Slide 1: Fourth quarter results 2022
14 February 2023 Fourth quarter results 2022
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Orkla ASA (the “Company”) solely for information purposes. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. Certain statements included in this presentation contain various forward-looking
Slide 3: Reflections on 2022
Reflections on 2022 • Challenging macro environment • Group EBIT (adj.) growth of 21% • Organic revenue growth of 9.6% for Branded Consumer Goods • EPS (adj.) of NOK 5.46 (+6%) • The Board intends to propose a dividend of NOK 3.00 per share *All Alternative Performance Measures (APM) are presented i
Slide 4: Summary of financials for the quarter
Summary of financials for the quarter • Group EBIT (adj.) growth of 2% • EBIT (adj.) for Branded Consumer Goods incl. HQ decline of 14% • Organic revenue growth of 9.5% for Branded Consumer Goods, broad based and price driven • EPS (adj.) of NOK 1.31 (-6%) *All Alternative Performance Measures (APM)
Slide 5: Transformation of Orkla - milestones going forward
Transformation of Orkla - milestones going forward Q3-22 Q4-22 Q1-23 Q2-23 New operating model Implementation of Go live New reporting outlined corporate structure new operating model structure • New organization and ambition for • Provide full year indicative top-line • New organization in operatio
Slide 6: Financial performance
Harald Ullevoldsæter, CFO Financial performance
Slide 7: Strong sales growth, EBIT (adj.) growth driven by Hydro Power
Strong sales growth, EBIT (adj.) growth driven by Hydro Power Key figures Q4-22 Q4-21 ∆ Q4 Operating revenues BCG 15,200 13,482 +12.7% EBIT (adj.) BCG 1,362 1,571 -13.3% EBIT (adj.) HQ -110 -119 EBIT (adj.) BCG incl. HQ 1,252 1,452 -13.8% EBIT (adj.) Industrial & Financial Investments 651 419 +55.4%
Slide 8: Cash flow from operations for the full year 2022
Cash flow from operations for the full year 2022 Cash flow from operations as at 31.12 (pre-tax) 2022 2021 Orkla Branded Consumer Goods (BCG, incl. HQ) EBIT (adj.) 5,025 5,433 Depreciation 2,096 1,924 Change in net working capital -2,415 -456 Net replacement investments -2,773 -2,625 Total BCG cash
Slide 9: Acquisitions and dividend increase net interest bearing debt
Acquisitions and dividend increase net interest bearing debt 17,188 = 1.8x 377 EBITDA* 3,414 12,758 3,004 3,828 1,463 Net debt 31 Cash flow Taxes & Dividends Expansion FX effects Net debt 31 December from financial and share capex and December 2021 operations items buyback net M&A 2022 Amounts in NO
Slide 10: Branded Consumer Goods (BCG)
Branded Consumer Goods (BCG)
Slide 11: Organic growth from price, slightly negative volumes
Branded Consumer Goods Organic growth from price, slightly negative volumes BCG revenue, Q4-21 → Q4-22 (MNOK) BCG revenue, 2021→ 2022 (MNOK) 2.0% 1.2% 15,200 4.0% 55,402 9.5% 9.6% -1.0% 13,482 49,204 Q4-21 Organic FX M&A Q4-22 2021 Organic FX M&A 2022 growth growth All Alternative Performance Measur
Slide 12: All business areas had positive growth in Q4 and 2022
Branded Consumer Goods All business areas had positive growth in Q4 and 2022 Organic growth for Branded Consumer Goods Organic growth Q4-22 by business area Orkla Foods Europe 7.2% 12.1% Orkla India 11.2% 9.0% 9.5% Confectionery FY 2022 9.6% 5.6% & Snacks 7.7% Orkla Care 4.0% Orkla Food 4.3% 18.5% I
Slide 13: Continued progress for the three prioritized growth initiatives
Continued progress for the three prioritized growth initiatives Full-year baseline (2021) Reported 2022 (YoY)* Consumer Health Revenue Growth Grow at least 50% by 2025 BNOK 4.6** 25% Consumer sales Growth Out of Home MEUR ~337 **/*** 64% A European leader in pizza franchise No of outlets No of outle
Slide 14: Cost increases continue to weigh on profitability
Branded Consumer Goods incl. HQ Cost increases continue to weigh on profitability ∆ Q4 U.EBIT (adj.), MNOK ∆ R12M U.EBIT (adj.) margin 1,452 11.0% -1.9% 9.1% -0.1% 2.1% 1,252 -15.3% -0.7% Q4-21 Underlying FX M&A Q4-22 R12M Q4-21 Underlying M&A and R12M Q4-22 growth margin FX All Alternative Performa
Slide 15: Uncertainty as to how market imbalances will affect supply and input prices in 2023
Branded Consumer Goods incl. HQ Uncertainty as to how market imbalances will affect supply and input prices in 2023 3 input cost consequences for Orkla in 2023 • Substantial impact on supply and prices of agricultural products 1. Increasing market prices 2023 and increasing costs due to drought effe
Slide 16: Orkla Foods Europe: Profit hampered by higher input costs and inflation
Orkla Foods Europe Profit hampered by higher input costs and inflation Q4-22 YTD Q4-22 Revenues 4,923 17,820 • Organic sales growth driven by price increases and partly offset by negative volume growth Organic growth +7.2% +7.2% • Profitability hampered by continuing increased input EBIT (adj.) 573
Slide 17: Orkla India: Strong sales performance with modest profit growth
Orkla India Strong sales performance with modest profit growth from high investments in advertising Q4-22 YTD Q4-22 Revenues 665 2,542 • Good organic domestic sales and recovering trend in export sales after the pandemic Organic growth +11.2% +15.5% • Double-digit growth in the masalas and pure spic
Slide 18: Orkla Confectionery & Snacks: Price driven top-line growth
Orkla Confectionery & Snacks Price driven top-line growth. Market conditions remained challenging Q4-22 YTD Q4-22 Revenues 2,246 7,578 • Continued market volume decline in grocery Organic growth 5.6% 5.2% • Input cost increases and inflation continued in the quarter EBIT (adj.) 345 989 • Price incre
Slide 19: Orkla Care: Top line growth but weak profit development
Orkla Care Top line growth both in the quarter and full year, but weak profit development continues in the quarter Q4-22 YTD Q4-22 Revenues 2,152 8,604 • Top line growth driven by strong sales in HSNG, B2B and International sales. Offset by weak sales in Home Organic growth 4.0% 5.3% and Personal Ca
Slide 20: Orkla Food Ingredients: Solid revenue and profit growth
Orkla Food Ingredients Solid revenue and profit growth driven by revenue management Q4-22 YTD Q4-22 Revenues 4,155 14,682 • EBIT (adj.) growth from revenue management, partly offset by steep increase in raw material Organic growth +18.5% +20.5% prices and high inflation EBIT (adj.) 198 853 • Particu
Slide 21: Orkla Consumer Investments: Resilient consumer sales across pizza franchise
Orkla Consumer Investments Resilient consumer sales across pizza franchise network. Easing painting tool sales decline Q4-22 YTD Q4-22 • Strong organic growth across most businesses. Revenues 1,223 4,751 Drag from painting tools sales easing Organic growth +9.3% +0.6% • Solid consumer sales continue
Slide 22: Jotun (42.6%): Strong sales and profit growth
Jotun (42.6%) Strong sales and profit growth Jotun 100% basis Q4-22 • Solid sales growth driven by both price increases Revenues 6.916 and volume growth Revenue growth 19,5% • Raw material prices declined in H2-22, gross margins starting to recover in Q4 EBITA 606 • Operating profit improvement driv
Slide 23: High power prices continue to boost earnings in Hydro Power
Industrial & Financial Investments High power prices continue to boost earnings in Hydro Power Hydro Power Fully consolidated into Orkla’s financial statements Volume Power prices1 EBIT adj. (GWh): (øre/kWh): (NOK million): Q4: 635 (633) Q4: 171,0 (126,5) Q4: 631 (415) YTD: 2,237 (2,065) YTD: 193.9
Slide 24: Closing remarks
Nils K. Selte, President & CEO Closing remarks
Slide 25: Closing remarks
Closing remarks • Price increases implemented to compensate for higher input costs • Cost improvements reinforced by over 40% for 2023 • Continue to invest in our strong brands • Increase long-term value creation through transformation of Orkla 25
Slide 26: Q&A
Nils K. Selte, President & CEO Harald Ullevoldsæter, CFO Q&A
Slide 27: Upcoming events
Upcoming events: First quarter 2023 9 May 2023 Capital Markets Day 2023 29 November 2023
Slide 28: Appendices
Appendices
Slide 29: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest-bearing liabilities (NOK million) NIBD / R12 EBITDA 17,188 1,8x 1,5x 12,758 1,0x 0,9x 6,551 15,217 6,380 10,834 0,5x 3,037 4,895 4,893 0,0x 2018 2019 2020 2021 Q4-22 2017 2018 2019 2020 2021 Q4-22 Leasing debt Ex leasing debt Amounts in NOK
Slide 30: Funding sources and maturity profile
Funding sources and maturity profile Debt maturity → average maturity 3.6 years Funding sources (in BNOK) MNOK 6,000 1.9 5,500 7.1 5,000 4,500 4,000 9.6 3,500 3,000 2,500 7.6 2,000 1,500 1,000 Unutilised credit facilities 500 Banks 0 Bonds and CP 2023 2024 2025 2026 2027 2028 - Cash, cash equivalent
Slide 31: Cost breakdown for 2022
Branded Consumer Goods incl. HQ Cost breakdown for 2022 BCG incl. HQ, cost breakdown 2022 as % of revenues 100% 52% 15% 5% 4% 15% 9.1% Revenues Cost of Conversion Distribution Advertising SG&A EBIT (adj.) materials costs costs costs 31
Slide 32: Indicative sales figures for 2022 per portfolio company
Indicative sales figures for 2022 per portfolio company BNOK Q1 2022 Q2 2022 Q3 2022 Q4 2022 2022 Jotun (100%) TBA Orkla Foods Europe 4,2 4,3 4,3 4,9 17,8 Orkla Food Ingredients 3,1 3,7 3,7 4,2 14,7 Orkla Confectionery & Snacks 1,7 1,8 1,9 2,2 7,6 Orkla Health 1,4 1,4 1,4 1,3 5,4 Orkla India 0,5 0,6
Slide 33: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Organic growth Organic growth shows like-for-like turnover growth for the Group’s business portfolio and is defined as the Group’s reported change in operating revenues adjusted for effects of the purchase and sale of companies and currency effects. In calculat
Slide 34: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Earnings per share (adj.) Earnings per share (adj.) show earnings per share adjusted for “Other income and expenses” (OIE) after estimated tax. Items included in OIE are specified in Note 3. The effective tax rate for OIE is lower than the group’s tax rate as a
Slide 35: ‘Orkla
A, ‘Orkla