq Helsinki.
Business areas in the end of 2022
Net sales in 2022 (2021)
1,341 MEUR (1,041)
R&D investments
136 MEUR (118)
6 production sites in Finland, 1 in France, 1 in Belgium
Operating profit
440 MEUR (243)
Shareholders (on 31 December 2022)
79,423 (80,792)
Personnel (on 31 December 2022)
3,527 (3,355)
Operating profit margin
33% (23%)
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 in brief
Production sites include packaging and warehouse operations in Salo, Finland and in Arendonk, Belgium
ORION | Financial Statement documents 2022 | 5
Customer
complaints
(pharmaceuticals)
60
Ppm (65)
ABC* training,
no. of participants
1,800
(532)
GxP* audits
by Orion
281
(256)
Greenhouse gas
emissions
(scope 1 & 2)
18,044
tCO
2
e (18,095)
Energy savings
858
MWh (7,349)
Injury rate
LTIF 1
3.7
(4.8)
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 office in Finland
R&D: Finland and UK
Production* sites in Finland and in France
Support functions in India
Orion’s products are available in over one hundred countries
Own sales organisation
Global sales partner network
1%
5%
7%
39%
48%
Net sales by business
Proprietary products
Specialty Products
Animal Health
Fermion and Contract manufacturing
Translation differences and Other
operations
1%
5%
7%
1
11%
25%
30%
10%
24%
Finland
24
Scandinavia
10
Other Europe
30
North America
25
Rest of the World
11
Net sales by market area
Finland
Scandinavia
Other Europe
North America
Rest of the World
2
* ABC = anti-corruption
and anti-bribery training
* Good practises
* Production sites include packaging and warehouse operations in Salo, Finland and in Arendonk, Belgium.
ORION | Financial Statement documents 2022 | 6
Report by the Board of Directors of
Orion Corporation for the financial
year 2022
Group’s key figures
Key figures relating to financial performance
2020 2021 2022
Net sales, EUR million 1,078.1 1,041.0 1,340.6
EBITDA, EUR million 336.5 289.1 487.1
% of net sales 31.2% 27.8% 36.3%
Operating profit, EUR million 280.1 243.3 439.6
% of net sales 26.0% 23.4% 32.8%
Profit before taxes, EUR million 278.3 242.3 440.3
% of net sales 25.8% 23.3% 32.8%
Profit for the period, EUR million 219.9 193.8 349.5
% of net sales 20.4% 18.6% 26.1%
Research and development expenses, EUR million 123.2 117.7 135.8
% of net sales 11.4% 11.3% 10.1%
Capital expenditure, excluding acquired in business combinations, EUR million 48.5 85.4 109.6
% of net sales 4.5% 8.2% 8.2%
Acquired in business combination, net of cash, EUR million 82.0
Interest-bearing net liabilities, EUR million -185.8 -108.3 -118.7
Basic earnings per share, EUR 1.56 1.38 2.49
Cash flow from operating activities per share, EUR 2.13 1.53 3.09
Equity ratio, % 66.7% 68.1% 60.9%
Gearing, % -25.4% -14.5% -13.1%
Return on capital employed (before taxes) 34.8% 28.8% 45.1%
Return on equity (after taxes), % 29.1% 26.2% 42.2%
Average personnel during the period 3,337 3,364 3,472
ORION | Financial Statement documents 2022 | 7
Events during the period
17 Feb 2022 Detailed results of Phase III ARASENS study were published.
17 Feb 2022 Orion’s collaboration partner Bayer upgraded estimate on Nubeqa®’s peak sales potential.
9 Mar 2022 Orion’s collaboration partner Bayer announced submissions of applications in the U.S and EU for additional
indication of darolutamide.
11 Mar 2022 Orion’s collaboration partner Bayer announced submission of application for additional indication of
darolutamide in Japan.
23 Mar 2022 Orion Corporation’s Annual General Meeting was held in Helsinki.
24 Mar 2022 Orion announced that the Company is planning to refocus its R&D.
20 Apr 2022 Liisa Hurme was appointed President and CEO of Orion Corporation as of 1 November 2022.
22 Apr 2022 Orion’s collaboration partner Bayer submitted application for additional indication of darolutamide in China.
3 May 2022 U.S. FDA accepted supplemental new drug application (sNDA) and granted priority review for additional
indication of darolutamide.
6 May 2022 Orion entered into exclusive agreement with Jemincare for novel non-opioid drug candidate for the treatment of
pain.
9 May 2022 Orion announced that in the future the Company’s research and development of new proprietary drugs will focus
on oncology and pain.
15 Jun 2022 Orion announced that it is acquiring animal health company VMD (Inovet).
13 Jul 2022 Orion and MSD announced a global development and commercialisation agreement for ODM-208.
13 Jul 2022 Orion upgraded full-year outlook for 2022.
20 Sep 2022 Juhani Kankaanpää was appointed as Senior Vice President, Global Operations, and member of the Executive
Management Board of Orion Group as of 1 November 2022.
17 Oct 2022 Orion announced changes in Orion Group Executive Management Board and new organisational structure as of
1 January 2023.
Events after the period
27 Jan 2023 Positive CHMP opinion for darolutamide in combination with docetaxel for the treatment of metastatic hormone-
sensitive prostate cancer.
Impacts of the war in Ukraine on Orion
Financial risks for Orion caused by the war in Ukraine relate to net sales, receivables and inventories in Russia and Ukraine.
Orion’s operations in Russia and Ukraine are sales operations and the Company does not have any proprietary fixed assets
in these countries. The number of employees in Russia declined significantly during the year 2022. Due to patient safety and
ethical reasons, Orion has delivered certain critical medicines in limited volumes to Russia and continued to supply medicines
to customers from local warehouses in the country. However, the situation currently makes it very difficult to estimate the future
development of the business. To Ukraine Orion has exported commercial deliveries of medicines and donated medicines
through charity organisations. The company will continue efforts to deliver medicines to Ukraine also going forward.
In 2022, Orion’s sales in Russia and in Ukraine accounted for around 3% and less than 1% respectively of the Group’s total
product sales. In January–December 2022, the combined sales in these countries were on par with the previous year mainly
due to strong sales before the war in January and February 2022 and the development of the rate of the Russian rouble. In
March–December 2022 the total net sales in these countries were clearly lower than in the comparative period.
The Russian rouble fluctuated strongly over the year. During the period of January–December 2022, the impact of the Russian
rouble rate on operating profit was about EUR 10 million positive. At the end of December 2022, Orion’s trade receivables in
Russia amounted to EUR 3 million and the value of inventories was EUR 5 million. The future development of the Russian rouble
exchange rate and its impact is currently difficult to estimate.
ORION | Financial Statement documents 2022 | 8
Orion does not procure energy, raw materials, or other utilities from Russia. The availability of natural gas and raw materials
from Russia and Ukraine could cause potential risks to Orion’s suppliers. Together with its partners, Orion works to analyse and
minimise possible risks.
Financial review
Net sales
Orion Group’s net sales in 2022 totalled EUR 1,341 (1,041) million, an increase of 29%. The increase is mainly due to the EUR
228 million upfront payment related to the ODM-208 agreement received in July, but product sales also developed positively.
Also, VMD’s net sales is now included in Orion Group’s net sales from the acquisition date onwards. Exchange rate fluctuations
had an EUR 18 million positive impact on net sales during the period mainly due to the Russian rouble. Net sales of Orion’s top
ten pharmaceuticals amounted to EUR 513 (476) million. They accounted for 38% (46%) of total net sales.
Operating profit
The Orion Group’s operating profit was up by 81% at EUR 440 (243) million. The increase is due to the ODM-208 agreement-
related EUR 228 million upfront payment. EBITDA was up by 69% at EUR 487 (289) million. Operating profit excluding the
ODM-208 agreement related upfront payment and costs of EUR 20 million was slightly lower than in the comparative period
mainly due to clearly increased operating expenses.
Gross profit from sales in local currencies increased by EUR 55 million from the comparative period. Price, cost and product
portfolio changes had a negative impact of EUR 68 million on gross profit of which roughly EUR 20 million are due to cost
increase and the rest due to price decreases in some key products and changes in the overall portfolio. Currency rate changes
had a positive impact of EUR 14 million, of which EUR 12 million was due to Russian rouble. The effect of exchange rates varied
greatly within the year. During the first and fourth quarters the effect was negative, while during the second and third quarters it
was positive. With the combined impact of these items, the gross profit from product and service sales was EUR 1 million higher
than in the comparative period.
Milestone payments accounted for EUR 234 (3) million and royalties for EUR 48 (24) million of net sales and operating profit.
Other operating income and expenses accounted for EUR 6 (6) million of operating profit.
Operating expenses increased by EUR 58 million. A significant part of the cost increase, approximately EUR 20 million, relate to
the execution of the ODM-208 agreement. These expenses include, among others, non-recurring advisory fees and provisions
for certain variable incentive systems.
Operating expenses
The Group’s sales and marketing expenses were up by 10% and totalled EUR 210 (191) million. Sales and marketing costs
increased because of a clear increase in promotional activities since COVID-19 and because the costs now also include VMD’s
sales and marketing costs, which were absent in the reference period. Research and development expenses increased by 15%
and totalled EUR 136 (118) million. Orion started late in the year several pre-clinical projects which contributed to the increase
of the R&D costs. Also, the timing of certain clinical stage costs increased R&D expenses during the last quarter of the year. R&D
costs accounted for 10% (11%) of the Group’s net sales. Administrative expenses were EUR 69 (48) million. They increased by
44% mainly due to the costs related to the execution of the ODM-208 agreement.
Group’s profit
Profit for the period was EUR 350 (194) million. Basic earnings per share were EUR 2.49 (1.38). Equity per share was EUR 6.48
(5.32).
The return on capital employed before taxes (ROCE) was 45% (29%) and the return on equity after taxes (ROE) 42% (26%).
Financial position
The Group’s gearing was -13% (-14%) and the equity ratio 61% (68%).
The Group’s total liabilities as at 31 December 2022 were EUR 596 (366) million. At the end of the period, interest-bearing
liabilities amounted to EUR 214 (108) million. Of the total interest-bearing liabilities EUR 197 (105) million were long-term
liabilities.
ORION | Financial Statement documents 2022 | 9
The Group had EUR 333 (217) million of cash and cash equivalents at the end of the reporting period.
The remeasurement of the pension plans has increased the equity by EUR 37 million during the period.
Cash flow
The cash flow from operating activities was EUR 434 (216) million. Cash flow increased mainly due to the ODM-208 related
upfront payment of USD 290 million, of which EUR 228 million is part of profit before taxes in cash flow. EUR 60 million of the
upfront payment, reserved to balance sheet to cover Orion’s share of ODM-208 development cost to be accrued in the future, is
shown as adjustment in the cash flow from operating activities.
The cash flow from investing activities was EUR -154 (-80) million. The increase is mainly due to the VMD acquisition.
The cash flow from financing activities was EUR -160 (-215) million. The difference is mainly due to changes in borrowing. In
January-December 2022, net borrowing was EUR 73 million higher than in the comparative period. In September–November
2022 the company acquired its own shares with EUR 18 million.
Capital expenditure
The Group’s capital expenditure without the acquisition of VMD totalled EUR 110 (85) million. This comprised EUR 59 (52)
million on property, plant and equipment and EUR 51 (33) million on intangible assets. Capital expenditure on intangible assets
includes an EUR 20 million upfront payment for exclusive licence to commercialise Amneal’s generic products in Europe,
Australia and New Zealand and an EUR 15 million upfront payment for Jemincare’s NaV 1.8 blocker (ODM-111).
At the end of the reporting period, capital expenditure to the acquisition of VMD totalled EUR 94 million including the purchase
price, net of cash of EUR 82 million and deferred payments of EUR 11 million. In addition, after the acquisition Orion repaid EUR
7 million of shareholder loans taken from former VMD shareholders.
Change in reporting from 1 January 2023
Orion’s new organisational structure entered into force on 1 January 2023, as a result of which, starting with the interim report
1-3/2023, Orion will report its net sales by business division in accordance with the new organisational structure. The business
divisions are Innovative Medicines, Branded Products, Generics and Consumer Health, Animal Health, and Fermion. Financial
reporting for 2022 will still follow the old structure.
Key business targets and key performance indicators in 2022
TARGET KPI’s in 2022 Status on 31 Dec 2022
Increasing the sales of the
current product portfolio
Significant increase in sales of Nubeqa® booked by Orion On target
Easyhaler® product portfolio sales increase by more than 5% On target
Building up long-term
growth
In-licensing of new products Partly on target
Portfolio enhancement through product acquisitions and M&A On target
Partner for ODM-208 development and commercialisation On target
Launch of Phase III clinical trial on ODM-208 Target not reached*
At least one new project proceeds to clinical development On target
Solidifying the R&D portfolio with new collaboration agreements On target
* Based on the decision to recruit additional patients to the ongoing Phase II study on ODM-208, this target was not attainable in
2022.
ORION | Financial Statement documents 2022 | 10
Business review
Review of the Finnish human pharmaceuticals market
(1–12/2022), the total sales of Orion’s human pharmaceuticals in January-December 2022, including both medicinal and non-
medicinal products, grew by 4% from the previous year.
A significant product group for Orion in Finland are reference-priced prescription drugs in the pharmacy channel. The sales of
Orion’s reference-priced prescription drugs increased by 12% while the total market fell by 3% from the comparative period.
The significant increase in Orion’s reference-priced prescription medicines in the statistics is explained by the strong volume
growth and the statistical method that only takes into account products that are reference-priced prescription medicines at the
time of compilation of the statistics. The average price of reference-priced drugs in the market declined by approximately 10%
from the comparative period (Source: Pharmarket). The impact of constant price competition on Orion has been significant due
to the Company’s broad product range and significant 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 non-medicinal products):
EUR million 1–12/22 1–12/21 Change %
Total sales of human pharmaceuticals (hospital and pharmacy channel)
Market 3,081 2,985 +3%
Orion 335 321 +4%
Prescription drugs total (pharmacy channel)
Market 1,761 1,696 +4%
Orion 189 184 +3%
Reference priced prescription drugs (pharmacy channel)*
Market 458 472 -3%
Orion 111 99 +12%
Self-care products (pharmacy channel)
Market 433 404 +7%
Orion 112 103 +9%
* 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 figures in the comparative period may deviate from previously published data.
Source: Pharmarket sales statistics 1-12/2022
Orion’s market share in the sales of human pharmaceuticals in Finland (medicinal and non-
medicinal products):
Orion’s market share, % 1–12/22 1–12/21
Human pharmaceuticals in total (hospital and pharmacy channel) 11% 11%
Prescription drugs total (pharmacy channel) 11% 11%
Reference priced prescription drugs (pharmacy channel)* 24% 21%
Self-care products (pharmacy channel) 26% 26%
* 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 figures in the comparative period may deviate from previously published data.
Source: Pharmarket sales statistics 1-12/2022
ORION | Financial Statement documents 2022 | 11
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 five countries in the Asia-Pacific region. 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 through its own
sales network in the Nordic countries, Belgium, France, some Eastern European countries and Vietnam. 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 the Easyhaler® product portfolio.
Net sales of the unit in January–December 2022 were up by 66% and totalled EUR 644 (388) million. The increase is mainly due
to the EUR 228 million upfront payment but product sales also developed well.
Net sales by product
EUR million 1−12/22 1−12/21 Change %
Easyhaler® product portfolio 130 117 +11%
Stalevo®, Comtess® and Comtan® 100 95 +5%
Nubeqa®* 88 39 +122%
Simdax® 43 57 -25%
Dexdor® 18 37 -51%
Other** 265 42 +525%
Total 644 388 +66%
* 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 2022,
net sales of darolutamide sold for use in clinical trials were EUR 2 (12) million.
Orion’s sales of Nubeqa® (darolutamide) in January-December 2022 totalled EUR 88 (39) million, of which royalties amounted
to EUR 40 (13) million and product sales, i.e. deliveries to Bayer to EUR 47 (26) million. Nubeqa® is approved in more than 70
markets around the world for the treatment of non-metastatic castration-resistant prostate cancer. In August 2022, the U.S. Food
and Drug Administration (FDA) approved additional indication of darolutamide in combination with docetaxel for the treatment
of metastatic hormone-sensitive prostate cancer (mHSPC). Filings in other regions are underway or planned by Bayer.
Bayer holds global commercial rights to darolutamide, and Orion is entitled to receive annually tiered royalties on global
darolutamide sales. The average annual royalty rate is initially approximately 20% including product sales to Bayer. At first,
the average annual royalty rate will be slightly lower, and as the annual global sales increase, the average annual royalty rate
will increase. If the annual global darolutamide sales were EUR 3 billion, Orion’s average annual royalty rate would be slightly
above 25%. Orion manufactures the product for global markets and co-promotes the product in Europe with Bayer. Orion
incurs front-end costs due to the structure of Nubeqa® sales recorded by the company. Manufacturing costs are recognised
at the time of delivery of the products, but royalty income is only recognised when the product is sold on the market and Orion
receives royalties from Bayer. This timing difference has a material impact on the profitability of the Nubeqa® sales recorded by
Orion, especially in the early stages of the product life cycle, when the relative share of product sales in the total sales recorded
by Orion is high. In addition to royalties, Orion is entitled to receive progressive one-off milestone payments from Bayer that may
total EUR 280 million, depending on the future sales development of Nubeqa.
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 fluticasone). Total net sales of the Easyhaler® product portfolio for the treatment of
asthma and chronic obstructive pulmonary disease increased by 11% and amounted to EUR 130 (117) million in January–
December 2022. In the comparative period, the market for dry-powder pulmonary drugs and the demand for Easyhaler®
products suffered from the reduced rate of doctors’ appointments due to the COVID-19 pandemic. The growth was driven by
the sales of the budesonide-formoterol combined formulation which increased by 11% to EUR 83 (74) million. The sales of other
ORION | Financial Statement documents 2022 | 12
Easyhaler® products (beclometasone, budesonide, formoterol, salbutamol and salmeterol-fluticasone combined formulation)
increased by 10% to EUR 47 (43) million.
Orion’s drugs for the 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 2022 increased by 5% and
amounted to EUR 100 (95) million. Orion markets its own Parkinson’s drugs in Europe and in some countries in the Asia-Pacific
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. Significant mandatory price reductions took effect in Japan
at the beginning of 2022. However, due to increased deliveries to other partners, the overall sales of Parkinson’s franchise
increased slightly.
Net sales of Orion’s Dexdor® intensive care sedative (dexmedetomidine), a product sold in Europe, were at EUR 18 (37) million,
down by 51%. The expected decline in sales was due to generic competition and a strong comparative period owing to
demand caused by the COVID-19 pandemic.
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 2022 were down by 25% at EUR 43 (57) million. Sales declined from the
comparative period mainly due to falling prices in some markets, but direct generic competition has also started to have an
impact.
Specialty Products
Net sales of the Specialty Products unit, comprising generic (off-patent) prescription drugs (including biosimilars) and self-
care products, increased by 4% in January-December 2022 and amounted to EUR 521 (503) million. Growth was driven by
self-care products, but sales of prescription medicines also developed well. There have been more respiratory tract infections
than in previous years, which partly explains the growth. Prices of reference-priced prescription drugs have continued to
decline especially in Finland, but Orion has been able to compensate for the impact of decreasing prices through increased
sales volumes. Owing to the COVID-19 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 comparative period. This led to
a decline in non-critical medical appointments and therefore in the number of prescriptions issued. Generic prescription drugs
accounted for 74% (75%) and self-care products for 26% (25%) of Specialty Products’ net sales.
Breakdown of Specialty Products’ net sales by product group 1–12/2022:
EUR million 1−12/2022 1−12/2021 Change %
Share of unit’s net sales
1–12/22
Share of unit’s net sales
1–12/21
Generic prescription drugs 384 380 +1% 74% 75%
Self-care products 137 123 +11% 26% 25%
Total 521 503 +4%
The Specialty Products unit’s most important market areas are Finland, Scandinavia and Eastern Europe. The unit’s sales
in Finland in January–December 2022 amounted to EUR 289 (278) million. The increase of 4% 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 for this impact with strong volume development.
In Scandinavia, Specialty Products’ sales totalled EUR 76 (76) million. In Eastern Europe, sales amounted to EUR 80 (81) million.
Net sales were at previous year’s level mainly due to a strong sales development in Russia and Ukraine before the war broke
out in Ukraine and the development of the rate of the Russian rouble. In March-December 2022 the total sales in these territories
declined clearly. Specialty Products’ sales in regions other than Finland, Scandinavia and Eastern Europe stood at EUR 76 (67)
million.
In January 2022, Orion announced that 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. In January 2023, Orion
announced it has signed a long-term license agreement with Amneal Pharmaceuticals, Inc. to commercialise Amneal’s generic
ORION | Financial Statement documents 2022 | 13
products in most parts of Europe as well as in Australia and New Zealand. The initial portfolio will include a mix of generic
products commercially available in the U.S. today, as well as selected pipeline products currently under development. Initial
products will be registered throughout Europe, Australia and New Zealand starting in 2023, with launches expected over the
coming years.
Animal Health
In the Nordic countries, Belgium, France, some Eastern European markets and Vietnam, Orion sells veterinary drugs itself, while
the Company operates through partners in other markets. In addition, Orion markets and sells veterinary drugs manufactured
by several other companies.
In June 2022, Orion acquired Belgian animal health company V.M.D. NV (“VMD”). Through this acquisition, Orion’s Animal Health
unit expanded its product portfolio and got a foothold in the livestock market, expanded its own geographical presence to
Western Europe and expanded export markets, and gained a production unit that specialises in the manufacturing of veterinary
medicines. The integration of the acquired company to Orion’s Animal Health unit is underway.
Net sales of the Animal Health unit in January–December 2022 were up by 35% and amounted to EUR 99 (73) million. Sales
include the turnover of the animal health company VMD (Inovet), acquired in June, which explains the increase from the
comparative period. Sales of animal sedative products accounted for 37% (53%), or EUR 36 (39) 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 effects of the
sedatives.
Fermion and Contract Manufacturing
Fermion manufactures active pharmaceutical ingredients for Orion and other pharmaceutical companies. Its product range
comprises nearly 30 pharmaceutical ingredients. It produces active pharmaceutical ingredients for Orion’s proprietary drugs
developed in house as well as for certain generic drugs. Fermion manufactures generic pharmaceutical ingredients for other
pharmaceutical companies and offers contract manufacturing services for the development and manufacturing of new active
pharmaceutical ingredients.
Net sales of Fermion and Contract Manufacturing, excluding deliveries for Orion’s own use, totalled EUR 69 (75) million. In
recent years, order cycles in the trade in pharmaceutical raw materials have become increasingly shorter. This has led to
clearly greater fluctuation in business volumes than before, both within each annual period and between different years.
Demand for Fermion products has been good and production capacity has been nearly fully utilised. The decline in external net
sales is partly explained by the fact that more production capacity has been allocated to the manufacturing of Orion’s active
pharmaceutical ingredients.
ORION | Financial Statement documents 2022 | 14
Research and development
The Group’s R&D expenses in January–December 2022 totalled EUR 136 (118) million, up by 15%. They accounted for 10%
(11%) of the Group’s net sales. R&D expenses also include expenses related to the development of the current portfolio. The
core therapy areas of Orion’s pharmaceutical research are oncology and pain. Orion also develops veterinary drugs and
selected generic drugs.
During 2022, Orion decided to focus on oncology and pain in the research and development of new proprietary products.
By concentrating resources, the company believes that it can best develop new treatments for patients’ needs and gain the
most effective return for its R&D efforts. Ongoing clinical development projects will continue as normal, with the exception of
Easyhaler® indacaterol glycopyrronium and Easyhaler® tiotropium development programs, which were terminated during 2022.
The development of new generic pharmaceuticals and the R&D of veterinary drugs will continue unchanged. The refocusing of
research and product development of new proprietary products will not affect the current portfolio of products that are on sale.
Key clinical development projects
Project Indication PHASE Registration
Darolutamide ARASENS
1
Prostate cancer (mHSPC) I II III Registration
Darolutamide ARANOTE
1
Prostate cancer (mHSPC) I II III
ODM-208 (CYP11A1 inhibitor)
2
Prostate cancer (mCRPC) I II
ODM-105 (tasipimidine) Psychiatric disorders I
ODM-111 (NaV 1.8 blocker) Pain I
1
In collaboration with Bayer = Phase completed = Phase ongoing = Status changed
2
In collaboration with MSD
Detailed results from 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) were published in February 2022 in the
New England Journal of Medicine and at the 2022 ASCO GU Cancers Symposium. In the ARASENS trial, darolutamide in
combination with docetaxel and androgen deprivation therapy (ADT) significantly increased overall survival (OS) compared to
placebo, docetaxel and ADT. The overall incidence of reported adverse events was similar between treatment arms. Consistent
benefits were also seen across secondary endpoints. In August, the U.S. Food and Drug Administration (FDA) approved
additional indication of darolutamide in combination with docetaxel for the treatment of metastatic hormone-sensitive
prostate cancer (mHSPC). Bayer has submitted applications for additional indication of darolutamide also in the EU, Japan
and China, among others. In January 2023, the Committee for Medicinal Products for Human Use (CHMP) of the European
Medicines Agency (EMA) recommended darolutamide plus ADT in combination with docetaxel for marketing authorisation in
the European Union (EU) for the treatment of patients with metastatic hormone-sensitive prostate cancer (mHSPC). The final
decision from the European Commission on the marketing authorisation is expected in the coming months.
In addition, Orion and Bayer have an ongoing Phase III ARANOTE clinical trial, which investigates the efficacy 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 an ongoing Phase II CYPIDES clinical trial on the ODM-208 molecule, a novel selective hormone synthesis inhibitor
(CYP11A1 inhibitor), for the treatment of patients with metastatic castration-resistant prostate cancer (mCRPC). Based on the
decision to recruit additional patients to this study, further data from this trial is expected in 2023. Finally, the study is expected
to be completed in the second half of 2024. In July, Orion and MSD announced a global development and commercialisation
agreement for ODM-208 and other drugs targeting cytochrome P450 11A1 (CYP11A1), an enzyme important in steroid
production. Under the terms of the agreement, Orion and MSD will co-develop and co-commercialise ODM-208. MSD paid
Orion an upfront payment of USD 290 million. Of this upfront payment, Orion recognised EUR 228 million as income at the time
of signing and EUR 60 million is reserved to cover Orion’s share of ODM-208 development cost to be accrued in the future.
Orion will be responsible for the manufacture of clinical and commercial supply of ODM-208.
In addition, the contract provides both parties with an option to convert the initial co-development and co-commercialisation
agreement into a global exclusive license to MSD. If the option is exercised, MSD would assume full responsibility for all
accrued and future development and commercialisation expenses associated with the programme. Orion would be eligible to
receive milestone payments associated with progress in the development and commercialisation of ODM-208 as well as tiered
ORION | Financial Statement documents 2022 | 15
double-digit royalties on sales if the product is approved. The total amount potentially accrued from multiple regulatory and
sales milestone events represents a substantial opportunity for Orion.
Orion has completed 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. Based on the accumulated data, Orion is
preparing to start a Phase II clinical trial to investigate the efficacy and safety of ODM-105 in psychiatric disorders.
Orion has an ongoing Phase I clinical trial with ODM-111, a NaV 1.8 channel blocker. The study will investigate the tolerability
and safety of the drug candidate in healthy volunteers. In May, Orion entered into an agreement with Chinese Jemincare,
through which Orion received exclusive global development and commercialisation rights, excluding mainland China, Hong
Kong, Macau and Taiwan, for the molecule. Orion also received ownership to certain key patent applications relating to the
compound within its own territory.
Orion has the right to develop and commercialise the asset in its territory. Orion will be fully responsible for its own development
and commercialisation costs. In addition, Orion will manufacture the products, including the active pharmaceutical ingredient,
for its markets.
Under the terms of the agreement, Jemincare gets a EUR 15 million upfront payment, in addition to which Jemincare is upon
achievement of certain development, commercialisation and sales targets entitled to receive milestone payments, which may
be significant. In addition, Jemincare is eligible to receive tiered royalty of 8% to 15% on future sales in Orion territory.
Orion together with Propeller Health has 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 field 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 were positive, and Orion is currently looking for a partner for further development and 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 pain. Additionally, Orion has projects underway
to develop new veterinary drugs and selected generic drugs. In December 2022, Orion and Alligator Bioscience agreed to start
a second joint research project under a collaboration agreement signed in 2021. The research collaboration is focused on the
discovery of novel bispecific antibodies directed towards immuno-oncology targets selected by Orion.
Personnel
The average number of employees in the Orion Group in January–December 2022 was 3,472 (3,364). At the end of December
2022, the Group had a total of 3,527 (3,355) employees, of whom 2,648 (2,617) worked in Finland and 879 (738) outside Finland.
The increase in personnel is mainly due to VMD employees being included in the Orion Group.
Salaries and other personnel expenses in January–December 2022 totalled EUR 264 (231) million.
Changes in Executive Management
On 20 April 2022, Orion Corporation’s Board of Directors appointed Liisa Hurme as President and CEO of Orion Corporation as
of 1 November 2022, until which her predecessor Timo Lappalainen held the position.
On 20 September 2022, Juhani Kankaanpää was appointed as Senior Vice President, Global Operations, and member of the
Executive Management Board of Orion Group as of 1 November 2022.
On 17 October 2022, Orion announced the new organisational structure and the following changes to the Executive
Management Board as of 1 January 2023. Satu Ahomäki was appointed Senior Vice President (SVP) of Generics and
Consumer Health business division, Virve Laitinen was appointed SVP of Corporate Strategy and Program Management
corporate level function, Niclas Lindstedt was appointed SVP of Animal Health business division, Hao Pan was appointed SVP
of Branded Products business division and Outi Vaarala was appointed SVP of Innovative Medicines business division. Vaarala
will also continue in her role as SVP of Research & Development.
ORION | Financial Statement documents 2022 | 16
Significant legal proceedings
Companies belonging to the Orion Group are parties to various legal disputes, which are not, however, considered to be
significant legal proceedings for the Group.
Shares and shareholders
On 31 December 2022 Orion had a total of 141,134,278 (141,134,278) shares, of which 34,186,494 (34,813,206) were A
shares and 106,947,784 (106,321,072) B shares. The Group’s share capital is EUR 92,238,541.46 (92,238,541.46). At the end of
December 2022, Orion held 932,771 (571,314) B shares as treasury shares. On 31 December 2022, the aggregate number of
votes conferred by the A and B shares was 789,744,893 (802,013,878) excluding treasury shares.
At the end of December 2022, Orion had 79,423 (80,792) 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 to one (1) vote.
However, a shareholder cannot vote more than 1/20 of the aggregate number of votes from the different share classes
represented at 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 626,712 A shares were converted into B shares in January–December
2022.
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. On 31 December 2022, the market
capitalisation of the Company’s shares, excluding treasury shares, was EUR 7,179 million.
In 2022, a total of 1,684,646 of Orion’s A shares and 79,342,616 B shares were traded on Nasdaq Helsinki. The total value of the
shares traded was EUR 3,414 million. During the year, 4.9% of the A shares and 74.2% of the B shares were traded. The average
turnover in Orion’s shares was 57.4%.
The price of Orion’s A shares increased by 41.6% and the price of its B shares by 40.3% in 2021. On 31 December 2022 the
closing quotation was EUR 51.10 for the A shares and EUR 51.24 for the B shares. The highest quotation for Orion’s A shares
was EUR 54.00 and the lowest quotation was EUR 33.90. The highest quotation for the B shares in 2022 was EUR 54.18 and the
lowest quotation was EUR 33.75.
Orion shares are also traded on various alternative trading platforms in addition to Nasdaq Helsinki.
Authorisations of the Board of Directors
On 23 March 2022, the Annual General Meeting of Orion Corporation authorised the Board of Directors to decide on a share
issue by issuing new shares. 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 Annual General Meeting authorised the Board of Directors also to decide on the acquisition of the Company’s own shares
and to decide on a share issue by conveying own shares. The Board of Directors shall be entitled to decide on the acquisition of
no more than 500,000 class B shares of the Company and to decide on the conveyance of no more than 1,000,000 own Class
ORION | Financial Statement documents 2022 | 17
B shares held by the Company. The authorisation to acquire own shares shall be valid for 18 months and the authorisation to
convey own shares shall be valid for five years from the decision of the Annual General Meeting.
The terms of the authorisations are reported in more detail in a stock exchange release on 23 March 2022.
The Board of Directors of Orion Corporation decided on 25 August 2022 on a share acquisition based on the authorisation by
the Annual General Meeting on 23 March 2022. Between 1 September and 19 September and 26 October and 4 November,
Orion acquired a total of 400,000 class B shares. After the acquisition, the Board of Directors is still authorised to decide on the
acquisition of no more than 100,000 class B shares.
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 two currently operating share-based incentive plans 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, and Orion Group’s Long-Term
Incentive Plan 2022, announced in a stock exchange release published on 10 February 2022.
Share ownership
Orion’s shares are in the book-entry system maintained by Euroclear Finland, and Euroclear Finland maintains Orion’s official
shareholder register.
At the end of December 2022, Orion had a total of 79,423 (80,792) registered shareholders, of whom 96% (96%) were private
individuals. They held 38% (40%) of the entire share stock and had 61% (61%) of the total votes. There were 56 (56) million
nominee-registered and foreign-owned shares, which was 40% (40%) of all shares, and they conferred entitlement to 10%
(10%) of the total votes.
At the end of December 2022, Orion held 932,771 (571,314) B shares as treasury shares, which is 0.7% (0.4%) of the Company’s
total share stock and 0.12% (0.07%) of the total votes.
Flagging notifications
In January–December 2022 Orion Corporation received altogether 9 notifications pursuant to Chapter 9, Section 5 of the
Securities Market Act. According to the notifications, the total number of Orion shares owned directly, indirectly and/or through
financial instruments by BlackRock, Inc. and its funds either increased above five (5) per cent or decreased below five (5) per
cent of Orion Corporation’s total shares.
The details of the notifications are available at www.orion.fi/en/flaggings.
Management’s shareholdings
At the end of 2022, the members of the Board of Directors owned a total of 674,973 of the Company’s shares, of which 613,063
were A shares and 61,910 B shares. At the end of 2022, the President and CEO owned 20,020 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 164,286 of the Company’s shares, which were all B shares. Thus, the Company’s executive management held 0.61% of all of
the Company’s shares and 1.58% 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 financial
requirements in the medium and long term to achieve the financial objectives.
ORION | Financial Statement documents 2022 | 18
Proposal by the Board of Directors: dividend EUR 1.60 per share
The parent company’s distributable funds are EUR 590,316,773.93, or EUR 4.21 per share. This includes EUR 348,926,255.92, or
EUR 2.49 per share, of profit for the financial 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 1.60 (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 profit distribution was proposed, the number of shares conferring entitlement to receive dividend totalled 140,201,507, on
which the total dividend payment would be EUR 224,322,411.20. The Group’s payout ratio for the financial year 2022 would
be 64.3% (108.8%). The dividend payment date would be 31 March 2023, and shareholders registered in the Company’s
shareholder register on 24 March 2023 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 365,644,362.73 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 different
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.fi/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 five (5) and at most eight (8) 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 Chair of the Board of Directors, and the
Board of Directors elects the Vice Chair 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
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.
Notice period of the service agreement of President and CEO is 6 months, both for the company and for the President and
CEO. The company has the right to immediately discharge the President and CEO from her duties. In certain situations, if the
President and CEO has breached the service agreement, the company has also the right to terminate the service agreement
with immediate effect. With the exception of such agreement breach situations, if the company has terminated the service
agreement, the President and CEO shall be entitled to a severance pay equalling to her base salary for 18 months. The
prerequisite for the severance pay is also that the company and the President and CEO enter into a separate agreement. If the
President and CEO terminates the service agreement, no severance pay is paid.
Orion publishes its Corporate Governance Statement and remuneration report for 2022 separately from the Report by the Board
of Directors on the Company’s website at www.orion.fi/en.
ORION | Financial Statement documents 2022 | 19
Annual General Meeting on 23 March 2022
The Annual General Meeting of Orion Corporation was held on 23 March 2022 under special arrangements at Event Venue Eliel
in Helsinki. 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 report and proposals concerning authorisation of the Board of Directors to decide on a share issue by issuing
new shares, to decide to acquire the Company’s shares and to decide on a share issue by conveying own shares.
Distribution of a dividend of EUR 1.50 per share was approved for 2021, 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 23 March 2022.
Annual General Meeting on 22 March 2023
Orion Corporation’s Annual General Meeting is planned to be held on Wednesday 22 March 2023 commencing at 14:00 EET.
Significant 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-effective 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 financial 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.
Identified 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.
Non-financial 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 final products and pharmaceutical ingredients from others, while
others also purchase them from Orion. Group production facilities are located in Finland, France and Belgium. Pharmaceutical
research centres are located in Finland and the United Kingdom. Orion had a total of 3,527 employees at the end of 2022, of
them 2,648 in Finland and 879 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
ORION | Financial Statement documents 2022 | 20
the high objectives it has set for the above. Based on a materiality assessment the Company has identified 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, and responsibility for the environment, its employees, business ethics and transparency. In 2022, the
Company has advanced its Sustainability Agenda, while focusing on improving corporate responsibility management and
further developing sustainability dialogue with stakeholders. A separate Sustainability Report for 2022 will be published in April
2023. A third-party limited assurance has been conducted to the non-financial reporting key figures and selected figures in the
Sustainability Report.
In June 2022, Orion acquired animal health company V.M.D. NV (“VMD”). Orion is in the process of integrating the new VMD
business units to Orion’s sustainability policies and risk management practices. This integration continues during 2023 and
once completed, Orion will include the new business units to its sustainability reporting indicators and results. The new business
units have been partially included to the 2022 reporting indicators and this is described indicator-by-indicator basis and the
new units are referred to as VMD units.
Environment, social matters and personnel
Policies
Orion’s environmental, health and safety (EHS) policy defines 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 efficiency 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 efficient use of materials and energy and appropriate wastewater management.
Orion’s human resources policy defines 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 defines 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 identified 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 define procedures and responsibilities for predicting, preventing and identifying deviations
and exceptional situations causing possible harm. In addition, the guidelines define how to identify, assess, deal with and
manage the risks of these situations. Management of EHS matters is monitored through annual internal audits. Operations
are continuously improved by identifying development objectives. The management of sustainability issues, including the
management of EHS risks, are also part of our supplier and partner selection and management practices.
Orion’s most significant 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 defined for impacted
areas, and the progress of these measures is monitored, for example, by measuring emissions, waste volumes and resource
use. All Group’s production plants have the valid environmental permits required for operations.
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 safety
observations.
ORION | Financial Statement documents 2022 | 21
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 monitors matters related to the environment, social impacts and personnel, and reports on them annually in
its Sustainability Report. The key figures concerning operations relate to energy, greenhouse gas emissions and the well-being
of employees.
Climate and energy consumption
Orion has a climate target of carbon neutrality in its own operations by 2030, and the work towards that target is progressing
well. In 2022, Orion decided to expand on that target and commit to align its business - including its full value chain - with
limiting global warming to 1.5°C. To that end, Orion has committed to setting science-based emission reduction targets for all its
emission scopes to reach alignment with 1.5°C by 2030.
The Company systematically reduces its greenhouse gas emissions and engages in energy conservation through Orion’s
energy efficiency programme. In 2022, the Company successfully initiated a heat pump plant project in Espoo, and plant will
start to produce heat in 2023. The plant utilizes waste heat from the production processes of Orion and energy from outdoor air,
producing zero emission heat for the district network of Orion Espoo.
Orion is committed also to the joint Energy Efficiency Programme for the members of the Confederation of Finnish Industries
(EK) for the years 2017–2025. The Energy Efficiency Programme target to improve energy efficiency by 7,5% was reached in
2021. Having reached the target, Orion decided to set its own, higher target of 15% improvement in the Company’s energy
efficiency by the end of the year 2025. Of this target, Orion has reached 60%. In 2022, the Company achieved energy savings
by investing in LED lighting in Espoo and Turku and by decreasing the temperature of the supply air in production facilities in
Oulu, among other things.
The greenhouse gas emission reductions in own operations (scopes 1-2) are mainly achieved through Orion’s energy efficiency
programme measures, including energy transformation projects, such as electrification of processes, in addition to which
renewable and carbon free energy sources are utilised. By the end of 2022 Orion has reduced the greenhouse gas emissions
in its own operations (scopes 1-2) by 60% compared with 2016.
1
In 2022, the Company further developed the calculations of
greenhouse gas emissions from its value chain (scope 3) and started to define a roadmap to reduce value chain greenhouse
gas emissions.
1
Greenhouse gas emission reduction excludes data from VMD’s operations.
2022 2021
Total energy consumption, energy savings and greenhouse gas emissions
2
Total absolute energy consumption (MWh)
3
154,832 156,707
Energy savings achieved by saving measures and efficiency improvements (MWh)
4
858 7,349
Energy Efficiency Programme targets achieved
5
121% 114%
Greenhouse gas emissions, scope 1 (tCO
2
e) 5,110 4,403
Greenhouse gas emissions, scope 2, market-based (tCO
2
e)
6
12,934 13,692
2
VMD production plants in France and Belgium are included to the figures as of July 2022.
3
Orion Group’s properties that do not contribute significantly to the total and have no production operations, such as rented offices,
are excluded from reporting.
4
Energy savings are estimates calculated in compliance with the guidelines of the Energy Authority.
5
Joint Energy Efficiency Programme 2017–2025 target for the members of the Confederation of the Finnish Industries (EK). The energy
savings target for 2025 is 7.5% of the energy consumption in 2016.
6
2021 figures restated due to refinement of the calculation of the emission factor.
Conservation of biodiversity and ecosystems
Orion recognises the importance of halting biodiversity loss and commits to working towards no biodiversity loss caused by our
business or our value chain. In 2022, Orion started the initial mapping of its biodiversity impacts throughout its value chain. The
work continues in 2023.
ORION | Financial Statement documents 2022 | 22
EU taxonomy: disclosure on environmentally sustainable activities
Orion has been actively following the development of the EU’s classification system for environmentally sustainable activities, the EU
Taxonomy, and its related disclosure obligations. The Company has conducted assessment of its Taxonomy-eligible economic activities
for climate change mitigation and climate change adaptation targets. Orion’s eligibility was assessed by mapping all of Orion’s
economic activities against the EU NACE codes, and comparing those to the Taxonomy-eligible activities set out by the EU. The scope
of activities included in the assessment matches Orion Group’s financial reporting and adheres to the principles of materiality. Based on
the assessment, the Taxonomy-eligible proportion of the Company’s turnover, capital expenditure and operating expenditure are 0% for
each. Consequently, the Taxonomy-aligned proportion of the Company’s turnover, capital expenditure and operating expenditure are
0% for each.
Information on Taxonomy-aligned activities are presented in the tables below. Turnover includes the Company’s net sales. More
information is available in Financial statement note 2.1 Revenue from contracts with customers. Capital expenditure consists of
additions to property, plant and equipment, intangible assets, right-of-use assets and the additions in business combination excluding
goodwill. More information is available in Financial statement note 3.1 Property, plant and equipment and intangible assets and 3.2
Leased assets. Operating expenditure consists of costs related to research and development, maintenance materials, leases of low-
value assets and short-term leases. More information is available in Financial statement note 2.3 Operating expenses and 3.2 Leased
assets.
ORION | Financial Statement documents 2022 | 23
Proportion of turnover from products or services associated with Taxonomy-aligned economic
activities – disclosure covering year 2022
Substantial contribution criteria
DNSH criteria
(‘Does Not Significantly Harm’)
Economic activities
Codes
Absolute
turnover
EUR million
Proportion
of turnover
%
Climate
change
mitigation
%
Climate
change
adaptation
%
Water and
marine
resources
%
Circular
economy
%
Pollution
%
Biodiversity
and
ecosystems
%
Climate
change
mitigation
(Y/N)
Climate
change
adaptation
(Y/N)
Water and
marine
resources
(Y/N)
Circular
economy
(Y/N)
Pollution
(Y/N)
Biodiversity
and
ecosystems
(Y/N)
Minimum
safeguards
(Y/N)
Taxonomy-
aligned
proportion
of turnover,
year 2022
Percent
Taxonomy-
aligned
proportion
of turnover,
year 2021
Percent
Category
(enabling
activity)
E
Category
(transitional
activity)
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
Turnover of
environmentally
sustainable activities
(Taxonomy-aligned)
(A.1)
0 0% 0%
A.2 Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned)
Turnover of
Taxonomy-
eligible but not
environmentally
sustainable activities
(not Taxonomy-
aligned) (A.2)
0 0%
Total (A.1 + A.2)
0 0% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
Turnover of
Taxonomy-non-
eligible activities (B)
1,341 100%
Total (A+B) 1,341 100%
ORION | Financial Statement documents 2022 | 24
Proportion of CapEx from products or services associated with Taxonomy-aligned economic activities
– disclosure covering year 2022
Substantial contribution criteria
DNSH criteria
(‘Does Not Significantly Harm’)
Economic activities
Codes
Absolute
CapEx
EUR million
Proportion
of CapEx
%
Climate
change
mitigation
%
Climate
change
adaptation
%
Water and
marine
resources
%
Circular
economy
%
Pollution
%
Biodiversity
and
ecosystems
%
Climate
change
mitigation
(Y/N)
Climate
change
adaptation
(Y/N)
Water and
marine
resources
(Y/N)
Circular
economy
(Y/N)
Pollution
(Y/N)
Biodiversity
and
ecosystems
(Y/N)
Minimum
safeguards
(Y/N)
Taxonomy-
aligned
proportion of
CapEx, year
2022
Percent
Taxonomy-
aligned
proportion
of CapEx,
year 2021
Percent
Category
(enabling
activity)
E
Category
(transitional
activity)
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
CapEx of
environmentally
sustainable activities
(Taxonomy-aligned)
(A.1)
0 0% 0%
A.2 Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned)
CapEx of Taxonomy-
eligible but not
environmentally
sustainable activities
(not Taxonomy-
aligned) (A.2)
0 0%
Total (A.1 + A.2)
0 0% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
CapEx of
Taxonomy-non-
eligible activities (B)
142 100%
Total (A+B) 142 100%
ORION | Financial Statement documents 2022 | 25
Proportion of OpEx from products or services associated with Taxonomy-aligned economic activities –
disclosure covering year 2022
Substantial contribution criteria
DNSH criteria
(‘Does Not Significantly Harm’)
Economic activities
Codes
Absolute
OpEx
EUR million
Proportion
of OpEx
%
Climate
change
mitigation
%
Climate
change
adaptation
%
Water and
marine
resources
%
Circular
economy
%
Pollution
%
Biodiversity
and
ecosystems
%
Climate
change
mitigation
(Y/N)
Climate
change
adaptation
(Y/N)
Water and
marine
resources
(Y/N)
Circular
economy
(Y/N)
Pollution
(Y/N)
Biodiversity
and
ecosystems
(Y/N)
Minimum
safeguards
(Y/N)
Taxonomy-
aligned
proportion of
OpEx, year
2022
Percent
Taxonomy-
aligned
proportion of
OpEx,
year 2021
Percent
Category
(enabling
activity)
E
Category
(transitional
activity)
T
A. TAXONOMY-ELIGIBLE ACTIVITIES
A.1 Environmentally sustainable activities
(Taxonomy-aligned)
OpEx of
environmentally
sustainable activities
(Taxonomy-aligned)
(A.1)
0 0% 0%
A.2 Taxonomy-eligible but not environmentally
sustainable activities (not Taxonomy-aligned)
OpEx of Taxonomy-
eligible but not
environmentally
sustainable activities
(not Taxonomy-
aligned) (A.2)
0 0%
Total (A.1 + A.2)
0 0% 0%
B. TAXONOMY-NON-ELIGIBLE ACTIVITIES
OpEx of Taxonomy-
non-eligible
activities (B)
174 100%
Total (A+B) 174 100%
ORION | Financial Statement documents 2022 | 26
Orion will conduct eligibility and alignment assessment for the four non-climate environmental objectives during 2023. These
objectives are the sustainable use and protection of water and marine resources; transition to a circular economy; pollution
prevention and control; and protection and restoration of biodiversity and ecosystems. The Company will report the Taxonomy-
aligned economic activities of these objectives as a part of the non-financial reporting 2023
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 fit for work
and healthy at work, and not exposed to occupational diseases. Achievement of this is shown by the occupational well-
being indicators of lost time incident frequency and absence due to illness rate. In 2022, the Company conducted initiatives
to promote safety culture, including strengthening the use of current tools and implementing a new tool to facilitate learning
from incidents. During the year, Orion defined strategic themes for its long-term safety development. The Company’s aim is to
achieve zero lost time incidents. Unfortunately, the lost time incident frequency target for 2022, LTIF 1 ≤ 3.0, was not achieved.
The Company will launch Orion Safety Value Creation program during 2023 to achieve the Company’s long-term safety
objectives.
2022 2021
Occupational well-being of personnel: Workplace injuries and sick leave of the personnel
Lost time incident frequency, LTIF 1
1
3.7 4.8
Absence due to illness (hours of absence due to illness as percentage of total theoretical working
hours)
2
4.1% 3.1%
1
Indicates the workplace injury rate as injuries causing an absence of at least one day per million total actual working hours. 2022
reporting includes Orion Group employees globally. VMD employees of production sites in France and Belgium are included as of
July 2022. 2021 reporting includes Orion Group employees in Finland.
2
Hours of absence due to illness as percentage of total theoretical working hours of Company personnel. Reporting covers the Orion
Group’s employees in Finland.
Respect for human rights and prevention of corruption and
bribery
Policies
Orion’s Code of Conduct defines 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 15 languages. Correspondingly, the ethical guidelines of the Third Party
Code of Conduct applying to Orion’s suppliers define 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.
The principles that are included in the Company’s Code of Conduct and the anti-corruption policy require that employees
refuse to offer or take a bribe, or any comparable benefit. 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 human rights and labour, the environment, occupational health and safety,
ethics and management systems) of their facilities and operations. Any findings detected in the sustainability audits will be
ORION | Financial Statement documents 2022 | 27
addressed with corrective actions 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 understand 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, confidentially. The
Company takes appropriate case-specific measures to end the conduct and activity violating the principles.
Indicators and results
In 2022, Orion rolled out the Code of Conduct for the new VMD employees and published an additional language version of
the policy and related e-learning to ensure accessibility to all new employees. The majority of Group 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.
In 2022, Orion continued to apply its human rights due diligence practices with risk-based approach. Orion was not made
aware of any human rights violations in its own operations through the whistleblowing channel in 2022. The Company takes all
such notifications seriously and handles them quickly and impartially.
Anti-corruption and bribery training is mandatory for certain personnel groups. Orion ensures that the training is completed
by all new employees for whom it is mandatory. We provide regular training and in 2022, the Company carried out a
comprehensive retraining for the targeted personnel groups.
2022 2021
Respect for human rights and prevention of corruption and bribery
Code of Conduct training, number of participants
1, 2
682 653
Anti-corruption and anti-bribery training, number of participants
1
1,800 532
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.
2
VMD employees are included to training participants as of 2022.
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, effective 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 audits manufacturing sites regularly to assess the adequacy of the
quality system and that all GMP (Good Manufacturing Practice) standards are followed. Orion analyses raw material and
ORION | Financial Statement documents 2022 | 28
product batches 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 defined QP (Qualified Person) in the quality assurance organisation decides when a product batch is released for sale. QP
is responsible for ensuring that each individual batch has been manufactured and checked in compliance with laws in force
and in accordance with the requirements of the marketing authorisation and with GMP. The stability of the product is monitored
during the shelf life and any customer complaints are monitored throughout the entire product life. Immediate action is taken if
any deficiency 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, effective 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 efficacy and safety. Clinical trials involving human subjects can only be conducted
with approval of the regulatory drug authorities and ethical committees. The pharmacology and safety of a drug candidate
are extensively studied using preclinical laboratory models and by monitoring tolerability and adverse effects 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 effects
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 benefit-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 risks for patients in relation to the benefits of the
drugs that might lead to liability or withdrawal of a product from the market. To cover for the financial impact of product liability
risk, the Orion Group’s products and operations are insured through operational and product liability insurances.
The manufacturing of pharmaceutical products is subject to regular inspections by the authorities. Pharmaceutical products
must be safe, efficacious 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 and wide supplier network may cause risks to the delivery reliability. Authorities and key customers
in different countries undertake regular and detailed inspections and audits of Orion’s manufacturing sites. Should some
inspection or audit outcome lead to significant corrective actions, it may at least temporarily have effects that decrease delivery
reliability and increase costs. This risk is, however, mitigated by continuous improvement and regular audit program by Orion.
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. 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.
ORION | Financial Statement documents 2022 | 29
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) specified for the pharmaceutical industry.
COVID-19 pandemic continued to impact audit programs with restrictions in certain geographical areas. Some of the audits to
our suppliers and partners in 2022 were conducted remotely. Similarly, some of the audits of Orion’s operations were conducted
remotely.
2022 2021
Product quality and safety
Number of GxP inspections/audits of Orion’s operations, total
1
63 43
Inspections by authorities 12 11
Audits by collaboration partners 51 32
Non-compliances from authority inspections 0 0
Number of GxP audits undertaken by Orion
1
281 256
Rejections 1 3
Number of customer complaints about the Pharmaceuticals business (ppm
2
) 60 65
1
Inspections and audits of Good Practices (GxP) and ISO 13485 audits.
1
ppm = parts per million packages sold.
Strategy
Orion’s Board of Directors has confirmed the Company’s strategy for 2023–2027.
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-effective 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 companion animals and livestock health: growing awareness and
understanding of the factors affecting personal well-being increase the demand for health-promoting and illness-preventing
products for humans and animals.
• 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 effective drug or therapy also creates added value for patients by improving their quality of life.
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.
ORION | Financial Statement documents 2022 | 30
• 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 flexibility. Attaining competitiveness and the desired level of profitability 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 larger companies and gain a competitive advantage from this.
Strategic targets
The following strategic targets and their achievement are monitored in the Company with clearly defined 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 to 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 financial 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-effective 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 benefit 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 scientific 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 profitability
ORION | Financial Statement documents 2022 | 31
Financial objectives
Through the financial objectives Orion aims to develop the Group’s shareholder value and ensure financial stability and
profitable growth. Orion’s financial 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 profitability at a good level. The aim is operating profit 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.
Outlook for 2023
Orion estimates that net sales in 2023 will be slightly higher than in 2022 without the EUR 228 million impact from the ODM-208
upfront payment (net sales in 2022 without the impact of the ODM-208 upfront payment were EUR 1,113 million).
Operating profit is estimated to be slightly higher or higher than in 2022 without the EUR 208 million net impact from the
ODM-208 upfront payment (operating profit in 2022 without the net impact of the ODM-208 upfront payment was EUR 232
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 profit that vary greatly from year to year. Forecasting
the timing and amount of these payments is difficult. In some cases, they are conditional on terms such as R&D outcomes
which are not known until studies have been completed, the progress of R&D projects or the attainment of specified sales
levels. On the other hand, neither the outcome nor the schedule of contract negotiations is generally known before the final
signing of the agreement. In 2022, Orion received an upfront payment of USD 290 million related to the ODM-208 contract,
of which EUR 228 million was recognised in revenue and operating profit. The contract-related expenses amounted to
approximately EUR 20 million, resulting in a net impact on operating profit of EUR 208 million.
Orion is eligible to receive milestone payments from Bayer based on sales of the Nubeqa® product upon meeting certain global
annual sales thresholds for the first time. The outlook for 2023 includes one such milestone payment of EUR 30 million. The
outlook does not include any other material milestone payments.
The outlook assumes that Orion’s own production will be able to operate normally throughout the year. Risks to the continuity of
production are discussed under ‘Near-term risks and uncertainties’.
The outlook does not include income, expenses or other impacts related to any future material product or company acquisition
or divestment.
Taulukko 2
2018
5
2019
51
2020
42
2021
3
2022
234
0
50
100
150
200
250
2018
2019
2020
2021
2022
Milestone payments received by Orion in 2018–2022
EUR million
5
51
42
234
3
1
ORION | Financial Statement documents 2022 | 32
Net sales
The outlook anticipates that the net sales of Nubeqa® booked by Orion will clearly increase in 2023. Orion’s estimate is
based on forecasts received from its partner Bayer. The net sales of the Animal Health business division is also expected to
increase clearly due to the acquisition of the animal health company VMD in summer 2022. Milestone payments are expected
to increase clearly excluding the impact of the ODM-208 upfront payment. In addition, the Easyhaler® product portfolio is
expected to act as one growth driver.
Aggregate net sales of other products are expected to decline from 2022, driven in particular by generic competition from
Simdax®, dexdor®, Precedex® and Parkinson’s drugs Stalevo®, Comtess® and Comtan®. Also, the sales of Orion’s own generic
dexmedetomidine and entcapone products are expected to decline due to competition. The expected decline in sales of
other generic medicines is mainly explained by lower prices in Orion’s main markets. In addition, the outlook assumes that
Orion’s turnover in Russia will be substantially lower than in 2022. In 2022, changes in exchange rates and especially in the
Russian rouble rate increased net sales. Fermion has been operating at very near full capacity over the past few years. The
share of manufacturing of the active pharmaceutical ingredients of Orion’s own proprietary drugs is estimated to increase, and
consequently Fermion’s external net sales reported by Orion are estimated to slightly decline in 2023.
Operating profit
Manufacturing costs are expected to increase faster than sales, mainly due to cost inflation, resulting in a lower relative gross
margin on product sales than in 2022. Cost inflation is reflected not only in raw material and energy prices, but also in salary
costs, among others. The outlook takes into account higher salary increases than in previous years.
Operating expenses are expected to increase slightly from 2022 reported costs (i.e. including ODM-208 agreement related
costs). The increase in R&D expenses will be influenced by the number and timing of projects in the clinical research phase.
In addition, there is a plan to increase investment in early-stage research, and hence in building the company’s future growth.
Sales and marketing expenses will be driven by, among other things, the costs of the acquired veterinary pharmaceutical
company Inovet, the planned launch of ganaxolone in Europe and costs related to Nubeqa, including the royalty payable to
Endo Pharmaceuticals. Salary increases also push up operating expenses.
The operating profit from growing products, above all the royalty from Nubeqa®, is estimated to grow faster than costs. Also,
milestone payments are expected to increase clearly excluding the impact of the ODM-208 upfront payment. Due to the factors
mentioned above, operating profit for 2023 is estimated to be slightly higher or higher than in 2022, excluding the net impact of
the EUR 208 million ODM-208 upfront payment.
Capital expenditure
The Group’s total capital expenditure in 2023 is expected to be clearly lower than in 2022, when capital expenditure was EUR
109 million. Investments in 2022 included EUR 20 million upfront payment for exclusive licence to commercialise Amneal’s
generic products in Europe, Australia and New Zealand and EUR 15 million upfront payment for Jemincare’s NaV 1.8 blocker
(ODM-111). In 2023, the grand total of investments will be still further increased by the revamping of Orion’s Enterprise Resource
Planning (ERP) system and renovation of the company’s head office in Espoo, both scheduled for 2021-23. The outlook of
capital expenditure does not include any investments related to any future material product or company acquisition.
Near-term risks and uncertainties
The outlook is based on the assumption that Orion’s own production can continue to operate normally. The sales of Orion-
manufactured products depend on the ability of production and the entire supply chain to operate at the planned level. This
involves numerous risks that may cause even material production disruptions. Such risks include the infection of employees,
the availability of supplies, equipment and spare parts, deteriorating availability of products, energy, starting materials and
intermediate products as well as logistics chain disruptions. Current risks to supply and logistics chains include the effects of
the COVID-19 pandemic and the war in Ukraine. Any other unforeseen changes in the operating environment could cause
disruptions to Orion’s production or other operations. Such risks may include natural disasters, significant geopolitical changes,
epidemics and pandemics.
In the current labour market situation, strikes and other industrial actions are also risks that may affect Orion’s production and
other operations directly or indirectly.
ORION | Financial Statement documents 2022 | 33
Sales of individual products and also Orion’s sales in individual markets may vary, for example depending on the extent to
which the ever-tougher price and other competition prevailing in pharmaceutical markets in recent years will specifically focus
on Orion’s products. Changes in pharmaceutical regulation in individual markets or more broadly, for example at EU level, may
affect the sales and profitability of Orion’s products.
Product deliveries to key partners are based on timetables that are jointly agreed in advance. Nevertheless, they can change,
for example as a consequence of decisions concerning adjustments of stock levels. In addition, changes in market prices and
exchange rates affect the value of deliveries. Due to Russia’s invasion of Ukraine, the visibility of business in these countries
is currently very low. Furthermore, it is uncertain whether all the receivables in Russia can be collected. However, this is not
considered to be a significant risk for the Group. Orion has insured its receivables, but only in part. So far, Orion has been able
to recover its receivables in Russia normally.
Currently no single currency is posing a material exchange rate risk for Orion. In Orion’s total net sales, the share of invoicing in
US dollars has fallen to around ten per cent. At the same time, the value of purchases in dollars has increased. The weight of the
US dollar will increase due to increasing sales of Nubeqa®. Other key currencies that carry an exchange rate risk are European
currencies other than EUR. However, the overall effect of the risk arising from currencies of European countries will be abated
by the fact that Orion has organisations of its own in most European countries, which means that in addition to sales income
there are also costs in these currencies. The exchange rate performance of the Japanese yen is significant due to sales of
Parkinson’s drugs in Japan. The exchange rate effect related to the Russian rouble arises in particular due to the strong volatility
of the currency. Russian sales do not represent a significant portion of Orion’s total 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, the war in Ukraine and other challenges in the
global supply and logistics chains of pharmaceuticals have increased the already elevated risk of supply disruptions.
Moreover, the disruptions, production volume changes and logistical challenges experienced in other industries may also have
unexpected and sudden ramifications that can manifest as shortages of necessary raw materials, supplies and equipment in
the chemical and pharmaceutical industries and as increases in prices. The rise of raw material prices and other supply chain
costs deteriorates the profitability of Orion’s products, since in the pharmaceuticals industry it is very difficult to pass on cost
increases to the prices of own products, especially prescription medicines, particularly in Europe. Cost inflation will have a
negative impact on Orion’s profitability in 2023. Due to the inventory turnover rate, the impact of price increases on the cost of
goods sold was still limited in 2022 and will be more pronounced in 2023. A continuation of high inflation levels poses a risk to
Orion’s profitability.
Authorities and key customers in different countries carry out regular and detailed inspections of drug development and
manufacturing at Orion’s production sites. Any remedial actions that may be required may at least temporarily have effects
that decrease delivery reliability and increase costs. Orion’s product range also contains products manufactured by other
pharmaceutical companies and products that Orion manufactures on its own but for which other companies supply active
pharmaceutical or other ingredients and components or parts (among these the Easyhaler® products). Possible problems
related to the delivery reliability or quality of the products of those manufacturers may cause a risk to Orion’s delivery reliability.
The single-channel system used for pharmaceuticals distribution in Finland, in which Orion’s products have been delivered to
customers through only one wholesaler, may also cause risks to delivery reliability.
Research projects always entail uncertainty factors that may either increase or decrease estimated costs. The projects may
progress more slowly or faster than assumed, or they may be discontinued. Nonetheless, changes that may occur in ongoing
clinical studies are reflected in costs relatively slowly and are not expected to have a material impact on earnings in the current
year. Owing to the nature of the research process, the timetables and costs of new studies that are being started are known well
in advance. They therefore typically do not lead to unexpected changes in the estimated cost structure. Orion often undertakes
the last, in other words Phase III, clinical trials in collaboration with other pharmaceutical companies. Commencement of these
collaboration relationships and their structure also materially affect the schedule and cost level of research projects.
Collaboration arrangements are an important component of Orion’s business model. Possible collaboration and licensing
agreements related to these arrangements also often include payments to be recorded in net sales that may materially affect
Orion’s financial results. In 2014–2022 the annual payments varied from EUR 3 million to EUR 234 million. The payments may be
subject to conditions relating to the progress of research projects or sales or to new contracts to be signed, and whether these
conditions or contracts materialise and what their timing is will always entail uncertainties.
ORION | Financial Statement documents 2022 | 34
Group’s key figures
Key figures relating to financial performance
2018 2019 2020 2021 2022
Net sales, EUR million 977.5 1,051.0 1,078.1 1,041.0 1,340.6
EBITDA, EUR million 293.9 308.9 336.5 289.1 487.1
% of net sales 30.1% 29.4% 31.2% 27.8% 36.3%
Operating profit, EUR million 252.8 252.8 280.1 243.3 439.6
% of net sales 25.9% 24.1% 26.0% 23.4% 32.8%
Profit for the period, EUR million 197.3 200.4 219.9 193.8 349.5
% of net sales 20.2% 19.1% 20.4% 18.6% 26.1%
Research and development expenses, EUR million 104.0 119.3 123.2 117.7 135.8
% of net sales 10.6% 11.3% 11.4% 11.3% 10.1%
Capital expenditure, excluding acquired in business
combinations, EUR million 64.8 42.6 48.5 85.4 109.6
% of net sales 6.6% 4.0% 4.5% 8.2% 8.2%
Acquired in business combination, net of cash, EUR million 82.0
Depreciation, amortisation and impairment, EUR million 41.1 56.1 56.5 45.8 47.5
Personnel expenses, EUR million 200.7 217.1 227.0 231.0 263.9
Equity total, EUR million 773.1 779.4 731.3 747.9 908.1
Interest-bearing net liabilities, EUR million -132.1 -139.1 -185.8 -108.3 -118.7
Assets total, EUR million 1,146.7 1,035.7 1,115.6 1,114.0 1,503.6
Cash flow from operating activities, EUR million 230.9 270.8 299.1 215.7 434.4
Equity ratio, % 68.8% 76.7% 66.7% 68.1% 60.9%
Gearing, % -17.1% -17.8% -25.4% -14.5% -13.1%
Return on capital employed (before taxes), % 44.3% 29.9% 34.8% 28.8% 45.1%
Return on equity (after taxes), % 45.5% 25.8% 29.1% 26.2% 42.2%
Personnel at the end of the period 3,154 3,265 3,311 3,355 3,527
Average personnel during the period 3,179 3,251 3,337 3,364 3,472
ORION | Financial Statement documents 2022 | 35
Performance per share
2018 2019 2020 2021 2022
Basic earnings per share, EUR 2.35 1.43 1.56 1.38 2.49
Diluted earnings per share, EUR 2.35 1.43 1.56 1.38 2.49
Cash flow from operating activities per share, EUR 1.64 1.93 2.13 1.53 3.09
Equity per share, EUR 5.50 5.55 5.21 5.32 6.48
Dividend per share, EUR
1
1.50 1.50 1.50 1.50 1.60
Total dividend, EUR million
1
211.0 210.7 210.7 210.8 224.3
Payout ratio, %
1
63.8% 105.2% 95.9% 108.8% 64.3%
A share
Number of shares at the end of the period 37,120,346 36,335,463 35,122,793 34,813,206 34,186,494
% of total share stock 26.3% 25.7% 24.9% 24.7% 24.2%
Effective dividend yield, %
1
5.0% 3.7% 4.0% 4.2% 3.1%
Price/earnings ratio (P/E) 12.89 28.64 23.97 26.16 20.52
Number of votes excluding treasury shares 742,406,920 726,709,260 702,455,860 696,264,120 683,729,880
% of total votes 87.8% 87.5% 87.0% 86.8% 86.6%
Total number of shareholders 20,368 19,990 22,015 23,252 23,232
Closing quotation at the end of previous financial year, EUR 32.07 30.30 40.95 37.40 36.10
Lowest quotation of review period, EUR 24.75 28.20 29.60 33.45 33.90
Average quotation of review period, EUR 29.63 34.26 40.26 36.33 41.38
Highest quotation of review period, EUR 35.70 42.00 48.45 41.05 54.00
Closing quotation at the end of review period, EUR 30.30 40.95 37.40 36.10 51.10
Trading volume, EUR million 63.2 73.5 102.5 58.9 69.9
Shares traded 2,131,981 2,149,046 2,547,090 1,620,990 1,684,646
% of the total number of shares 5.7% 5.9% 7.3% 4.7% 4.9%
1
The Board of Directors’ proposal for 2022 to the Annual General Meeting.
ORION | Financial Statement documents 2022 | 36
2018 2019 2020 2021 2022
B share
Number of shares at the end of the period, including
treasury shares 104,137,482 104,922,365 106,011,485 106,321,072 106,947,784
% of total share stock 73.7% 74.3% 75.1% 75.3% 75.8%
Treasury shares 562,440 765,399 671,082 571,314 932,771
Number of shares at the end of the period, excluding
treasury shares 103,575,042 104,156,966 105,340,403 105,749,758 106,015,013
Effective dividend yield, %
1
4.5% 3.6% 4.0% 4.1% 3.1%
Price/earnings ratio (P/E) 12.89 26.86 24.06 26.46 20.58
Number of votes excluding treasury shares 103,575,042 104,156,966 105,340,403 105,749,758 106,015,013
% of total votes 12.2% 12.5% 13.0% 13.2% 13.4%
Diluted number of shares, average 103,556,473 103,745,206 104,892,709 105,565,593 106,065,089
% of total share stock 73.3% 73.4% 74.3% 74.8% 75.2%
Total number of shareholders 58,903 52,913 56,487 64,385 63,016
Closing quotation at the end of previous financial year, EUR 31.08 30.28 41.27 37.53 36.52
Lowest quotation of review period, EUR 22.57 28.19 30.02 32.51 33.75
Average quotation of review period, EUR 27.90 33.48 40.69 35.86 42.16
Highest quotation of review period, EUR 33.50 42.52 48.80 39.42 54.18
Closing quotation at the end of review period, EUR 30.28 41.27 37.53 36.52 51.24
Trading volume, EUR million 3,389.3 2,846.5 4,213.9 3,027.7 3,344.4
Shares traded 121,458,874 85,303,946 103,556,863 84,437,433 79,342,616
% of the total number of shares 116.6% 81.3% 97.7% 79.4% 74.2%
A and B share total
Number of shares at the end of the period 141,257,828 141,257,828 141,134,278 141,134,278 141,134,278
Average number of shares during the period excluding
treasury shares 140,676,819 140,571,373 140,506,969 140,546,563 140,501,281
Total number of votes conferred by the shares 845,981,962 830,866,226 807,796,263 802,013,878 789,744,893
Diluted number of shares, average 140,676,819 140,571,373 140,506,969 140,563,896 140,589,736
Total number of shareholders 72,802 66,595 72,003 80,792 79,423
Trading volume, EUR million 3,452.5 2,920.0 4,316.4 3,086.6 3,414.4
Shares traded 123,590,855 87,452,992 106,103,953 86,058,423 81,027,262
Total shares traded, % of total shares 87.5% 61.9% 75.2% 61.0% 57.4%
Market capitalisation at the end of the period excluding
treasury shares, EUR million 4,261.0 5,786.5 5,267.0 5,118.7 7,179.1
1
The Board of Directors’ proposal for 2022 to the Annual General Meeting.
ORION | Financial Statement documents 2022 | 37
Largest shareholders by number of shares
1
31 Dec 2022 A shares B shares Total shares
% of total
shares Total votes
% of total
votes
1. Ilmarinen Mutual Pension Insurance Company 1,847,000 1,444,629 3,291,629 2.33% 38,384,629 4.85%
2. Erkki Etola and companies 2,500,000 325,000 2,825,000 2.00% 50,325,000 6.36%
Etola Erkki 200,000 4,000,000 0.51%
Etola Oy 2,300,000 46,000,000 5.82%
Etola Group Oy 325,000 325,000 0.04%
3. Varma Mutual Pension Insurance Company 2,720,405 2,720,405 1.93% 2,720,405 0.34%
4. Land and Water Technology Foundation and
companies 2,083,360 2,083,360 1.48% 41,667,200 5.27%
Land and Water Technology Foundation 1,034,860 20,697,200 2.62%
Tukinvest Oy 1,048,500 20,970,000 2.65%
5. Elo Mutual Pension Insurance Company 292,800 1,585,000 1,877,800 1.33% 7,441,000 0.94%
6. Ylppö Jukka 1,247,136 147,729 1,394,865 0.99% 25,090,449 3.17%
7. The Social Security Institution of Finland, Kela 1,218,368 1,218,368 0.86% 1,218,368 0.15%
8. Into Ylppö and commanding votes 785,492 242,848 1,028,340 0.73% 15,952,688 2.02%
Ylppö Into 577,936 240,200 11,798,920 1.49%
Ylppö Eeva 110,778 1,324 2,216,884 0.28%
Ylppö Aurora 96,778 1,324 1,936,884 0.24%
9. The State Pension Fund 1,000,000 1,000,000 0.71% 1,000,000 0.13%
10. Orion Corporation² 932,771 932,771 0.66% 932,771 0.12%
10 largest total 8,755,788 9,616,750 18,372,538 13.02% 184,732,510 23.36%
Total 34,186,494 106,947,784 141,134,278 100.00% 790,677,664 100.00%
1
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.
2
Not entitled to vote at Orion’s General Meetings of shareholders.
ORION | Financial Statement documents 2022 | 38
Largest shareholders by number of votes
1
31 Dec 2022 A shares B shares Total shares
% of total
shares Total votes
% of total
votes
1. Erkki Etola and companies 2,500,000 325,000 2,825,000 2.00% 50,325,000 6.36%
Etola Erkki 200,000 4,000,000 0.51%
Etola Oy 2,300,000 46,000,000 5.82%
Etola Group Oy 325,000 325,000 0.04%
2.
Land and Water Technology Foundation and
companies 2,083,360 2,083,360 1.48% 41,667,200 5.27%
Land and Water Technology Foundation 1,034,860 20,697,200 2.62%
Tukinvest Oy 1,048,500 20,970,000 2.65%
3. Ilmarinen Mutual Pension Insurance Company 1,847,000 1,444,629 3,291,629 2.33% 38,384,629 4.85%
4. Ylppö Jukka 1,247,136 147,729 1,394,865 0.99% 25,090,449 3.17%
5. Into Ylppö and commanding votes 785,492 242,848 1,028,340 0.73% 15,952,688 2.02%
Ylppö Into 577,936 240,200 11,798,920 1.49%
Ylppö Eeva 110,778 1,324 2,216,884 0.28%
Ylppö Aurora 96,778 1,324 1,936,884 0.24%
6. Aho Group Oy and commanding votes 730,599 9,794 740,393 0.52% 14,621,774 1.85%
Aava Terveyspalvelut Oy 358,230 4 7,164,604 0.91%
Juhani Aho Foundation for Medical Research 107,800 2,156,000 0.27%
Aho Kari Jussi 75,763 1,365 1,516,625 0.19%
Lappalainen Annakaija 58,034 5,500 1,166,180 0.15%
Aho Ville Jussi 50,496 425 1,010,345 0.13%
Porkkala Miia 41,683 833,660 0.11%
Aho Antti Jussi 38,593 2,500 774,360 0.10%
7. Orion Pension Fund² 544,208 178,702 722,910 0.51% 11,062,862 1.40%
8. Eija Ronkainen and companies 535,500 39,615 575,115 0.41% 10,749,615 1.36%
EVK-Capital Oy 535,500 16,671 10,726,671 1.36%
Eija Ronkainen 22,944 22,944 0.00%
9. Saastamoinen Foundation 504,996 504,996 0.36% 10,099,920 1.28%
10. Oy Ingman Finance Ab 445,000 445,000 0.32% 8,900,000 1.13%
10 largest total 11,223,291 2,388,317 13,611,608 9.64% 226,854,137 28.69%
Total 34,186,494 106,947,784 141,134,278 100.00% 790,677,664 100.00%
1
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.
2
Not entitled to vote at Orion’s General Meetings of shareholders.
ORION | Financial Statement documents 2022 | 39
Ownership base by type of shareholder
31 Dec 2022 Owners % A shares % B shares % Total shares % Total votes %
Non-financial
companies 2,001 2.52 4,768,834 13.95 3,308,033 3.09 8,076,867 5.72 98,684,713 12.48
Financial and
insurance institutions 80 0.10 574,254 1.68 3,528,596 3.30 4,102,850 2.91 15,013,676 1.90
Public sector entities 41 0.05 2,143,654 6.27 8,374,608 7.83 10,518,262 7.45 51,247,688 6.48
Households 76,193 95.93 22,536,298 65.92 31,438,616 29.40 53,974,914 38.24 482,164,576 60.98
Non-profit
organisations 755 0.95 3,068,583 8.98 4,071,953 3.81 7,140,536 5.06 65,443,613 8.28
Nominee-registered
and foreign
shareholders 352 0.44 1,094,871 3.20 55,293,207 51.70 56,388,078 39.95 77,190,627 9.76
Number of treasury
shares 1 0.00 0 0.00 932,771 0.87 932,771 0.66 932,771 0.12
Total 79,423 100.00 34,186,494 100.00 106,947,784 100.00 141,134,278 100.00 790,677,664 100.00
Ownership base by number of shares
31 Dec 2022 Owners % A shares % B shares % Total shares % Total votes %
1–100 39,145 49.29 418,486 1.22 1,273,608 1.19 1,575,913 1.12 8,418,155 1.06
101–1,000 30,991 39.02 3,112,571 9.10 9,892,822 9.25 11,641,316 8.25 58,113,910 7.35
1,001–10,000 8,497 10.70 8,257,133 24.15 16,266,024 15.21 23,367,768 16.56 168,193,957 21.27
10,001–100,000 716 0.90 7,498,665 21.93 9,191,071 8.59 18,079,116 12.81 172,302,743 21.79
100,001–1,000,000 61 0.08 7,422,143 21.71 7,592,102 7.10 14,972,704 10.61 148,417,513 18.77
1,000,001– 12 0.02 7,477,496 21.87 61,799,386 57.78 70,564,690 50.00 234,298,615 29.63
Total 79,422 100.00 34,186,494 100.00 106,015,013 99.13 140,201,507 99.34 789,744,893 99.88
of which nominee-
registered 11 0.01 870,208 2.55 55,079,491 51.95 55,949,699 39.91 72,483,651 9.18
Number of treasury
shares 1 0.00 0 0.00 932,771 0.87 932,771 0.66 932,771 0.12
Total 79,423 100.00 34,186,494 100.00 106,947,784 100.00 141,134,278 100.00 790,677,664 100.00
ORION | Financial Statement documents 2022 | 40
Shareholdings in Orion Corporation of the Members elected to
the Board of Directors on 23 March 2022
31 Dec 2022 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 0 0 8,797 970 8,797 0.01 0.00
Hilpi Rautelin, Vice Chairman 1,800 0 4,161 593 5,961 0.00 0.01
Kari Jussi Aho 75,763 0 1,365 485 77,128 0.05 0.19
Maziar Mike Doustdar
1
0 0 485 485 485 0.00 0.00
Ari Lehtoranta 0 0 3,161 593 3,161 0.00 0.00
Veli-Matti Mattila 0 0 3,841 485 3,841 0.00 0.00
Eija Ronkainen 535,500 0 39,615 485 575,115 0.41 1.36
Karen Lykke Sørensen
1
0 0 485 485 485 0.00 0.00
Board of Directors total 613,063 0 61,910 4,581 674,973 0.48 1.56
1
For Maziar Mike Doustdar and Karen Lykke Sørensen, the changes have been observed as of 23 March 2022, when they started as
Board members.
The figures include the shares held by organisations and foundations controlled by the person.
Shareholdings in Orion Corporation of the Members of the
Executive Management Board
31 Dec 2022 A shares
Change from
1 Jan B shares
Change from
1 Jan A and B total
% of total
shares
% of total
votes
Liisa Hurme, President and CEO 0 0 20,020 2,548 20,020 0.01 0.00
Satu Ahomäki 0 0 38,849 548 38,849 0.03 0.00
Olli Huotari 0 0 68,431 2,039 68,431 0.05 0.01
Juhani Kankaanpää
1
0 0 3,012 3,012 0.00 0.00
Jari Karlson 0 0 37,271 2,039 37,271 0.03 0.00
Virve Laitinen 0 0 16,723 -1,961 16,723 0.01 0.00
Outi Vaarala 0 0 0 0 0 0.00 0.00
Executive Management Board total 0 0 184,306 5,213 184,306 0.13 0.02
1
Juhani Kankaanpää, the changes have been observed as of 1 November 2022, when he started as member of the Executive
Management Board.
The figures include the shares held by organisations and foundations controlled by the person.
ORION | Financial Statement documents 2022 | 41
31 Dec 2022 A share B share Total
Trading code on Nasdaq Helsinki ORNAV ORNBV
Listing day 1 Jul 2006 1 Jul 2006
ISIN code FI0009014369 FI0009014377
ICB code 4500 4500
Reuters code ORNAV.HE ORNBV.HE
Bloomberg code ORNAV.FH ORNBV.FH
Share capital, EUR million 22.3 69.9 92.2
Counter book value per share, EUR 0.65 0.65
Minimum number of shares 1
Maximum number of A and B shares, and
maximum number of all shares 500,000,000 1,000,000,000 1,000,000,000
Votes per share 20 1
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 2022 | 42
EBITDA
=
Operating profit + Depreciation + Amortisation + Impairment losses
Interest-bearing net liabilities
=
Interest-bearing liabilities - Cash and cash equivalents - Money market
investments
Return on capital employed (ROCE), %
=
Profit before taxes + interest and other finance expenses
x 100
Total assets - Non-interest-bearing liabilities (average during the period)
Return on equity (ROE), %
=
Profit 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
(basic and diluted)
=
Profit attributable to the owners of the parent company
Average number of shares during the period, excluding treasury shares
Cash flow from operating actitivies
per share, EUR
=
Cash flow from operating activities
Average number of shares during the period, 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
Effective 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 excluding treasury shares x
Closing quotation of the period
Calculation of the key figures
ORION | Financial Statement documents 2022 | 43
Consolidated financial statements (IFRS)
Consolidated income statement
EUR million Note 2022 2021
Net sales 2.1 1,340.6 1,041.0
Cost of goods sold -491.7 -447.5
Gross profit 848.9 593.5
Other operating income and expenses 2.4 5.7 6.4
Selling and marketing expenses 2.2, 2.3, 4.1 -210.3 -191.0
Research and development expenses 2.2, 2.3, 4.1 -135.8 -117.7
Administrative expenses 2.2, 2.3, 4.1 -68.8 -47.9
Operating profit 439.6 243.3
Finance income and expenses 2.5 0.7 -1.0
Profit before taxes 440.3 242.3
Income tax expense 5.1 -90.8 -48.5
Profit for the period 349.5 193.8
PROFIT ATTRIBUTABLE TO
Owners of the parent company 349.5 193.8
Basic earnings per share, EUR
1
2.6 2.49 1.38
Diluted earnings per share, EUR
1
2.6 2.49 1.38
1
Earnings per share has been calculated from the profit attributable to the owners of the parent company.
Consolidated statement of comprehensive income
EUR million Note 2022 2021
Profit for the period 349.5 193.8
Cumulative translation adjustments 6.3 -2.9 1.6
Items that may be reclassified subsequently to profit and loss -2.9 1.6
Remeasurement of pension plans, net of tax 4.2, 5.1 37.0 29.0
Items that will not be reclassified to profit and loss 37.0 29.0
Other comprehensive income net of tax 34.2 30.6
Comprehensive income for the period 383.7 224.4
COMPREHENSIVE INCOME ATTRIBUTABLE TO
Owners of the parent company 383.7 224.4
The notes are an integral part of the consolidated financial statements.
ORION | Financial Statement documents 2022 | 44
Consolidated statement of financial position
Assets
EUR million, 31 Dec Note 2022 2021
Property, plant and equipment 3.1, 3.2 373.3 332.6
Goodwill 3.1, 3.4 87.2 13.5
Intangible rights 3.1 100.0 53.0
Other intangible assets 3.1 3.8 2.5
Investment in associate 3.5 0.1 0.1
Other investments 6.6 0.2 0.2
Pension assets 4.2 56.2 15.0
Deferred tax assets 5.2 3.1 6.6
Other non-current receivables 3.7 1.0 0.3
Non-current assets total 624.9 423.7
Inventories 3.6 315.6 265.2
Trade receivables 3.7 180.7 174.8
Current tax receivables 3.7 4.9 3.3
Other receivables 3.7 44.8 30.2
Cash and cash equivalents 6.5 332.6 216.7
Current assets total 878.7 690.3
Assets total 1,503.6 1,114.0
Equity and liabilities
EUR million, 31 Dec Note 2022 2021
Share capital 92.2 92.2
Other reserves 3.3 3.3
Cumulative translation adjustments -10.8 -8.4
Retained earnings 823.3 660.7
Equity attributable to owners of the parent company 908.1 747.9
Equity total 6.3 908.1 747.9
Deferred tax liabilities 5.2 42.2 34.0
Pension liabilities 4.2 3.0 4.9
Non-current provisions 3.8 0.6 0.4
Interest-bearing non-current liabilities 6.4 196.8 104.7
Other non-current liabilities 3.9 77.7 13.0
Non-current liabilities total 320.2 156.9
Current provisions 3.8 0.1 0.0
Interest-bearing current liabilities 6.4 17.2 3.8
Trade payables 3.9 114.4 89.6
Current tax liabilities 3.9 1.4 6.8
Other current liabilities 3.9 142.4 109.0
Current liabilities total 275.4 209.2
Liabilities total 595.5 366.1
Equity and liabilities total 1,503.6 1,114.0
The notes are an integral part of the consolidated financial statements.
ORION | Financial Statement documents 2022 | 45
Consolidated statement of changes in equity
Equity attributable to owners of the parent company
EUR million Note
Share
capital
Other
reserves
Cumulative
translation
adjustments
Remeasurement
of pension plans
Treasury
shares
Retained
earnings
Retained
earnings
total
Equity
total
Equity at 1 January 2021 92.2 3.4 -7.9 -28.9 -21.5 694.1 643.6 731.3
Profit for the period 193.8 193.8 193.8
Other comprehensive income
Cumulative translation adjustments 6.3 -0.5 2.1 2.1 1.6
Remeasurement of pension plans 4.2 29.0 29.0 29.0
Transactions with owners
Dividends paid 6.3 -211.2 -211.2 -211.2
Share-based incentive plans 4.1 3.4 0.1 3.5 3.5
Other adjustments -0.1 0.0 0.0 -0.1
Equity at 31 December 2021 92.2 3.3 -8.4 0.0 -18.2 678.9 660.7 747.9
Equity at 1 January 2022 92.2 3.3 -8.4 0.0 -18.2 678.9 660.7 747.9
Profit for the period 349.5 349.5 349.5
Other comprehensive income
Cumulative translation adjustments 6.3 -2.4 -0.5 -0.5 -2.9
Remeasurement of pension plans 4.2 37.0 37.0 37.0
Transactions with owners
Dividends paid 6.3 -211.2 -211.2 -211.2
Repurchase of treasury shares -17.9 -17.9 -17.9
Share-based incentive plans 4.1 1.3 4.3 5.7 5.7
Other adjustments -0.0 0.0 0.0 0.0
Equity at 31 December 2022 92.2 3.3 -10.8 37.1 -34.8 821.1 823.3 908.1
The notes are an integral part of the consolidated financial statements.
ORION | Financial Statement documents 2022 | 46
EUR million Note 2022 2021
Profit before taxes 440.3 242.3
Finance income and expenses 2.5 -0.7 1.0
Depreciation, amortisation and impairment 2.2 47.5 45.8
Gains/losses on sales or disposals of property, plant and equipment
and intangible assets 2.4 -0.1 -3.9
Unrealised foreign exchange gains and losses 0.4 -0.4
Change in pension asset and pension obligation 4.2 2.7 6.2
Change in provisions 3.8 0.2 0.1
Other adjustments 63.6 1.4
Total adjustments to profit before taxes 113.6 50.2
Change in trade and other receivables 11.0 -21.7
Change in inventories -4.1 -6.9
Change in trade and other payables -31.9 -7.7
Total change in working capital -25.0 -36.3
Interest and other financial expenses paid -5.0 -2.1
Interest and other financial income received 6.0 1.2
Dividends received 0.0 0.0
Income taxes paid 5.1 -95.6 -39.6
Total net cash flow from operating activities 434.4 215.7
Investments in property, plant and equipment 3.1 -56.5 -47.0
Investments in intangible assets 3.1 -16.6 -38.0
Acquired in business combination, net of cash 3.4 -82.0
Sales of property, plant and equipment and other investments 3.1, 6.6 0.9 4.7
Total net cash flow from investing activities -154.3 -80.2
Changes in current loans including leasing liabilities 6.4 -11.4 -3.6
Proceeds of non-current loans 6.4 100.8
Repayment of non-current loans 6.4 -20.0
Repurchase of treasury shares 6.3 -17.9
Dividends paid and other distribution of profits 6.3 -211.2 -211.2
Total net cash flow from financing activities -159.8 -214.8
Net change in cash and cash equivalents 120.4 -79.3
Cash and cash equivalents at 1 January 6.5 216.7 294.4
Foreign exchange differences -4.4 1.6
Cash and cash equivalents at 31 December 6.5 332.6 216.7
Consolidated statement of cash flows
ORION | Financial Statement documents 2022 | 47
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Parent company Orion corporation’s
financial statements (FAS)
EUR million Note 2022 2021
Net sales 1 1,171.3 912.8
Other operating income 2 11.1 12.6
Operating expenses 3, 4 -727.9 -657.5
Depreciation, amortisation and impairment 4 -32.5 -32.8
Operating profit 422.0 235.1
Finance income and expenses 5 10.5 11.4
Profit before extraordinary items, appropriations and taxes 432.5 246.5
Appropriations 6 1.5 4.5
Income tax expense 7 -85.1 -46.4
Profit for the period 348.9 204.7
Income statement
ORION | Financial Statement documents 2022 | 94
Balance sheet
Assets
EUR million, 31 Dec Note 2022 2021
Intangible rights 96.8 52.7
Other long-term expenditure 2.4 2.5
Intangible assets total 8 99.2 55.2
Land and water areas 4.0 4.0
Buildings and constructions 153.2 151.3
Machinery and equipment 80.3 78.3
Other tangible assets 1.5 1.7
Advance payments and construction in progress 31.9 21.8
Tangible assets total 9 270.9 257.1
Holdings in Group companies 159.1 67.2
Other investments 0.2 0.2
Investments total 10 159.3 67.4
Non-current assets total 529.4 379.7
Non-current receivables 11 0.2 0.3
Inventories 12 192.1 182.5
Trade receivables 13 145.8 152.1
Other current receivables 13 130.1 65.6
Liquid money market investments 14 104.9
Cash and bank 184.5 156.0
Current assets total 757.5 556.3
Assets total 1,287.0 936.2
Liabilities
EUR million, 31 Dec Note 2022 2021
Share capital 92.2 92.2
Expendable fund 0.5 0.5
Reserve for invested unrestricted equity 0.9 0.9
Retained earnings 240.0 264.5
Profit for the period 348.9 204.7
Shareholders' equity 15 682.6 562.8
Appropriations 16 105.5 101.0
Provisions 17 0.5 0.4
Loans from credit institutions 176.5 100.0
Other non-current liabilities 68.8
Non-current liabilities total 18 245.3 100.0
Trade payables 106.7 79.3
Other current liabilities 146.6 92.7
Current liabilities total 19 253.3 172.0
Liabilities total 1,287.0 936.2
ORION | Financial Statement documents 2022 | 95
Cash flow statement
EUR million 2022 2021
Operating profit 422.0 235.1
Depreciation, amortisation and impairment 32.5 32.8
Other adjustments -0.8 -4.4
Total adjustments to operating profit 31.7 28.4
Change in trade and other receivables -48.1 -25.3
Change in inventories -9.6 3.3
Change in trade and other payables 73.4 -22.9
Total change in working capital 15.7 -44.9
Interest and other financial expenses paid -3.9 -2.0
Dividends received 8.8 12.3
Interest and other financial income received 5.5 1.0
Income taxes paid -93.4 -37.6
Total net cash flow from operating activities 386.5 192.4
Investments in intangible assets -16.5 -33.1
Investments in tangible assets -39.7 -36.8
Sales of tangible assets 0.7 4.6
Investments in subsidiary shares -83.1 0.0
Sales of other investments 0.0
Repayments of loan receivables 0.1 0.1
Total net cash flow from investing activities -138.4 -65.1
Changes of current loans 16.8 -0.7
Proceeds of non-current loans 100.0
Repayments of non-current loans -11.8
Repurchase of treasury shares -17.9
Dividends paid and other distribution of profits -211.3 -211.2
Group contributions received 9.5 8.0
Total cash flow from financing activities -114.7 -203.9
Net change in cash and cash equivalents 133.4 -76.6
Cash and cash equivalents at 1 Jan
1
156.0 232.6
Net change in cash and cash equivalents 133.4 -76.6
Cash and cash equivalents at 31 Dec
1
289.4 156.0
1
Cash and cash equivalents include liquid money market investments with a very low fluctuation-in-value risk, as well as cash in
hand and at bank.
ORION | Financial Statement documents 2022 | 96
Parent company notes to the financial statements for
2022 (FAS)
Orion Corporation is the parent company of the Orion Group that is domiciled in Espoo. The Company’s business ID is 1999212-6.
The Orion Corporation’s first financial year was 1 July–31 December 2006, because the Company 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. Orion Corporation’s shares are listed on Nasdaq Helsinki. Trading in
Orion’s shares commenced on 3 July 2006.
Accounting policies
The financial statements of Orion Corporation are prepared in accordance with the Finnish Accountig Act, as well as other
regulations and guidelines set for the preparation of financial statement.
Net sales
Net sales include revenue from sale of goods and services adjusted for indirect taxes, discounts and foreign exchange
differences on sales in foreign currencies. Net sales also include milestone payments under contracts with collaboration
partners, which are paid by the collaboration partner as a contribution to cover the research and development expenses of a
product during the development phase and tied to certain milestones in research projects. In addition, net sales include royalties
from the product licensed out by the Group.
Revenue from sale of goods in recognised when the significant risks and rewards of ownership of the goods have been
transferred to the buyer. Revenue from services is recognised when the service has been rendered. Milestone payments are
recognised when the research and development project has progressed to a phase that, in accordance with an advance
agreement with the collaboration partner, triggers the partner’s obligation to pay its share. Royalties are recognised on an
accrual basis in accordance to the licensing agreements.
Foreign currency transactions
The revaluation of foreign currency receivables and liabilities is based on the exchange rates quoted by the European Central
Bank at the end of reporting period. Foreign exchange gains and losses from translation of the items are recognised in the
income statement. Foreign exchange gains and losses related to business operations are recognised as adjustments to sales
and purchases. Foreign exchange gains and losses related to financial receivables and liabilities in foreign currencies and
currency derivatives related to them are included in finance income and expenses.
Research and development expenses
Research and development expenses are entered as expenses during the financial year in which they are incurred.
Income taxes
Income taxes comprise the taxed based on taxable profit and tax adjustments to prior periods. The financial statement of the
parent company does not include recognition of the deferred tax assets or liabilities, but in the notes amount of deferred tax
assets and liabilities recognised to Group financial statements are presented. These deferred liabilities or assets are calculated
from material differences due to timing between the tax assessment and the financial statements, using the tax rate confirmed
at the time of the financial statements for subsequent years.
Non-current assets
The balance sheet values of intangible and tangible assets are based on acquisition costs, depreciated according to plan. The
depreciation according to plan is based on the useful lives of the assets, following the straight-line depreciation method.
The acquisition cost of the intangible and tangible assets includes assets with remaining useful life, as well as fully depreciated
non-current asst items that are sill in operative use. The corresponding policies are applied to the accumulated depreciation.
ORION | Financial Statement documents 2022 | 97
The useful lives of various asset categories are:
• intangible rights and other capitalised expenditure 5–10 years
• goodwill 5–20 years
• buildings and stuctures 20–40 years
• machinery, equipment and furniture 5–10 years
• vehicles 6 years
• other tangible assets 10 years
Other long-term expenditure items that generate or maintain income for three years or longer are capitalised and are normally
depreciated over five years.
Land and water areas and revaluations are not depreciated according to plan. The production and office facilities were
revalued in the Orion Group in the 1970s and 1980s. The revaluations are based on valuation of each asset separately.
Rental agreements
Payments related to rental agreements are recognised as rent expenses in income statement.
Inventories
Inventories are presented in the statement of financial position using the standard price for self-manufactured products, and for
purchased products using the weighted average cost method of variable costs incurred from procurement and manufacturing,
or if lower, the probable selling price or replacement cost.
Financial assets and liabilities and derivative contracts
Other investments, derivative financial instruments 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 financial
liabilities are measured at amortised cost.
Other investments include shares and investments. Liquid money market investments included in cash and cash equivalents
are bank deposits, certificates of deposit and commercial paper with maturities of no more than three months on acquisition
issued by banks and companies. The fair value is based on the prices available in the markets. 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 financial
liabilities include interest-bearing liabilities and trade and other payables.
Currency derivatives for hedging currency risk are measured at fair value using market prices on the reporting date. The fair
value of currency derivatives that hedge operative items is recognised in other operating income and expenses, whereas the
fair value of currency derivatives that hedge loans and receivables denominated in foreign currencies is recognised in the
finance income and expenses.
Share-based incentive plans
The share-based incentive plans 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 affecting 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 final 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, amortisation and impairment.
Pension arrangements
The pension security of the Company’s employees has been arranged through the Orion Pension Fund and pension assurance
companies. Supplementary pension security has been arranged through the pension fund for employees whose employment
began prior 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.
Provisions
Commitments by the Company to contractual expenses that are unlikely to generate corresponding revenue are deducted from
income as provisons. Similarly, contractual losses that are likely to materialise are deducted from income.
ORION | Financial Statement documents 2022 | 98
1 Net sales
Net sales by business area
EUR million 2022 2021
Pharmaceuticals business 1,171.3 912.8
Total 1,171.3 912.8
Net sales by market area
EUR million 2022 2021
Finland 321.9 313.4
Scandinavia 123.5 127.8
Other Europe 294.6 300.6
North America 319.6 73.7
Other countries 111.7 97.3
Total 1,171.3 912.8
2 Other operating income
EUR million 2022 2021
Service charges received from Group companies 6.7 5.5
Gains on sales of property, plant and equipment and intangible assets 0.3 3.9
Rental income 2.1 2.2
Other operating income 2.0 0.9
Total 11.1 12.6
3 Change in provisions
EUR million 2022 2021
Change in provisions -0.0 0.1
Total, increase (-) or decrease (+) -0.0 0.1
ORION | Financial Statement documents 2022 | 99
4 Operating expenses, depreciation, amortisation and
impairment
Operating expenses
EUR million 2022 2021
Increase (-) or decrease (+) in stocks of finished goods or work in progress 0.4 11.0
Production for own use -2.5 -3.4
Raw materials and services
Purchases during the financial year 270.6 247.8
Increase (-) or decrease (+) in stocks -10.0 -7.7
External services 30.8 27.7
Total 291.4 267.8
Personnel expenses
Wages and salaries 135.9 125.2
Pension expenses 19.9 14.7
Share-based incentive plans 9.7 3.2
Other social security expenses 6.0 5.6
Total 171.5 148.7
Other operating expenses 267.1 233.4
Total operating expenses 727.9 657.5
Voluntary social security expenses are included in other operating expenses.
Auditor’s remuneration
EUR million 2022 2021
Auditing 0.1 0.1
Assignments under Auditing Act Section 1 Subsection 1 Paragraph 2 0.0 0.0
Tax consulting 0.0
Total 0.1 0.1
Depreciation, amortisation and impairment
EUR million 2022 2021
Depreciation and amortisation according to plan 32.1 32.2
Impairments 0.4 0.6
Total 32.5 32.8
More information of depreciation and amortisation by asset class for the financial year in notes 8–9.
Further information on depreciation according to the plan is presented in parent company accounting policies.
Average number of employees
2022 2021
Average number of employees during the financial year 2,293 2,285
ORION | Financial Statement documents 2022 | 100
Share-based payments
The Group has two share-based incentive plans in force for key persons of the Group.
The plan that commenced in 2022 includes three earning periods, which are the calendar years 2022–2024, 2023–2025 and 2024–2026.
The Board of Directors decides on the earnings criteria and on targets to be established for them at the beginning of each earning
period. One earning period, calendar years 2022–2024, commenced in 2022. The potential reward of the plan for the earning period
2022–2024 is based on achieving the Orion Group’s operating profit and net sales targets.
The target group of the plan consists of approximately 60 people. The total maximum amount of rewards to be paid on the basis of the
plan is 760,000 Orion Corporation class 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 2022–2026. 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 2022, no Orion Corporation B shares had been paid as rewards under this
plan.
There are no restriction periods in the plan, as the duration of each earning period is three years. The Board of Directors may decide
to decrease the rewards to be paid to a key person if the limits set for the rewards to be paid from the plan for one calendar year are
exceeded.
The plan that commenced in 2019 includes five earning periods, which are the calendar years 2019, 2019–2020, 2019–2021, 2020–2022
and 2021–2023. The Board of Directors decided 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 profit 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 2022, a total of 152,674 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 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 rewards under the plans 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, shall be paid as follows:
Earning period
Reward paid on /
potential reward to be paid in
2019 2 Mar 2020
2019–2020 1 Mar 2021
2019–2021 1 Mar 2022
2020–2022 2023
2021–2023 2024
2022–2024 2025
2023–2025 2026
2024–2026 2027
ORION | Financial Statement documents 2022 | 101
5 Finance income and expenses
EUR million 2022 2021
Income from other non-current investments
Dividend income from Group companies 8.8 12.3
Dividend income from other investments 0.0 0.0
Interest income from other companies 0.0 0.0
Other interest and finance income
Interest income from Group companies 0.2 0.1
Interest income from other companies 0.8 0.1
Revaluation result 0.0
Other finance income 4.9 0.9
Interest expenses and other finance expenses
Interest expenses to Group companies -0.1
Interest expenses to other companies -0.8 -0.8
Other finance expenses -3.4 -1.1
Total 10.5 11.4
6 Appropriations
EUR million 2022 2021
Change in cumulative accelerated depreciation, increase (-), decrease (+) -4.5 -5.0
Group contribution received 6.0 9.5
Total 1.5 4.5
7 Income taxes
EUR million 2022 2021
Current taxes 85.1 46.8
Adjustments for current tax of prior periods -0.0 -0.4
Total 85.1 46.4
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 in Group
EUR million, 31.12 2022 2021
Provisions 0.1 0.1
Total 0.1 0.1
Deferred tax liability in Group
EUR million, 31.12 2022 2021
Appropriations 21.1 20.2
Revaluations 3.3 3.3
Total 24.4 23.5
ORION | Financial Statement documents 2022 | 102
8 Intangible assets
Intangible
rights Goodwill
Other capitalised
expenditure Total
EUR million 2022 2021 2022 2021 2022 2021 2022 2021
Acquisition cost at 1 January
1
197.7 168.5 68.3 68.3 56.4 56.4 322.4 293.1
Additions 49.3 32.4 0.6 1.1 49.9 33.5
Disposals -0.0 -2.9 -0.0 -1.3 -0.0 -4.1
Reclassifications 0.2 -0.3 0.1 0.3 0.3 -0.1
Acquisition cost at 31 December 247.2 197.7 68.3 68.3 57.1 56.4 372.5 322.4
Accumulated amortisation and impairment at
1 January
1
-144.9 -141.9 -68.3 -68.3 -54.0 -53.8 -267.2 -264.0
Accumulated amortisation on disposals 0.0 2.9 1.2 0.0 4.1
Amortisation -5.0 -5.3 -0.7 -1.4 -5.7 -6.8
Impairment -0.4 -0.6 -0.4 -0.6
Accumulated amortisation and impairment at
31 December -150.4 -144.9 -68.3 -68.3 -54.7 -54.0 -273.3 -267.2
Book value at 1 January 52.7 26.6 2.5 2.6 55.2 29.2
Book value at 31 December 96.8 52.7 2.4 2.5 99.1 55.2
Accumulated difference between total and planned
amortisation at 1 January 2.4 2.6 0.4 0.4 2.8 3.1
Change in cumulative accelerated amortisation,
increase (+) or decrease (-) -0.0 -0.3 0.0 -0.0 0.0 -0.3
Accumulated difference at 31 December 2.4 2.4 0.5 0.4 2.8 2.8
1
Initial values include fixed 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 2022 | 103
9 Tangible assets
Land and
water
Buildings and
structures
Machinery and
equipment
Other
tangible assets
Advance
payments and
construction
in progress Total
EUR million 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021
Acquisition cost at 1 January
1
4.0 4.2 319.4 307.3 280.2 285.1 3.9 3.3 21.8 17.0 629.3 616.9
Additions 4.8 8.8 12.2 12.3 0.0 0.0 24.2 15.3 41.2 36.4
Disposals -0.2 -0.8 -0.2 -6.6 -23.7 -0.2 -0.0 -7.5 -24.1
Reclassifications 7.4 3.5 6.3 6.4 0.0 0.5 -13.9 -10.4 -0.3 0.1
Acquisition cost at 31 December 4.0 4.0 330.8 319.4 292.0 280.2 3.9 3.9 31.9 21.8 662.6 629.3
Accumulated depreciation at
1 January
1
-168.1 -158.7 -201.9 -209.4 -2.2 -1.9 -372.2 -370.0
Accumulated depreciation on
disposals and transfers 0.6 0.2 6.3 23.1 6.8 23.3
Depreciation -10.1 -9.7 -16.0 -15.6 -0.2 -0.2 -26.3 -25.5
Accumulated depreciation at
31 December -177.6 -168.1 -211.7 -201.9 -2.4 -2.2 -391.7 -372.2
Book value at 1 January 4.0 4.2 151.3 148.7 78.3 75.7 1.7 1.4 21.8 17.0 257.1 246.9
Book value at 31 December 4.0 4.0 153.2 151.3 80.3 78.3 1.5 1.7 31.9 21.8 270.9 257.1
Accumulated difference between
total and planned depreciation at
1 January 45.5 44.7 52.6 48.2 0.1 0.1 98.2 92.9
Change in cumulative accelerated
depreciation, increase (+) or
decrease (-) -0.3 0.9 4.7 4.4 -0.0 0.0 4.5 5.2
Accumulated difference at
31 December 45.3 45.5 57.3 52.6 0.1 0.1 102.7 98.2
1
Initial values include fixed 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 2022 was EUR 48.6 (2021: 49.4) million. The
revaluation included in the acquisition cost of buildings EUR 16.5 (2021: 16.5) million.
10 Investments
Holdings in
Group companies
Other shares
and equity
Receivables from
subsidiaries Total
EUR million 2022 2021 2022 2021 2022 2021 2022 2021
Acquisition cost at 1 January 107.3 107.3 0.2 0.2 107.5 107.5
Additions 91.9 91.9
Disposals -0.0 -0.0 -0.0 -0.1 -0.0
Acquisition cost at 31 December 199.2 107.3 0.2 0.2 -0.0 199.3 107.5
Accumulated impairment at 1 January -40.0 -40.0 -40.0 -40.0
Accumulated impairment at
31 December -40.0 -40.0 -40.0 -40.0
Book value at 1 January 67.2 67.2 0.2 0.2 67.4 67.5
Book value at 31 December 159.2 67.2 0.2 0.2 -0.0 159.3 67.4
ORION | Financial Statement documents 2022 | 104
11 Non-current receivables
EUR million, 31 Dec 2022 2021
Other receivables from Group companies 0.0 0.0
Loan receivables from an associated company belonging to the Group 0.2 0.3
Total 0.2 0.3
12 Inventories
EUR million, 31 Dec 2022 2021
Raw materials and consumables 52.8 46.5
Work in progress 19.4 12.7
Finished products and goods 113.0 117.5
Other inventories 6.8 5.8
Total 192.1 182.5
13 Current receivables
EUR million, 31 Dec 2022 2021
Trade receivables 104.7 103.9
Receivables from Group companies
Trade receivables 41.2 48.2
Loan receivables 82.3 27.7
Other receivables 0.2 0.0
Prepaid expenses and accrued income 8.7 15.0
Total 132.4 90.8
Loan receivables from an associated company belonging to the Group 0.1 0.1
Other loan receivables 0.2 0.0
Other receivables 4.0 3.9
Prepaid expenses and accrued income 34.7 18.9
Total 275.9 217.7
Specification of prepaid expenses and accrued income
EUR million, 31 Dec 2022 2021
Royalties 21.7 7.7
Service and maintenance fees 3.5 4.1
Price differences from sales and other sales accruals 3.3 3.1
Income tax receivables 2.9
Sales rights 1.3
Derivative contracts 0.1 0.1
Accrued interests 0.2 0.0
Other prepaid expenses and accrued income 2.9 2.7
Total 34.7 18.9
ORION | Financial Statement documents 2022 | 105
14 Liquid money market investments
EUR million, 31 Dec 2022 2021
Liquid money market investments 104.9
Total 104.9
Difference between market value and book value
EUR million, 31 Dec 2022 2021
Market value 105.0
Corresponding book value -104.9
Accrued interest from interest instruments included in prepayments and accrued income -0.1
Total -0.0
15 Shareholder’s equity
Restricted equity
EUR million 2022 2021
Share capital at 1 January 92.2 92.2
Share capital at 31 December 92.2 92.2
Restricted equity total at 31 December 92.2 92.2
Unrestricted equity
EUR million 2022 2021
Expendable fund at 1 January 0.5 0.5
Expendable fund at 31 December 0.5 0.5
Reserve for invested unrestricted equity at 1 January 0.9 0.9
Reserve for invested unrestricted equity at 31 December 0.9 0.9
Retained earnings at 1 January 469.2 475.7
By decision of Annual General Meeting
Dividends -210.9 -210.8
Donations -0.4 -0.4
Repurchase of treasury shares -17.9
Unpaid dividends 0.0
Profit for the period 348.9 204.7
Retained earnings at 31 December 588.9 469.2
Unrestricted equity total at 31 December 590.3 470.6
Dividends proposed by the Board of Directors are not recognised in the financial statements until they have been approved by
the Annual General Meeting.
ORION | Financial Statement documents 2022 | 106
Parent company share capital by share class
2022 2021
31 Dec number EUR number EUR
A shares (20 votes/share) 34,186,494 34,813,206
B shares (1 vote/share) 106,947,784 106,321,072
Total 141,134,278 92,238,541.46 141,134,278 92,238,541.46
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 2022 a number of 626,712 A shares were converted to B shares.
16 Appropriations
EUR million, 31 Dec 2022 2021
Cumulative accelerated depreciation 105.5 101.0
Total 105.5 101.0
17 Provisions
EUR million, 31 Dec 2022 2021
Pension provisions 0.5 0.4
Total 0.5 0.4
18 Non-current liabilities
Interest-bearing liabilities
EUR million, 31 Dec 2022 2021
Loans from credit institutions 176.5 100.0
Total 176.5 100.0
Loans due later than five years
EUR million, 31 Dec 2022 2021
Loans from credit institutions 82.4
Total 82.4
Non-interest-bearing liabilities
EUR million, 31 Dec 2022 2021
Liabilities based on contracts 60.0
Earn out and interest accrual on deferred purchase price 8.8
Total 68.8
ORION | Financial Statement documents 2022 | 107
19 Current liabilities
EUR million, 31 Dec 2022 2021
Loans from credit institutions 11.8
Advances received 1.7 0.8
Trade payables 81.2 65.1
Liabilites to Group companies
Trade payables 25.5 14.2
Loans 23.7 6.6
Accrued liabilities and deferred income 3.1 1.8
Other liabilities 0.0
Total 52.3 22.6
Provisions 0.0
Other liabilities 13.8 13.3
Accrued liabilities and deferred income 92.6 70.3
Total 253.3 172.0
Specification of accrued liabilities and deferred income
EUR million, 31 Dec 2022 2021
Personnel expenses 49.7 34.5
Liabilities from licensing agreements 20.0
Research and development expenses 7.6 6.9
Price reductions 5.0 6.5
Accrued price adjustments related to sales and purchases 5.0 5.4
Royalties 1.2 2.5
Income tax liability 5.5
Derivative contracts 0.3 0.1
Accrued interests 0.2 0.0
Other accrued liabilities and deferred income 3.8 8.9
Total 92.6 70.3
Liabilities include
EUR million, 31 Dec 2022 2021
Non-current interest-bearing liabilities 176.5 100.0
Non-current non-interest-bearing liabilities 68.8
Current interest-bearing liabilities 35.5 6.6
Current non-interest-bearing liabilities 217.8 165.5
Total 498.5 272.0
20 Notes relating to members of administrative bodies
Salaries and remuneration paid to members of administrative bodies of the Company
EUR million 2022 2021
President and CEO and members of Board of Directors 1.8 2.4
No partial remuneration has been paid.
No loans have been granted to the members of administrative bodies.
Management pension commitments
The President and CEO´s pension is determined by the law applicable to employees from 1 November 2022 onwards.
In 2022 EUR 0.2 (2021: 0.2) million was recorded as expenses for the statutory pension of the former President and CEO.
ORION | Financial Statement documents 2022 | 108
21 Contingencies
Contingencies for own liabilities
EUR million, 31 Dec 2022 2021
Guarantees given 5.0 6.8
Total guarantees
EUR million, 31 Dec 2022 2021
Total guarantees 5.0 6.8
22 Liabilities and commitments
Lease agreements
EUR million, 31 Dec 2022 2021
Payments payable under lease agreements
within next 12 months 0.4 2.0
later than 12 months 0.5 1.7
Total 0.9 3.7
Lease agreements are mainly leasing agreements from 3 to 10 years and they don’t comprise redemption clause.
Other liabilities
EUR million, 31 Dec 2022 2021
Drug damage liability 0.3 0.3
VAT liability for real estate investments
The company is liable to review VAT deductions made for real estate investments completed in 2014–2022 if the use subject to
VAT decreases during the review period. The last review year is 2031 and the maximum liability is EUR 13.5 million.
23 Financial risks
The objective of the financial risk management is to decrease the negative effects of market and counterparty risks on the
Group’s profits and cash flows and to ensure sufficient liquidity.
The main principles for financial risk management are defined 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.
More information about the financial risks can be found from the Group’s Financial Statements.The main difference 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.
ORION | Financial Statement documents 2022 | 109
24 Derivative contracts
Nominal values and maturity of currency derivatives
EUR million, 31 Dec 2022 2021
Currency forward contracts and currency swaps 39.3 30.4
Currency options 25.7 30.2
All derivatives have a maturity less than one year.
Fair values of non-hedge-accounting derivatives
2022 2021
EUR million, 31 Dec Positive Negative Net Net
Currency forward contracts and currency swaps 0.1 -0.2 -0.2 -0.0
Currency options 0.1 -0.0 0.0 0.0
Fair value measurement and hierarchy
EUR million, 31 Dec 2022 Level 1 Level 2 Level 3 Total
Derivatives
Currency derivatives 0.1 0.1
Other investments
Shares and investments 0.2 0.2
Assets total 0.1 0.2 0.3
Derivatives
Currency derivatives -0.3 -0.3
Liabilities total -0.3 -0.3
EUR million, 31 Dec 2021 Level 1 Level 2 Level 3 Total
Derivatives
Currency derivatives 0.1 0.1
Other investments
Shares and investments 0.2 0.2
Assets total 0.1 0.2 0.3
Derivatives
Currency derivatives -0.1 -0.1
Liabilities total -0.1 -0.1
The fair value of level 1 financial instrument is based on quotations available in the active markets. The fair value of level 2
derivatives is based on the prices available in the markets. The fair value of level 3 financial 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. No transfers between levels occured during the reporting period.
25 Holdings in Group companies
See Note 7.3 Group companies in the notes to the consolidated financial statements for the parent company’s holdings in other
companies.
ORION | Financial Statement documents 2022 | 110
Proposal by the Orion Corporation
Board of Directors on use of profit
funds from the financial year
The parent company’s distributable funds are EUR 590,316,773.93, including EUR 348,926,255.92 of profit for the financial year.
The Board of Directors proposes that the distributable funds of the parent company be used as follows:
• distribution of EUR 1.60 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 profit distribution was
proposed, the number of shares conferring entitlement to receive dividend totaled 140,201,507, on
which the total dividend would be EUR 224,322,411.20
• donations to medical and other purposes of public interest as decided by the Board of Directors EUR 350,000.00
• retention in equity EUR 365,644,362.73
EUR 590,316,773.93
There have been no material changes in the Company’s financial position since the end of the financial year. The liquidity of
the Company is good and, in the opinion of the Board of Directors, the proposed profit distribution would not compromise the
liquidity of the Company.
ORION | Financial Statement documents 2022 | 111
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, 9 February 2023
Mikael Silvennoinen Hilpi Rautelin Kari Jussi Aho
Chairman Vice Chairman
Maziar Mike Doustdar Ari Lehtoranta Veli-Matti Mattila
Eija Ronkainen Karen Lykke Sørensen
Liisa Hurme
President and CEO
On auditor’s report has been issued today.
Espoo, 9 February 2023
KPMG OY AB
Kimmo Antonen
Authorised Public Accountant
ORION | Financial Statement documents 2022 | 112
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Orion Corporation (business identity code 1999212-6) for the year ended
31 December, 2022. The financial statements comprise the consolidated balance sheet, income statement, statement of
comprehensive income, statement of changes in equity, statement of cash flows and notes, including a summary of significant
accounting policies, as well as the parent company’s balance sheet, income statement, cash flow statement and notes.
In our opinion
• the consolidated financial statements give a true and fair view of the group’s financial position, financial performance and
cash flows in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU
• the financial statements give a true and fair view of the parent company’s financial performance and financial position in
accordance with the laws and regulations governing the preparation of financial 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 fulfilled 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 financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Materiality
The scope of our audit was influenced 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 effect of
identified misstatements on the financial 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 influence on the
economic decisions of the users of the financial 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 financial statements.
Auditor’s Report
To the Annual General Meeting of Orion Corporation
This document is an English translation of the Finnish auditor’s report. Only the Finnish version of the report is legally binding.
ORION | Financial Statement documents 2022 | 113
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial
statements of the current period. These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. The significant 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 different revenue flows: product sales, revenue
from sales rights to products and revenue from clinical
phase research and development work undertaken with
collaboration
Net sales include both fixed 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 different 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 effectiveness of control environment and
application controls in respect of the main sales software and
the related user rights management.
We identified and assessed internal controls over invoicing
as well as tested their effectiveness. 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 significant 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 2022 | 114
The key audit matter How the matter was addressed in the audit
Inventories (refer to note 3.6 Inventories)
The inventories account for a significant amount
(approximately 36 %) of the total consolidated assets.
Pricing of individual inventory items is based on the
functionality of information systems and the accuracy of
product-specific 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 significance 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 effectiveness 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 sufficiency of impairment entries relating to
the inventories.
We considered the sufficiency of the Group’s disclosures in
respect of inventories and assessed their appropriateness.
ORION | Financial Statement documents 2022 | 115
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 financial statements that
give a true and fair view in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU, and of
financial statements that give a true and fair view in accordance with the laws and regulations governing the preparation of
financial 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 financial statements that
are free from material misstatement, whether due to fraud or error.
In preparing the financial 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 financial 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 financial 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 influence the economic decisions of users taken on the
basis of the financial 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 financial statements, whether due to fraud or error, design and
perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient 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 effectiveness 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 significant 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
financial 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 financial statements, including the disclosures, and whether
the financial statements represent the underlying transactions and events so that the financial statements give a true and fair
view.
• Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the
group to express an opinion on the consolidated financial 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 significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
ORION | Financial Statement documents 2022 | 116
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
significance in the audit of the financial 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 benefits of such communication.
Other Reporting Requirements
Information on our audit engagement
We were first appointed as auditors by the Annual General Meeting on 20 March 2018, and our appointment represents a total
period of uninterrupted engagement of five years.
Other Information
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 financial statements does not cover the other information.
In connection with our audit of the financial 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 financial 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 financial 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 financial statements should be adopted. The proposal by the Board of Directors regarding the use of the
profit 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 financial period audited by us.
Espoo 9 February 2023
KPMG OY AB
Kimmo Antonen
Authorised Public Accountant, KHT
ORION | Financial Statement documents 2022 | 117
Independent Auditor’s Reasonable
Assurance Report on Orion Corporation’s
ESEF Financial Statements
To the Board of Directors of Orion Corporation
We have undertaken a reasonable assurance engagement in respect of whether the consolidated financial statements for the
year ended 31 December, 2022 included in the digital financial statements 74370029VAHCXDR7B745-2022-12-31-en.zip of
Orion Corporation (Business ID 1999212-6) have been marked up with iXBRL markups 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 financial
statements (ESEF financial statements) that comply with the requirements of ESEF RTS. This responsibility includes:
• preparation of ESEF financial statements in XHTML format in accordance with Article 3 of the ESEF RTS
• marking up the primary statements and the notes to the consolidated financial statements, and the company identification
data included in the ESEF financial statements with iXBRL tags in accordance with Article 4 of the ESEF RTS; and
• ensuring consistency between ESEF financial statements and audited financial statements.
The Board of Directors and the Managing Director are also responsible for such internal control as they deem necessary to
prepare the ESEF financial statements in accordance with the requirements of the ESEF RTS.
Auditor’s Independence and Quality Management
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 fulfilled our other ethical responsibilities in accordance with these requirements.
The auditor applies International Standard on Quality Management ISQM 1, which requires the firm to design, implement and
operate a system of quality management including policies or procedures regarding compliance with ethical requirements,
professional standards and applicable legal and regulations 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 financial statements included in the ESEF financial 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 primary statements of the consolidated financial statements included in the ESEF financial statements are, in all material
respects, marked up with iXBRL tags in accordance with Article 4 of the ESEF RTS, and;
• whether the notes to the consolidated financial statements and the company identification data included in the ESEF financial
statements data, have been marked up, in all material respects, with iXBRL tags in accordance with Article 4 of the ESEF RTS;
and
• whether the ESEF financial statements and the audited financial 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 sufficient and appropriate to provide a basis for our opinion.
ORION | Financial Statement documents 2022 | 118
Opinion
In our opinion, the primary statements of the consolidated financial statements, the notes to the consolidated financial
statements and the company identification data included in the ESEF financial statements of Orion Corporation identified as
74370029VAHCXDR7B745-2022-12-31-en.zip for the year ended 31 December, 2022 are, in all material respects, marked up in
compliance with the ESEF Regulatory Technical Standard.
Our audit opinion on the audit of the consolidated financial statements of Orion Corporation for the year ended 31 December,
2022 is set out in our Auditor’s Report dated 9 February, 2023. In this report, we do not express any audit opinion or other
assurance conclusion on the consolidated financial statements.
Helsinki 27 February, 2023
KPMG OY AB
Kimmo Antonen
Authorised Public Accountant, KHT
ORION | Financial Statement documents 2022 | 119
Key events in 2022
Key events in 2022
May
Orion announced
that in the future, the
company will invest
in the research and
development of new
proprietary drugs in
two therapy areas:
oncology and pain.
February
Orion’s collaboration
partner Bayer upgraded
estimate on Nubeqa®’s
peak sales potential.
February
First results from the ARASENS
trial presented at the 2022 ASCO GU Cancers
Symposium and simultaneously published in The
New England Journal of Medicine.
June
Orion acquired animal
health company VMD
(Inovet)
May
Orion entered into
exclusive agreement with
Jemincare for novel
non-opioid drug
candidate for the
treatment of pain.
April
Liisa Hurme
was appointed
President and CEO of
Orion Corporation as of
1 November 2022.
ORION | Financial Statement documents 2022 | 120
August
U.S. FDA approved
additional indication
of darolutamide in
combination with
docetaxel for the
treatment of metastatic
hormone-sensitive
prostate cancer
(mHSPC).
July
Orion upgraded full-
year outlook for 2022
following the USD 290
million upfront payment
regarding ODM-208
agreement.
September
Juhani Kankaanpää
was appointed as
Senior Vice President,
Global Operations, and
member of the Executive
Management Board of
Orion Group as of
1 November
2022.
November
Liisa Hurme started as
the President and CEO of
Orion Corporation.
October
Orion announced
changes in Orion Group
Executive Management
Board and new
organisational structure
as of 1 January 2023.
July
Orion and MSD announced global collaboration
for the development and commercialisation of
ODM-208, an investigational steroid synthesis
inhibitor for the treatment of metastatic
castration-resistant prostate cancer.
