Slide 1: Fourth quarter results 2012
Fourth quarter results 2012 Oslo, 7 February 2013 ÅGE KORSVOLD, PRESIDENT & CEO
Slide 2: Agenda
Agenda Åge Korsvold, President & CEO • Strategy and highlights Q4-2012 Terje Andersen, CFO • Financial performance Q4-2012 Jan Ove Rivenes, CEO Orkla Home & Personal • Branded Consumer Goods 2
Slide 3: Orkla's transformation to a Branded Consumer Goods company
Orkla’s transformation to a Branded Consumer Goods company 2011 2012 2013 New strategic direction Organise and act as a Major actions executed to to grow within Branded Consumer implement strategy Branded Consumer Goods Goods company 3
Slide 4: Corporate structure
Corporate New structure corporate structure Associated Business areas company Non-core Orkla Sapa Orkla Home & Orkla Orkla Food Jotun Orkla Foods Confectionery (Part of future JV) Personal International Ingredients (42.5%) The world’s leading & Snacks aluminum solutions provider Heat Transfer Rolled
Slide 5: Orkla Growth Strategy
Orkla Growth Strategy Targets: Organic growth 3-5 % and margin improvement Local Brands Customers Operations People & Innovations & Marketplace & Efficiency & Leadership The strongest local The preferred The most efficient The best employees brands & the best supplier to drive consumer goods & leade
Slide 6: 2013 priorities: Execution
2013 priorities: Execution • Successful integration of Rieber • Complete transactions and execute the JV with Hydro • Merge the Swedish food companies Procordia and Abba Seafood • Strengthen support functions to facilitate growth and synergies across business areas 6
Slide 7: Allocation of capital and dividend policy
Allocation of capital and dividend policy • Grow Branded Consumer Goods • Remain an Investment Grade company • Long term dividend capacity depends on future profit and size of the Branded Consumer Goods area • In the transformation period the Board intends to keep dividend at NOK 2.50 supported by p
Slide 8: A dividend of NOK 2.50 per share is proposed by the Board of Directors
A dividend of NOK 2.50 per share is proposed by the Board of Directors Dividend NOK per share Special dividend Ordinary dividend 5.00 5.00 2.50 2.50 2.25 2.25 2.25 2.00 1.00 1.50 2.50 0.60 0.65 0.68 0.39 0.41 0.50 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
Slide 9: Profit growth in the quarter
Profit growth in the quarter -18 1,103 121 67 -25 47 3 35 873 EBITA Q4 -11 Foods Nordic Brands Nordic Brands Food Heat Transfer Financial Other EBITA Q4 - 12 International Ingredients Investments 9
Slide 10: Financial performance
FINANCIAL PERFORMANCE TERJE ANDERSEN, CFO 10
Slide 11: Structural accounting changes
Structural accounting changes Result as of 30 September and net gain from IPO Borregaard IPO presented as discontinued operations. Remaining 19% presented as financial holding. Net result after tax presented as discontinued Sapa operations. After closing, 50% holding presented (Part of future JV) as
Slide 12: Group income statement
Group income statement Amounts in NOK million Q4 Q4 2011 2012 2011* 2011 2012 8 124 8 457 Operating revenues 61 009 30 158 30 001 873 1 103 EBITA 4 041 2 872 3 295 -11 -5 Amortisation intangibles -55 -17 -16 -342 -244 Other income and expenses -1041 -375 -433 520 854 EBIT 2 945 2 480 2 846 59 47 Pro
Slide 13: Net debt reduced by NOK 6 billion in 2012
Net debt reduced by NOK 6 billion in 2012 Amounts in NOK billion 10.6 3.3 -1.5 1.0 5.0 4.5 -2.0 3.5 -3.2 Net debt CF from Cash flow Company Dividend Expansion Taxes paid Discontinued Net debt 31 Dec 2011 operations from Orkla sales and share and financial operations 31 Dec 2012 Financial buy-backs i
Slide 14: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest-bearing liabilities (NOKm) Equity ratio (%) 27 424 53.6 53.9 51.7 51.8 47.7 19 848 19 652 10 645 4 960 2008 2009 2010 2011 2012 2008 2009 2010 2011 2012 14
Slide 15: Hydro Power
Hydro Power • Production was 696 GWh in Q4 compared with 766 GWh last year • Q1 will be affected by a planned maintenance stop (60 GWh) EBITA for Hydro Power (NOK million) Spot prices (NordPool) (NOK/MWh) 93 93 87 85 518 409 45 45 292 33 279 266 275 215 154 -13 15 15 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2011 201
Slide 16: Profit improvement for Heat Transfer
Profit improvement for Heat Transfer Heat Transfer Q4-11 Q4-12 2011 2012 Operating revenues 890 943 3 908 3 990 • Improvement programme in Sweden EBITA 6 73 179 309 benefits EBITA development, despite declining European markets EBITA margin performance: • Cost optimisation and 9% productivity improv
Slide 17: Sapa (part of future JV) - Discontinued operation
Sapa (part of future JV) - Discontinued operation • Further decline in European markets continues to impact Profiles Europe and Building System Sapa JV Q4-11 Q4-12 2011 2012 • Volumes down 11% compared Operating revenues 6 169 5 670 27 057 25 372 with Q4-11 EBITA 107 - 72 631 233 Other income and ex
Slide 18: Jotun (42.5%) Strong financial performance in 2012
Jotun (42.5%) Strong financial performance in 2012 • Double digit EBITA growth and improved cash flow Amounts in NOK million Jotun as of 31 as of 31 Change Aug 2011 Aug 2012 • Reduced revenues from Marine Revenues 7 039 7 686 9% segment due to cyclical EBIT 754 886 18 % downturn in the industry • Ne
Slide 19: Branded Consumer Goods
BRANDED CONSUMER GOODS JAN OVE RIVENES, CEO ORKLA HOME & PERSONAL 19
Slide 20: Branded Consumer Goods Profit growth in the quarter
Branded Consumer Goods Profit growth in the quarter EBITA Rolling 12 months Amounts in NOK million 3,000 2,900 2,800 2,700 2,600 2,500 2,400 2,300 2,200 2,100 2,000 100 0 Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- 0
Slide 21: Branded Consumer Goods Solid cash flow over time
Branded Consumer Goods Solid cash flow over time 3,269 2,964 2,785 2,351 2,154 2008 2009 2010 2011 2012 Cash conversion* 91% 117% 100% 77% 99% *Cash flow from operations before tax / EBITA 21
Slide 22: Orkla Foods Nordic
Orkla Foods Nordic Revenues 2012: Finland 11% Denmark 6% Sweden 38% Other 9% 37% Norway 22
Slide 23: Orkla Foods Nordic Sales growth in 2012
Orkla Foods Nordic Sales growth in 2012 • Organic sales growth of 1% Organic revenue growth (%) in 2012 • 3% when adjusted for 4% loss of contract production after Q4 2011 1% • Sales growth in the grocery channel in Q4 -1% -1% • Strong innovation programme in Stabburet -4% and Abba Seafood 2008 2009
Slide 24: Orkla Foods Nordic Broad based profit improvement
Orkla Foods Nordic Broad based profit improvement • 10% EBITA growth in Q4 Key figures (NOK million) • Improved EBITA-margin in Q4 Q4-11 Q4-12 2011 2012 • Underlying 2012 EBITA- Operating revenues 2 650 2 378 9 496 8 569 margin increase of 50 basis EBITA 357 392 1 082 1 161 EBITA margin 13.5 % 16.5
Slide 25: Orkla Brands Nordic
Orkla Brands Nordic Snacks & confectionery Revenues: Finland Sweden 8% 17% Denmark 9% Other 7% Home & Personal 59% Norway 25
Slide 26: Orkla Brands Nordic Stable sales development
Orkla Brands Nordic Stable sales development • Underlying revenue improvement of 2% in Q4 Organic revenue growth (%) • 1% in 2012 when adjusted 6% for loss of contract production after Q3 2011 4% • Strong sales and profit growth in home and personal care and 1% 1% confectionary 0% • Still weak perfo
Slide 27: Profit growth for Orkla Brands Nordic
Profit growth for Orkla Brands Nordic • EBITA growth of 13% to Key figures (NOK million) NOK 408 million in Q4 Q4-11 Q4-12 2011 2012 Operating revenues 2 133 2 388 7 928 8 213 • Jordan developing according EBITA 361 408 1 464 1 435 to plan EBITA margin 16.9 % 17.1 % 18.5 % 17.5 % • Stable underlying
Slide 28: Orkla Brands International
Orkla Brands International Profit decline in Russia Organic revenue growth Russia (%) 10% • Market shift from local distributors to national retailers 7% • Restructuring of production 1% 1% • Concentration of 0% product portfolio 2008 2009 2010 2011 2012 Solid sales growth in India Organic revenue g
Slide 29: Orkla Food Ingredients
Orkla Food Ingredients Organic revenue growth (%) 9% • Underlying sales growth both 6% in Q4 and for the full year 4% 1% • Fourth quarter EBITA amounted to NOK 74 million -2% (NOK 71 million) 2008 2009 2010 2011 2012 • Increased raw material cost compensated for by raising prices Key figures (NOK mi
Slide 30: Examples of innovations Q1 2013
Examples of innovations Q1 2013 30
Slide 31: Q&A
Q&A • Åge Korsvold, President & CEO • Terje Andersen, CFO • Jan Ove Rivenes, CEO Orkla Home & Personal • Atle Vidar Johansen, CEO Orkla Foods
Slide 32: Appendices
APPENDICES af Developing people — creating value (93 O R K L A
Slide 33: Cash flow as of 31 December
Cash flow as of 31 December Amounts in NOK million 2011 2012 Cash flow Industial Activities: Operating profit 2 558 2 566 Profit/ loss from discontinued operations 465 Amortisation, depreciations and impairment charges 2 088 943 Changes in net working capital, etc. -1 094 526 Net replacement expendi
Slide 34: Balance sheet as of 31 December
Balance sheet as of 31 December Amounts in NOK million 31.12.2011 31.12.2012 Intangible assets 12 801 10 069 Property, plant and equipment 18 058 9 929 Financial assets 5 682 3 630 Non-Current assets 36 541 23 628 Assets in discontinued operations 391 13 740 Inventories 8 047 4 243 Receivables 10 46
Slide 35: Net financial items
Net financial items Amounts in NOK million Q4-11 Q4-12 Full year 2012 Net interest expenses -76 -81 -399 Currency gain/loss -5 -5 -18 Other financial items, net -7 -15 - 38 Net financial items -88 -101 -455 35
Slide 36: Debt maturity profile, Orkla Group
Debt maturity profile, Orkla Group NOK million 9 000 8 000 7 000 Average maturity 6 000 3.1 years 5 000 4 000 3 000 2 000 1 000 0 2013 2014 2015 2016 2017 2018 2019 2020 2021 Drawn amounts Unutilised credit facilities Gross Interest-bearing liabilities and Unutilised credit facilities, ref. Note 29
Slide 37: Net gearing 0.16 as of Q4-12
Net gearing 0.16 as of Q4-12 60 1.40 54 1.20 48 1.00 42 36 0.80 30 0.60 24 18 0.40 12 0.20 6 - 0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 -6 -0.20 Equity Net interest-bearing liabilities Net gearing 37
Slide 38: Funding sources
Funding sources Banks 5.5 Unutilised credit facilities 10.5 14.1 13.1 Bonds and CP 7.5 9.3 7.8 Cash, Cash equivalents and Figures in NOK billion Interest Bearing Assets 38