Orion Corp New B Shs

Good afternoon and welcome to Orion's full year 2025 result webcast and conference call. My name is Tuukka Hirvonen. I am the head of IR here at Orion. In a few moments, our CEO Liisa Hurme will present the results for the full year and Q4 last year, after which you will have the possibility to ask questions from Liisa and also from our CFO René Lindell. We will be first taking questions through the conference call lines and after that we will turn to the webcast. So through the webcast you have the possibility to type in your questions through the chat function of the webcast. Just before I let Liisa take over, I'd like to draw your attention to this usual disclaimer regarding future forward-looking statements. And with this short note, it's my pleasure to invite Liisa to the podium. Liisa, please.

Thank you, Tuukka. And welcome on my behalf as well. I'll start with the Q4 and with some highlights during the last three months of last year. It's my pleasure to say that all our business divisions had a strong quarter and performed extremely well. Also, we received 180 million sales milestone from Bayer related to Nubeka. And we were able to proceed with our clinical pipeline by initiating phase two program with ODM212 molecule in our oncology pipeline. And also our partner Tenax in the United States initiated phase three trial called level two with levosimendan for pulmonary hypertension. And Q4 highlights the base business during Q4 compared to the previous year grew 18.5% and 60% when we include the previously mentioned milestone. And operating profit growth was 59% and including the milestone 254%, bringing us to 47% operating profit margin in Q4. Operating cash flow per share was slightly lower than previous year, and that's mainly due to the timing of royalty payments from Bayer. The net sales bridge is almost masked by Nubeka and innovative medicines as it includes the 180 million milestone. But it doesn't shadow the extremely good performance of other divisions, branded, generics and animal health. Of course, the divisions are smaller, so the growth in euros is also smaller. And this all brought us to 695 million euros during Q4. In the operating profit, we of course see the 180 million. but a very good development on our royalties, close to 50 million, and also sales volumes brought us 28 million euros. Price development, COGS and product mix put us slightly down by 12 million, and the effect of exchange rate on gross margin was 4.1 million. And other operating costs and fixed costs were also well handled. So nothing specific there. And so our Q4 operating profit was 328 million. And now I move to 2025. This was an all time high year for Orion Pharma, both with net sales and operating profit. And I want to take the opportunity here today to thank all my colleagues all around the world in Orion Pharma for this achievement. in all business divisions, in R&D, in operations. You couldn't achieve anything like this without a very, very good collaboration in the company. So in addition to Euros, we also had lots of positive development in R&D. And I note approvals both in Europe and US. Several new license and collaboration agreements. license agreements for early stage technology platforms in our innovative medicines and oncology, but also acquiring and licensing product rights for both branded products and generics. Also MSD, our other significant partner, expanded the Ope Vesastat development to women's cancers. which is wonderful news, both for women suffering of these cancers and taking all the possible opportunities of this molecular mechanism of action. And Board of Directors of Orion Pharma is proposing a dividend of 1.80 euros per share. And this is proposed to be paid in two installments. For the full year numbers, 21% growth in our base business, 22.5% including milestone, operating profit 58%. if I round it to 59 percent growth in base business and 52 percent, including the milestones. And for the full year operating profit margin, this brings us to 33.4 percent compared to the previous year's 27. And of course, this is mainly due to the or partly due to the milestone that we received. And operating cash flow was slightly better than in 24. driven by good sales performance and mainly by sales performance, as the milestone will be visible in the cash flow only this year. And now I move to the divisions. Innovative medicines, here the net sales is really Nubeka, either the royalties or royalties and the product sales. And the dark part here describes the sales and royalties, where the growth was close to 38%. Of course, there the milestone also included brings us to 152% growth. And then for between the full years, the growth was 60% for the base business and 55% with the milestone. And then there is the picture that we will always want to have here to remind you of the very back-end loaded character of this business due to the tiered royalties from there. And we can see it extremely well here in the Q4-25, where the royalties jump up significantly from the previous quarter. The product deliveries and product sales between the Q3 and Q4 last year remained at the similar level. Branded products continued in Q4, the two-digit number growth with 11%, and the full-year growth was close to 10%. For the respiratory portfolio, the growth comes from the budesonide formaterol combination product. For the CNS, it comes from Stalivo or the Entacapone product family for Parkinson's disease. and especially retaining the rights in Japan back to Orion Pharma, but also from some new products that we've been launching in Europe. And then a significant growth of our women's health portfolio. Generics and Consumer Health really did it last year. 5.7% growth during the Q4 is above all averages in this business and 4.6% for the full year as well. And this is a result of a lot of activities. We've done more than ever of launches in our current territories. We've had some bigger launches also this year for the products where the patents have ended. And this comes also from all of our regions. Animal health quarter four was more, how would I say, calm compared to the previous quarters with only 1% growth. And this is mainly when you see this type of changes on a quarterly basis in animal health, it's usually the delivery timing of products to our partners. And then again, it didn't have a big effect on the yearly full year sales, where the growth is close to 10%. And in a similar way to generics, the growth really comes from a broad here, even a broad region, a geographic region globally, but also from a broad portfolio, both on the livestock and companion animal business. This is a nice list of our 10 biggest products. Almost all the products are growing, some even with very healthy two-digit numbers. Then some are more or less at par, like Animal Health Dexdomitor and Burana. Maybe it's good to note here that the Divina series, the women's health portfolio, has now climbed to be the number four. So it has actually now climbed up and passed the animal health sedative portfolio. And this is only a very natural order of products here to have the innovative products Nubeca as the first fastest growing product and then all the three main products from branded side. as the next ones. And then we have biggest generic products represented here. Simdocs unfortunately of course declining. Farreston's decline again is a matter of delivery timings. I think the big message in this slide is that, to my recollection, this is the first year when innovative medicines is our biggest division. So this is clearly a kind of a landmark event for Orion. Generic still hold almost 30% or generate 30% of our net sales and branded products 17%. And the two other divisions, Animal Health and Fermion, are significantly smaller ones. No significant news on our key clinical development pipeline. I already mentioned that we've started phase two for the ODM212 in two different indications, mesothelioma and EHE. Both are rare oncology indications. We were able to start this study already in the end of the last year. and are aiming to start a study with the combination of this molecule to some current oncology treatments during the first part of this year. And also you can see here now two studies for Levocimendan also to level two. And this is a very nice slide on sustainability, this time about diversity. Orion has been ranked as number three in the Nordic Business Diversity Index. Which means that if you look at the numbers here on this slide, how men and women, what is the share of men and women on different level of the organization. You can look at the board of directors, where almost 40% of members are women. In executive team, almost 45% of the members are women. And if you look at the whole personnel in Orion Pharma, they are almost 56% of the personnel are women. And there are a lot of other information here of which we are very, very proud. One that I can mention is the accomplishment of the code of conduct agreements with our suppliers, which is 98. We provided our outlook for 2026 for this year already on January 14th and it holds. So we've stated that our net sales range for this year is 1.9 billion from 1.9 billion to 2.1 billion. And our operating profit range is 550 million from 550 million to 750 million. And here are our upcoming events and our general meeting. Annual general meeting will be held on 24th of March. I thank you for your attention at this point and we are ready for your questions.

Thank you, Liisa. We are opening the floor for Q&A. Just as a reminder to the webcast viewers that you can type in your question using the chat function of the webcast. But first, let's turn on to the conference call lines and I'd like to hand over to the operator at this point.