Slide 1: Third quarter results 2015
1 Third quarter results 2015 30 October 2015 Peter A. Ruzicka, President & CEO
Slide 2: Improved performance in the third quarter
Improved performance in the third quarter 2.3% organic 15% EBIT (adj.)2 growth1 growth in BCG 57% increase in EPS 1Reported growth adjusted for FX and M&A 2 2EBIT (adj.) = Operating profit before other income and expenses
Slide 3: Continued growth in the quarter
Highlights: Continued growth in the quarter • Group EBIT (adj.)1 increased by 13% to NOK ~1 billion • Increase of 57% in EPS to NOK 0.80 • Improving performance in Branded Consumer Goods • 2.3% organic growth2 • EBIT (adj.) growth of 15% in BCG • Strong contribution from associates • All-time high s
Slide 4: Organic growth in three out of four business areas
Branded Consumer Goods Q3 2015: Organic growth in three out of four business areas Organic growth performance1,2 2.5% 2.3% 2.3% Orkla Foods 4.2% 1.1% 0.7% Orkla Confectionery 1.2% & Snacks Orkla Home & Personal -2.6% Orkla Food Ingredients 4.0% -2.8% 2011 2012 2013 2014 YTD Q3-15 Q3-15 1Reported gro
Slide 5: Orkla Foods: New launch Pizzabakeriet in Norway
Examples of innovations and relaunches in Q3 2015: Orkla Foods: New launch “Pizzabakeriet” in Norway
Slide 6: Orkla Confectionery & Snacks: Hand-cooked crisps
Examples of innovations and relaunches in Q3 2015: Orkla Confectionery & Snacks: Hand-cooked crisps
Slide 7: Orkla Home & Personal: wool essentials for the autumn season
Examples of innovations and relaunches in Q3 2015: Orkla Home & Personal: wool essentials for the autumn season 7
Slide 8: Margin negatively impacted by dilutive effects from acquisitions
Branded Consumer Goods Q3 2015: Margin negatively impacted by dilutive effects from acquisitions EBIT (adj.) margin change Reported EBIT (adj.) margin Q3 2015 per business area 12.6% 12.2% Orkla Foods 0.9%-p. 12.0% 11.8% 11.6% Orkla Confectionery -1.3%-p. & Snacks Orkla Home & Personal -1.3%-p. Orkl
Slide 9: EBIT (adj.) growth in line with target
Branded Consumer Goods Q3 2015: EBIT (adj.) growth in line with target Breakdown of BCG EBIT (adj.) growth Q3 2015 Weakening NOK1 15% • Positive currency translation effects 6% • Higher input prices, especially for Norwegian companies 9% Reported Currency EBIT (adj.) EBIT (adj.) translation growth i
Slide 10: Reducing our factory footprint
Branded Consumer Goods Q3 2015: Reducing our factory footprint One integrated supply chain Steady pace in factory rationalisation 14 2 2 8 2 BCG production sites 2014 Q1-15 Q2-15 Q3-15 Acc. as of Q3-15 10
Slide 11: Delivering on strategy
Delivering on strategy • Group EBIT (adj.)1 increased by 13% Improved • 2.3% organic growth2 in BCG performance • EBIT (adj.) growth of 15% in BCG • Strong performance from associates Delivering on • Continued progress in supply chain initiated and restructuring ongoing • Cederroth acquisition appro
Slide 12: Financial performance
1 2 Financial performance Jens Bjørn Staff, CFO
Slide 13: Group EBIT (adj.) improved by 13% to NOK ~1 billion in Q3
Group EBIT (adj.) improved by 13% to NOK ~1 billion in Q3 Amounts in NOK million Key figures Q3-14 Q3-15 YTD 14 YTD 15 Operating revenues 7 271 8 381 21 480 23 627 EBIT (adj.) 879 993 2 207 2 507 Other income and expenses -44 -96 2 -268 EBIT 835 897 2 209 2 239 Profit/loss from associates and JV 126
Slide 14: Broad-based EBIT (adj.) improvement
Broad-based EBIT (adj.) improvement Amounts in NOK million Branded Consumer Goods: +NOK 135 million -5 +29 -16 993 +13 +21 +72 879 Group EBIT Orkla Foods Orkla Orkla Home Orkla Food Orkla Orkla HQ Group EBIT (adj.) Q3-14 Confectionery & Personal Ingredients Investments (adj.) Q3-15 & Snacks 14
Slide 15: Branded Consumer Goods
A ‘Orkla Branded Consumer Goods
Slide 16: Positive organic growth
Positive organic growth Amounts in NOK million 8,064 6.7 % 6.5 % 6,984 2.3 % BCG operating Organic growth1 FX M&A BCG operating revenues Q3-14 revenues Q3-15 16 1Reported growth adjusted for FX and M&A
Slide 17: Strong performance in Orkla Foods compared with soft third quarter last year
Orkla Foods Strong performance in Orkla Foods compared with soft third quarter last year Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +4.2% OG1 +3.4% OG1 8,861 9,428 1.140 13.2 12.3 1.022 11.5 12.1 429 2,900 3,261 357 Q3 YTD Q3 YTD Q3 YTD • Broad-based growt
Slide 18: Growth in Orkla Confectionery & Snacks
Orkla Confectionery & Snacks Growth in Orkla Confectionery & Snacks Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +1.2% OG1 +1.9% OG1 3,995 529 17.7 3,539 16.4 448 12.7 13.2 217 238 1,228 1,452 Q3 YTD Q3 YTD Q3 YTD • Organic growth mainly driven by • EBIT (ad
Slide 19: Mixed picture in Orkla Home & Personal
Orkla Home & Personal Mixed picture in Orkla Home & Personal Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -2.6% OG1 -1.3% OG1 3,710 3,894 20.4 19.1 661 677 17.8 17.4 1,254 1,410 256 269 Q3 YTD Q3 YTD Q3 YTD • Weak organic sales performance in • Profitability
Slide 20: Continued strong progress in Orkla Food Ingredients
Orkla Food Ingredients Continued strong progress in Orkla Food Ingredients Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +4.0% OG1 +3.6% OG1 5,483 298 6.0 4,713 5.5 5.4 225 4.8 119 1,638 1,989 90 Q3 YTD Q3 YTD Q3 YTD • Broad-based sales growth • Main driver o
Slide 21: Orkla Investments
A ‘Orkla Orkla Investments
Slide 22: Share portfolio, Jotun, Sapa, Hydro Power, Real estate
22 Hydro Power Jotun (42.5%) Orkla Investments Real estate Sapa (50%) Share portfolio Financial investments
Slide 23: Solid underlying EBIT growth in Sapa
Sapa (50/50 joint venture) Solid underlying EBIT growth in Sapa Amounts in NOK million 2014 2015 Orkla’s share of Operating revenues Underlying EBIT net profit after tax 106 42,536 1,279 34,493 707 54 54 47 11,603 13,907 404 201 Q3 YTD Q3 YTD Q3 YTD • Strong demand in North • Positive contributions
Slide 24: Growth across all segments and regions in Jotun
Jotun (42.5%) Growth across all segments and regions in Jotun Amounts on 100% basis in NOK million 2014 2015 Operating revenues Operating profit 10,753 1,630 8,660 978 January-August January-August • Improved sales volumes with growth across all • Increased margins from cost improvements segments an
Slide 25: Historically low power prices
Hydro Power Historically low power prices 2014 2015 GWh produced Spot prices (NOK/MWh) EBIT (adj.) (NOK million) 891 715 688 252 246 263 264 73 680 609 558 568 211 5856 177 46 123 39 27 22 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • All time high production • Power prices at the lowest level • Extremely l
Slide 26: Net debt
A ‘Orkla Net debt
Slide 27: Change in net debt 2015
Change in net debt 2015 Amounts in NOK billion 8.9 0.4 0.5 2.2 2.2 2.6 5.7 0.2 Net debt 31 Expansion Cash flow Sale of shares Net paid to Tax, dividends FX effects Net debt 30 December and sale of from and financial shareholders received, net September 2014 companies operations assets financial & 20
Slide 28: Summary
2 8 Summary Peter A. Ruzicka, President & CEO
Slide 29: Delivering on our strategy and increasing performance
Summary Delivering on our strategy and increasing performance Keep the strategy on track Deliver organic growth at least in line with market growth Target annual adj. EBIT growth of 6-9%1 in BCG Maintain a stable dividend of at least NOK 2.50 per share 29 1Including add-ons, excluding currency effec
Slide 30: Q&A
3 0 Q&A Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO
Slide 31: Appendices
‘Orkla Appendices
Slide 32: Group income statement
Group income statement Amounts in NOK million Q3-14 Q3-15 YTD-14 YTD-15 Operating revenues 7 271 8 381 21 480 23 627 EBIT (adj.) 879 993 2 207 2 507 Other income and expenses -44 -96 2 -268 EBIT 835 897 2 209 2 239 Profit/loss from associates and joint ventures 126 239 373 1 022 Interests, net -68 -
Slide 33: Net financial items
Net financial items FY 2014 Q3-14 Q3-15 Net interest expenses -363 -68 -78 Currency gain/loss 0 -2 -3 Result from Share Portfolio and dividends 93 29 36 Other financial items, net -93 -13 -22 Net financial items -363 -54 -67 33
Slide 34: Balance sheet
Balance sheet Amounts in NOK million 31.12.2014 30.09.2015 Intangible assets 14 598 17 450 Property, plant and equipment 9 484 10 256 Investments in associates and joint ventures etc. 13 026 12 587 Non-current assets 37 108 40 293 Assets held for sale 22 22 Inventories 3 873 4 824 Inventory of devel
Slide 35: Cash flow
Cash flow Amounts in NOK million YTD-14 YTD-15 Operating profit 2 257 2 165 Amortisation, depreciation and write-downs 691 841 Change in net working capital - 918 - 283 Net replacement expenditures - 587 - 659 Cash flow from operations 1 443 2 064 Cash flow from operations, Financial Investments 45
Slide 36: Sapa (joint venture) – figures on 100% basis
Sapa (joint venture) – figures on 100% basis Amounts in NOK million Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Sales volume (1,000 tonnes) 350 322 353 358 341 Revenues (NOK million) 11 561 11 890 14 134 14 494 13 895 Underlying EBIT 201 -55 392 483 404 Excluded items: Unrealised derivative positions 66 -79 -145
Slide 37: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest bearing debt (NOK million) Net gearing 10,645 0.28 0.28 0.24 8,496 8,928 0.18 0.19 5,661 4,786 2011 2012 2013 2014 Q3-15 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 37
Slide 38: Debt maturity profile
Debt maturity profile Amounts in NOK million Average maturity 3.6 years 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2015 2016 2017 2018 2019 2020 2021 Later Unutilised credit facilities Drawn amounts 38
Slide 39: Funding sources
Funding sources Amounts in NOK billion 1.8 4.3 Unutilised credit facilities Banks Bonds and CP 5.4 Cash, cash equivalents and interest bearing assets 5.3
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