Slide 1: Second quarter results 2015
1 Second quarter results 2015 17 July 2015 Peter A. Ruzicka, President & CEO
Slide 2: Continued progress in second quarter
Highlights: Continued progress in second quarter • Group EBIT (adj.)1 increased by 18% to NOK 789 million in Q2 • EBIT (adj.) improvement in Branded Consumer Goods of 11% in Q2 • Improving operations in Branded Consumer Goods YTD • 2.3% organic growth 2015 • EBIT (adj.) margin 10.9%, up from 10.4% 2
Slide 3: Volume-driven organic growth in first half of 2015
Branded Consumer Goods YTD 2015: Volume-driven organic growth in first half of 2015 Organic growth performance1,2 2.5% 2.3% Orkla Foods 3.0% 1.1% 0.7% Orkla Confectionery 2.3% & Snacks Orkla Home & Personal -0.6% Orkla Food Ingredients 3.3% -2.8% 2011 2012 2013 2014 YTD-15 1Reported growth adjusted
Slide 4: Improving operations in Branded Consumer Goods
Branded Consumer Goods YTD 2015: Improving operations in Branded Consumer Goods EBIT (adj.) margin change RTM EBIT (adj.) margin performance YTD 2015 per business area 12.6% 12.2% Orkla Foods 0.3%-p. 12.0% 11.8% 11.6% Orkla Confectionery 1.4%-p. & Snacks Orkla Home & Personal -0.1%-p. Orkla Food Ing
Slide 5: Grandiosa and Big One with relaunches and new launches
Examples of innovations and relaunches in Q2 2015: Grandiosa and Big One with relaunches and new launches 5
Slide 6: FUN Light SQUEEZE iT
Examples of innovations and relaunches in Q2 2015: FUN Light SQUEEZE iT 6
Slide 7: Oven-roasted nuts without added oil
Examples of innovations and relaunches in Q2 2015: Oven-roasted nuts without added oil 7
Slide 8: Jordan wipes dispenser
Examples of innovations and relaunches in Q2 2015: Jordan wipes dispenser 8
Slide 9: Financial Performance
9 Financial Performance Jens Bjørn Staff, CFO
Slide 10: Group EBIT (adj.) improved by 18% to NOK 789 million in Q2
Group EBIT (adj.) improved by 18% to NOK 789 million in Q2 Amounts in NOK million Key figures Q2-14 Q2-15 YTD 14 YTD 15 Operating revenues 7 196 7 705 14 209 15 246 EBIT (adj.) 669 789 1 328 1 514 Other income and expenses 78 -55 46 -172 EBIT 747 734 1 374 1 342 Profit/loss from associates and JV 19
Slide 11: Broad-based EBIT (adj.) improvement
Broad-based EBIT (adj.) improvement Amounts in NOK million Branded Consumer Goods: +NOK 79 million 789 -4 +45 +25 +2 +19 +33 669 Group EBIT Orkla Foods Orkla Orkla Home Orkla Food Orkla Orkla HQ Group EBIT (adj.) Q2-14 Confectionery & Personal Ingredients Investments (adj.) Q2-15 & Snacks 11
Slide 12: Branded Consumer Goods
A eS Orkla ane Branded Consumer Goods
Slide 13: Positive organic growth despite negative Easter effects
Positive organic growth despite negative Easter effects Amounts in NOK million 7,404 3.2 % ~ 2.7% 2.9 % 6,979 0.2 % BCG operating Organic growth1 FX M&A BCG operating revenues Q2-14 revenues Q2-15 13 1Reported growth adjusted for FX and M&A Illustrative Easter-adjusted organic growth
Slide 14: Orkla Foods
Key financials Q2 2015 Orkla Foods Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +1.9% OG1 +3.0% OG1 5,961 6,167 665 711 11.7 12.5 11.2 11.5 3,041 3,122 356 389 Q2 YTD Q2 YTD Q2 YTD • Broad-based sales growth in Q2 • Broad-based EBIT (adj.) and margins improv
Slide 15: Orkla Confectionery & Snacks
Key financials Q2 2015 Orkla Confectionery & Snacks Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +0.4% OG1 +2.3% OG1 2,543 291 11.4 2,311 9.7 9.8 10.0 231 1,344 1,170 132 113 Q2 YTD Q2 YTD Q2 YTD • Organic growth mainly driven by • EBIT (adj.) growth in Q2 m
Slide 16: Orkla Home & Personal
Key financials Q2 2015 Orkla Home & Personal Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -2.8% OG1 -0.6% OG1 2,456 2,484 16.5 16.4 405 408 15.0 15.4 1,176 1,157 176 178 Q2 YTD Q2 YTD Q2 YTD • Weak organic sales performance in • Profitability in all segments
Slide 17: Orkla Food Ingredients
Key financials Q2 2015 Orkla Food Ingredients Amounts in NOK million 2014 2015 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -0.9% OG1 +3.3% OG1 3,494 179 6.7 3,075 5.9 135 5.1 121 4.4 96 1,624 1,814 Q2 YTD Q2 YTD Q2 YTD • Positive organic growth adjusted • Acquired companies contributed pos
Slide 18: Orkla Investments
A ‘Orkla Orkla Investments
Slide 19: Orkla Investments
Key financials Q2 2015 Orkla Investments 42.5% ownership 50% ownership Hydro Power Orkla’s financial investments 16% ownership 19
Slide 20: Sale of shares in Gränges AB
Sale of shares in Gränges AB • On 22 May 2015, Orkla sold a 15% stake in Gränges • The sale was carried out through an accelerated book building process to Swedish and international investors at a price of SEK 66 per share • Orkla recognised a NOK 425 million gain on the sale in Q2 following the sel
Slide 21: Sapa (50/50 joint venture)
Key financials Q2 2015 Sapa (50/50 joint venture) Amounts in NOK million 2014 2015 Orkla’s share of Operating revenues Underlying EBIT net profit after tax 28,628 875 52 22,890 44 483 506 14,494 11,544 350 7 Q2 YTD Q2 YTD -7 Q2 YTD • Strong demand in North • Underlying EBIT improvement driven by str
Slide 22: Jotun (42.5%)
Key financials T1 2015 Jotun (42.5%) Amounts on 100% basis in NOK million 2014 2015 Operating revenues Operating profit 5,234 774 4,091 435 January-April January-April • Growth across all segments and regions • Improved profitability through increased sales and cost improvements • Solid revenue grow
Slide 23: Hydro Power
Key financials Q2 2015 Hydro Power 2014 2015 GWh produced Spot prices (NOK/MWh) EBIT (adj.) (NOK million) 715 688 680 609 568 252 246 263 264 73 558 211 5856 177 46 39 27 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 • Lower volumes compared • Lower spot prices compared • EBIT (adj.) reduction in Q2 with Q2 2
Slide 24: Capital structure
<A Orkla Capital structure
Slide 25: Change in net debt 2015
Change in net debt 2015 Amounts in NOK billion 7.4 0.2 0.0 6.2 0.5 2.5 1.1 0.1 Net debt 31 Expansion Cash flow Sale of shares Net paid to Tax, dividends FX effects Net debt 30 March 2015 and sale of from and financial shareholders received, net June 2015 companies operations assets financial & other
Slide 26: Capital Markets Day 11 September 2015
Capital Markets Day 11 September 2015 Orkla will host an investor day in London on Friday 11 September 2015 at the London Stock Exchange. Programme: 11.15 Registration and buffet lunch 12.00 Presentations and case stories from the Group Executive Board of Orkla ASA: • Orkla Group • Orkla Foods • Ork
Slide 27: Summary
2 7 Summary Peter A. Ruzicka, President & CEO
Slide 28: Delivering on strategy
Summary Delivering on strategy • 2.3% organic growth in BCG Satisfactory • Synergies from structural change contribute to margin improvement in BCG performance • Group EBIT (adj.) increased by 18% with improvements in both BCG and YTD Orkla Investments Delivering on • Sale of shares in Gränges AB in
Slide 29: Positive start for AquaDerma
Positive start for AquaDerma AquaDerma facial cream Market share in % of value – grocery trade 14 12 11.7 10 8 6 4 2 0 Week 11 Week 13 Week 15 Week 17 Week 19 Week 21 Week 23 Week 25 Week 5 Week 7 Week 9 Source: Nielsen week 24 2015
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 Q2-14 Q2-15 H1-14 H1-15 Operating revenues 7 196 7 705 14 209 15 246 Amortisation intangibles -5 -5 -9 -9 EBIT (adj.) 669 789 1 328 1 514 Other income and expenses 78 -55 46 -172 EBIT 747 734 1 374 1 342 Profit/loss from associates and joint ventures 192
Slide 33: Net financial items
Net financial items FY 2014 Q2-14 Q2-15 Net interest expenses -363 -84 -18 Currency gain/loss 0 1 0 Result from financial assets and dividends 93 46 35 Other financial items, net -93 -21 -16 Net financial items -363 -58 1 33
Slide 34: Statement of financial position
Statement of financial position Amounts in NOK million 31.12.2014 30.06.2015 Intangible assets 14 598 15 238 Property, plant and equipment 9 484 9 667 Investments in associates and joint ventures etc. 13 026 12 215 Non-current assets 37 108 37 120 Assets held for sale 22 22 Inventories 3 873 4 210 I
Slide 35: Cash flow
Cash flow Amounts in NOK million H1-14 H1-15 Operating profit 1 416 1 282 Amortisation, depreciation and write-downs 469 546 Change in net working capital - 628 - 72 Net replacement expenditures - 391 - 404 Cash flow from operations 866 1 352 Cash flow from operations, Financial Investments 53 35 Ta
Slide 36: Sapa (joint venture) – figures on 100% basis
Sapa (joint venture) – figures on 100% basis Amounts in NOK million Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Sales volume (1,000 tonnes) 359 368 350 322 353 358 Revenues (NOK million) 11 346 11 544 11 603 11 890 14 134 14 494 Underlying EBIT 155 350 201 -55 392 483 Excluded items: Unrealised derivative p
Slide 37: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest bearing debt (NOK million) Net gearing 10,645 0.31 0.28 8,496 0.24 7,353 0.19 0.18 5,661 4,786 2010 2012 2013 2014 Q2-15 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 37
Slide 38: Debt maturity profile
Debt maturity profile Amounts in NOK million Average maturity 3.7 years 6,000 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 1.5 Unutilised credit facilities 5.8 Banks Bonds and CP 5.2 Cash, cash equivalents and interest bearing assets 3.6