QIX Dividends Europe: Pharmaceutical manufacturer Orion presents robust 6-month report

The robust specifications of the US stock exchanges also boosted the QIX Dividend Europe Index on Wednesday, which rose slightly to 12,630 points in the afternoon.

Orion Corporation stock in the Dividend Index rose over 3% on Tuesday, driven by a solid earnings report. And on Wednesday, too, it is slightly up at EUR 34.35. The management of the Finnish pharmaceutical and diagnostics company presented 6-month figures yesterday, which were consistently convincing. Despite the burdens of price inflation, the abandonment of the Russian business and falling demand for veterinary services, revenues rose from EUR 554 million in the previous year to EUR 563 million. Ultimately, this was growth of a good 2.4%. Orion itself has specialized in the research and development of innovative medical treatments for diseases and diagnostic tests. The most important global customers in this regard include specialists and veterinarians as well as pharmacies, hospitals and health centers as well as laboratories. The 6-month business at Orion was supported by the increased sales of the “Innovative Medicines” division, which increased significantly thanks to the good development of the prostate cancer drug Nubeqa, which is co-distributed by the pharmaceutical manufacturer Bayer. Orion has also increased the sales prospects for the cancer drug for the coming years. And things have also been going very well for the healthcare service provider on the Finnish market recently. Here, sales of generics and “OTC” products rose from January to the end of June in view of the strong volume growth.

At Orion, however, overall sales of the “Generics and Consumer Health” division fell due to generic competition and the price collapse of the drugs Simdax and Dexmedetomidin, as well as the cessation of business in Russia. One consequence of this was a declining return on equity of just 20%, after 34% in the previous year. At Orion, an important component of the pharmaceutical business for human and veterinary medicines continues to be cooperation with global partners. However, worldwide cooperation and licenses taken have fluctuated in the last 5 years, mostly in the range of 5 million to 50 million euros. And in view of the continuing robust business, a slightly higher sales level of EUR 1.19 billion is also expected for 2023. In addition, there should also be a dividend increased to EUR 1.56. For the last 5 years, Orion has paid its shareholders mostly more than 210 million euros each year as profit sharing. After the recent price slide, the share even offers an attractive return of over 4.0%.

The QIX Dividends Europe is a stock index that focuses specifically on stable and reliable dividend payers in Europe. 25 European stocks are included in the index, which qualify according to a set of rules that have been tried and tested. In addition to a high dividend yield, the set of rules takes into account fundamental criteria such as dividend continuity, dividend growth or profit growth. Technical aspects such as stable price developments with low volatility are also included in the ranking.

On the other hand, the Henkel share was hardly changed compared to the previous day at 71.25 euros in the dividend index. The recent robust price development for the papers of the consumer goods producer is also easy to understand, as they are considered defensive and high-dividend. Henkel also announced further price increases in June. In the case of consumer goods, increases are necessary this year, the board of directors recently defended the plans in the “Rheinische Post”. Also, price negotiations with retail chains are currently not easy. According to the manager, it can also happen that individual products from the company are no longer delivered if no agreement can be reached. Henkel is still struggling with high raw material and energy prices. The company boss emphasized that these would have increased by EUR 3 billion for the detergent and adhesive manufacturer in 2021 and 2022. That had a significant impact on our profit margin, despite all our savings efforts. Nevertheless, the last year was extremely robust for the Düsseldorf-based company, also because the prices for brands such as Spee, Pritt and Schwarzkopf were raised sharply in some cases.

At the same time, the reduction of 2,000 jobs worldwide was announced. Henkel is also in the process of restructuring its entire consumer goods division. As part of the ongoing restructuring, the company has already parted with numerous brands from the non-core business, especially in the low-margin cosmetics sector. At the end of December, Henkel even had record sales of 22.3 billion euros. And the payout ratio of 44% and the unchanged dividend of EUR 1.85 were also impressive. The consumer goods company’s stock still offers a solid return on investment of 2.6%.

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