Slide 1: Third quarter results 2009
Third quarter results 2009 30 October 2009
Slide 2: Agenda
Agenda • Highlights and financial performance CEO Dag J. Opedal • Orkla Brands EVP Torkild Nordberg • Orkla Aluminium Solutions / Orkla Materials EVP Bjørn Wiggen 2 Third quarter 2009
Slide 3: Orkla - Comprehensive actions – improved financials
Orkla - Comprehensive actions – improved financials • Continued contribution from extensive action plans – Cash flow from operations NOK 3.1 billion as of Q3 – Improved cost position compared with Q2 • Important structural actions – Acquisition of Indalex – Sale of energy assets • Uncertain market o
Slide 4: Highlights Q3
Highlights Q3 • Continued profit growth for Orkla Brands • Positive EBITA for Orkla Aluminium Solutions in Q3 – Comprehensive structural and cost-cutting measures – Successful integration of Indalex • General weak market conditions for Orkla Materials – Capacity utilisation of 57 % in Q3 for Elkem s
Slide 5: Improved profit vs. last quarter
Improved profit vs. last quarter…. EBITA performance from Q2-09 to Q3-09 (figures in NOK million) 51 -15 -28 1 811 121 170 177 334 Q2-09 Orkla Elkem ex. Orkla Brands Borregaard Orkla Elkem Solar Other Q3-09 Aluminium Solar Financial Solutions Investments 5 Third quarter 2009
Slide 6: However, still somewhat behind last year
….however, still somewhat behind last year EBITA performance from Q3-08 to Q3-09 (figures in NOK million) 55 -155 18 1026 51 -110 -63 -11 811 Q3-08 Orkla Brands Borregaard Orkla Elkem ex. Elkem Solar Orkla Other Q3-09 Financial Solar Aluminium Investments Solutions All figures in NOK million 6 Third
Slide 7: Strong cash flow from operations
Strong cash flow from operations -143 269 3 115 612 358 546 1473 as of 30 Sep Orkla Brands Orkla Elkem Borregaard Other as of 30 Sep 2008 Aluminium 2009 Solutions All figures in NOK million * Cash flow from operations: Operating profit, amortisation, net 7 Third quarter 2009 replacement expenditures
Slide 8: Key figures for the Orkla Group
Key figures for the Orkla Group Amounts in NOK million Q3 Q3 30.9 30.9 2009 2008 2009 2008 Operating revenues 14 088 15 904 41 188 49 087 EBITA* 811 1 026 1 378 3 242 Profit/loss before tax 494 -939 461 2 360 Net profit 481 -1215 1 362 1 454 Cash flow from industrial operations 1 663 365 3 115 1 473
Slide 9: Energy assets sold for NOK 6 billion
Energy assets sold for NOK 6 billion • Hydropower plants, with total annual power production of 1.7 TWh, sold for NOK 6 billion • Gain on sale approx. NOK 3.5 billion • Transaction to be closed in H1-2010 • Elkem's power plants in Sauda and Borregaard's power plants in Sarpsborg will be retained 9 T
Slide 10: Part of Elkem's hydropower assets sold
Part of Elkem’s hydropower assets sold Assets sold: Plant Capacity Price Salten Bremanger 1.1 TWh 0.5 TWh owned NOK 4,300 million NOK 1,709 million Salten (Nordland) 0.2 TWh leased - Assets owned: Plant Capacity Sauda1 2 TWh Bremanger (Sogn og Fjordane) Borregaard (Østfold) Borregaard2 0.6 TWh Sauda
Slide 11: The Indalex acquisition
The Indalex acquisition • Sapa to merge No 1 and No 2 players in North America through the acquisition of Indalex • Market share in North America increased to approx. 30 % • Strong synergy-driven case – Production, logistics and shared services • Succesful integration process 11 Third quarter 2009
Slide 12: Orkla Associates and Orkla Financial Investments
Orkla Associates and Orkla Financial Investments 12 Third quarter 2009
Slide 13: Orkla Associates
Orkla Associates Amounts in NOK million Amounts in NOK million 1.1-31.8. 1.1-31.8. REC Q3 2009 Q3 2008 Change Jotun 2009 2008 Change Revenues 2 160 1 919 13 % Revenues 7 811 6 739 16 % EBITDA 429 711 -40 % EBIT 858 807 6% Profit before tax 782 792 -1 % EBIT -665 537 Profit/loss before tax -1 143 1 7
Slide 14: Orkla Financial Investments Share Portfolio
Orkla Financial Investments Share Portfolio • Market value of Share Portfolio NOK 10.3 billion Portfolio MSCI Nordic OSEBX S&P 500 • Return on Share Portfolio +26.2 % • Increased net asset value 2009 2007-2009 * 43,5 % – YTD NOK 2.4 billion 30,7 % 26,2 % 19,3 % -3,6 % -4,1 % -4,5 % -5,4 % * Rolling
Slide 15: Orkla Brands
Orkla Brands EVP Torkild Nordberg 15
Slide 16: Continued EBITA improvement
Continued EBITA improvement • Flat topline performance Amounts in NOK million Q3 Q3 – Market shares stabilising Operating revenues 2009 2008 Change Orkla Brands 5 661 5 646 0% • Continued focus on cost Orkla Foods Nordic 2 377 2 392 -1 % improvements Orkla Brands Nordic 1 890 1 869 1% – Synergies in
Slide 17: 80 % of turnover from No. 1 positions
80 % of turnover from No. 1 positions Orkla Brands Brands Food Foods Nordic Brands Nordic International Ingredients 17 Third quarter 2009
Slide 18: Private Label share relatively low in the Nordics, but increasing
Private Label share relatively low in the Nordics, but increasing Change in PL-share PL share of Country/Company relevant categories 3-month trend 12-month trend Norway/Stabburet 13 % unchanged unchanged Sweden/Procordia 18 % +0.4 %-points +1.0 %-points Denmark/Beauvais 20 % +1.9 %-points +1.6 %-poi
Slide 19: Orkla Brands development planned in 2 stages
Orkla Brands development planned in 2 stages: • 2008-09: Back on track • 2010 : Focus on growth 19 Third quarter 2009
Slide 20: Getting back on track was the priority in 2008-09
Getting back on track was the priority in 2008-09 • Restoring margins • Organisational and modus operandi improvements • Less focus on structural growth • Restructuring outside the Nordic area 20 Third quarter 2009
Slide 21: 2010: Focusing on growth
: Focusing on growth 2010 • Defining clear growth directions in all business units • Focus both on organic and structural growth • Innovation most important lever • Enhanced synergy capture in Orkla Brands 21 Third quarter 2009
Slide 22: Important new launches in Q3-09
Important new launches in Q3-09 • New launch of old brand from Nidar • Entering the important milk chocolate segment • Relaunch of Big One Pizza • New product launch from • New production equipment Pierre Robert improves product quality • Wool collection for children 22 Third quarter 2009
Slide 23: Orkla Aluminium Solutions
17. June 2009 Orkla Aluminium Solutions EVP Bjørn Wiggen 23 Third quarter 2009
Slide 24: Sapa – market stabilisation
Sapa – market stabilisation Amounts in NOK million • Restructuring of cost-base and efficiency programmes have reduced break-even levels Q3 Q2 Q3 Change Operating revenues 2009 2009 2008 Q3-Q3 – Positive cash flow performance Orkla Aluminium Solutions 5 424 4 904 6 696 -19 % • Strong demand for Heat
Slide 25: The last quarters have been stable - still at very low levels
The last quarters have been stable - still at very low levels US Extrusion Apparent Consumption European Extrusion Apparent Consumption 400 850 810 790 341 342 800 350 762 764 316 318 743 308 750 726 Thousand Tons 293 Thousand Tons 300 276 700 676 250 234 650 202 207 198 600 200 552 550 531 534 537
Slide 26: Sapa shows improvement over second and third quarters
Sapa shows improvement over second and third quarters 600 400 343 364 200 NOK million 92 29 0 -102 -200 -148 -400 -342 -600 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2009 26 Third quarter 2009
Slide 27: The dramatic decline seems to be over - recovery is expected to be slow
The dramatic decline seems to be over - recovery is expected to be slow • Stimulus packages and the end of stock depletion are starting to bring economies out of recession • However, no return to pre-crisis levels expected until 2011 at the earliest as labour markets continue to worsen • GDP is expe
Slide 28: Indalex acquisition still in early days, but the start is encouraging
Indalex acquisition still in early days, but the start is encouraging • New Sapa North America organisation established • Closing conditions cleared – Catawba operations have been sold with no significant impact on volume or profit • Synergy potential confirmed, already in execution phase – Metal –
Slide 29: The restructuring of the North American operation is progressing according to plan
The restructuring of the North American operation is progressing according to plan Restructuring of Sapa North American Operation Calgary Vancouver Montreal Portland Toronto Yankton Elkhart Spanish Fork Morris Mountaintop Cressona City of Parsons Connersville Industry Burlington Cast House Magnolia
Slide 30: Orkla Materials
Orkla Materials 30 Third quarter 2009
Slide 31: Continued weak market conditions for Elkem Silicon-related
Continued weak market conditions for Elkem Silicon-related • Capacity utilisation at 57 % in Q3 Amounts in NOK million Q3 Q3 Operating revenues 2009 2008 Change • Price level stabilising Elkem 1 703 2 235 -24 % Energy 268 230 17 % • Significant cost reduction and Silicon-related 1 441 2 014 -28 % im
Slide 32: Elkem Energy
Elkem Energy • The plants in Salten and Bremanger will be included in Elkem’s results in EBITA per quarter - Elkem Energy Figures restated (excl. Energy trading) Q3 and Q4 2009 300 240 • From 1.1.2010, only Sauda plant 180 included in the Elkem Energy figures 120 60 • Gain on sale (approx. NOK 3.5 b
Slide 33: Elkem Solar: Ramp-up the main focus in 2010
Elkem Solar: Ramp-up the main focus in 2010 • Damaged equipment due to fire in Elkem Solar plant repaired – Hot commissioning started mid October • Restart of ramp-up from the end of November – Less volume in 2009 than previously anticipated • 2010 a ramp-up year – Full capacity by end 2010 • Signif
Slide 34: Borregaard: Satisfactory profit despite weak markets
Borregaard: Satisfactory profit despite weak markets Amounts in NOK million • Volume decline for core products Q3 Q2 Q3 Change • Closure of Swiss plant in 2008 Operating revenues 2009 2009 2008 Q3-Q3 contributed to good capacity utilisation Borregaard 963 958 1 104 -13 % Energy 68 57 64 6% • Satisfa
Slide 35: Financial calendar
Financial calendar 10 December 2009 - Extraordinary General Meeting 11 February 2010 – Fourth quarter 2009 22 April 2010 – Annual General Meeting 5 May 2010 – First quarter 2010 21 July 2010 – Second quarter 2010 28 October 2010 – Third quarter 2010 35 Third quarter 2009
Slide 36: Q&A
Q&A CEO Dag J. Opedal EVP Torkild Nordberg EVP Bjørn Wiggen CFO Terje Andersen 36 Third quarter 2009
Slide 37: Third quarter 2009
37 Third quarter 2009
Slide 38: Appendix
Appendix 38 Third quarter 2009
Slide 39: Group income statement
Group income statement Amounts in NOK million Q3 Q3 2009 2008 Change Operating revenues 14 088 15 904 -11 % EBITA* 811 1 026 -21 % Amortisation intangibles -53 -53 Restructuring and significant impairment -94 0 EBIT 664 973 Associates - 328 573 Dividends 14 58 Gains and losses/write-downs Share Port
Slide 40: Cash flow as of 30 Sep 2009
Cash flow as of 30 Sep 2009 Amounts in NOK million 30.9.2009 30.9.2008 Industry division: Operating profit 1 191 3 204 Amortisations, depreciations and write-downs 1 933 1 594 Changes in net working capital 821 -1 826 Net replacement expenditure - 830 -1 499 Cash flow from operations 3 115 1 473 Fin
Slide 41: Balance sheet as of 30 Sep 2009
Balance sheet as of 30 Sep 2009 Amounts in NOK million 30.9.2009 31.12.2008 Intangible assets 17 290 17 301 Property, plant and equipment 25 748 26 368 Financial assets 18 769 18 331 Non-Current assets 61 807 62 000 Assets in discontinued operations - 3 148 Inventories 7 580 9 564 Receivables 10 938
Slide 42: Currency translation effects
Currency translation effects Amounts in NOK million per Revenues Q3-09 Q3-09 Orkla Brands 37 177 Orkla Aluminium Solutions 307 1173 Elkem 43 188 Borregaard 25 117 Total 412 1 655 per EBITA Q3-09 Q3-09 Orkla Brands 3 14 Orkla Aluminium Solutions -27 -70 Elkem 5 14 Borregaard 1 4 Total -18 -38 42 Thir
Slide 43: Largest holdings in the Share Portfolio
Largest holdings in the Share Portfolio Market value in NOK million per 30 Sep 2009 Principal holdings Industry Market value Share of Share of portfolio (%) equity (%) Tomra Systems Industrials 621 6% 15,3 % Rieber & Søn Food & Beverage 497 5% 15,6 % Elekta B Health Care Equipment 313 3% 3,0 % Tandb
Slide 44: Sapa is serving a set of different end-use markets
Sapa is serving a set of different end-use markets Breakdown of sales by Business Area & End-Use Market 2008 Pro Forma Incl. Indalex Sapa Group 100% Building Heat Profiles System Transfer 80% 9% 11% 100% 77% 23% 26% 15% 32% 15% 7% 7% Distribution Industrial B&C Transport Automotive Other 21% 12% 34%
Slide 45: Financial items
Financial items 46 Third quarter 2009
Slide 46: Net financial items
Net financial items Amounts in NOK million Full year Q3-2009 Q3-2008 2008 Net interest expenses -193 -235 -977 Currency gain/loss 12 24 -49 Other financial items, net* -9 -9 34 Net financial items -190 -220 -992 47 Third quarter 2009
Slide 47: Debt maturity profile
Debt maturity profile NOK million Average maturity 4.3 years 12 000 10 000 8 000 6 000 4 000 2 000 0 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019- Drawn amounts Unutilised credit facilities 48 Third quarter 2009
Slide 48: Net gearing 0.59 per Q3-09
Net gearing 0.59 per Q3-09 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 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 Q3 09 -0,2 Equity Net interest-bearing liabilities Net gearing 49 Third quarter 2009
Slide 49: Funding Sources
Funding Sources Unutilised credit Bonds and CP 28 % facilities 25 % 9.3 10.9 18.1 Banks 47 % Figures in NOK billion 50 Third quarter 2009
Slide 50: Third quarter 2009
51 Third quarter 2009