Orkla Asa · OSL:ORK
Orkla Asa — Investor Presentation (December 2011)
123 slides from Orkla Asa's investor presentation, December 2011
Slide 1: Investor presentation The Orkla Group
Investor presentation The Orkla Group Dec 2011
Slide 2: Agenda
Agenda • Business portfolio and Orkla’s growth story • Strategic direction • Financial performance 2010 • Financial performance Q3-11 • Orkla Brands • Sapa • Borregaard • Jotun • REC • Hydro Power • Share Portfolio
Slide 3: Existing business portfolio
Existing business portfolio Share Portfolio NOK 7.4 billion as of Q3-11 Hydro Power The leading Nordic Fast 2.5 TWh World leader in the Moving Consumer aluminium solutions Goods (FMCG) company industry Leading specialised cellulose company Revenues: NOK 3.8 billion – 80% of revenues from #1 brands 4
Slide 4: Orkla's growth story: combining operational and structural expertise
Orkla’s growth story Combining operational and structural expertise NOK billion 70 60 Sales Industry division Elkem 50 Silicon sold Orkla 40 Media sold 30 Carlsberg Breweries Hydropower sold assets sold 20 More than 200 M&A transactions 10 over the last 10 years 0 1998 2006 1999 1992 1995 1996 2002
Slide 5: Orkla's growth story
Orkla’s growth story Orkla has created substantial value 500 450 400 Value of NOK 1 invested 31.12.82, dividend reinvested 350 300 286 250 Orkla 200 OSEBX 150 S&P 500 100 5 0 30 18 0 1998 2006 1999 1992 1993 2002 1983 1985 1989 1994 1995 1996 2007 1982 1984 1986 1987 1988 1990 2000 2001 2003 2005 19
Slide 6: Strategic direction
Strategic direction oe Developing people — creating value (93 O RK L A
Slide 7: Key strategic messages
Key strategic messages • Growth through allocating capital within branded goods • Orkla will divest its Share Portfolio • Sapa – focusing on value enhancement through operational improvements 7
Slide 8: Branded goods share of revenues significantly decreased since 2004
Branded goods share of revenues significantly decreased since 2004 1986-2003: A strong SHARE OF ORKLA REVENUES FROM BRANDED GOODS branded goods-oriented profile • Orkla/Borregaard merger • Orkla/Nora merger • Procordia acquisitions • Orkla Breweries • Orkla Media 2004-2010: Less focus on branded goo
Slide 9: Non-core assets divested in last 12 months
Non-core assets divested in last 12 months • Successful divestment of Elkem Silicon-related NOK 13 billion • Net divestments in the Share portfolio NOK 4 billion • Sale of Borregaard forests at favourable valuation NOK 1.7 billion 9
Slide 10: Delivering 9 consecutive quarters of operational improvements
Delivering 9 consecutive quarters of operational improvements Rolling 12 months Figures restated after the sale of Elkem Silicon-related NOK million 4,311 4,222 4,302 4,056 4,070 4,190 3,944 3,875 3,783 3,721 3,289 3,322 3,029 2,821 2,719 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2008 2008 2008 2
Slide 11: Growth through allocating capital within branded goods
STRATEGIC DIRECTION Growth through allocating capital within branded goods 11
Slide 12: Orkla Brands has proven track record in building strong market positions
Orkla Brands has proven track record in building strong market positions … Detergents 1 Personal Care 1 Biscuits 1 1 2 Confectionery 1 Dietary Supplements 1 2 1 1 Textiles 1 2 Snacks 2 1 1 1 Frozen pizza 1 1 1 Ketchup 1 1 2 1 Dressings 1 1 2 Preserved vegetables 1 1 1 1 Jam/Marmalade 1 1 1 Caviar (c
Slide 13: …and increasing shareholder value
…and increasing shareholder value 20 ROCE (%) 15 10 WACC 10% 5 ORKLA BRANDS 0 2003 2004 2005 2006 2007 2008 2009 2010 13
Slide 14: Growth and capital allocation based on our core expertise within branded goods
Growth and capital allocation based on our core expertise within branded goods Brand building • Customer insight • Brand development • Sales management M&A skills and expertise • Deal orientation • Deal structure • Post deal integration 14
Slide 15: Increasing growth opportunities
Increasing growth opportunities • An increasing number of potential targets identified within relevant categories and geographies • Expansion opportunities along several dimensions • Expand Nordic FMCG* operations • FMCG expansion outside Nordic countries • Adjacent categories in Nordic countries an
Slide 16: Our capital allocation criteria
Our capital allocation criteria • Competitive edge and leading market positions in clearly defined product categories and relevant markets • Customer insight, sustainably unique and differentiated market offerings – as a base for customer loyalty and preference • Scalability and opportunities to rep
Slide 17: Financial flexibility supports group strategy
Financial flexibility supports group strategy 17
Slide 18: Strong financial flexibility and expansion capacity
Strong financial flexibility and expansion capacity Current debt capacity NOK 20 – 25 billion • Unused credit lines NOK 13 billion • Bilateral bank relations – no loan syndicates No financial covenants Flexibility from re-allocation of assets 18
Slide 19: Return of capital to shareholders
Return of capital to shareholders • Dividend strategy focuses on predictability and stability with steady year-on-year dividend increase • Share buy-backs aim at supplementing dividend • Special dividend based on capital structure 19
Slide 20: Orkla's general meeting approved a special dividend of NOK 5 per share
Orkla’s general meeting approved a special dividend of NOK 5 per share • Based on Orkla’s capital structure for the fiscal 0.80+5.00 Dividend NOK per share year of 2010, a special dividend was proposed by the Board of Directors 5.00 • Capital structure as of 2010: Special dividend • Equity to total
Slide 21: Financial Performance 2010
Financial Performance 2010 21
Slide 22: EBITA improvement for the group in 2010
EBITA improvement for the group in 2010 EBITA performance from 2009 to 2010 (figures in NOK million) EBITA Orkla Brands Sapa Borregaard Hydro Power Orkla Financial Other EBITA 2009 Chemicals Investments 2010 22 * NOK 397 million from divested power assets, gain from sale of Orkla HQ NOK 196 million
Slide 23: Highlights 2010
Highlights 2010 • Improved markets and demand throughout the year, in particular for Sapa and Borregaard • Stable markets for Orkla Brands, however continued growth in profit and margin • EBITA-margin +0.5%p to 12.6% for 2010 • Strong results for the Share Portfolio with a return of 31.8% • Negative
Slide 24: Strong improvement in EBITA after the financial crisis
Strong improvement in EBITA after the financial crisis Rolling 12 months NOK million 4,302 Figures restated after sale Elkem Silicon-related 4,056 4,190 3,944 3,875 3,783 3,721 3,289 3,322 3,029 2,821 2,719 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010 2010 20
Slide 25: Group income statement
Group income statement Amounts in NOK million Q4-10 Q4-09 Change 2010 2009 Change 15 884 13 497 18 % Operating revenues 57 338 50 233 14 % 1 322 1 161 14 % EBITA 3 944 3 029 30 % -15 -60 Amortisation intangibles -52 -213 506 2 975 Other revenues and expenses 330 2871 1 813 4 076 EBIT 4 222 5 687 - 8
Slide 26: Net gearing 0.42 – Equity ratio 53.6%
Net gearing 0.42 – Equity ratio 53.6% NOK billion Net gearing 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 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 -6 -0.20 Equity Net interest-bearing liabilities Net gearing 26
Slide 27: Cash flow as of 31 Dec 2010
Cash flow as of 31 Dec 2010 31.12.2010 31.12.2009 Industry division: Operating profit 2 940 5 191 Amortisations, depreciations and write-downs 2 503 2 653 Gain, sale of hydro power assets/sold companies -3 066 Changes in net working capital -1 462 2 197 Net replacement expenditure -1 512 -1 173 Cash
Slide 28: Balance sheet as of 31 Dec 2010
Balance sheet as of 31 Dec 2010 Amounts in NOK million 31.12.2010 31.12.2009 Intangible assets 12 960 14 731 Property, plant and equipment 17 730 24 694 Financial assets 10 985 15 922 Non-Current assets 41 675 55 347 Assets in discontinued operations 13 891 Inventories 7 102 7 531 Receivables 10 380
Slide 29: Financial Performance Q3-11
Financial Performance Q3-11 29
Slide 30: EBITA contribution by segments
EBITA contribution by segments Borregaard 451 Hydro Power 173 1.908 698 Orkla Brands Sapa Amounts in NOK million at Q3-11 30 30
Slide 31: Continued profit growth
Continued profit growth NOK million 4,222 4,070 3,944 3,875 3,783 3,721 3,289 3,322 3,029 2,821 2,719
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