Slide 1: First quarter results 2016
1 First quarter results 2016 3 May 2016 Peter A. Ruzicka, President & CEO
Slide 2: Significant EPS growth in the quarter
Highlights: Significant EPS growth in the quarter • Continued growth in Branded Consumer Goods • 1.8% organic growth2 despite negative Easter effects • EBIT (adj.) growth of 12% in BCG supported by sales growth and cost improvement programmes • Strong contribution from associates • Sapa delivered so
Slide 3: Continued organic growth in BCG
Branded Consumer Goods Q1 2016: Continued organic growth in BCG Organic growth performance1 2.8% 2.5% 1.8% Orkla Foods 3.3% 1.1% 0.7% Orkla Confectionery 6.2% & Snacks Orkla Care -2.2% Orkla Food Ingredients -0.7% -2.8% 2011 2012 2013 2014 2015 Q1-16 1Reported growth adjusted for FX and M&A 3
Slide 4: Growth in Orkla's biggest category
Growth in Orkla’s biggest category 1.2 million more pizza Grandiosa sold in Norway in Q1 4% volume and 7% value growth in Q1 for the frozen pizza category Orkla has strengthened its market share 4 Source: Nielsen per March 2016
Slide 5: Launching organic alternatives
Launching organic alternatives 5
Slide 6: Meeting increased demand for vegetarian food
Meeting increased demand for vegetarian food 6
Slide 7: New crisps launch with strong sales and social media exposure
New crisps launch with strong sales and social media exposure 7
Slide 8: New range from Dr. Greve makes Orkla number one in skin care
New range from Dr. Greve makes Orkla number one in skin care 8
Slide 9: Successful cost improvements implemented
Successful cost improvements implemented Several cost measures in recent years - Increased sales force efficiency - Supply chain restructuring initiated - Integration programs of acquired companies initiated Additional measures in Q1-16 - Investing in larger, more flexible production hubs - Consolid
Slide 10: EBIT (adj.) growth still impacted by currency
Branded Consumer Goods Q1 2016: EBIT (adj.) growth still impacted by currency Breakdown of BCG R12M EBIT (adj.) EBIT (adj.) growth Q1 2016 NOK million 12% 4 500 4 000 5% 3 500 7% 3 000 2 500 2 000 1 500 Q1- Q1- Q1- Q1- Q1- Q1- Q1- Reported Currency EBIT (adj.) 10 11 12 13 14 15 16 EBIT (adj.) transl
Slide 11: Strong improvement in Sapa
Strong improvement in Sapa Significant improvement since R12M Underlying EBIT establishment of Sapa JV NOK million 1,600 • NOK 1 billion in synergies realised R12M underlying EBIT • Strong North American market 1,400 • Higher share of value added products 1,200 1,000 Focus on continued operational 8
Slide 12: Delivering on our strategy and increasing performance
Summary Delivering on our strategy and increasing performance Keep the strategy on track Deliver organic growth at least in line with market growth Target annual adj. EBIT growth of 6-9%1 in BCG Maintain a stable dividend of at least NOK 2.50 per share 12 1Including add-ons, excluding currency effec
Slide 13: Financial performance
1 3 Financial performance Jens Bjørn Staff, CFO
Slide 14: Group EBIT (adj.) improvement of 13% in the quarter
Group EBIT (adj.) improvement of 13% in the quarter Amounts in NOK million Key figures Q1-15 Q1-16 Operating revenues 7 541 8 610 EBIT (adj.) 725 817 Other income and expenses -117 -30 EBIT 608 787 Profit/loss from associates and JV 238 462 Net financials and other -51 2 Profit/loss before tax 795 1
Slide 15: Branded Consumer Goods
A ‘Orkla Branded Consumer Goods
Slide 16: Sales growth of 16% driven by FX, M&A and organic growth
Sales growth of 16% driven by FX, M&A and organic growth Amounts in NOK million 8,362 8.6% 5.5% 7,220 1.8% BCG operating Organic growth1 FX M&A BCG operating revenues Q1-15 revenues Q1-16 16 1Reported growth adjusted for FX and M&A
Slide 17: Underlying margin improvement offset by dilution effects from M&A
Underlying margin improvement offset by dilution effects from M&A Reported EBIT (adj.) margin in BCG Comments 10.7% 10.3% • Margin diluted by M&A and distribution agreements • Increased input costs continue to impact margins • Underlying positive margin trend due to several cost improvements through
Slide 18: Solid top and bottom line growth in Orkla Foods
Key financials Q1 2016 Solid top and bottom line growth in Orkla Foods Amounts in NOK million 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +3.3% OG1 3,418 377 10.6 11.0 3,045 322 Q1 Q1 Q1 • Organic growth related to launches, • Profit and margin expansion driven by sales growth an
Slide 19: Strong sales growth in Orkla Confectionery & Snacks
Key financials Q1 2016 Strong sales growth in Orkla Confectionery & Snacks Amounts in NOK million 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +6.2% OG1 1,457 177 13.3 159 12.1 1,199 Q1 Q1 Q1 • Broad based organic growth • EBIT (adj.) growth driven by strong sales, but dilutive ef
Slide 20: Orkla Care impacted by acquisitions and FX effects
Key financials Q1 2016 Orkla Care impacted by acquisitions and FX effects Amounts in NOK million 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -2.2% OG1 1,655 17.3 1,327 230 247 14.9 Q1 Q1 Q1 • Weaker sales performance primarily • Profitability in all segments negatively affected b
Slide 21: Orkla Food Ingredients had slight growth in a seasonally weak quarter
Key financials Q1 2016 Orkla Food Ingredients had slight growth in a seasonally weak quarter Amounts in NOK million 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -0.7% OG1 1,873 58 59 3.5 1,680 3.2 Q1 Q1 Q1 • The quarter was negatively • Continued expansion in ice cream ingredients
Slide 22: Orkla Investments
A ‘Orkla Orkla Investments
Slide 23: Share portfolio Jotun (42.5%)
23 Hydro Power Jotun (42.5%) Orkla Investments Real estate Sapa (50%) Share portfolio Financial investments
Slide 24: Solid underlying and reported growth in Sapa
Sapa (50/50 joint venture) Solid underlying and reported growth in Sapa Amounts on 100% basis in NOK million 2015 2016 Orkla’s share of Operating revenues Underlying EBIT net profit after tax 14,051 13,905 571 209 392 45 Q1 Q1 Q1 • Healthy demand growth in North • Significant year on year improvemen
Slide 25: Continued sales and profit growth in Jotun
Jotun (42.5%) Continued sales and profit growth in Jotun Amounts on 100% basis in NOK million 2014 2015 Operating revenues Operating profit 16,282 2,064 13,171 1,314 FY FY • Continued sales growth in Q1 driven by the Marine • Profit growth in Q1 positively affected by segment and Decorative sales in
Slide 26: Lower production volumes and power prices
Hydro Power Lower production volumes and power prices 2015 2016 GWh produced Spot prices (NOK/MWh) EBIT (adj.) (NOK million) 558 546 246 56 228 44 Q1 Q1 Q1 • Slightly lower production • Lower power prices • Lower volumes and price volumes compared with record explain the reduced EBIT high 2015 volum
Slide 27: Net debt
2 7 Net debt
Slide 28: Changes in net debt Q1-16
Changes in net debt Q1-16 Amounts in NOK billion 0.2 1.5 0.9 0.1 0.2 8.3 0.1 7.8 Net debt 31 Expansion Cash flow Sale of Net paid to Tax, FX effects Net debt 31 December and sale of from shares and shareholders dividends March 2016 2015 companies operations financial received, net assets financial &
Slide 29: Summary
2 9 Summary Peter A. Ruzicka, President & CEO
Slide 30: Delivering on strategy
Delivering on strategy • 1.8% organic growth2 in BCG Strong • EBIT (adj.)1 growth of 12% in BCG performance • Strong performance from associates • EPS growth of 74% • Sale of remaining ownership share in Gränges Allocating • Acquisition of Hamé completed, which will make capital to Orkla one of the
Slide 31: New salad spreads with fewer calories and more protein
New salad spreads with fewer calories and more protein 31
Slide 32: Confectionery bites launched in Norway, Sweden and Finland
Confectionery bites launched in Norway, Sweden and Finland 32
Slide 33: New design for the Nutrilett range
New design for the Nutrilett range 33
Slide 34: Q&A
3 4 Q&A Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO
Slide 35: Appendices
‘Orkla Appendices
Slide 36: Group income statement
Group income statement Amounts in NOK million Q1-15 Q1-16 2015 Operating revenues 7 541 8 610 33 198 EBIT (adj.) 725 817 3 609 Other income and expenses -117 -30 -502 EBIT 608 787 3 107 Profit/loss from associates and joint ventures 238 462 1 111 Interests, net -63 -50 -192 Other financial items, ne
Slide 37: Net financial items
Net financial items Amounts in NOK million FY 2015 Q1-15 Q1-16 Net interest expenses -192 -63 -50 Currency gain/loss 0 1 1 Result from Share Portfolio and dividends 135 29 78 Other financial items, net -71 -18 -27 Net financial items -128 -51 2 37
Slide 38: Statement of financial position
Statement of financial position Amounts in NOK million 31.12.2015 31.03.2016 Intangible assets 17 676 18 389 Property, plant and equipment 10 523 10 999 Investments in associates and joint ventures etc. 13 029 12 871 Non-current assets 41 228 42 259 Assets held for sale 182 0 Inventories 4 623 5 173
Slide 39: Cash flow
Cash flow Amounts in NOK million Q1-15 Q1-16 Operating profit 605 796 Amortisation, depreciation and write-downs 301 253 Change in net working capital -415 -445 Net replacement expenditures -205 -390 Cash flow from operations 286 214 Cash flow from operations, Financial Investments 40 -27 Tax -224 -
Slide 40: Sapa (joint venture) – figures on 100% basis
Sapa (joint venture) – figures on 100% basis Amounts in NOK million Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 Sales volume (1,000 tonnes) 353 358 341 311 349 Operating revenues (NOK million)1 14 051 14 484 13 895 12 821 13 905 Underlying EBIT 392 483 404 128 571 Excluded items: Unrealised derivative positions -
Slide 41: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest bearing debt (NOK million) Net gearing 8,496 0.28 7,805 8,268 0.24 0.23 0.24 5,661 0.19 4,786 2012 2013 2014 2015 Q1-16 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 41
Slide 42: Debt maturity profile
Debt maturity profile Amounts in NOK million 5,500 Average maturity 3.1 years 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2016 2017 2018 2019 2020 2021 Later Unutilised credit facilities Drawn amounts 42
Slide 43: Funding sources
Funding sources Amounts in NOK billion 2.0 Unutilised credit facilities Banks 5.2 8.2 Bonds and CP Cash, cash equivalents and interest bearing assets 5.1 43
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