Slide 1: Third quarter results 2016
1 Third quarter results 2016 1 November 2016 Peter A. Ruzicka, President & CEO
Slide 2: Highlights Q3 2016: Continued progress
Highlights Q3 2016: Continued progress • Progress in Branded Consumer Goods in terms of sales growth and cost reductions • Continued growth in Sapa, weaker marine and offshore markets for Jotun • 31% increase in EPS from Q3 last year • Acquisition of Harris (UK) and Broer (NL) completed in Q3 • Cont
Slide 3: Volume driven organic growth
Branded Consumer Goods Q3 2016: Volume driven organic growth Positive organic growth Organic growth with quarterly fluctuations1 in 3 out of 4 business areas1 Orkla Foods 3.3% 4.3% 4.1% 3.8% Orkla Confectionery 4.1% & Snacks 2.3% 2.0% 1.8% Orkla Care 1.3% 0.2% Orkla Food Ingredients -0.9% Q1-15 Q2-1
Slide 4: Ongoing cost improvements produce results
Ongoing cost improvements produce results Several cost measures implemented Illustrative graph - Supply chain cost improvements - Integration programmes for acquired companies 2009 2010 2011 2012 2013 2014 2015 YTD-16 Organic sales growth1 Underlying fixed costs2 1Reported growth adjusted for curren
Slide 5: Successfully delivered on complex integration of Cederroth
Status one year after acquiring Cederroth: Successfully delivered on complex integration NOK >80 million in cost synergies realised (12 months run rate) Sales ahead of plan Additional value creation potential identified 5
Slide 6: Strong improvement in Sapa
Strong improvement in Sapa R12M underlying EBITDA (NOK billion) 3.5 • Underlying EBITDA up NOK 3.0 607 million (+27%) YTD 2.5 • Net interest bearing debt 2.0 reduced from NOK 1.8 billion as 1.5 of 31/12-15 to NOK 0.5 billion as of 30/9-16 1.0 0.5 0.0 Q4- Q3- 13 16 6
Slide 7: Financial performance
7 Financial performance Jens Bjørn Staff, CFO
Slide 8: Group EBIT (adj.) improvement of 19% in the quarter
Group EBIT (adj.) improvement of 19% in the quarter Key figures Q3-15 Q3-16 YTD-15 YTD-16 Operating revenues 8 381 9 429 23 627 27 472 EBIT (adj.) 993 1 178 2 507 2 991 Other income and expenses -96 -149 -268 -260 EBIT 897 1 029 2 239 2 731 Profit/loss from associates and JV 239 313 1 022 1 217 Net
Slide 9: Sales growth of 14% driven by M&A and organic growth
Branded Consumer Goods Q3 2016 Sales growth of 14% driven by M&A and organic growth 9,179 11.5% 0.4% 8,064 2.0% BCG operating Organic growth1 FX M&A BCG operating revenues Q3-15 revenues Q3-16 9 Amounts in NOK million. 1Reported growth adjusted for currency translation effects and structural changes
Slide 10: Continued growth in Branded Consumer Goods
Branded Consumer Goods Q3 2016 Continued growth in Branded Consumer Goods 2015 2016 EBIT (adj.) EBIT (adj.) margin (%) 3,051 13.1% 13.2% 2,644 11.7% 11.4% 1,209 1,055 Q3 YTD Q3 YTD • Top line and EBIT (adj.) growth in all business areas • 15% EBIT (adj.) growth in Q3 from higher sales, cost improvem
Slide 11: Orkla Foods: Continued sales and profit growth
Orkla Foods Q3 2016 Continued sales and profit growth 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +3.3% OG1 +3.4% OG1 11,290 1,352 13.2 13.1 12.1 12.0 9,428 1,140 512 3,261 3,905 429 Q3 YTD Q3 YTD Q3 YTD • Sales and profit growth supported by acquisition of Hamé • Positive organi
Slide 12: Orkla Confectionery & Snacks: Growth in all markets
Orkla Confectionery & Snacks Q3 2016 Growth in all markets in the quarter 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +4.1% OG1 +5.8% OG1 596 529 3,995 4,434 16.4 17.3 13.2 13.4 238 260 1,452 1,501 Q3 YTD Q3 YTD Q3 YTD • Volume-driven organic growth in all markets • New business
Slide 13: Orkla Care: Organic growth despite challenging markets
Orkla Care Q3 2016 Organic growth despite still challenging markets 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +1.3% OG1 +0.2% OG1 5,010 770 19.1% 677 17.8% 17.4% 3,894 15.4% 269 307 1,410 1,726 Q3 YTD Q3 YTD Q3 YTD • Improved performance, despite challenging markets for OHPC in
Slide 14: Orkla Food Ingredients: Increased sales and EBIT (adj.)
Orkla Food Ingredients Q3 2016 Increased sales and EBIT (adj.) driven by add-on acquisitions 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -0.9% OG1 0.6% OG1 6,089 333 6.0 6.2 5,483 298 5.4 5.5 119 130 1,989 2,095 Q3 YTD Q3 YTD Q3 YTD • Increased sales and profit driven by add-on a
Slide 15: Orkla Investments
Orkla Investments Volume (GWh): share portfolio Real estate & Hydro Power into Orkla accounts Book value real Fully consolidated 724 (891) estate: Power prices1 (NOK/MWh): NOK 1.6 billion 235 (123) Market value share portfolio: EBIT (NOK million): NOK 0.2 billion 64 (22) Jotun (42.5%) Accounted for
Slide 16: Significant underlying and reported earnings growth in Sapa
Sapa (50/50 joint venture) Significant underlying and reported earnings growth in Sapa 2015 2016 Orkla’s share of Sales volume (tonnes) Underlying EBIT net profit after tax 700 1,052 1,055 1,862 1,279 341 340 487 172 404 106 54 Q3 YTD Q3 YTD Q3 YTD • Stable positive demand growth in Europe driven by
Slide 17: Sales and profit growth in Jotun
Jotun (42.5%) Sales and profit growth in Jotun 2015 2016 Operating revenues Operating profit 10,753 10,917 1,630 1,716 January-August January-August • Revenue and volume growth and continued improved profits • Easing sales growth due to Marine and Offshore downturn • Continued plant investments in l
Slide 18: Changes in net debt Q3-16
Changes in net debt Q3-16 0.7 10.2 1.0 0.1 0.0 0.1 0.4 9.5 Net debt 30 Expansion Cash flow Sale of Net paid to Tax, FX effects Net debt 30 June 2016 and sale of from shares and shareholders dividends September companies operations financial received, net 2016 assets financial & other items 18 Amount
Slide 19: Summary
1 9 Summary Peter A. Ruzicka, President & CEO
Slide 20: Orkla Foods: Introducing TORO dessert mixes
A selection of recent launches Orkla Foods: Introducing TORO dessert mixes 20
Slide 21: Orkla Confectionery & Snacks: Further expansion into chocolate in Denmark
A selection of recent launches Orkla Confectionery & Snacks: Further expansion into chocolate in Denmark 21
Slide 22: Orkla Care: New launches from Nutrilett well received
A selection of recent launches Orkla Care: New launches from Nutrilett well received 22
Slide 23: Orkla Food Ingredients: Growing the Naturli' vegan range
A selection of recent launches Orkla Food Ingredients: Growing the Naturli’ vegan product range 23
Slide 24: Orkla products available through Tmall
Orkla products available through Tmall 24
Slide 25: Delivering on strategy
Delivering on strategy • Progress in Branded Consumer Goods • Continued growth in Sapa, weaker marine Continued and offshore markets for Jotun progress in Q3 • 31% increase in EPS • Harris (UK) and Broer (NL) acquired • Continued focus on realising One Orkla • Utilise opportunities from acquisitions
Slide 26: Q&A
2 6 Q&A Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO
Slide 27: Appendices
‘Orkla Appendices
Slide 28: Group income statement
Group income statement Q3-15 Q3-16 YTD 2015 YTD 2016 Operating revenues 8 381 9 429 23 627 27 472 EBIT (adj.) 993 1 178 2 507 2 991 Other income and expenses -96 -149 -268 -260 EBIT 897 1 029 2 239 2 731 Profit/loss from associates and joint ventures 239 313 1 022 1 217 Interests, net -78 -40 -159 -
Slide 29: Net financial items
Net financial items FY 2015 Q3-15 Q3-16 Net interest expenses -192 -78 -40 Currency gain/loss 0 -3 1 Result from Share Portfolio and dividends 135 36 40 Other financial items, net -71 -22 -15 Net financial items -128 -67 -14 29 Amounts in NOK million
Slide 30: Statement of financial position
Statement of financial position 31.12.2015 30.09.2016 Intangible assets 17 676 18 255 Property, plant and equipment 10 523 10 841 Investments in associates and joint ventures etc. 13 029 12 791 Non-current assets 41 228 41 887 Assets held for sale 182 - Inventories 4 623 5 397 Inventory of developme
Slide 31: Cash flow
Cash flow YTD 2015 YTD 2016 Operating profit 2 165 2 715 Amortisation, depreciation and write-downs 841 874 Change in net working capital -283 -592 Net replacement expenditures -659 -1 040 Cash flow from operations 2 064 1 957 Cash flow from operations, Financial Investments 127 -129 Tax -668 -436 D
Slide 32: Sapa (joint venture) – figures on 100% basis
Sapa (joint venture) – figures on 100% basis Q3-15 Q4-15 Q1-16 Q2-16 Q3-16 Sales volume (1,000 tonnes) 341 311 349 366 340 Operating revenues (NOK million)1 13 895 12 821 13 905 14 071 13 141 Underlying EBIT 404 128 571 804 487 Excluded items: Unrealised derivative positions -95 209 83 116 51 Other
Slide 33: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest-bearing debt (NOK million) Net gearing 9,474 0.28 0.29 8,496 7,805 0.23 5,661 0.18 4,786 0.16 2012 2013 2014 2015 Q3-16 2012 2013 2014 2015 Q3-16 33
Slide 34: Debt maturity profile
Debt maturity profile 5,000 Average maturity 3.4 years 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 34 Amounts in NOK million
Slide 35: Funding sources
Funding sources 1.5 Unutilised credit facilities 5.3 8.4 Banks Bonds and CP Cash, cash equivalents and interest bearing assets 5.7 35 Amounts in NOK billion
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