Orkla Asa · OSL:ORK
Orkla Asa — Investor Day (September 2011)
27 slides from Orkla Asa's investor day presentation, Sep 14, 2011
Slide 1: Leveraging our core strengths
Leveraging our core strengths Strategic status and direction Bjørn M. Wiggen President and CEO Orkla ASA
Slide 2: Key strategic messages
Key strategic messages • Growth through allocating capital within branded goods • Orkla will divest its Share Portfolio • Sapa – focusing on value enhancement through operational improvements • A special dividend of NOK 5 per share is proposed by the Board of Directors 2
Slide 3: Existing business portfolio
Existing business portfolio Share Portfolio NOK 9.5 billion as of Q2-11 Hydro Power The leading Nordic Fast 2.5 TWh World leader in the Moving Consumer aluminium solutions Goods (FMCG) company industry Leading specialised cellulose company Revenues: NOK 3.8 billion – 80% of revenues from #1 brands 4
Slide 4: Orkla's growth story
Orkla’s growth story Combining operational and structural expertise NOK billion 70 60 Sales Industry division Elkem 50 Silicon sold Orkla 40 Media sold 30 Carlsberg Breweries Hydropower sold assets sold 20 More than 200 M&A transactions 10 over the last 10 years 0 1999 1992 1995 1996 2002 2004 1983
Slide 5: Branded goods share of revenues significantly decreased since 2004
Branded goods share of revenues significantly decreased since 2004 1986-2003: A strong SHARE OF ORKLA REVENUES FROM BRANDED GOODS branded goods-oriented profile • Orkla/Borregaard merger • Orkla/Nora merger • Procordia acquisitions • Orkla Breweries • Orkla Media 2004-2010: Less focus on branded goo
Slide 6: Non-core assets divested in last 12 months
Non-core assets divested in last 12 months • Successful divestment of Elkem Silicon-related NOK 13 billion • Net divestments in the Share portfolio NOK 4 billion • Sale of Borregaard forests at favourable valuation NOK 1.7 billion 6
Slide 7: Delivering 8 consecutive quarters of operational improvements
Delivering 8 consecutive quarters of operational improvements NOK million 4,222 4,302 4,056 4,070 4,190 3,944 3,875 3,783 3,721 3,289 3,322 3,029 2,821 Rolling 12 months EBITA 2,719 Figures restated after sale Elkem Silicon-related Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2008 2008 2008 2009 2
Slide 8: Strategic direction: growth through allocating capital within branded goods
STRATEGIC DIRECTION GROWTH THROUGH ALLOCATING CAPITAL WITHIN BRANDED GOODS 8
Slide 9: Orkla Brands has proven track record in building strong market positions
Orkla Brands has proven track record in building strong market positions … Detergents 1 Personal Care 1 Biscuits 1 1 2 Confectionery 1 Dietary Supplements 1 2 1 1 Textiles 1 2 Snacks 2 1 1 1 Frozen pizza 1 1 1 Ketchup 1 1 2 1 Dressings 1 1 2 Preserved vegetables 1 1 1 1 Jam/Marmalade 1 1 1 Caviar (c
Slide 10: …and increasing shareholder value
…and increasing shareholder value ROCE (%) 20 15 10 WACC 10% 5 ORKLA BRANDS 0 2003 2004 2005 2006 2007 2008 2009 2010 10
Slide 11: Growth and capital allocation based on our core expertise within branded goods
Growth and capital allocation based on our core expertise within branded goods Brand building • Customer insight • Brand development • Sales management M&A skills and expertise • Deal orientation • Deal structure • Post deal integration 11
Slide 12: Increasing growth opportunities
Increasing growth opportunities • An increasing number of potential targets identified within relevant categories and geographies • Expansion opportunities along several dimensions • Expand Nordic FMCG* operations • FMCG expansion outside Nordic countries • Adjacent categories in Nordic countries an
Slide 13: Clear growth opportunities in branded goods
Clear growth opportunities in branded goods Russia & Eastern NORDICS + BALTICS Western Europe Europe Asia FOOD AND BEVERAGES Revenues 22 BNOK >40 BNOK >20 BNOK Same categories in Same categories outside the Nordic countries Nordic countries NON-FOOD GROCERIES OTHER BRANDED >100 BNOK GOODS New catego
Slide 14: Our capital allocation criteria
Our capital allocation criteria • Competitive edge and leading market positions in clearly defined product categories and relevant markets • Customer insight, sustainably unique and differentiated market offerings – as a base for customer loyalty and preference • Scalability and opportunities to rep
Slide 15: Jotun – within our branded goods scope
Jotun – within our branded goods scope • Orkla’s ownership: 42.5% • One of the world’s leading/fastest growing manufacturers of paints and coatings • Represented on all continents via subsidiaries and JVs • Orkla has confirmed its long-term interest in Jotun 15
Slide 16: Assets outside our future growth scope
Assets outside our future growth scope 16
Slide 17: Orkla Share Portfolio
Orkla Share Portfolio • Share Portfolio will be divested • Different exit-routes to be considered • Market value as of 30 June 2011 NOK 9.5 billion 82% Listed 17
Slide 18: Borregaard: advanced biorefinery and global niche player
• Advanced Biorefinery and a global niche player • Leading market positions in biochemicals like Lignin, Specialty Cellulose and Vanillin • Strong markets and significant operational improvement in 2011 • Internal restructuring of assets underway to facilitate a structural solution 18
Slide 19: 39.7% share in REC defined as a financial holding
• 39.7% share in REC defined as a financial holding to Orkla • Value potential in a world leading producer of polysilicon • Orkla will support REC in their work on operational improvements and structural solutions 19
Slide 20: Sapa – focusing on value enhancement through operational improvements
Sapa – focusing on value enhancement through operational improvements Strategic priorities • Strong focus on operational execution to reach financial targets • Integrating our Asian operations • Strengthening our organization Sapa is outside Orkla’s long-term growth scope • Limited capital allocatio
Slide 21: Significant value creation potential
Significant value creation potential Operational improvements • Realistic EBITA margin target of 6% • Proven results for the North American operations – now focusing on Europe The extrusion markets are still below mid-cycle levels Footprint established in Asia, focus on ramp-up and integration 21
Slide 22: Financial flexibility supports group strategy
Financial flexibility supports group strategy 22
Slide 23: Strong financial flexibility and expansion capacity
Strong financial flexibility and expansion capacity Current debt capacity NOK 20 – 25 billion • Unused credit lines NOK 13 billion • Bilateral bank relations – no loan syndicates No financial covenants Additional flexibility from re-allocation of assets 23
Slide 24: Return of capital to shareholders
Return of capital to shareholders • Dividend strategy focuses on predictability and stability with steady year-on-year dividend Dividend NOK per share increase 0.80+5.00 • Share buy-backs aim at Special dividend supplementing dividend Ordinary dividend 2.50 • Special dividend based on 5.00 2.25 2.25
Slide 25: Board proposes a special dividend of NOK 5 per share
Orkla’s Board of Directors proposes a special dividend of NOK 5 per share 0.80+5.00 Dividend NOK per share • Based on Orkla’s current capital structure a special dividend is 5.00 proposed Special dividend Ordinary dividend • Decision to be approved at an extraordinary General Meeting 5.00 5.00 2.50
Slide 26: Key strategic messages
Key strategic messages • Growth through allocating capital within branded goods • Orkla will divest its Share Portfolio • Sapa – focusing on value enhancement through operational improvements • A special dividend of NOK 5 per share is proposed by the Board of Directors 26
Slide 27: Orkla
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