Slide 1: Fourth quarter results 2020
Fourth quarter results 2020 11 February 2021 Jaan Ivar Semlitsch, President & CEO
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: Entering 2021 with cautious optimism
Entering 2021 with cautious optimism • We have delivered on our immediate priorities during the Covid-19 pandemic • Supported long-term growth plans • Our work on the sustainability agenda has been recognized externally 3
Slide 4: We have navigated through Covid-19 with satisfactory performance
We have navigated through Covid-19 with satisfactory performance • EBIT (adj.) for Branded Consumer Goods incl. HQ improved by 7% (+14% full-year 2020) • Covid-related restrictions reimposed in several markets • Strong results from Jotun • Adjusted EPS* increased by +13% to NOK 1.43 in Q4 (+19% to
Slide 5: Jotun – a fast growing global market leading Paints & Coatings company
Jotun – a fast growing global market leading Paints & Coatings company Jotun sales*, 2010 -> 2020, BNOK Sales split*, 2020 Middle East, Europe & 30 India & Africa Americas CAGR +8% 25 29% 30% 20 15 41% 10 Asia 5 0 Decorative 2010 2020 40% coatings Jotun business system Jotun IFRS Performance 60% coa
Slide 6: Financial performance
Financial performance Harald Ullevoldsæter, CFO
Slide 7: Adj. EPS +13% from profit growth in Branded Consumer Goods and Jotun
Adj. EPS +13% from profit growth in Branded Consumer Goods and Jotun Key figures Q4-20 Q4-19 ∆ Q4 Operating revenues BCG 12,443 11,778 +6% EBIT (adj.) BCG 1,648 1,551 +6% EBIT (adj.) HQ -102 -112 EBIT (adj.) BCG incl. HQ 1,546 1,439 +7% EBIT (adj.) Orkla Industrial & Financial Investments 27 76 -64%
Slide 8: ERP projects more complex and time-consuming than anticipated
ERP projects more complex and time-consuming than anticipated 2017 More than 30 different ERP systems in BCG and many were close to "end of support“ Preparing for digitalization and “One Orkla” Decision to build a template based on SAP S4 Hana with common master data to implement in most of BCG and
Slide 9: Strong cash flow from higher earnings
Strong cash flow from higher earnings Cash flow from operations per 31.12 (pre-tax) YTD Q4-20 YTD Q4-19 Orkla Branded Consumer Goods (BCG, incl. HQ) EBIT (adj.) 5,440 4,786 Amortisation and depreciation 1,783 1,581 Change in net working capital 670 812 Net replacement investments -2,251 -1,931 Total
Slide 10: Investment level in 2020 reflects run rate maintenance level, ongoing ERP investments and expansion projects
Investment level in 2020 reflects run rate maintenance level, ongoing ERP investments and expansion projects Capex split 2020 (2.7 BNOK) Total net capex ~5.9% of revenues • Net maintenance capex excl. ERP (inc. Expansion leasing): ~4% in 2020 18% • Building future ERP platforms ~1% in 2020 • Expansi
Slide 11: Continued strong balance sheet and financial flexibility after dividend payment and structural growth
Continued strong balance sheet and financial flexibility after dividend payment and structural growth = 0.9x 6,551 585 6,380 EBITDA 1,012 5,438 2,609 1,061 Net debt 31 Cash flow Taxes & Net paid to Expansion FX effects Net debt 31 December from financial shareholders capex and December 2019 operatio
Slide 12: Branded Consumer Goods
A ‘Orkla Branded Consumer Goods
Slide 13: Top line growth of ~6% from currency translation effects and organic growth
Branded Consumer Goods Q4-20: Top line growth of ~6% from currency translation effects and organic growth BCG revenue, Q4-19 → Q4-20 (MNOK) 4.7% 12,443 -0.3% 1.3% 11,778 Q4-19 Organic growth FX M&A Q4-20 13 Amounts in NOK million
Slide 14: Care and Consumer Investments drive improvement in organic growth
Branded Consumer Goods Q4-20: Care and Consumer Investments drive improvement in organic growth Organic growth for Branded Consumer Goods Organic growth Q4-20 by business area Foods 1.7% 1.8% 1.6% 1.6% Confectionery -1.6% 1.3% & Snacks Care 8.7% 0.4% Food -4.3% Ingredients 2016 2017 20181 20192 2020
Slide 15: Profit and margin growth
Branded Consumer Goods incl. HQ: Profit and margin growth ∆ Q4 U.EBIT (adj.), MNOK ∆ R12M U.EBIT (adj.) margin 4.5% 0.8% 1,546 0.4%-p 0.0%-p 11.7% 11.2% 2.1% 1,439 Q4-19 Underlying FX M&A Q4-20 R12M Q4-19 Underlying M&A and FX R12M Q4-20 growth margin 15
Slide 16: Improved results from organic growth and increased productivity
Orkla Foods Improved results from organic growth and increased productivity Q4-20 YTD Q4-20 • Organic sales growth in Q4 mainly driven by Revenues 4,871 18,301 Nordic markets and India Organic growth 1.7% 3.7% • Continued positive impact on grocery sales from Covid-19 partly offset by lower sales to
Slide 17: Negative organic growth driven by phasing of sales between quarters
Orkla Confectionery & Snacks Negative organic growth driven by phasing of sales between quarters Q4-20 YTD Q4-20 • Good market growth in Nordic grocery – Revenues 2,062 7,171 continued low demand in the Baltics Organic growth -1.6% 2.0% • Sales decline related to timing of seasonal sales and de-stoc
Slide 18: Strong market growth in many Care categories
Orkla Care Strong market growth in many Care categories Q4-20 YTD Q4-20 • Strong growth for HSNG and health categories Revenues 1,822 6,905 Organic growth 8.7% 9.2% • Strong market growth in many Care categories • Profit margin weakened by increased A&P spend EBIT (adj.) 203 1,019 and fixed cost acc
Slide 19: Growth hampered by reinforced Covid-19 restrictions in Out of home
Orkla Food Ingredients Growth hampered by reinforced Covid-19 restrictions in Out of home Q4-20 YTD Q4-20 • Negative impact on Out of home consumption Revenues 2,834 10,696 from reinforced Covid-19 restrictions in several Organic growth -4.3% -5.9% markets • EBIT (adj.) decline related to lower sale
Slide 20: Broad based topline growth from continued high home improvement activity
Orkla Consumer Investments Broad based topline growth from continued high home improvement activity and record pizza restaurant chain sales in Finland Q4-20 YTD Q4-20 Revenues 969 3,847 • High home improvement activity contributed to double digit sales growth of painting tools across markets Organic
Slide 21: Current status for financial targets from Capital Markets Day 2018
Current status for financial targets from Capital Markets Day 2018 Organic growth U.EBIT %* NWC / NSV -3pp >= market >1.5pp by 2021 by 2021 R12M Net working capital • Target to grow organically at • Target to improve underlying / R12M Net sales** least in line with our underlying margin (adjusted fo
Slide 22: Power prices significantly lower
Orkla Industrial & Financial Investments Power prices significantly lower Hydro Power Fully consolidated into Orkla’s financial statements Volume Power prices1 EBIT adj. (GWh): (øre/KWh): (NOK million): Q4: 702 (534) Q4: 13.6 (39.3) Q4: 25 (72) YTD: 2,884 (2,156) YTD: 9.8 (38.7) YTD: 42 (292) Financ
Slide 23: Record results and continued topline growth
Orkla Industrial & Financial Investments - Jotun (42.6%) Record results and continued topline growth Jotun 100% basis Q4-20 Revenues 5,273 • Continued growth driven by Decorative, Protective and Powder segments. Slowdown in Marine coatings Growth 3.6% • Mixed Covid-19 effects between markets EBITA 6
Slide 24: Closing remarks
A ‘Orkla Closing remarks
Slide 25: We have navigated through Covid-19 crisis with satisfactory performance
We have navigated through Covid-19 crisis with satisfactory performance Summary Q4-20 Outlook • EBIT (adj.) for Branded Consumer Goods incl. HQ • Agile approach to changes in consumer trends and improved by 7% preferences • Covid-related restrictions reimposed in several markets • Support long term
Slide 26: Q&A
Q&A Jaan Ivar Semlitsch, President & CEO Harald Ullevoldsæter, CFO
Slide 27: Save the date
Save the date Orkla Capital Markets Day 23 November 2021
Slide 28: Appendices
Appendices
Slide 29: 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 the calc
Slide 30: 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 in bot
Slide 31: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest-bearing liabilities (NOK million) NIBD / R12 EBITDA 8,056 1,5x 6,551 6,380 1,0x 0,9x 3,037 0,5x 4,895 4,893 14 0,0x 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 Leasing debt Ex leasing debt 31 Amounts in NOK million
Slide 32: Funding sources and maturity profile
Funding sources and maturity profile Debt maturity → average maturity 3.2 years Funding sources (in BNOK) MNOK 4,000 3.6 3,500 7.6 3,000 3.3 2,500 2,000 1,500 5.2 1,000 500 Unutilised credit facilities Banks 0 Bonds and CP 2021 2022 2023 2024 2025 2026- Cash, cash equivalents and interest bearing as
Slide 33: Slide 33