Slide 1: First quarter results 2010
First quarter results 2010 Oslo, 5 May 2010
Slide 2: Agenda
Agenda ¾ Highlights Q1 Dag J. Opedal, CEO ¾ Financial Investments and Associates Roar Engeland ¾ Orkla Aluminium Solutions and Orkla Materials Bjørn Wiggen ¾ Orkla Brands Torkild Nordberg 22 First Q4 andquarter full-year results results 20102009
Slide 3: Highlights first quarter 2010
Highlights first quarter 2010 • Broad-based profit improvement vs. weak Q1-09 – Positive contribution from Orkla Brands, Sapa, Elkem Silicon-related and Jotun (42.5 %) – Power production approx. 60% lower than normal due to extraordinarily low reservoir levels • Cyclical upturn supports revenue grow
Slide 4: Broad-based EBITA improvement vs. weak Q1-09
Broad-based EBITA improvement vs. weak Q1-09 EBITA performance from Q1-09 to Q1-10 (figures in NOK million) -25 -8 203 -248 * 471 -18 -6 704 102 233 Q1-09 Orkla Brands Orkla Elkem ex. Elkem Solar Borregaard Orkla Orkla Other Q1-10 Aluminium Solar Materials Financial Solutions Energy Investments 4 Fi
Slide 5: Comprehensive actions – EBITA improvement
Comprehensive actions – EBITA improvement Rolling 12 months NOK million 4,504 4,602 4,448 4,240 3,444 2,919 2,591 2,448 2,376 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 5 First quarter results 2010
Slide 6: Market outlook slightly firmer
Market outlook slightly firmer • More positive underlying momentum in cyclical sectors going into Q2 • Increased capacity utilisation • International financial markets continue to be volatile • Orkla is well positioned 6 First quarter results 2010
Slide 7: Business outlook
Business outlook Robust development (42.5%) Well positioned for cyclical upturn Extensive (39.7%) ramp-up in 2010/11 Moses Lake Singapore Herøya Glomfjord Kristiansand 7 First quarter results 2010
Slide 8: Financial performance Orkla Financial Investments Orkla Associates
Financial performance Orkla Financial Investments Orkla Associates Roar Engeland 8 First quarter results 2010
Slide 9: Group income statement
Group income statement Amounts in NOK million Q1 2010 Q1 2009 Change Operating revenues 14 893 13 448 11 % EBITA 704 233 202 % Amortisation intangibles -10 -50 Restructuring and significant impairment 27 0 EBIT 721 183 Associates -4 484 135 Dividends 138 45 Gains and losses/write-downs Share Portfol
Slide 10: Orkla Financial Investments Share Portfolio
Orkla Financial Investments Share Portfolio • Market value of NOK 11.7 billion • Return on Share Portfolio in 2010 2008-2010 Q1-10 + 11.2% 11,2 % 10,2 % • Change in unrealised gains in Q1, 5,4 % + NOK 0.7 billion 1,4 % -2,8 % -4,2 % -5,5 % -7,0 % Portfolio MSCI Nordic OSEBX S&P 500 10 First quarter
Slide 11: Orkla Associates – REC (39.7%)
Orkla Associates – REC (39.7%) Amounts in NOK million REC Q1 2010 Q1 2009 Change Revenues 2 360 1 936 22 % EBITDA 415 510 -19 % EBIT -125 298 Profit/loss before tax 730 650 12 % • Orkla will be participating in the outlined equity rights issue in REC (NOK 1.6 billion) – Following the equity rights i
Slide 12: Orkla Associates – Jotun (42.5%)
Orkla Associates – Jotun (42.5%) Sales (including shares in joint ventures) Figures in NOK million 11,219 10,442 • Tertial reporting 8,872 7,733 • Satisfactory start to the year 6,710 – Moderate increase in volume 5,815 5,580 6,075 5,476 and results • Weaker results expected within shipbuilding and
Slide 13: Orkla Aluminium Solutions
Orkla Aluminium Solutions Bjørn Wiggen 13 First quarter results 2010
Slide 14: The market is recovering in several segments, although from historically low levels
The market is recovering in several segments, although from historically low levels North America Extrusion Apparent Consumption European Extrusion Apparent Consumption 500 900 450 800 415 762 764 411 Thousand Tons 388 Thousand Tons 400 700 676 343 350 325 315 600 292 293 546 550 300 537 519 526 266
Slide 15: EBITA improvement continues
EBITA improvement continues 364 343 117 129 92 29 -102 -148 -342 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09 Q2-09 Q3-09 Q4-09 Q1-10 15 First quarter results 2010
Slide 16: Continued positive impact from cost efficiency programmes
Continued positive impact from cost efficiency programmes Operating Revenues in NOK million Q1 2010 Q1 2009 Change • Slight market growth although from historically low levels, Orkla Aluminium Solutions Sapa Profiles 6 120 4 827 4 883 3 780 25 % 28 % however the Building and Sapa HT and BS Eliminati
Slide 17: Orkla Materials
Orkla Materials 17 First quarter results 2010
Slide 18: Positive underlying trend for the silicon-related operations
Positive underlying trend for the silicon-related operations • Increased demand and higher Operating revenues in NOK million Q1 2010 Q1 2009 Change prices for Elkem Silicon-related Orkla Materials 2 890 2 770 4% – Positive one-off effects Elkem Siliconrelated 1 934 1 456 33 % NOK 90 million Borregaa
Slide 19: Hydropower in Sauda - Extraordinarily low reservoir levels and production
Hydropower in Sauda - Extraordinarily low reservoir levels and production • Sauda with annual production Production in GWh capacity of approx. 1.9 TWh 500 • Production significantly lower than normal Q1 -level 203 • Committed volume for delivery higher than actual production Q1-10 Normal production
Slide 20: Elkem Solar
Elkem Solar 20 First quarter results 2010
Slide 21: Broadening customer base confirms product quality
Broadening customer base confirms product quality • New contract with leading solar energy company – Volume: Up to 1,000 MT in 2010 • Contract with CaliSolar announced Q4 – Volume: Up to 500 MT 2010, 1,000 MT 2011-12 ® • Other potential customers in process of qualifying ESS • Renegotiations of exis
Slide 22: Elkem Solar in ramp-up phase
Elkem Solar in ramp-up phase • Ambitions to take a leading cost position – mid USD 20 per kg* • Production Q1-10: 400 MT • Characteristics for ramp-up phase – High fixed costs – Periodic production stops – Production will not be linear • Expected periodic production stops in Q2 to perform modificati
Slide 23: Orkla Brands
Orkla Brands Torkild Nordberg 23 First quarter results 2010
Slide 24: Stable long-term profit trend
Stable long-term profit trend 12 months rolling EBITA in NOK million 3 000 2 800 2 600 2 400 2 200 2 000 1 800 1 600 1 400 1 200 Q1-03 Q1-04 Q1-05 Q1-06 Q1-07 Q1-08 Q1-09 Q1-10 24 First quarter results 2010
Slide 25: Broad-based profit growth in Q1
Broad-based profit growth in Q1 Operating revenues in NOK million Q1 2010 Q1 2009 Change • EBITA +20% and EBITA% +1.8%-p compared with Q1 last Orkla Brands 5 403 5 398 0% Orkla Foods Nordic 2 190 2 283 -4 % year Orkla Brands Nordic 1 949 1 870 4% Orkla Brands International 412 430 -4 % – Positive ef
Slide 26: Going forward: Focusing on growth
Going forward: Focusing on growth • Clear growth directions in all business units • Focus on both organic and structural growth • Innovation most important organic lever 26 First quarter results 2010
Slide 27: Recent examples of organic growth
Recent examples of organic growth 27 First quarter results 2010
Slide 28: Dots / Ballerina Kladdkaka
Dots / Ballerina Kladdkaka 10 9 DOTS (Norway) 8 Biggest Norwegian 7 4 ,7 4 ,2 biscuits brand 6 5 8.9% value share, 8 4 weeks after launch 3 4 ,5 4 ,5 2 1 0 ,3 0 0 0 ,2 4U 030110 4U W 310110 4U W 280210 4U W 280310 1 6 ,0 1 4 ,0 BALLERINA KLADDKAKA (Sweden) 1 2 ,0 1 0 ,0 8 ,0 Biggest biscuit variant
Slide 29: Grandiosa “X-tra allt Hämtpizza”
Grandiosa “X-tra allt Hämtpizza” • New launch in Q1 – Sweden (Procordia) • Larger than most frozen pizzas (550 grams vs. 350 grams) • More topping (“X-tra allt”) • New packaging inspired from take-away pizza • Sold 2/3 of annual sales ambition after 12 weeks 29 First quarter results 2010
Slide 30: Kalev Chocolate Factory
Kalev Chocolate Factory • Established in 1806, today’s brand in Chocolates use since 1948 • Leading confectionery company in Estonia, with main focus on chocolate and sugar confectionery Flour mixes • Modern factory in Jüri (outside Tallinn) • Annual net sales of NOK 220 million Biscuits • Employs 3
Slide 31: Peterhof
Peterhof Chocolate Paste • Number one in chocolate spread (national market share of 31%) – Biscuits – regional player • New factory commissioned in 2008 in Lomonosov region 12,300 sq meters Biscuits • NSV 2009 was approximately approx. NOK 85 million • Employs approximately 450 people Instant Porrid
Slide 32: Sonneveld
Sonneveld • Market leader in bread improvers in the Benelux countries • Strengthens OFI's capabilities in key product area, industrial segment and innovation • Modern and flexible production facility • Based in Papendrecht in the Netherlands • Established in 1956 • Revenues of NOK 440 million • 140
Slide 33: Q&A
Q&A Dag J. Opedal, CEO Roar Engeland Bjørn Wiggen Torkild Nordberg Terje Andersen, CFO 33 33 Q4 First and quarter full-year results results 20102009
Slide 34: Appendix
Appendix 34 First quarter results 2010
Slide 35: Financial calendar
Financial calendar 21 July 2010 - Second quarter 2010 28 October 2010 - Third quarter 2010 35 First quarter results 2010
Slide 36: Cash flow as of 31 March 2010
Cash flow as of 31 March 2010 NOK million 1.1-31.3.2010 1.1-31.3.2009 Industry division: Operating profit 760 204 Amortisations, depreciations and write-downs 623 658 Changes in net working capital -1 133 - 282 Net replacement expenditure - 300 - 325 Cash flow from operations - 50 255 Financial item
Slide 37: Balance sheet as of 31 March 2010
Balance sheet as of 31 March 2010 NOK million 31.3.2010 31.12.2009 Intangible assets 14 724 14 731 Property, plant and equipment 24 587 24 694 Financial assets 10 762 15 922 Non-Current assets 50 073 55 347 Inventories 8 043 7 531 Receivables 13 300 16 568 Share Portfolio etc. 11 740 11 087 Cash and
Slide 38: Currency translation effects
Currency translation effects Revenues in NOK million Q1-10 Orkla Brands -152 Orkla Aluminium Solutions -629 Elkem -44 Borregaard -21 Total -846 EBITA in NOK million Q1-10 Orkla Brands -8 Orkla Aluminium Solutions -16 Elkem -1 Borregaard 1 Total -24 38 First quarter results 2010
Slide 39: Largest holdings in the Share Portfolio
Largest holdings in the Share Portfolio per 31 Mar 2010 Share of Share of Principal holdings Industry Market value portfolio (%) equity (%) Tomra Systems Industrials 667 6% 15,3 % Rieber & Søn Food & Beverage 526 4% 16,0 % Amer Sports Consumer Discretionary 473 4% 5,6 % Elekta B Health Care Equipmen
Slide 40: Orkla Materials Energy – Additional information about Sauda
Orkla Materials Energy – Additional information about Sauda • Production capacity: approx. 1.9 TWh annually • Fixed obligations: – 2010: Obligations to deliver approx. 250 GWh per quarter at long term fixed price. Obligations to pay for a fixed volume approx. 206 GWh per quarter at partly fixed pric
Slide 41: Appendix: Financial items
Appendix: Financial items 41 First quarter results 2010
Slide 42: Net financial items
Net financial items Key figures in NOK million 1.1-31.12 1.1-31.12 Full year 2010 2009 2009 Net interest expenses -97 -321 -883 Currency gain/loss -2 -22 15 Other financial items, net -37 - 20 - 84 Net financial items -136 -363 -952 42 First quarter results 2010
Slide 43: Debt maturity profile
Debt maturity profile Average maturity NOK million 4.2 years 6 000 5 000 4 000 3 000 2 000 1 000 0 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2021 Drawn amounts Unutilised credit facilities 43 First quarter results 2010
Slide 44: Net gearing 0.43 as of Q1-10
Net gearing 0.43 as of Q1-10 NOK billion Net gearing 60 1,4 54 1,2 48 42 1,0 36 0,8 30 0,6 24 18 0,4 12 0,2 6 0,0 0 -6 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Q1 10 -0,2 Equity Net interest-bearing liabilities Net gearing 44 First quarter results 2010
Slide 45: Funding Sources
Funding Sources Unutilised credit Bonds and CP 31% facilities 32% 10.0 10.0 11.8 Banks 37% Figures in NOK billion 45 First quarter results 2010
Slide 46: First quarter results 2010
46 First quarter results 2010