Growing Professional in Healthcare On July 1, 2006 Orion Group will - PowerPoint PPT Presentation

Growing Professional in Healthcare

On July 1, 2006 Orion Group will Demerge Current Orion Group New ”Orion Corporation” ”Oriola-KD Corporation” Orion Orion Pharma KD Oriola Diagnostica R&D, manufacture and Trade in pharmaceuticals, marketing of pharmaceuticals healthcare and dental and diagnostic tests products 2

General Trends

Pharmaceutical Market Overview Population per Pharmaceutical Market in 2005, USD million Market Growth in 2005, % Country, million Poland 4645 Poland + 7 % Poland 38.6 Russia Russia Russia 3740 + 17 % 142.0 Sweden Sweden Sweden 3286 + 4 % 8.9 Finland Finland + 7 % Finland 5.3 2083 + 9 % Denmark 1759 Denmark Denmark 5.3 Lithuania Lithuania 401 Lithuania 3.5 + 17 % + 14 % 2.4 Latvia 194 Latvia Latvia + 1 % 1.4 Estonia 153 Estonia Estonia Source: IMS World Review 2006 4

Spending in Healthcare is I ncreasing Population projection in Sweden Population projection in Finland over 65 year olds over 65 year olds Population Population 2 400 000 1 600 000 2 200 000 85- 1 400 000 85- 2 000 000 75-84 75-84 65-74 1 800 000 1 200 000 65-74 1 600 000 1 000 000 1 400 000 1 200 000 800 000 1 000 000 600 000 800 000 600 000 400 000 400 000 200 000 200 000 0 0 2005 2010 2015 2020 2025 2030 2005 2010 2015 2020 2025 2030 Source: Statistics Sweden Source: Statistics Finland, 2003 5

Oriola-KD Businesses

Market Presence and Invoicing by Market Area Invoicing by Market Area in 2005, EUR million Sweden 1 450 M€ Finland 950 M€ Baltic Countries 50 M€ Denmark 5 M€ Personnel by market area in 2006 Finland 836 Sweden 458 Denmark and 243 Baltic countries 7

Business Segments and Key Figures in 2005 Out of Group total 8 9 % 2 1 2 5 Pharm aceutical Trade I nvoicing M€ • Distribution EBI T M€ 1 8 6 7 % • Wholesale • Retail I nvoicing M€ Healthcare & Dental Trade 2 6 7 1 1 % • Healthcare Products 9 3 3 % EBI T M€ • Healthcare Distribution Services • Dental Products 8

Strategic Intent • To be the leading company in both Pharmaceutical and Healthcare & Dental Trade in Finland and Sweden by developing and investing in both business segments • To grow selectively in the Baltic Countries, Denmark, Poland and Russia organically and through acquisitions 9

Pharmaceutical Trade

Pharmaceutical Trade – Businesses Distribution Wholesale Retail 11

Business Logic in Distribution Finland Pharmaceutical Pharmaceutical Independent industry distributors retail pharmacies Sw eden Pharmaceutical Pharmaceutical Apoteket AB industry distributors retail pharmacies 12

Pharmaceutical Trade Finland Sweden Baltic Countries Market EUR 1.7 billion EUR 2.8 billion EUR 0.7 billion size • Number 2 • Number 2 • Number 3-4 in each country • Market share 42% • Market share 43% • Market share • Market leader in free Market approximately 5% trade goods to position pharmacies • Increase the number • Increase the number of • Vertical integration of principals principals into retail Key pharmacies • Strengthen further the • Start marketing of free actions position in pharmacy trade goods to marketing pharmacies 13

Pharmaceutical Trade - Principals 14

Healthcare & Dental Trade

Business Logic in Healthcare and Dental Healthcare and Healthcare and Hospitals, dentists, dental OEMs dental distributors etc… 16

Healthcare Trade

Healthcare Trade – Product Offering Procedure Units Nursing Care Medical Imaging Laboratories 18

Healthcare Trade Sweden and Finland Baltic Countries Denmark Market EUR 0.2 billion EUR O.6 billion EUR 2.1 billion size • Market leader • Small operations • Growing position Market (< €10M) in the surgical (< €10M) in hospital • Market share position and anesthesia products supplies and in appr. 15% selected laboratory products • Strengthen market • Increase offering • Further develop leadership by close especially into the offering into growing Key cooperation with the ORs/ I CUs market segments actions leading suppliers and by • Enter into the developing the portfolio wholesaling of consumables 19

Healthcare Trade - Principals 20

Healthcare Distribution Services • Healthcare Logistics • Logistic services including warehousing to public sector healthcare customers • Home Distribution • Delivery of hospital products directly to the homes of the patients • Supplier Services • Distribution services to the medical device manufacturers 21

Dental Trade

Dental Trade - Product Offering Consumables and orthodontic products Equipment Dental laboratory products 23

Dental Trade Sweden and Finland Baltic Countries Denmark Market EUR 60 million EUR 160 million EUR 25 million size • Market leader • Strong position in • Market leader or # 2 Market selected product areas position depending on • Market share the country over 50% position • Strengthen further the • Develop product • More focus on Key leadership position offering equipm ent actions • First to introduce new • More focus on digital technologies imaging 24

Dental Trade - Principals 25

Financials

Increasing Focus on Growth I NVOI CI NG, MEUR • Markets for 2700 2400 pharmaceuticals and 2100 healthcare continue to 1800 grow 1500 2 3 4 9 2 2 2 8 2 1 2 5 • Rigorous price 1200 900 competition in 1 2 3 8 600 pharmaceutical trade 4 9 9 300 2 6 8 2 6 7 2 3 6 • More focus in 1 9 3 1 2 4 0 1 2 3 4 5 development of 0 0 0 0 0 0 0 0 0 0 2 2 2 2 2 S S S S S A R healthcare and dental A A R F F F F F I I trade Pharmaceutical Trade Healthcare & Dental Trade * Kronans Droghandel from 1 July 2 0 0 2 27

Stable Performance • Strong market position in OPERATI NG PROFI T, MEUR 35 Finland and Sweden 30 • Higher margins in 25 Healthcare and Dental 20 2 1 1 8 2 4 Trade – High volumes and 15 1 7 1 3 low m argins in 10 Pharmaceutical Trade 5 8 9 7 8 7 • Optimization of cost 0 efficiency and capacity in 1 2 3 4 5 0 0 0 0 0 0 0 0 0 0 pharm aceutical distribution 2 2 2 2 2 S S S S S A A A R R F F F F F • Share of Healthcare and I I Dental Trade of operating Pharmaceutical Trade profit to grow Healthcare & Dental Trade * Operat ing profit of business segm ents does not include Group ex penses ex pected to be approx. EUR 3.0 m illion 28

Strong Cash Flow after Investments • Stable and strong cash flow CASH FLOW, MEUR 40 38 enabling development of 32 35 business operations and 30 growth into new market 26 25 areas 20 • Low requirements for 15 maintenance investments 10 • Possibility to strengthen 5 future cash flow through 0 further optimization of 3 4 5 0 0 0 0 0 0 working capital 2 2 2 S S S R R A F F F I I 29

Strong Balance Sheet MEUR • Strong cash and cash 200 equivalents 180 160 • Low interest-bearing 140 120 liabilities and gearing 100 80 • High working capital, the 60 40 utilization of which can 20 0 be optimized further 3 4 5 0 0 0 0 0 0 2 2 2 • Equity ratio 34% S S S A R R F F F (March 31, 2006) I I • Gearing -4% Cash and bank Interest-bearing debt (March 31, 2006) Shareholders' equity NWC 30

Invoicing – Q1 2006 I NVOI CING, MEUR • Invoicing of 600 Pharmaceutical Trade 500 declined 2,5% 400 5 0 8 5 2 1 300 • Invoicing of Healthcare 200 and Dental Trade 100 increased 15,7% 7 1 6 2 0 5 6 0 0 0 0 2 2 1 1 Q Q S S R R F F I I Pharmaceutical Trade Healthcare and Dental Trade 31

Operating Profit – Q1 2006 OPERATING PROFIT, MEUR • Operating profit of 8 Pharmaceutical Trade declined due to tight 6 competition 3 .1 4 3 .9 • One-off items include restructuring 2 .7 costs of MEUR 0.4 2 2 .8 • Operating profit of 1 .8 1 .2 0 Healthcare and Dental . l c 5 6 x 0 0 e 0 0 ( 2 2 Trade clearly im proved 6 0 1 1 0 Q Q f 2 f o without one-off items 1 - Q ) e s n m O e t • One-off items include inventory I Pharmaceutical trade write-down of MEUR 1.6 Healthcare and Dental Trade * Operat ing profit before allocat ion of Group expenses 32

2006 Outlook • The invoicing of Oriola-KD for 2006 is forecasted to be almost at the level of the comparable figure for 2005 • The operating profit for 2006 is forecasted to be lower than the comparable figure for 2005, mainly due to the heavy competitive situation and the low growth of the pharmaceutical market in Finland, as well as one-off items related to the dem erger and the operational rearrangem ents being implemented in the Group 33

Summary

Company Strengths • Basic market fundaments support long term growth • Deep knowledge of the Nordic healthcare market – since 1907 • Independent and locally managed company • Two strong business segments • Excellent position in Pharmaceutical trade • Growing Healthcare & Dental business • Strong balance sheet and cash flow 35