Slide 1: Fourth quarter results 2015
1 Fourth quarter results 2015 11 February 2016 Peter A. Ruzicka, President & CEO
Slide 2: Continued growth in the fourth quarter
Continued growth in the fourth quarter 4.1% organic growth1 17% EBIT (adj.)2 growth in BCG Full-year EPS doubled to NOK 3.24 1Reported growth in Q4 adjusted for FX and M&A 2 2EBIT (adj.) = Operating profit in Q4 before other income and expenses
Slide 3: Strong performance in the quarter
Highlights: Strong performance in the quarter • Group EBIT (adj.)1 increased by 9% to NOK 1.1 billion • Increase in EPS from NOK -0.06 to NOK 0.73 • Continued growth in Branded Consumer Goods • 4.1% organic growth2 driven by successful innovations and high campaign activity • EBIT (adj.) growth of 1
Slide 4: Sales growth in all business areas
Branded Consumer Goods Q4 2015: Sales growth in all business areas Organic growth performance1,2 4.1% 2.8% 2.5% Orkla Foods 5.2% 1.1% Orkla Confectionery 0.7% 7.2% & Snacks Orkla Care 0.6% Orkla Food Ingredients 3.0% -2.8% 2011 2012 2013 2014 2015 Q4-15 1Reported growth adjusted for FX and M&A 4 2Fo
Slide 5: Several cross-border innovations
Top-line growth initiatives: Several cross-border innovations 5
Slide 6: Increased collaboration with customers
Top-line growth initiatives: Increased collaboration with customers Nutrilett Breakfast Bar for Pizzabakeriet for Coop Norge NorgesGruppen A range of TORO products launched under Beauvais brand – only in Coop Denmark 6
Slide 7: Orkla Food Ingredients and Orkla Foods launch TORO-bakeriet
Top-line growth initiatives: Orkla Food Ingredients and Orkla Foods launch TORO-bakeriet Project team with members from both Orkla Foods and Orkla Food Ingredients 7
Slide 8: Grandiosa home-made: sales boosted by relaunch
Top-line growth initiatives: Grandiosa home-made: sales boosted by relaunch Sales increased by 66% after relaunch of three new varieties of +66% Grandiosa home-made Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 8 Source: Nielsen
Slide 9: EBIT (adj.) growth supported by currency
Branded Consumer Goods Q4 2015: EBIT (adj.) growth supported by currency Breakdown of BCG R12M EBIT (adj.) EBIT (adj.) growth Q4 2015 NOK mill. 4 500 17% 4 000 5% 3 500 12% 3 000 2 500 2 000 1 500 Q4- Q4- Q4- Q4- Q4- Q4- Q4- Q4- Q4- Q4- Reported Currency EBIT (adj.) 06 07 08 09 10 11 12 13 14 15 EBI
Slide 10: Continuous improvements for more profitable operations
Continuous improvements for more profitable operations Significant supply chain improvements Several initiatives to reduce SG&A costs • 14 factories closed or under closure • Increased sales force efficiency since 2014 • Cederroth and NP Foods integration • 15 factory redesign projects initiated pro
Slide 11: Significant re-allocation to Branded Consumer Goods
Significant re-allocation to Branded Consumer Goods Exits and sales Share portfolio NOK ~ 1.5billion in freed-up capital in 2015 Strengthened BCG 1 NOK ~ 5 billion 1 allocated to BCG in 20151 1 11 1Closed or announced acquisitions (including pending acquisitions Hamé and Kavli)
Slide 12: Hamé strengthens Orkla within its key categories
Hamé strengthens Orkla within its key categories Nordics / Baltics Central Europe Category (Position and market share) Ketchup No.1 No.1 No.1-2 No.1 No.1 No.1 No.1 No.1 No.3 No.1 Pâté No.1 - - - - - No.1 No.1 No.1 No. 2 Preserved No. 1 No.1 No.1 No.1-2 No.1 No.3 No.1 No.1 - - vegetables Jams and No.
Slide 13: 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 13 1Including add-ons, excluding currency effec
Slide 14: Financial performance
1 4 Financial performance Jens Bjørn Staff, CFO
Slide 15: Group EBIT (adj.) improvement of 9% in the quarter
Group EBIT (adj.) improvement of 9% in the quarter Amounts in NOK million Key figures Q4-14 Q4-15 2014 2015 Operating revenues 8 119 9 571 29 599 33 198 EBIT (adj.) 1 007 1 102 3 214 3 609 Other income and expenses -102 -234 -100 -502 EBIT 905 868 3 114 3 107 Profit/loss from associates and JV -252
Slide 16: Branded Consumer Goods
A ‘Orkla Branded Consumer Goods
Slide 17: Positive organic growth
Positive organic growth Amounts in NOK million 9,314 8.8% 5.8% 7,854 4.1% BCG operating Organic growth1 FX M&A BCG operating revenues Q4-14 revenues Q4-15 17 1Reported growth adjusted for FX and M&A
Slide 18: Underlying margin improvement
Underlying margin improvement Q4-15 EBIT (adj.) margin bridge Full year EBIT (adj.) margin bridge 0.6% -0.4% -0.8% 0.6% 12.0% 13.0% 12.8% 11.8% Q4-14 Underlying Dilution Q4-15 2014 Underlying Dilution 2015 improvement from M&A improvement from M&A 18
Slide 19: Sales growth and margin expansion in Orkla Foods
Orkla Foods Sales growth and margin expansion in Orkla Foods Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +5.2% OG1 +3.9% OG1 13,250 1,701 13.8 14.7 12,232 1,488 12.2 12.8 561 3,371 3,822 466 Q4 FY Q4 FY Q4 FY • Continued sales growth across • Sales growth a
Slide 20: Strong organic growth in Orkla Confectionery & Snacks
Orkla Confectionery & Snacks Strong organic growth in Orkla Confectionery & Snacks Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +7.2% OG1 +3.5% OG1 5,813 843 16.9 17.3 4,987 693 13.9 14.5 314 1,448 1,818 245 Q4 FY Q4 FY Q4 FY • Strong organic growth, primari
Slide 21: Orkla Care impacted by FX and acquisitions
Orkla Care Orkla Care impacted by FX and acquisitions Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) 0.6% OG1 -0.7% OG1 5,534 852 881 17.2 4,960 15.3 15.9 12.4 1,250 1,640 191 204 Q4 FY Q4 FY Q4 FY • Organic sales growth driven by 3 of • Profitability in all s
Slide 22: Steady growth in Orkla Food Ingredients
Orkla Food Ingredients Steady growth in Orkla Food Ingredients Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +3.0% OG1 +3.4% OG1 7,598 414 6.6 6,534 345 5.5 5.3 5.4 1,821 2,115 120 116 Q4 FY Q4 FY Q4 FY • Continued organic growth • Greater exposure to ice cre
Slide 23: Orkla Investments
A ‘Orkla Orkla Investments
Slide 24: Orkla Investments portfolio
24 Hydro Power Jotun (42.5%) Orkla Investments Real estate Sapa (50%) Share portfolio Financial investments
Slide 25: Continued underlying EBIT growth in Sapa
Sapa (50/50 joint venture) Continued underlying EBIT growth in Sapa Amounts in NOK million 2014 2015 Orkla’s share of Operating revenues Underlying EBIT net profit after tax 55,252 1,407 123 46,211 17 652 11,842 12,821 128 -313 -55 -360 Q4 FY Q4 FY Q4 FY • 1% market increase in North • Positive cont
Slide 26: Sapa restructuring and synergy agenda delivered one year ahead of plan
Sapa (50/50 joint venture) Sapa restructuring and synergy agenda delivered one year ahead of plan Amounts in NOK million 1,407 • Significant improvement since establishment of Sapa JV • NOK 1 billion in synergies realised • Exit of unprofitable business • Higher share of value added products • Focus
Slide 27: Growth across all segments and regions in Jotun
Jotun (42.5%) Growth across all segments and regions 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 • High revenue growth driven by both improved sales • Better profitability through active cost control volumes and positive
Slide 28: Lower power prices only partly offset by higher volumes
Hydro Power Lower power prices only partly offset by higher volumes 2014 2015 GWh produced Spot prices (NOK/MWh) EBIT (adj.) (NOK million) 2,850 264 248 216 2,572 205 188 154 73 680 713 49 Q4 FY Q4 FY Q4 FY • Increased production • Still low power prices • Reduced EBIT (adj.) due to volumes low powe
Slide 29: Net debt and dividend
A ‘Orkla Net debt and dividend
Slide 30: Changes in net debt 2015
Changes in net debt 2015 Amounts in NOK billion 7.8 0.6 2.4 0.6 3.7 5.7 2.6 0.3 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 December 2014 companies operations financial received, 2015 assets net financial
Slide 31: Dividends 1993 – 2015
Dividends 1993 – 20151 Amounts in NOK Special dividend Ordinary dividend 5.00 5.00 2.50 2.50 2.50 2.50 2.50 2.25 2.25 2.25 2.00 1.50 1.00 2.50 0.39 0.41 0.50 0.60 0.65 0.68 0.19 0.23 0.27 0.32 0.80 0.90 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 151 31 1Proposed dividend
Slide 32: Financial calendar
Financial calendar Event Date Annual General Meeting 14 April 2016 Q1-2016 3 May 2016 Q2-2016 15 July 2016 Q3-2016 1 November 2016 Q4-2016 9 February 2017 32
Slide 33: Summary
3 3 Summary Peter A. Ruzicka, President & CEO
Slide 34: Delivering on strategy
Delivering on strategy • Group EBIT (adj.)1 increased by 9% Strong • 4.1% organic growth2 in BCG performance • EBIT (adj.) growth of 17% in BCG • Strong performance from associates Value • Significant strengthening of foothold in creating M&A Central Europe and • Further expansion in ice cream restr
Slide 35: Launching healthier alternatives
Launching healthier alternatives 35
Slide 36: Extended skin care range from Dr. Greve
Extended skin care range from Dr. Greve 36
Slide 37: New chocolate launches in Denmark, Norway and Latvia
New chocolate launches in Denmark, Norway and Latvia 37
Slide 38: Q&A
3 8 Q&A Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO
Slide 39: Appendices
‘Orkla Appendices
Slide 40: Group income statement
Group income statement Amounts in NOK million Q4-14 Q4-15 2014 2015 Operating revenues 8 119 9 571 29 599 33 198 EBIT (adj.) 1 007 1 102 3 214 3 609 Other income and expenses -102 -234 -100 -502 EBIT 905 868 3 114 3 107 Profit/loss from associates and joint ventures -252 89 121 1 111 Interests, net
Slide 41: Net financial items
Net financial items Amounts in NOK million FY 2015 Q4-14 Q4-15 Net interest expenses -192 -125 -33 Currency gain/loss 0 0 2 Result from Share Portfolio and dividends 135 16 35 Other financial items, net -71 -39 -15 Net financial items -128 -148 -11 41
Slide 42: Balance sheet
Balance sheet Amounts in NOK million 31.12.2014 31.12.2015 Intangible assets 14 598 17 676 Property, plant and equipment 9 484 10 523 Investments in associates and joint ventures etc. 13 026 13 029 Non-current assets 37 108 41 228 Assets held for sale 22 182 Inventories 3 873 4 623 Inventory of deve
Slide 43: Cash flow
Cash flow Amounts in NOK million 2014 2015 Operating profit 3 181 3 058 Amortisation, depreciation and write-downs 930 1 109 Change in net working capital - 491 404 Net replacement expenditures - 838 - 930 Cash flow from operations 2 782 3 641 Cash flow from operations, Financial Investments - 59 94
Slide 44: Sapa (joint venture) – figures on 100% basis
Sapa (joint venture) – figures on 100% basis Amounts in NOK million Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Sales volume (1,000 tonnes) 322 353 358 341 311 Operating revenues (NOK million)1 11 842 14 051 14 484 13 895 12 821 Underlying EBIT -55 392 483 404 128 Excluded items: Unrealised derivative positions -
Slide 45: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest bearing debt (NOK million) Net gearing 10,645 0.28 0.24 0.23 8,496 7,805 0.19 0.18 5,661 4,786 2011 2012 2013 2014 2015 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 45
Slide 46: Debt maturity profile
Debt maturity profile Amounts in NOK million 5,500 Average maturity 3.2 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 46
Slide 47: Funding sources
Funding sources Amounts in NOK billion 1.3 Unutilised credit facilities Banks 5.3 8.4 Bonds and CP Cash, cash equivalents and interest bearing assets 3.9 47
Slide 48: 48
48