Slide 1: First quarter results 2015
1 First quarter results 2015 7 May 2015 Peter A. Ruzicka, President & CEO
Slide 2: Highlights Q1 2015
Highlights Q1 2015 Positive organic growth for all business areas • Group EBIT (adj.)1 increased by 10% to NOK 725 million • Improving operations in Branded Consumer Goods – 4.3% organic growth2. Positive organic growth for all business areas – EBIT (adj.) margin 10.7%, up from 10.3% in Q1-14 • Good
Slide 3: Improving operations in Branded Consumer Goods
Branded Consumer Goods Q1 2015: Improving operations in Branded Consumer Goods RTM EBIT (adj.) margin development Actions 12.6% 12.2% • Delivered on initiated and ongoing 11.8% 11.9% structural processes 11.6% 11.6% 11.6% • Focused on activities that drive organic growth and improve margins • Ongoin
Slide 4: Positive development in EBIT (adj.) margin
Branded Consumer Goods Q1 2015: Positive development in EBIT (adj.) margin Q1-14 Q1-15 EBIT (adj.) margin BCG EBIT (adj.) margin BCG per business area 10.7% 10.3% 10.6% Orkla Foods 10.6% Orkla 10.3% Confectionery & Snacks 13.3% 17.9% Orkla Home & Personal 17.3% Orkla Food 2.7% Ingredients 3.5% Q1-14
Slide 5: Optimising our factory footprint across all business areas
Branded Consumer Goods Q1 2015: Optimising our factory footprint across all business areas Factory closures by quarter - accumulated 10 Q1-15 Q4-14 3 Q3-14 7 Q2-14 Q1-14 2 2 5 2 2 2 3 2 2 2 2 1 1 1 1 1 1 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 5
Slide 6: Continued positive organic growth
Branded Consumer Goods Q1 2015: Continued positive organic growth Organic growth development1,2 4.3% Estimated easter effects Adj. organic growth 2.5% 2.5% 1.8% 1.1% 0.7% 0.4% -2.2% -2.8% 2011 2012 2013 2014 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 1Reported growth adjusted for FX and M&A 6 2For organic growth
Slide 7: Growth in all business areas
Branded Consumer Goods Q1 2015: Growth in all business areas Organic growth1 BCG per business area in Q1 Comments • Organic growth in all business areas Orkla Foods 4.1% • Top line growth mainly volume driven Orkla Confectionery 4.2% • About half of the BCG organic growth & Snacks is related to East
Slide 8: Orkla Foods: Chilled vegetable pasta
Examples of innovations and relaunches in Q1 2015 Orkla Foods: Chilled vegetable pasta 8
Slide 9: Orkla Confectionery & Snacks: Big Cut
Examples of innovations and relaunches in Q1 2015 Orkla Confectionery & Snacks: Big Cut 9
Slide 10: Orkla Home & Personal: More efficient detergents in smaller packaging
Examples of innovations and relaunches in Q1 2015 Orkla Home & Personal: More efficient detergents in smaller packaging 10
Slide 11: Orkla Food Ingredients: Marzipan for ice cream and cakes
Examples of innovations and relaunches in Q1 2015 Orkla Food Ingredients: Marzipan for ice cream and cakes 11
Slide 12: The primary Nordic go-to-market partner for PepsiCo
Activities that drive organic growth The primary Nordic go-to-market partner for PepsiCo 4 12
Slide 13: Executing on strategy
Summary Q1 2015: Executing on strategy • Deliver on initiated and ongoing structural processes • Optimise supply chain • Focus on activities that drive organic growth and improve margins: – Strong innovation programmes – More cross-market initiatives – Increase sales force effectiveness – Strengthen
Slide 14: Financial Performance
1 4 Financial Performance Jens Bjørn Staff, CFO
Slide 15: Group EBIT (adj.) improved by 10% to NOK 725 million in Q1
Group EBIT (adj.) improved by 10% to NOK 725 million in Q1 Amounts in NOK million Key figures Q1-14 Q1-15 Operating revenues 7,013 7,541 EBIT (adj.) 659 725 Other income and expenses -32 -117 EBIT 627 608 Profit/loss from associates and JV 55 238 Net financials and other -103 -51 Profit/loss before
Slide 16: EBIT (adj.) improvement driven by Orkla Confectionery & Snacks
EBIT (adj.) improvement driven by Orkla Confectionery & Snacks Amounts in NOK million Branded Consumer Goods: +NOK 74 million +12 -20 725 +19 +1 +41 659 +13 Group EBIT Orkla Foods Orkla Orkla Home Orkla Food Orkla Orkla HQ Group EBIT (adj.) Q1-14 Confectionery & Personal Ingredients Investments (adj
Slide 17: 4.3% organic growth in BCG
4.3% organic growth in BCG Amounts in NOK million 7,220 0.3 % 2.1 % 4.3 % 6,767 BCG operating Organic growth1 FX M&A BCG operating revenues Q1-14 revenues Q1-15 17 1Reported growth adjusted for FX and M&A
Slide 18: Branded Consumer Goods
A ‘Orkla Branded Consumer Goods
Slide 19: Orkla Foods
Key financials Q1 2015 Orkla Foods Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +4.1% OG1 2,920 3,045 309 322 13.8 11.7 12.3 10.6 10.6 Q1 Q1 Q1 Q2 Q3 Q4 • Broad-based sales growth in Q1 • Broad-based EBIT (adj.) improvement and stable margins • Timing of Eas
Slide 20: Orkla Confectionery & Snacks
Key financials Q1 2015 Orkla Confectionery & Snacks Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +4.2% OG1 1,141 1,199 159 17.7 16.9 118 13.3 10.3 9.7 Q1 Q1 Q1 Q2 Q3 Q4 • Organic growth mainly driven by • Broad-based EBIT (adj.) improvement in most business
Slide 21: Orkla Home & Personal
Key financials Q1 2015 Orkla Home & Personal Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +1.4% OG1 1,280 1,327 229 230 20.4 17.9 17.3 15.0 15.3 Q1 Q1 Q1 Q2 Q3 Q4 • Broad-based growth • Margins negatively affected by a weak NOK • Increased marketing investme
Slide 22: Orkla Food Ingredients
Key financials Q1 2015 Orkla Food Ingredients Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +7.9% OG1 1,680 58 1,451 6.6 5.9 5.5 39 3.5 2.7 Q1 Q1 Q1 Q2 Q3 Q4 • Positive Easter effects • Broad based EBIT (adj.) improvement • Improvement was driven by good • Im
Slide 23: Orkla Investments
A ‘Orkla Orkla Investments
Slide 24: Orkla Investments
Key financials Q1 2015 Orkla Investments JVs & associates - Equity accounting Ownership: 42.5% Ownership: 50% Ownership: 31% Fully consolidated1 Hydro Power Orkla’s financial investments 1In addition to Sapa, Jotun and Gränges, Orkla Investments has a number of smaller associates within Real Estate
Slide 25: Sapa (50/50 joint venture)
Key financials Q1 2015 Sapa (50/50 joint venture) Amounts in NOK million 2014 2015 Orkla’s share of Operating revenues Underlying EBIT net profit after tax 44 54 45 14,134 392 11,346 -51 155 -360 Q1 Q1 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 • Strong demand in North • Underlying EBIT improvement driven by syn
Slide 26: Jotun (42.5%)
Key financials 2014 Jotun (42.5%) Amounts in NOK million 2013 2014 Total net sales EBIT 13,171 1,258 1,314 12,034 • All time high sales and operating profit for Q1 • Positively impacted by currency effects • Good sales growth for all segments 26
Slide 27: Hydro Power
Key financials Q1 2015 Hydro Power 2014 2015 GWh produced Spot prices (NOK/MWh) EBIT (adj.) (NOK million) 741 680 609 252 246 263 264 73 558 568 211 5856 46 39 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • Lower volumes compared • Lower spot prices compared • EBIT (adj.) in Q1 15 slightly with Q1 2014 with
Slide 28: Capital structure
A ‘Orkla Capital structure
Slide 29: Change in net debt 2015
Change in net debt 2015 Amounts in NOK million 0.3 6.2 0.0 0.2 0.8 0.1 0.0 5.7 Net debt 31 Expansion Cash flow Sale of shares Net paid to Tax, dividends FX effects Net debt 31 December and sale of from and financial shareholders received, net March 2015 2014 companies operations assets financial & o
Slide 30: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest bearing debt (NOK million) Net gearing 10,645 0.31 0.28 8,496 0.24 0.18 0.19 5,661 6,210 4,786 2010 2012 2013 2014 Q1-15 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 • Average maturity 3.9 years 30
Slide 31: Capital Markets Day September 2015 – save the date
Capital Markets Day 11 September 2015 – save the date Orkla will host an investor day in London on Friday 11 September 2015 at London Stock Exchange. The meeting will begin at 11.15 UK time and round off by 17.00. A formal invitation with agenda will be sent out in June. The Orkla management team lo
Slide 32: Outlook
3 2 Outlook Peter A. Ruzicka, President & CEO
Slide 33: Delivering on strategy
Summary Delivering on strategy • 4.3% organic growth in BCG, broad-based and volume-driven Strong Q1 • Synergies from structural change contribute to margin improvement in BCG performance • Group EBIT (adj.) increased by 10% • Strong start to the year for Jotun and Sapa Deliver on • Agreement to acq
Slide 34: Q&A
3 4 Q&A Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO
Slide 35: Appendices
‘Orkla Appendices
Slide 36: Group income statement
Group income statement Amounts in NOK million Q1-14 Q1-15 FY'14 Operating revenues 7 013 7 541 29 599 Amortisation intangibles -4 -4 -23 EBIT (adj.) 659 725 3 214 Other income and expenses -32 -117 -100 EBIT 627 608 3 114 Profit/loss from associates and joint ventures 55 238 121 Interests, net -86 -
Slide 37: Net financial items
Net financial items FY 2014 Q1-14 Q1-15 Gains, losses, write-downs shares and financial 56 -12 18 assets Dividends 37 14 11 Currency gain /loss 0 1 1 Interest on pensions -49 -11 -11 Other financial items -44 -9 -7 Other financial items, net 0 -17 12 37
Slide 38: Statement of financial position
Statement of financial position Amounts in NOK million 31.12.2014 31.03.2015 Intangible assets 14 598 14 993 Property, plant and equipment 9 484 9 599 Investments in associates and joint ventures etc. 13 026 13 473 Non-current assets 37 108 38 065 Assets held for sale 22 22 Inventories 3 873 4 052 I
Slide 39: Cash flow
Cash flow Amounts in NOK million Q1-14 Q1-15 Operating profit 638 605 Amortisation, depreciation and write-downs 233 301 Change in net working capital - 391 - 415 Net replacement expenditures - 195 - 205 Cash flow from operations 285 286 Cash flow from operations, Financial Investments 9 40 Tax - 16
Slide 40: Sapa (joint venture) – figures on 100% basis
Sapa (joint venture) – figures on 100% basis Amounts in NOK million Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Sales volume (1,000 tonnes) 346 360 346 314 359 367 350 322 353 Revenues 10,367 10,974 10,798 10,132 11,346 11,544 11,603 11,890 14,134 Underlying EBITDA 304 508 328 -43 440 641
Slide 41: Debt maturity profile
Debt maturity profile Amounts in NOK million 6,000 5,000 4,000 3,000 2,000 1,000 10 0 2015 2016 2017 2018 2019 2020 2021 Later Unutilised credit facilities Drawn amounts 41
Slide 42: Funding sources
Funding sources Amounts in NOK billion 3.0 5.8 Unutilised credit facilities Banks Bonds and CP Cash, cash equivalents and interest bearing assets 5.3 3.9