Orkla Asa · OSL:ORK
Orkla Asa — Investor Day (November 2023)
105 slides from Orkla Asa's investor day presentation, Nov 29, 2023
Slide 1: Portfolio Company Presentation Material, Collated
Portfolio Company Presentation Material, Collated Orkla Capital Markets Day 29 November 2023
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: Portfolio Company Presentation Material
Portfolio Company Presentation Material Jotun Orkla Foods Europe Orkla Food Ingredients Page 4-22 Page 23-36 Page 37-50 Orkla Confectionery & Snacks Orkla Health Orkla India Page 51-68 Page 69-86 Page 87-101
Slide 4: Jotun Group
Jotun Group Orkla Capital Markets Day Morten Fon, CEO 4 November 29, 2023
Slide 5: It starts with corporate culture…
The Penguin Spirit It starts with corporate culture… …in Jotun we call it “The Penguin Spirit” Loyalty Care Respect Boldness 5
Slide 6: Jotun at a glance
01 Jotun at a glance 6
Slide 7: Global footprint and diversified business portfolio
Global footprint and diversified business portfolio 38% 28% 27% 7% 42 40 10 300 1 097 billion NOK +100 sales income countries factories people million litres of paint sold Jotun 100%, Aug 2023 12 months rolling, % of sales by segment 7
Slide 8: Continuous growth and profitability on 100% basis
Continuous growth and profitability on 100% basis … 2023 will be a record year Sales EBITA NOK million NOK million 80 000 NOK 7.5 billion 8 000 70 000 7 000 60 000 6 000 50 000 5 000 NOK 42 billion 40 000 4 000 30 000 3 000 20 000 2 000 10 000 1 000 0 0 Jotun 100%, actual rates, full year 8
Slide 9: Business update
02 Business update 9
Slide 10: Jotun Protects Property
Jotun development ….is based on our long term strategy – 4 Segments – Organic growth – Differentiated approach Jotun Protects Property 10
Slide 11: Jotun growing faster than world GDP
Jotun growing faster than world GDP No M&As, only organic growth Average growth(%) last 20 years: World GDP 3% Index Jotun volumes 7% 700 Jotun sales in NOK 10% 604 Jotun sales 600 500 400 374 Jotun volume 300 200 172 Global GDP 100 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 20
Slide 12: Well-positioned in emerging markets
Well-positioned in emerging markets 52% of revenues from countries with growth rate greater than World growth Expected GDP growth 2023-2027 (% p.a.) % Production & sales 9,0 8,3 Sales 8,0 7,0 6,6 6,6 6,5 6,5 6,5 5,8 6,0 5,4 5,4 5,2 5,0 4,5 4,5 4,4 4,0 4,0 3,5 3,5 3,4 3,4 3,2 3,0 2,0 1,0 0,0 Jotun 10
Slide 13: High potential for further growth
High potential for further growth Global market shares – per segment Decorative Paints Powder Coatings Protective Coatings Marine Coatings Jotun Group 3% 2% 7% 24% 3% LOCAL GLOBAL Jotun Group 13
Slide 14: One global parent brand with sub-brands
One global parent brand with sub-brands Strong and clear communication across segments Jotun Group 14
Slide 15: The Three Step Model, our holistic approach to sustainability
The Three Step Model, our holistic approach to sustainability 15
Slide 16: Financial status
03 Financial status 16
Slide 17: Revenue and profit has reached a new level
Revenue and profit has reached a new level Operating revenue Revenue growth (%) Operating profit Operating margin (%) 31 204 33 000 60% 7 000 60,0% 5 838 27 858 50% 6 000 50,0% 28 000 5 000 22 809 40% 40,0% 23 000 21 070 3 737 3 489 4 000 19 652 30% 3 138 30,0% 3 000 18 000 22% 2 320 18,7% 20% 20,0%
Slide 18: Lower raw material prices driving GM recovery
Lower raw material prices driving GM recovery Forecast Raw material index Total Gross Margin (12m) N3M 60% +2% 150 140 55% 130 50% 120 45% 110 Average RM 100 40% 90 35% 80 30% 70 Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 Jotun 100%,
Slide 19: Strong Return on Capital Employed development
Strong Return on Capital Employed development 35% 33% 30% 25% 20% Average: 20% 15% 10% 5% 0% 2007 2009 2011 2013 2015 2017 2019 2021 2023 Aug 12mr Jotun Group, actual rates 19
Slide 20: Strong financial position
Strong financial position Low net debt Strong equity ratio Strong cash position 70% Net interest bearing debt (NOK million) 57% 58% 54% 54% 60% Net debt/EBITDA 51% 4 563 50% 5 000 2 581 Policy requirement (50%) 2 900 1,5 4 500 1,3 40% 4 000 3 388 3 312 2 400 1,1 1 807 2 956 3 500 0,8 1 690 0,9 1 900
Slide 21: Summary
04 • Proven and successful business model • Sales and profit reached a new level • Well positioned for continued organic growth Summary • Strong financial position 21
Slide 22: Jotun Protects Property
Jotun Protects Property
Slide 23: Orkla Foods Europe: Realizing the margin potential
Orkla Capital Markets Day 2023 Orkla Foods Europe Realizing the margin potential 23
Slide 24: Introduction to Orkla Foods Europe
Introduction to Orkla Foods Europe Key figures (R12M Q3-2023) Geographical presence1 Channel exposure (R12M Q3-2023) NOK 19.7bn 7% Other & export Operating 2% revenue E-commerce NOK 19.7bn 21% Out of home Employees ~ 5,400 70% Grocery EBIT (adj.) NOK revenue >1bn NOK revenues 1000 > X > 250mn NOK 2.
Slide 25: Orkla Foods Europe has been generating significant shareholder value over time
Orkla Foods Europe has been generating significant shareholder value over time EBIT and cash flow generation Cash flow from operations EBIT (adj.) Total generation NOK billion 2.2 2.2 2.0 2.1 NOK 20bn+ Cash flow generated 1.6 since 2011 1.3 1.1 NOK 23bn+ EBIT generated 2011 2013 2015 2017 2019 2021
Slide 26: Majority of volume decline driven by reduced overall consumption in retail
Majority of volume decline driven by reduced overall consumption in retail Orkla Foods Europe Drivers of Orkla Foods Europe Actions to increase volume volume/mix development volume/mix Volume decline Increase advertising and campaign (R12M, Q3-2023) Other 11% spend and activities Loss to private 24%
Slide 27: Orkla Foods Europe's competitive advantage
Orkla Foods Europe’s competitive advantage Key competitive advantages 1 2 3 Brands Categories Differentiated business model Business model supporting regional Strong local brands with long heritage Market leading supplier across many scale and consumer-first mentality, with and pricing ability/consu
Slide 28: Strong local brands with consumer preference
Brands Categories Bus. model 1. Strong local brands with consumer preference Norway Sweden Finland Denmark Czech Republic #1 Ambient ready meals #1 Frozen ready meals #1 Ketchup #1 Jam & marmalade #1 Dehydrated ready meals #1 Frozen pizza #1 Ketchup #1 Preserved vegetables #1 Ketchup #1 Spices #1 Ke
Slide 29: Market leading supplier across many resilient and attractive categories
Brands Categories Bus. model 2. Market leading supplier across many resilient and attractive categories Key categories displays strong underlying growth over Largest and strongest position in the key the past years categories where we decide to play Market growth in key categories1 (NOK billion, 201
Slide 30: Differentiated business model
Brands Categories Bus. model 3. Differentiated business model Business model principles and resulting impact Closer to consumers compared to global players Strong local presence driving superior local consumer and customer understanding with flexibility to adapt to local needs and preferences Region
Slide 31: Targets for EBIT growth, cash conversion and revenue growth towards 2026
Targets for EBIT growth, cash conversion and revenue growth towards 2026 EBIT (adj.) margin 13-14% in 2026 Financial Cash conversion > 100% p.a. targets from Q3-20231 to ROCE >15%; +3%-p 2026 Yearly organic revenue growth of 2-3% - positive volume/mix growth Target to 2030 Reduce GHG emission2 Scope
Slide 32: Focus on margin expansion through defined initiatives across the value chain
Margin exp. Cash conv. Rev. growth Focus on margin expansion through defined initiatives across the value chain Simplify, harmonize and optimize our core business Procurement program Operational efficiency Organizational development Net revenue management Established and initiated Accelerated supply
Slide 33: Improve cash conversion through capital efficiency programs
Margin exp. Cash conv. Rev. growth Improve cash conversion through capital efficiency programs Steady cash generation through improved capital efficiency Net working capital CapEx allocation Initiated net working capital program, targeted at improving Increased focus on return from CapEx and priorit
Slide 34: Growth through focus on attractive categories and fast-growing channels
Margin exp. Cash conv. Rev. growth Growth through focus on attractive categories and fast-growing channels Focus on strong core and fast-growing channels Focus on selected categories Strong growth in Out-of-Home Perfect sales execution and brands Focus on five selected categories; ready Strengthen a
Slide 35: Key take-aways
Key take-aways Margin expansion through cost Strong cash conversion through Building our core business reductions and net revenue moderate CapEx and reduced through strengthened management current capital commercial efforts 35
Slide 36: Note: Orkla analysis based on data from data providers
Note: Orkla analysis based on data from renounced data providers across markets, categories and channels, including Nielsen and Euromonitor where applicable. Proprietary primary sources have also been included for markets without market coverage from regular data providers.
Slide 37: Orkla Food Ingredients
November 2023 Orkla Capital Markets Day Orkla Food Ingredients Building a leading European and US food ingredients company
Slide 38: Large and resilient addressable market of NOK 120bn
Large and resilient addressable market of NOK 120bn, with strong growth potential and favourable drivers Orkla Food Ingredients’ current market …with long-term attractive growth drivers Commodities • Resilient ingredient markets, with high purchase frequency Increasing level of specialization Formul
Slide 39: Orkla Food Ingredients delivers tasty and sustainable solutions enabling customers to win
Orkla Food Ingredients delivers tasty and sustainable solutions enabling customers to win Example category expertise (not exhaustive) Sales channel split 1% Bakery ingredients Other European leading 10% Export supplier of bakery & 66% OF SALES 2022 pastry ingredients Cake mixes Bread mix Improvers F
Slide 40: Decades of growth have transformed Orkla Food Ingredients into a European leader
Decades of growth have transformed Orkla Food Ingredients from a small local player to a European leader Sales, NOK billion 2012-2022 development Organic CAGR: +3% 18.1 2.7x Topline increased 14.7 3.9x 12.0 EBIT (adj.) increased 10.3 10.7 9.6 8.7 8.2 7.6 1.7%-p 6.5 5.4 5.4 6.0 EBIT margin increase 4
Slide 41: Competitive edge captured in our multi-local-model
Orkla Food Ingredients competitive edge is captured in our multi-local-model Organic and structural growth are Further key parts of the culture with a strong expansion track-record of extracting synergies Utilising common capabilities, driving scale in operations and Leverage scale cross-border sale
Slide 42: Orkla Food Ingredients is built on strong national positions
Orkla Food Ingredients is built on strong national positions Bakery Sweet Plant- ingredients ingredients based DK NO SE LT #1 S&D bakery CZ #2 S&D #1 ice-cream #1 S&D NL bakery #1 S&D bakery #1 ice- #1 plant-based dairy PL bakery cream PT #2 margarine & spreads #1 ice- #1 ice- cream cream1 LV EE #1
Slide 43: Solid foundation built; common capabilities to accelerate scale benefits
Solid foundation built; common capabilities created last three years to accelerate scale benefits Key synergy areas HR Operations Scale in Leverage the Managing IT excellence procurement footprint CapEx ESG Group operations team Combined procurement Share of own CapEx master plan, Education reinforc
Slide 44: Structural growth is a key part of the expansion strategy
Structural growth is a key part of the expansion strategy, with 50+ businesses acquired since 1999 • M&A focus on broadening geographical presence in attractive markets and strengthening category ’99-‘11 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 positions • Acquisitions have driven topl
Slide 45: Priority for structural growth is to expand within core product categories
Priority for structural growth is to expand within core product categories Bakery Ingredients Target companies in Europe with complementary categories, in Priority is to expand within core particular within the confectionary / pastry segments. Additionally, Bakery is also aiming to strengthen positi
Slide 46: Driving scale towards 2026
Driving scale towards 2026 Significant EBIT growth and increased returns Revenues EBIT adj. ROCE ESG 5% 12% +2.0%-p -66% GHGe annual annual increase in scope 1&2 growth growth ROCE Grow operating profits ahead of revenues Notes Targets include minor bolt-on acquisitions, which represents ~1-2% of re
Slide 47: Increased focus on scalability delivering an uplift in EBIT margin
Increased focus on scalability going forward delivering an uplift in EBIT margin Scale priorities Grow Operations: cost reduction projects initiated and identified across conversion, distribution and SG&A. Systemize improvements within OFI operations system operating profits Procurement: step-change
Slide 48: Building a leading European and US food ingredients company
Building a leading European and US food ingredients company in a partnership between Orkla and Rhône 48
Slide 49: Orkla has entered into a partnership with Rhône
Orkla has entered into a partnership with Rhône to enable Orkla Food Ingredients to continue its growth journey Orkla and Rhône expect that the partnership will enable the Orkla Food Ingredients to continue its growth journey The partnership with Rhône aims to build upon and strengthen OFI’s existin
Slide 50: More information
More information Videos OFI video 1 - YouTube https://www.youtube.com/watch?v=C6_Mh5QevJ4 OFI video 2 - YouTube https://www.youtube.com/watch?v=wWUwTQLVc-c 50
Slide 51: Orkla Confectionery & Snacks: Maximizing core portfolio potential
Orkla Capital Markets Day 2023 Orkla Confectionery & Snacks Maximizing core portfolio potential
Slide 52: The #1 snacking choice for the Nordic/Baltic
Our aspiration The #1 snacking choice for the Nordic/Baltic consumers Winning together with local, sustainable brands and passionate people 52
Slide 53: The leading Nordic and Baltic snacking player
The leading Nordic and Baltic snacking Categories – Operating Revenue (2022) player 3.6 (47%) 2.7 (36%) Operating revenue Employees 7.6 ~3,000 1.0 (13%) Countries / Biscuits Confectionery Snacks Factories Business Units 13 7 53 Operating revenue in NOK billion, all figures from 2022; Other ~3% inclu
Slide 54: Established in 2013, but our history dates back to 1806
Orkla Confectionery & Snacks was established in 2013, but our history dates back to 1806 1806 1883 1910 1920 1956 1965 1970 1993 1870 1888 1912 1952 1957 1967 1992 54
Slide 55: Iconic hero brands within snacking categories across Nordics and Baltics
The portfolio holds iconic hero brands within the snacking categories across the Nordics and Baltics Snacks #2 #1 #1 #1 #3 #1 Confectionery #2 #7 #4 >#10 #1 #1 #1 Biscuits #1 #1 #3 #1 #1 55
Slide 56: The confectionery and snacks categories are attractive for Orkla and the retailers
The confectionery and snacks categories are attractive for Orkla and the retailers Our categories are large.. .. and growing.. ..with good margins.. ..and attractive attributes Confectionery & Snacks • Impulse CAGR above Often bought on impulse, i.e., (C&S) is ~15% of For both supplier and trade Eur
Slide 57: Unique and structural competitive advantages
Orkla Confectionery & Snacks offers unique and structural competitive advantages Strong #1 and #2 brands Local size Employer attractiveness Leading heritage brands with deep Unmatched local strength with unique Strong talent base and ability to attract roots in their relative market; consumer insigh
Slide 58: Strong financial results over many years
Strong financial results over many years – inflationary environment challenging last years EBIT adj. margin 13.9% 14.6% 15.1% 16.3% 16.1% 16.6% 16.8% 15.2% 13.1% 7,177 7,328 7,571 6,216 6,429 6,234 6,605 5,777 Operating 4,972 Revenue 2014 2015 2016 2017 2018 2019 2020 2021 2022 • Continued topline g
Slide 59: Solid cash generation over time, with significant growth investments done
Solid cash generation over time, with significant growth investments done – reducing future investment needs EBIT and cash flow generation Examples of recent replacement CapEx New smaller chocolate factory Operational cash flow EBIT (adj.) outside of Riga Opened 2021 1,203 1,094 1,113 1,045 1,006 Ne
Slide 60: Macro turmoil has increased ramp-up time and cost of new biscuit factory
The external macro turmoil in recent years has increased ramp-up time and cost of our new biscuit factory Ramp-up challenges Factory status November 2023 Financial impact Weekly production volume 2023 • Instability in global supply chains delayed project • Significant uplift in production volumes la
Slide 61: Full Potential Plan focusing on 3 key strategic priorities
We have built a strong Full Potential Plan focusing on 3 key strategic priorities to release our potential Unlock the growth potential in our hero brands by much sharper portfolio prioritization. Increase and 1 Win with heroes focus investments in 40% of brand positions to drive >80% of the growth.
Slide 62: The growth journey has already started!
The growth journey has already started! 1 Win with heroes Example initiatives: Grow selected hero brands Smash! with strong Stratos has seen significant Acquisition growth engine growth journey and uplift in growth after Bubs has products loved adoption – with strong increased prioritization and by
Slide 63: New biscuit factory combines cost and commercial synergies
Our new biscuit factory exemplifies how we can combine cost and commercial synergies 2 Fuel our hero positions Example initiative: Orkla Biscuit Production Capacity and technology to drive innovation at scale – enabling commercial synergies. Significant cost synergies with joint factory for all bisc
Slide 64: Central initiatives and investments in critical capabilities
We will drive central initiatives and investments in critical capabilities across our geographies 3 Step-change in capabilities/enablers Example initiative: Cross-country capability lift Sales excellence Increased investments in scalable central sales capabilities – such as Perfect Sales and Net Rev
Slide 65: Our strategy comes with significant improvements to ensure increased value creation
Our strategy comes with significant improvements to ensure increased value creation From To Razor-sharp Strict portfolio prioritization system to channel resources to Innovation focused broad portfolios portfolio core positions. with limited central governance priorities >80% of growth expected from
Slide 66: Margin expansion through volume growth is the foundation towards 2026
Margin expansion through volume growth is the foundation for our value creation towards 2026 EBIT (adj.) margin Annual volume-/mix >15% within 2026 > 2% p.a. growth Return on Capital Cash 13% Employed within 2026 ~100% conversion p.a. 66
Slide 67: Investment highlights
Investment highlights Large market in current geographies and categories – consistently outgrowing other 1 food categories with attractive margins for both supplier and trade. Leading branded snacking company uniquely positioned across indulgence categories snacks, biscuits and 2 confectionery in No
Slide 68: Orkla Confectionery & Snacks
A ‘Orkla Confectionery & Snacks
Slide 69: Orkla Health: Scalable platform in Consumer Health
‘ Orkla Health Scalable platform in Consumer Health Orkla Capital Markets Day 2023 69
Slide 70: Orkla Health is set up as a new company focusing on consumer health
Orkla Health is set up as a new company focusing on consumer health 2005 2022 March 2023 Today Building ‘Orkla Care’ through a structural journey Carve-out into three Focused Portfolio Companies company Operating revenues, NOK billion The previous Business Area Orkla Health is 10 ‘Orkla Care’ is sep
Slide 71: Orkla Health at a glance
Orkla Health at a glance We are a leading Consumer Health Operating in relevant Consumer Strong Go-to-Market organisation in platform Health categories selected markets ~6bn Food supplements ~65% of revenues Operating revenues, NOK ~80 Oral care ~15% of revenues Brands ~1,800 Wound care Employees ~1
Slide 72: Fast-growing global health market
Global • Large market at NOK ~5,700bn market • Fast growing at ~5% p.a. historically (2017-22) and expected to grow at 6-7% p.a. 2022-27 Fast-growing European market • Large market at NOK ~1,000bn • Fast growing at ~4% p.a. global health historically (2017-22) and expected to grow at ~5% p.a. 2022-2
Slide 73: Orkla Health has a portfolio of preferred brands
Orkla Health has a portfolio of preferred brands BRANDS WITH GLOBAL POTENTIAL Jordan Möller’s Oslo Skin Lab Cederroth Scandinavian brand that Leading supplier of Cod Leading direct-to-consumer For 75 years, offer wide has been caring for Liver Oil with heritage company with health and First Aid asso
Slide 74: Food supplements, Omega-3, Oral Care, Wound Care positions
Food supplements Omega-3 Oral Care Wound Care #1 Norway #1 Norway #1 Norway #1 Norway Denmark Denmark Denmark Finland Finland Finland Sweden Sweden Greece Spain Romania Hungary Turkey Serbia The Baltics 74
Slide 75: From leading in Nordic grocery to…
From leading in Nordic grocery to… …increased exposure towards online channels …increased exposure outside Nordics Operating revenues, NOK billion Grocery Operating revenues, NOK billion Nordic region Pharmacy Rest of World Specialized trade Distribution and industry +24 %-p D2C / Online +7 %-p vs 2
Slide 76: Entered 1-2 new countries per year
Example Oslo Skin Lab Entered 1-2 new countries per year Revenues Oslo Skin Lab, NOK million 366 282 289 239 127 43 17 2017 2018 2019 2020 2021 2022 R12M Q3-23 76
Slide 77: Reached leadership positions in Kids toothbrush
Example Jordan Asia Reached leadership positions in Kids toothbrush Revenues Jordan Asia, NOK million +10% in the Kids #1 159 toothbrush segment 99 in the Kids #2 toothbrush segment in the Kids #2 toothbrush segment (online) 2017 2022 77
Slide 78: History of structural growth with the ambition to further accelerate organic growth
History of structural growth with the ambition to further accelerate organic growth Key financials Operating revenues, organic and structural growth, NOK billion EBIT (adj.) margin 6.1 +15% 5.4 4.2 3.5 3.0 3.1 2018 2019 2020 2021 2022 R12M Q3-23 16% 16% 16% 17% 14% 14% 78
Slide 79: Our ambition is to become a leading consumer health player
Our ambition is to become a leading consumer health player – serving consumers across relevant channels and geographies 79
Slide 80: Strategic priorities 2024-2026
Strategic priorities 2024-2026 Strong cash generating Decomplexify and Fuel our growth foundation leverage scale ambitions Rejuvenate our strong Decomplexify and Two growth engines positions in the Nordic leverage synergies grocery through within the company • Expand multi-channel sharper prioritisa
Slide 81: Rejuvenate our strong positions in the Nordic grocery
Rejuvenate our strong Immediate priorities positions in Establish a more focused portfolio to reduce cost 1 the Nordic and complexity grocery 2 Increase and prioritise A&P investments into fewer through brands where it matters the most sharper Continue to invest in consumer-driven innovation, 3 prio
Slide 82: Decomplexify and leverage synergies within the company
Decomplexify and leverage synergies Leveraging Go- within the Leveraging scale back-end Leveraging capabilities to-Market company to strengths improve efficiency Example of priorities: Insourcing of Leverage digital Deliver Orkla Health’s production for NutraQ capabilities across full portfolio thro
Slide 83: Expand multi-channel positions in D2C and pharmacy
Expand multi- channel positions in D2C and pharmacy and build omni- channel Multi-channel Omni-channel platform Expand leadership across Develop data-driven omni- channels by strengthening channel play for prioritised pharmacy position and continue brands: to grow D2C 83
Slide 84: Build global brands through a broader international route to market
Build global Prioritised brands Prioritised geographies brands through a Europe, Asia broader international route to Europe, Asia market Western Europe Europe 84
Slide 85: Our ambition towards 2026
Our ambition towards 2026 7-9% ~14% -100% -83% High single digit revenue Maintain EBIT (adj.) margin at Reduction in GHG growth* towards 2026, majority 14% in 2026, with emissions** driven by volume growth longer term ambition of margins Scope scope 1&2 by 2025 2030 above 16% * Excluding FX and stru
Slide 86: The journey has just started
The journey has just started Solid foundation – Fast-growing global health market – Clear strategic direction 86
Slide 87: Orkla India: Value creating growth engine
Orkla Value creating growth engine India November 2023 Orkla Capital Markets Day
Slide 88: Attractively positioned to grow faster
Market Attractively India is the world’s fastest growing large economy positioned to grow faster Track record Orkla India has delivered sustained profitable growth and built attractive market positions Value creation Execution excellence to drive further value creation 88
Slide 89: Rapidly growing large economy with a long growth runway
Rapidly growing large economy with a long growth runway Secular growth driving consumption… …and rising affluence… … aiding packaged foods rapid growth Robust growth Young population with limited 1 cooking knowledge 6.7% Expected GDP CAGR FY23-27 2019 Elite and 2030E middle-class Indians1 33% 49% Lo
Slide 90: Competitive advantage based on superior local market positions
Competitive advantage based on superior local market positions Strongly rooted local brands Orkla India’s home markets Resilient leadership positions Diverse portfolios across meal occasions 100-year heritage Credibility and understanding Repository of > 3,000 of local food recipes Cost-efficient va
Slide 91: Dynamic heritage brands with stand-out market leading positions
Dynamic heritage brands with stand-out market leading positions Blended spices Pure spices Breakfast mixes Sweet mixes Two iconic In attractive local brands markets Karnataka 2.9x 2.6x 7.9x 7.5x 64mn Inhabitants #1 2nd position #1 2nd position #1 2nd position #1 2nd position Kerala 3.9x 4.0x No mate
Slide 92: Demonstrated consistent financial performance year on year
Demonstrated consistent financial performance year on year Revenue (NOKmn)1 EBIT (NOKmn)1 Cash conversion2 Current capital3 2022 2022 ~ 2,500 ~ 300 >100% Negative long-term average (2013-2022) (2013-2022) 2.8x 7.6x for MTR for MTR MTR organic growth MTR organic growth CAGR: 12% CAGR: 25% vs. 2013 vs
Slide 93: Financial targets imply strong future value creation
Financial targets imply strong future value creation Revenue (NOKmn) EBIT (NOKmn) Cash conversion1 Current capital2 2026 2026 12% 20% Consistent 4-5%-p CAGR CAGR >100% reduction (2023-2026) vs. 2023 vs. 2023 Highly disciplined and focused approach to M&A Note: 1) Cash conversion is defined as operat
Slide 94: Distinct levers to drive future topline growth
Distinct levers to drive future topline growth Grow the core International business Scale up pure spices by doubling distribution Develop consumer first innovations in exports Extend consumer offering in blended spices and Accelerate growth of Arabic masala range in expand breakfast and sweets portf
Slide 95: Eastern journey mirroring MTR's value creation trajectory
Eastern journey mirroring MTR’s value creation trajectory Consistently improving financial metrics Where are we heading? R12M1 vs 2021 Synergise distribution between MTR and Eastern networks Revenue2 EBIT-margin Current capital Expand food portfolio through breakfast and sweets platform +34% ~2%-p ~
Slide 96: Margin expansion to be driven by front and back-end efficiencies
Margin expansion to be driven by front and back-end efficiencies Sales efficiency Supply chain efficiency Reduce manufacturing footprint and consolidate Increase salience of blended spices procurement Digitalisation within manufacturing to enhance Optimise trade promotions and terms productivity and
Slide 97: Continuing to grow through prudent use of capital
Continuing to grow through prudent use of capital Fixed capital efficiency Current capital efficiency ₹ Rationalising manufacturing footprint Harmonisation of supplier terms Outsourcing of lower-value-added categories Supplier financing arrangements to reduce inventory days 97
Slide 98: Embedded sustainability in business and company culture
Embedded sustainability in business and company culture ➢ 100% renewable electricity by 2030 ➢ 100% recyclable packaging by 2030 ➢ Water positive by 2030 ➢ Net zero by 2045 ~10mn meals to nourish school children by 2030 98
Slide 99: Long-term value creating growth driver
Market Long-term value India is the world’s fastest growing large economy creating growth driver Track record Orkla India has delivered sustained profitable growth and built attractive market positions Value creation Execution excellence to drive further value creation 99
Slide 100: Strong leadership supported by quality talent
Strong leadership supported by quality talent Suniana Calapa Sunay Bhasin Director – Finance & IT CEO – MTR Joined: 2023 Joined: 2016 Ex – Metro & JP Morgan Ex – Britannia & Yum Ankur Bhaumik Murali Subramaniam Director – Operations CEO – Eastern Joined: 2009 Joined: 2023 Ex – Reliance retail & Dabu
Slide 101: Orkla
A ‘Orkla
Slide 102: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Contribution ratio Contribution ratio is calculated by dividing the contribution margin by operating revenues. Operating revenues minus variable operating expenses constitute the contribution margin. Variable operating expenses are reported on the financial sta
Slide 103: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Change in underlying EBIT (adj.) Change in underlying EBIT (adj.) shows like-for-like EBIT (adj.) growth for the group’s business portfolio and is defined as the group’s reported change in EBIT (adj.) adjusted for effects of the purchase and sale of companies a
Slide 104: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Return on Capital Employed (ROCE) cont. Average capital employed is at all times an average of the closing balance for the five last reported quarters. ROCE shows the return that the Orkla group receives on the capital invested in the various consolidated portf
Slide 105: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Structure (acquisitions and disposals) Structural growth includes adjustments for the acquisition of the businesses Norstamp, Bubs Godis, Da Grasso, Khell-Food, Denali Ingredients, Lofoten Marine Oils, Healthspan and Hadecoup, and the winding-up of Hamé Foods i