Slide 1: Third quarter results 2013
Third quarter results 2013 Åge Korsvold, President & CEO
Slide 2: Agenda
Agenda Strategy and highlights – Åge Korsvold, President & CEO Financial performance – Terje Andersen, CFO Branded Consumer Goods – Christer Åberg, CEO Orkla Confectionery & Snacks
Slide 3: Highlights Q3 2013
Highlights Q3 2013 • EBITA for Branded Consumer Goods was 11% higher than for Q3 2012 – Acquired companies contributed operating revenues of approximately NOK 1.2 billion and EBITA of approximately NOK 120 million in the quarter • Positive development and profit growth for Orkla Home & Personal and
Slide 4: Rolling 12 months EBITA for Branded Consumer Goods
Rolling 12 months EBITA for Branded Consumer Goods Amounts in NOK million 3,000 2,900 2,800 2,700 Strategic priorities 2,600 (2013-2016) 2,500 2,400 • Reducing complexity 2,300 • Extracting cost 2,200 synergies and 2,100 improving cash flow 2,000 • Driving organic growth 100 • Improving skill base 0
Slide 5: We know how to grow and have the plans to execute
We know how to grow and have the plans to execute How do we reduce costs and How do we grow? improve cash flows? • Realize restructuring synergies • Innovate with superior local insight • Integrate companies and add-ons • Drive growth through point-of- • Continuous improvements purchase execution •
Slide 6: Financial targets announced at Orkla's Investor Day
Financial targets announced at Orkla’s Investor Day EBIT EBIT Organic Organic (adjusted)1 (adjusted)1 revenue revenue margin margin growth growth R12M pr Q3 2015/2016 YTD pr Q3 From 2016 Orkla Foods 13.6% > 15.0% -3.3% 2-3% Orkla Confectionery & 14.8% > 16.5% -3.3% 2-4% Snacks Orkla Home & 17.2% > 1
Slide 7: Financial Performance
Financial Performance Terje Andersen, CFO
Slide 8: Group income statement
Group income statement Amounts in NOK million Q3 Q3 2012 2013 Operating revenues 7 193 8 443 EBITA 868 909 Amortisation intangibles -4 -4 Other income and expenses -22 -228 EBIT 842 677 Profit/loss from associates and joint ventures 88 77 Dividends received 8 2 Gains, losses and write-downs shares a
Slide 9: EBITA bridge Q3 2013
EBITA bridge Q3 2013 Amounts in NOK million -3 24 -44 -20 909 84 868 EBITA Q3-12 Branded Gränges Hydro Power Financial HQ/other EBITA Q3-13 Consumer Goods (Heat Transfer) Investments 9
Slide 10: Group income statement
Group income statement Amounts in NOK million Q3 Q3 2012 2013 Operating revenues 7 193 8 443 EBITA 868 909 Amortisation intangibles -4 -4 Other income and expenses -22 -228 EBIT 842 677 Profit/loss from associates and joint ventures 88 77 Dividends received 8 2 Gains, losses and write-downs shares a
Slide 11: Change in net debt year to date Q3 2013
Change in net debt year to date Q3 2013 Amounts in NOK billion 0,7 0,8 -1,8 9,9 2,5 4,8 7,1 -2,9 -1,3 Net debt 31 Sale of shares Cash flow from Expansion Paid to FX effects Tax, dividends Paid from Net debt 30 Dec 2012 and financial operations (incl. Rieber shareholders received, net Sapa JV Sep 201
Slide 12: Volume and profit growth for Gränges (Heat Transfer)
Volume and profit growth for Gränges (Heat Transfer) • Volume growth in Europe despite Key figures Q3-12 Q3-13 slow automotive market Operating revenues 948 950 EBITA 66 90 • Operational efficiency improvements in both Sweden and China EBITA margin performance: • Further restructuring in Sweden 9% 9
Slide 13: Hydro Power – Lower production – Higher prices
Hydro Power – Lower production – Higher prices • Spot prices were 85% higher than in Q3-12 • Production was 545 GWh in Q3 compared with 760 GWh last year – Whereof 257 GWh each quarter is contract production with no P&L effect EBITA (NOK million) Spot prices (NordPool, NOK/MWh) 85 312 294 77 292 285
Slide 14: Jotun (42,5%)
Jotun (42,5%) • Solid growth in all segments except Key figures As of As of Change 31/8 2012 31/8 2013 Marine which continues to decline Operating revenues 7 686 8 174 6.3% EBIT 886 1 050 18.5% • Cold spring weather in Scandinavia has contributed to lower sales in the region • Higher gross margin fo
Slide 15: Sapa (50/50 joint venture)
Sapa (50/50 joint venture) • Sapa, the new global leader in extruded aluminum solutions, was established on 1 September 2013. Pro-forma figures (100%) Q3-12 Q3-13 • Focus on integration and realisation of synergies Operating revenues 10 414 10 797 Underlying EBIT 76 24 • Decline in general extrusion
Slide 16: Branded Consumer Goods
Branded Consumer Goods Christer Åberg, CEO Orkla Confectionery & Snacks
Slide 17: Orkla Foods
Orkla Foods Q3-12 Q3-13 • Unsatisfactory sales growth in Norway Operating revenues 1 973 2 597 • Demanding integration process Organic revenue growth -3.5% • Lower contribution from innovations EBITA 312 364 • Satisfactory performance in Sweden, Finland and the Baltics • Sale of real estate (NOK 11
Slide 18: Integration of Rieber according to plan
Integration of Rieber according to plan • Announced cost synergies of NOK 250-300 million • Run-rate end of 2013 NOK 150 million • P&L effect in Q3 of approximately NOK 15 million • Organic revenue decline of 8% in the Nordics in Q3 • Contributed NOK 71 million to Orkla Foods’ EBITA in Q3 18
Slide 19: Innovations in Orkla Foods
Innovations in Orkla Foods 19
Slide 20: Orkla Confectionery & Snacks
Orkla Confectionery & Snacks Q3-12 Q3-13 • Challenging markets Operating revenues 1 138 1 147 • High activity and competition both from other brands and private labels Organic revenue growth -3.6% • Somewhat lower market shares EBITA 212 185 • Positive development in the Baltics • Organic revenue gr
Slide 21: Turnaround case with significant potential
Turnaround case with significant potential Gradual improvements towards 2016 target • 2-4 % organic growth • >16.5 % EBIT margin Growing the top line • Regain focus on our local core # 1 and # 2 positions • One face to the retailer – increased importance as supplier • The right leaders with the righ
Slide 22: Ongoing restructuring in Orkla Confectionery & Snacks
Ongoing restructuring in Orkla Confectionery & Snacks • Orkla Confectionery & Snacks will cut costs by NOK 300 million in 2014-16 – Approximately NOK 150 million of this is expected to reach the bottom line • Several cost reducing initiatives already initiated: – Restructuring and integration of com
Slide 23: Orkla Home & Personal
Orkla Home & Personal Q3-12 Q3-13 • Satisfactory performance for Lilleborg • Integration of Jordan ahead of schedule Operating revenues 1 016 1 192 Organic revenue growth -1.2% • Strong quarter for Orkla House Care EBITA 216 250 • Positive development in Pierre Robert Group • Strong innovations • In
Slide 24: Innovations in Orkla Home & Personal
Innovations in Orkla Home & Personal 24
Slide 25: Orkla International
Orkla International Q3-12 Q3-13 • Sales and profit decline in Operating revenues 494 738 Orkla Brands Russia Organic revenue growth -1.5% • Organic sales decline of 12%, with decline in both traditional and modern trade EBITA -15 -8 • Restructuring completed in Q2 2014 • Organic sales growth of 18%
Slide 26: Orkla Food Ingredients
Orkla Food Ingredients Q3-12 Q3-13 • Broad-based profit growth Operating revenues 1 372 1 524 • Underlying growth and contribution Organic revenue growth 3.0% from acquired companies EBITA 59 77 • Positive FX effects • Good performance for bakery ingredients in the Nordics with profit growth and sta
Slide 27: Q&A
Q&A Åge Korsvold, President & CEO Terje Andersen, CFO Christer Åberg, CEO Orkla Confectionery & Snacks
Slide 28: Appendices
‘Orkla Appendices
Slide 29: Cash flow
Cash flow Amounts in NOK million YTD Q3 2012 YTD Q3 2013 Operating profit 2 065 1 276 Amortisation, depreciation and write-downs 711 1 258 Change in net working capital 30 - 773 Cash flow from operating act. bef. net replacement exp. 2 806 1 761 Net replacement expenditures - 568 - 496 Cash flow fro
Slide 30: Balance sheet
Balance sheet Amounts in NOK million 31.12.2012 30.9.2013 Assets: Intangible assets 10 069 15 273 Property, plant and equipment 9 601 12 003 Financial non-current assets 3 686 11 140 Non-current assets 23 356 38 416 Assets in discontinued operations 13 740 0 Inventories 4 243 4 971 Receivables 5 357
Slide 31: Net financial items
Net financial items FY 2012 Q3-12 Q3-13 Net interest expenses -389 -113 -104 Currency gain/loss -18 1 0 Other financial items, net -82 -25 -27 Net financial items -489 -137 -131 31
Slide 32: Debt maturity profile
Debt maturity profile NOK million 9 000 8 000 7 000 Average maturity 6 000 3.4 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 32
Slide 33: Net gearing 0.31 as of Q3-13
Net gearing 0.31 as of Q3-13 60 1.40 54 1.20 48 42 1.00 36 0.80 30 0.60 24 18 0.40 12 0.20 6 - 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Q3-13 -6 -0.20 Equity Net interest-bearing liabilities Net gearing 33
Slide 34: Funding sources
Funding sources Banks 5.0 Unutilised credit 10.5 13.1 11.2 facilities 7.0 Bonds and CP 9.3 2.0 Cash, Cash equivalents and Figures in NOK billion Interest Bearing Assets 34