Orkla Asa · OSL:ORK
Orkla Asa — Investor Day (2013)
42 slides from Orkla Asa's investor day presentation, 2013
Slide 1: Improving performance from increased local scale
Improving performance from increased local scale Atle Vidar Johansen EVP & CEO, Orkla Foods
Slide 2: Improving performance from increased local scale
Improving performance from increased local scale • Building on unmatched market positions • Reaching 2016 targets • Achieving top line growth through improved innovation and scale 34
Slide 3: Building on unmatched market positions
Improving performance from increased local scale • Building on unmatched market positions • Reaching 2016 targets • Achieving top line growth through improved innovation and scale 35
Slide 4: Building on unmatched market positions
Building on unmatched market positions • Strong and well-known local brands with mainly #1 market positions • Superior in serving the local consumer needs and preferences • Local business model with significant scale advantage 36
Slide 5: A broad portfolio with 80% of revenues from Norway and Sweden
A broad portfolio with 80% of revenues from Norway and Sweden Revenues 2012, proforma incl. Rieber for the full year: NOK 10.7 billion Geographical Sales Category sales split channel sales split sales split Meals: ready, Baltics Other Out-of-home canned,dry, Sauces Finland components 2% 6% 14% 13% 2
Slide 6: Strong #1 brands with long heritage
Strong #1 brands with long heritage 38
Slide 7: #1 market positions in Norway
#1 market positions in Norway Market share Position Orkla vs. Multinationals 78% Soups Dry 96% #1 Ketchup 19% Casseroles 95% #1 Sauces dry 91% #1 Orkla Foods Heinz 79% Mackerel 90% #1 Frozen pizza 79% #1 Pizza 16% Ketchup 78% #1 Canned dinner 73% #1 Orkla Foods Dr. Oetker Sweet spread 70% #1 48% Jam
Slide 8: #1 market positions in Sweden
#1 market positions in Sweden Market share Position Orkla vs. Multinationals 55% Cod roe spread 77% #1 35% Pies 77% #1 Ketchup Dilutables 71% #1 Fruit and berry drinks 69% #1 Orkla Foods Heinz Pickled herring 64% #1 Frozen pies and cakes 63% #1 Pickled cucumber 63% #1 36% 28% Ketchup 55% Pizza #1 Fr
Slide 9: Solid market positions in Denmark
Solid market positions in Denmark Market share Position Orkla vs. Multinationals 43% 37% #1 Pickled vegetables 52% Ketchup Marmelade 43% #1 Ketchup 43% #1 Orkla Foods Heinz Fresh pasta 42% #1 Salad spreads 27% #1 62% Tuna 15% #2 Mustard 13% Pickled herring 13% #2 Orkla Foods Unilever 41 Source: AC N
Slide 10: Solid market positions in Finland
Solid market positions in Finland Market share Position Pickled herring 73% #1 Pickeled vegetables 54% #1 Ketchup 40% #1 Dilutables 34% #1/2 Pizza 33% #1/2 42 Source: Company estimates
Slide 11: Local brands based on local insight are winners
Local brands based on local insight are winners Local brands Local • Superior local consumer understanding insight • Superior trade and category understanding Local • Cost advantages and competitive strength in sales and advertising scale • Attracting the best people • Flexible local value chain 43
Slide 12: Reaching 2016 targets
Improving performance from increased local scale • Building on unmatched market positions • Reaching 2016 targets • Achieving top line growth through improved innovation and scale 44
Slide 13: Orkla Foods' targets for 2016
Orkla Foods’ targets for 2016 Organic • Focus on growing core brands and categories growth • Launch new products outside existing categories 2-3 % • Increase cross-country innovations EBIT • Realise the full synergy potential from Rieber margin • Improve cost efficiency throughout the value chain >
Slide 14: Track record of positive EBIT margin performance
Track record of positive EBIT margin performance RTM EBIT (adjusted)1 in NOK million EBIT margins (adjusted) 2 1,200 14.3% 14.4% 14.0% 13.9% 1,150 12.9% 1,100 1,050 1,000 950 900 850 800 Q4 2009 Q4 2010 Q4 2011 Q4 2012 Q2 2013 2009 2010 2011 2012 RTM H1 2013 •Consolidation of Rieber will lower EBIT
Slide 15: Rieber & Søn and Orkla are a perfect match
Rieber & Søn and Orkla are a perfect match • Similar strategy and focus – Strong positions – Local consumer insight and taste preferences – Multi-local model • Complementary + – Competence – Products and categories – Technology • Overlapping geographies 47
Slide 16: 2013: Restructuring to reach the 2016 targets
2013: Restructuring to reach the 2016 targets NOK • Integrating the Nordic Rieber & Søn business units with the existing 250-300 million1 Orkla Foods companies NOK • Successfully merged Abba Seafood and Procordia 30-40 million NOK 10-15 • Changed production structure for Orkla Foods Danmark million
Slide 17: Rieber: Realising cost synergies well on track
Rieber: Realising cost synergies well on track Expected cost synergies of MNOK 250-3001, whereof ~50% to be realized in 2013 Run-rate effect realized per end of Split cost synergies year 100% 12% 100% 42% 80% 50% 46% 2013 2014 2015 FTE- Purchasing Other Total payroll 49 1. Synergies for the Orkla Gr
Slide 18: Achieving top line growth through improved innovation and scale
Improving performance from increased local scale • Building on unmatched market positions • Reaching 2016 targets • Achieving top line growth through improved innovation and scale 50
Slide 19: Organic sales growth
Organic sales growth1 3,7% 2,4% 2,0% 0,5% -1,3% -1,5% -1,9% -2,3% 2010 2011 2012 H1 2013 Retail channel All channels 51 1. Adjusted for acquired and divested companies and currency translation effects. Divested bakery business exluded for all years.
Slide 20: Innovation is clearly the key growth driver
Innovation is clearly the key growth driver Main • Health/Nutrition trends in • Indulgence our markets • Convenience Product • Taste upgrades/ • Nutrition improve- ments • Packaging Our innovation is always based on local consumer and category insight 52
Slide 21: Two examples showing new growth platforms through innovation
Two examples showing new growth platforms through innovation Abba Middagsklart! Pauluns •Helping consumers eat more fish • The launch of a cross category health brand 53
Slide 22: Focusing on local consumer insights
Focusing on local consumer insights Starting with local consumer insight… …developing products consumers prefer to buy • 7 of 10 Swedes want to increase their • ABBA Middagsklart! makes it easy to fish consumption cook fish that everybody likes • Difficult to cook fish properly • Focus on: 1. Great
Slide 23: Rolling out successful launches
Rolling out successful launches Launch wave 1 Launch wave 2 Launch wave 3 Launch wave 4 • Just add salmon • Bigger pack size • Just add cod • New varieties • New taste variety • New geographies 55
Slide 24: Resulting in ABBA Middagsklart generating additional revenue
Resulting in ABBA Middagsklart generating additional revenue 80 70 60 Value (SEK million) 50 40 30 20 10 0 2011 2012 RTM W3213 56 | Source: AC Nielsen
Slide 25: Launching of a new cross-category healthy brand
Launching of a new cross-category healthy brand Starting with local consumer insight… …establishing a brand consumers prefer to buy • Sales of healthy food were increasing • Core of the brand – ”Bara bra mat” • Shift from diet focus to other health • Clear health benefit benefits • Building credibil
Slide 26: Creating a wide product range
Creating a wide product range Cereals Granola Juice Müsli Coconut water Porridge 58
Slide 27: Resulting in impressive value growth and high brand awareness
Resulting in impressive value growth and high brand awareness Value growth, SEK million Brand awareness, % 140 90 80% 80 120 +43% 70 100 60 +30% 80 50 +65% 60 40 30 40 20 20 10 0 0 2010 2011 2012 2013 2008 2010 2011 2012 2013 59 Source: 2008 TNS, resp 2010 och v.9-10 2013 Scandinfo
Slide 28: Returning Rieber to organic growth
Returning Rieber to organic growth • Growth has been negatively impacted by the long period of uncertainty But we are now going to... • Focus on the core portfolio under the Toro brand • Innovate from complementary competence and technologies • Build on a management team with proven track record 60
Slide 29: Achieving top line growth through improved innovation and scale
Achieving top line growth through improved innovation and scale Bente Brevik, CEO Orkla Foods Norge
Slide 30: Slide 30
Slide 31: Financial performance 1987 - 2012
Financial performance 1987 - 2012 Net sales value (NOK million) EBITA (NOK million) EBITA Net sales value 63
Slide 32: We are able to create volume growth
We are able to create volume growth 2010 2011 12 10 Change in volume shares (%) 8 6 4 2 0 -2 -4 -6 -8 -10 Total market Privat label Other Orkla Foods Norge 64 Source: AC Nielsen RTM. Changes in volume shares (%)
Slide 33: Innovation is the core of what we do
Innovation is the core of what we do 70 % 60 % 50 % 40 % 30 % 20 % 10 % 0% New launches Line extensions Re-launches Total innovation 65 Share of Orkla Foods Norge’s revenues that comes from launches the last three years
Slide 34: 500 000 000
500 000 000 66
Slide 35: Rieber's superior #1 market positions..
Rieber’s superior #1 market positions.. 120 % 100 97 95 90 80 79 78 70 60 54 40 49 36 20 0 Dry sauces Dry soups Dry Frozen Sweet Frozen Ketchup Dressing Jam casseroles pizza bread ready to eat spread meals 67 Source: AC Nielsen grocery market shares, YTD as of week 36 2013
Slide 36: ..are a perfect match with Orkla's #1 market positions
..are a perfect match with Orkla’s #1 market positions 120 % 100 97 95 90 80 79 78 70 60 54 40 49 36 20 0 Dry sauces Dry soups Dry Frozen Sweet Frozen Ketchup Dressing Jam casseroles pizza bread ready to eat spread meals 68 Source: AC Nielsen grocery market shares, YTD as of week 36 2013
Slide 37: Local brands and taste are the winners
Local brands and taste are the winners 120 % 100 97 95 90 80 79 78 70 60 54 40 49 36 33 20 18 20 14 7 1 5 1 0.5 0 Dry sauces Dry soups Dry Frozen Sweet Frozen Ketchup Dressing Jam casseroles pizza bread ready to eat spread meals 69 Source: AC Nielsen grocery market shares, YTD as of week 36 2013
Slide 38: Mature markets don't exist
-Mature markets don’t exist
Slide 39: Significant growth in market shares
Significant growth in market shares 50 % 50 % 45 % 43 % 45 % 42 % 40 % 41 % 40 % 40 % 40 % 39 % 36 % 35 % 34 % 35 % 34 % 33 % 35 % 35 % 30 % 30 % 25 % 25 % 20 % 20 % 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Stabburet Stabburet Chilled kjølt Total Stabburet Stabburet Leverpostei Le
Slide 40: Income synergies..
Income synergies.. ..through sharing competencies and technologies 72
Slide 41: Slide 41
Slide 42: Improving performance from increased local scale
Improving performance from increased local scale • Building on unmatched market positions • Reaching 2016 targets • Achieving top line growth through improved innovation and scale 74