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 p The Orkla Group December 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 Q 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
Slide 4: Orkla's growth story
Orkla s growth story Orkla’s 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 1982 1983 1992 1996 1997 19
Slide 5: Orkla has created substantial value
Orkla’s growth story Orkla kl has h created d substantial b i l value l 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 1982 1983 1992 1996 1997 1999 2008 2009 2010 1984 1985 1986 1987 1988 1989 1990 1991 1993 1994 1995 19
Slide 6: Strategic direction
Strategic direction pe Developing people — creating value (33 O R IK LA
Slide 7: Key strategic messages
Key y strategic g messages g • 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: 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 b
Slide 9: Non-core assets divested in last months
Non-core Non core assets divested in last 12 months • Successful S f l divestment di off Elkem Elk Silicon-related Sili l d NOK 13 billion • Net e divestments d es e s in the e Share S a e portfolio po o o NOK 4 billion • Sale of Borregaard forests at favourable valuation NOK 1.7 1 7 billion billi 9
Slide 10: Delivering 9 consecutive quarters of operational improvements
Delivering g 9 consecutive q 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 200
Slide 11: Growth through allocating capital within branded goods
STRATEGIC DIRECTION Growth through allocating capital within ithi branded b d d goods d 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 T il Textiles 1 2 Snacks 2 1 1 1 Frozen pizza 1 1 1 K t h Ketchup 1 1 2 1 Dressings 1 1 2 Preserved vegetables 1 1 1 1 Jam/Marmalade 1 1
Slide 13: ...and increasing shareholder value
…and increasing shareholder value 20ROCE (%) 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 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 d l integration 14
Slide 15: Increasing growth opportunities
Increasing growth opportunities • An A increasing i i number b off potential i l targets identified id ifi d within i hi relevant categories and geographies • Expansion opportunities along several dimensions • Expand Nordic FMCG* operations • FMCG expansion outside Nordic countries • Adjacent catego
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 y and opportunities pp t
Slide 17: Financial flexibility supports group strategy
Financial flexibility supports g o p strategy group st ateg 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 l lbbank k relations l – no loan l syndicates d No financial covenants Flexibility from re-allocation of assets 18
Slide 19: Return of capital to shareholders
Return of capital to shareholders • Dividend d d strategy a gy focuses o u on o predictability p d ab y and a d stability ab y with steady year-on-year dividend increase • Share buy buy-backs backs aim at supplementing dividend • Special dividend based on capital structure 19
Slide 20: General meeting approved a special dividend of NOK 5 per share
Orkla’s general meeting approved a special i l di dividend id d off NOK 5 per share h • Basedd on Orkla’s kl ’ capitall structure ffor the h fiscal f l 0.80+5.00 Dividend Di id d NOK per share h year of 2010, a special dividend was proposed by the Board of Directors 5.00 • Capital structure as of 20
Slide 21: Financial Performance 2010
Financial Performance 2010 21
Slide 22: EBITA improvement for the group in 2010
EBITA improvement p for the g group p 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 mi
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 g restated after sale Elkem Silicon-related 4,056 4,190 3,944 3,875 3,783 3,721 3,289 3,322 3 029 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 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 15 -60 60 Amortisation intangibles -52 52 -213 213 506 2 975 Other revenues and expenses 330 2871 1 813 4 076 EBIT 4
Slide 26: Net gearing 0.42 – Equity ratio 53.6%
Net g gearing g 0.42 – Equity q y ratio 53.6% NOK billion Net gearing 60 1.40 54 1.20 48 1.00 42 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 31.12.2010 31 12 2009 31.12.2009 Industry division: Operating profit 2 940 5 191 Amortisations, depreciations d and d write-downs d 2 503 03 2 653 6 3 Gain, sale of hydro power assets/sold companies -3 066 Changes in net working capital -1 462 2 197 Net replace
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 t ib ti by b segments t Borregaard 451 Hydro Power 173 1.908 O kl B Orkla Brands d 698 Sapa Amounts in NOK million at Q3 Q3-11 11 30 30
Slide 31: Continued profit growth
Continued profit growth Rolling 12 months EBITA Figures restated after sale Elkem Silicon-related NOK million 4,222 4,302 4,056 4,070 4,190 3,944 3 875 3,875 3,783 3,721 3,289 , 3,322 3,029 2,821 2 719 2,719 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2008 2008 2008 2008 2009 2009 2009 2009 2010 2010
Slide 32: Highlights Q3-11
Highlights g g Q Q3-11 • EBITA growth for the 9th consecutive quarter • +9% compared with Q3-10 Q3 10 • Satisfactory performance for Orkla Brands • High Hi h raw material t i l prices i compensated t d for f ini the th quarter t • Softer markets for Sapa • Satisfactory S ti f t ffor P Profiles fil N
Slide 33: Change in EBITA Q3-10 to Q3-11
Change in EBITA Q3-10 Q3 10 to Q3-11 Q3 11 1 124 1 30 -14 72 1 035 Q3-10 Borregaard Sapa Orkla Hydro Power Q3-11 Chemicals Brands and other 33
Slide 34: Group income statement
Group income statement Amounts in mill. NOK Q3 2011 Q3 2010 Change Operating revenues 14 896 14 198 5% EBITA 1 124 1 035 9% Amortisation intangible assets -9 -12 Other income and expenses -178 -15 EBIT 937 1 008 Profit/loss associates -1 787 2 089 Dividends received, gains, losses and write-downs Sh
Slide 35: Cash flow third quarter
Cash flow third quarter q Amounts in NOK million Q3-11 Q3-10 Cash flow Industial Activities: Operating profit 942 1 006 Amortisation, depreciations and impairment charg 531 464 Changes in net working capital, etc. 1 - 261 Net replacement expenditure - 291 - 365 Cash flow from operations 1 183 844 Fi
Slide 36: Balance sheet as of 30 Sep 2011
Balance sheet as of 30 Sep p 2011 Amounts in NOK million 30.09.2011 31.12.2010 g Intangible assets 13 082 12 960 Property, plant and equipment 17 828 17 730 Financial assets 6 501 10 985 Non-Current assets 37 411 41 675 Assets in discontinued operations - 13 891 I Inventories i 8 094 7 102 Receivabl
Slide 37: Information per business area
Information p per business are 37
Slide 38: Orkla Brands
[ og a rex) Od Pow yA pu Orkla Brands | Developing people — creating value (33 O R IK LA
Slide 39: 25 years of 8% revenue growth
25 years of 8% revenue growth Turnover, NOK million CAGR 1986-2010 Pekar MTR Chips Peterhof Panda Sonneveld Collett Kalev SladCo Krupskaya Dansk Droge Bakehuset Kotlin Superfish VOLVO Turnover: AGREEMENT OF Romania Guseppe + 8% Procordia Abba Seafood NORA Felix Abba ACQUISITION Beauvais Felix Austri
Slide 40: Majority of turnover is derived through B2C in the Nordics
Majority of turnover is derived through B2C in the Nordics Share of turnover 2010 Other 6% Asia 2% Russia & CEE Key figures (NOK million) 2010 12 % Norway Finland 38 % Turnover 23 627 8% Denmark EBITA 2 967 11 % Sweden Man-years 13 918 23 % Nordic = 80% 40
Slide 41: 80% of turnover from leading market positions
80% of turnover from leading market positions Orkla Brands Food Foods Nordic Brands Nordic Brands International Ingredients 41
Slide 42: Leading local brands in Norway
Leading g local brands in Norway y Market shares Stabburet Dr. Oetker 80% 14% Lilleborg P&G 78% 6% Source: ACNielsen 42
Slide 43: Leading local brands in Sweden
Leading local brands in Sweden Market shares Procordia Heinz 55% 33% Göteborgs Kex Kraft 12% 1% Source: ACNielsen 43
Slide 44: Leading local brands in Denmark & Estonia
Leading g local brands in Denmark & Estonia Market shares KiMs Frito-Lay 47% 9% mark Denm Kalev Mars 35% 6-7% onia Kraft 3 4% 3-4% Esto Source: ACNielsen 44
Slide 45: Competitors
Competitors «| Developing people — creating value (33 O R IK L A
Slide 46: General characteristics of competitors
General characteristics of competitors • International or global in scope • Far bigger than our own operations • Focus on global power brands • Pursuing a “race for scale” (primarily upstream) • Centrally C t ll led, l d with ith local l l “go “ to t market” k t” organizations 46
Slide 47: Examples of main competitors
Examples of main competitors Categories g Competitors p Detergents P&G, Reckitt Benckiser, Colgate-Palmolive, Sara Lee Personal Care P&G, Colgate-Palmolive, L‘Oréal Biscuits Kraft Foods Confectionery K ft Foods Kraft F d Dietary Supplements Midelfart Sonesson, Cederroth Textiles H&M, Lindex Snacks M
Slide 48: Growth through allocating capital within branded goods
STRATEGIC DIRECTION Growth through allocating capital within branded goods 48
Slide 49: Orkla Brands – strategic direction
Orkla Brands – strategic direction • Growth strategy; a combination of organic growth through existing businesses and acquisitions, primarily in markets in which Orkla Brands is already present • Continue to operate on the basis of The Multi-Local Model where responsibility for value creation lies w
Slide 50: Strategic and financial targets
Strategic and financial targets • Annual EBITA growth of 10% through a balanced split between organic and structural growth • Profitable structural growth through increased scale in existing geographies • Create category growth & achieve volume growth that exceeds market growth • Underlying improvem
Slide 51: Local scale is the core of our strategy
Local scale is the core of our strategy 51
Slide 52: The Multi-Local Model is uniquely positioned to...
The Multi-Local Model is uniquely positioned to... • …create competition barriers by satisfying local customer preferences • …create create more value through innovation and synergy extraction than local firms can achieve alone 52
Slide 53: Most markets are local, example: Chocolate in Norway & Sweden
Most markets are local, example: Chocolate in Norway & Sweden (Illustrative) S d Sweden N Norway ~15% of brands Source: Euromonitor are in both markets 53
Slide 54: Characteristics for defining a relevant geographical market
Characteristics for defining a relevant geographical market • Local tastes and preferences • Predominantly local assortments • L Locally ll bbased d mass media di • Leadership network • Could be national, regional or even purely local 54
Slide 55: Orkla Brands' competitive advantages
Orkla Brands’ competitive advantages • Strong consumer loyalty to our local brands • We always operate in home markets (Multi- Local Model) • Attract and develop the best leaders through p broad value chain exposure and career • Complete local value chains • Superior local consumer insight as a base
Slide 56: Acquisitions > NOK 100 million, 2004-2010
Acquisitions > NOK 100 million, 2004 2010 2004-2010 Enterprise value, NOK million • Chips 3 060 • Dansk Droge 928 • Sladco 713 • Collett Pharma 535 • Panda 494 • MTR 482 • Krupskaya p y 339 • Peterhof 263 • Kalev 257 • Bakehuset 257 • Sonneveld 217 • Brinkers Romania 153 • Pekar 122 • Ardealul Roman
Slide 57: Geographical priorities for acquisitions
Geographical G og p p priorities o s for o acquisitions qu s o s Increase scale in existing geographies a) Norway, Norway Sweden, Sweden Denmark and Finland b) Estonia, Latvia and Lithuania c)) South-India and regions g in Russia 57
Slide 58: Product category search criteria
Product category g search criteria • Localness • Are there locally distinguishable preferences? • Size and g growth dynamics • Is the category sufficiently large/too large? • Is the category supported by key trends? • Synergy potential • How can we add value to the category? • What synergies can we
Slide 59: Company search criteria
Company search criteria • It is easier to turn a “good” company into a “great” company than to transform a “weak” weak company into a “good” good company • We have few general preferences with regards to specific product category criteria - they must be assessed for each relevant geography 59
Slide 60: Financial results 2010 and Q3-11
Financial results 2010 and Q3-11 60
Slide 61: Operating revenues and EBITA 2010
Operating revenues and EBITA 2010 Operating revenues per area EBITA per area 61
Slide 62: Brands - Highlights 2010
Brands - Highlights g g 2010 • Underlying EBITA growth of 7% Operating revenues 2010 2009 Change O kl Brands Orkla B d 23 627 23 046 3% • EBITA-margin 12.6% Orkla Foods Nordic 9 438 9 754 -3 % • Increase in raw material prices Orkla Brands Nordic 7 896 7 722 2% Orkla Brands International 2 009 1 939
Slide 63: Strong local brand positions – high margin level
Strong local brand positions – high hi h margin i llevell EBITA margin, Percent 12 1 % 12.1 12.6 % 11.1 % 10.0 % 2007 2008 2009 2010 EBITA margin 2010 Orkla Foods Nordic 12.1 % Orkla Brands Nordic 19 6 % 19.6 Orkla Brands International 2.0 % Orkla Food Ingredients 5.9 % Orkla Brands 12.6 % 63
Slide 64: Solid cash flow over time
Solid cash flow over time Cash flow, NOK million 3 270 2 965 2 258 2 351 2007 2008 2009 2010 Cash 102% 91% 117% 100% conversion Cash conversion = cash flow from operations before tax / EBITA 64
Slide 65: Consistent long-term performance
C Consistent i t t long-term l t performance f EBITA Rolling 12 months NOK million 3,000 2,800 2,600 2,400 2,200 2 000 2,000 1,800 200 0 Q3- Q4- Q1- Q2- Q3- Q3- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- Q4- Q1- Q2- Q3- 03 03 04 04 04 04 05 05 05 05 0
Slide 66: Margins stabilised at a higher level in the Nordic FMCG companies
Margins stabilised at a higher level in the Nordic FMCG companies % RTM EBITA margin* 16 15 14 13 12 11 1 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 06 06 06 06 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10 11 11 11 * Orkla Brands Nordic and Orkla Foods Nordic 66
Slide 67: Q3-11: Profit in line with last year
Q3-11: Profit in line with last y year,, in spite p of weak markets and higher raw material prices Operating revenues Q3-11 Q3-10 Change • Top line growth of 4%* related to Orkla Brands 6 030 5 804 4% price increases – to offset higher raw Orkla Foods Nordic 2 242 2 267 -1% material prices Orkla Bra
Slide 68: Higher raw material prices in 2011 than in 2010
Higher raw material prices in 2011 th than in i 2010 FAO price index: higher price levels each t in quarter i 2011 th than in i 2010 EU sugar: 50% higher prices than last year + 38% 240 + 34% + 25% 190 220 180 200 170 180 ndex 160 160 ex EU sugar price in FAO price inde 140 150 120 140 100 80 130 F
Slide 69: Orkla Brands' 10 biggest raw material groups
Orkla Brands’ 10 biggest raw material groups Groups 1 V Vegetable t bl oil il 2 Flour, grain and bakery mix 3 Sugar 4 Meat, cut and trimming 5 Cheese 6 Cocoa & chocolate 7 Fruit and berry 8 Spice, dry herb and extract 9 Pelagic 10 Tomato paste p 69
Slide 70: Sapa
Developing people — creating value (33 O R IK LA
Slide 71: The Sapa growth story
The Sapa growth story Sapa sales 1999 Sapa sales 2010 10.5 bn. NOK 27.7bn. NOK 2001–2004 2005 2007 2008 2009 Elkem acquires 74% Orkla acquires Merger of Sapa Profiles Orkla swaps Elkem Orkla acquires of Sapa for 4.0 bn remaining 26% for 1.6 and Alcoa Extrusions Aluminium for Alcoa’s Indale
Slide 72: Sapa operates with three focused business models
Sapa operates with three focused business models Sapa Profiles Sapa Building System Sapa Heat Transfer The world’s leading producer One of the three largest The world’s leading producer of extruded profiles – suppliers of profile-based of strip for heat exchanger including extensive value- building
Slide 73: Sapa delivers to several markets
Sapa delivers to several markets Sapa 100% Profiles Building Heat 76% System Transfer 8% 16% Nordic Rest of North Asia 7% Europe America + RoW 7% 51% 35% 73
Slide 74: Sapa is exposed to a large number of end-user markets
Sapa is exposed to a large number of end-user markets Sales Sa es Sp Splitt by Business us ess Area ea & End-Use d Use Market a et 2010 0 0 Sapa Group 100% Profiles Building Heat 76% System Transfer 8% 16% 78% 22% 100% 15% 5% 8% 22% 13% 37% Distribution Industrial B&C Transport Automotive Other 17%
Slide 75: Sapa in 2005 – a mid-sized European company
Sapa in 2005 – a mid-sized European company Sites: 18 Sales: 12 500 MNOK FTE: 8 000 75
Slide 76: Sapa today – a global company
Sapa today – a global company Sites: 65 Sales: 27 700 MNOK FTE: 14 800 76
Slide 77: Strategic direction: Focusing on value enhancement through operational improvements
Strategic direction: Focusing on value enhancement through operational improvements Strategic i priorities i i i • Strong focus on operational execution to reach financial targets g • Integrating our Asian operations • Strengthening our organization Sapa is outside Orkla’s l long-term t growthth sco
Slide 78: Significant value creation potential
Significant g value u creation o po potential Operational p improvements p • Realistic EBITA margin target of 6% • Proven results for the North American operations – now focusing f i on Europe E The extrusion markets are still below mid-cycle levels Footprint established in Asia, f focus on ramp-up
Slide 79: Significant progress for the NA operations – now focusing on Europe
Significant progress for the NA operations – now focusing on Europe 79
Slide 80: Sapa's financial goals remain firm
Sapa’s Sapa s financial goals remain firm Capital Turnover Rate EBITA-Margin Return on Capital Employed 3 6% 18%
Slide 81: Significant progress towards 6% target in North America
Significant progress towards 6% target in North America Sapa Profiles North America Significant progress towards EBITA margin development 6% target, despite weak 6% m ket markets 5% 4.5% More than 80% of profit growth from internal 4% 2 9% 2.9% 3% improvement 2% Synergies and strategic 1% init
Slide 82: Several actions initiated to improve the European operations
Several actions initiated to improve the E European operations ti Sapa p Profiles Europe p 6% EBITA margin development Volumes improved, however 5% weak results 4% Restructuring programme with 3% annual effect during 2012 2.1% 2.1% 2% Transfer of the learning and 1% experience from the NA 0% o
Slide 83: Significant potential for improvement
Significant potential for improvement Sapa Profiles Europe Average EBITA Margin Ranking, YTD June 2011 Profiles Europe Operating Companies 83
Slide 84: Strengthening restructuring programmes
Strengthening restructuring programmes Restructuring programmes in Europe according to plan Portugal and Denmark implemented Proposal of closure of extrusion activities in Ghlin, Belgium have been accepted - social plan to be formally signed 27 October Additional actions taken in Q3-11 as we
Slide 85: Financial results
td Financial results =| Developing people — creating value (33 O R IK LA
Slide 86: Expectations of underlying market growth for full year 2011 have decreased
Expectations of the underlying market growth for full year 2011 have decreased during Q3 Expected Development by Geographic Region & End End-Use Use Market 2011 vs. 2010 Distribution Industrial Com. B&C Res. B&C Transport Automotive North America 0% to 5% 0% to 5% 5% to -10% 5% to -10% 10% to 15% 0%
Slide 87: Extrusion consumption still well below mid-cycle levels
Extrusion consumption still well b l below mid-cycle id l levels l l Apparent Aluminium Extrusion Consumption 1985 to 2020F 3,500 nt Consumption (ktonnes) 3,000 Europe E CAGR 1985-05 = 3.9% -12% 2,500 2 000 2,000 North America 1,500 -28% CAGR 1985-05 = 2.7% 1 000 1,000 Apparen 500 0 1985 1990 1995 2
Slide 88: Softening markets in Q3-11
S ft i Softening markets k t in i Q3-11 Q3 11 Amounts in NOK million • Satisfactory performance for the Operating Revenues Q3 11 Q3-10 Q3-11 Q3 10 Change North American operations Sapa 7 621 7 024 8% Profiles 6 077 5 577 9% • Continued weak development p and Heat Transfer and Building System 1 762 1
Slide 89: Reported figures 2010
Reported figures 2010 Operating Revenues 2010 2009 Change Sapa 27 684 20 803 33 % Profiles 21 671 15 621 39 % Heat Transfer and Building System 6 814 5 856 16 % Eliminations li i i - 801 - 674 6 EBITA 2010 2009 Change Sapa 744 - 344 Profiles 373 - 574 Heat Transfer and Building System 371 230 61 % E
Slide 90: Sapa's global network a competitive advantage
Sapa’s global network a competitive advantage Local customers Towards solutions Health & Safety World Class Operations World Class Purchasing
Slide 91: Key messages
Key messages • Sapa - the world leader in the attractive aluminium solutions industry • Increased confidence about reaching our 6% margin targets g due to p proven results for the North American operations • Footprint F t i t established t bli h d iin A Asia i – now focusing f i on ramp-up and integ
Slide 92: Borregaard
Borregaard EB Developing people — creating value (33 O R IK LA
Slide 93: Advanced Biorefinery and a global niche player
• Advanced Biorefinery y and a global g niche player p y • Leading market positions in biochemicals like Lignin, Specialty Cellulose and Vanillin • Strong markets and significant operational improvement in 2011 • Internal restructuring of assets underway to facilitate a structural solution 93
Slide 94: Borregaard is the global leader in biobased chemicals
Borregaard is the global leader in biobased chemicals A niche i h player l with ith a specialised i li d product d t portfolio tf li Borregaard’s biochemicals are sustainable and environmentally friendly substitutes to petrochemicals 94
Slide 95: Borregaard is the world's most advanced biorefinery
Borregaard is the world’s most advanced biorefinery High raw materials utilisation and products with a wide range of applications Cellulose Lignin Vanillin Ethanol Construction materials Concrete additives Food Pharmaceutical industry Cosmetics Animal feed Perfumes Bio Fuel F d Food Mi i Mining Ph P
Slide 96: Borregaard – Business areas
Borregaard – Business areas BORREGAARD Specialty p y Ingredients g & Energy Li i Lignin cellulose Pharma Borregaard Borregaard Borregaard Borregaard Borregaard LignoTech g ChemCell Ingredients g Synthesis y Energy Sales distribution (Industry 2010) 23 % 36 % 41 % Lignin Spec cellulose Ingredients&Ph
Slide 97: Business areas
Business areas • Borregaard B d Lignotech Li t h is i th the world’s ld’ lleading di supplier li off lilignin i bi binding di and dispersing agents, with production in eight countries • Borregaard Chemcell is a major European supplier of speciality cellulose for chemical applications. The production
Slide 98: Strategic direction Borregaard
Strategic direction Borregaard • Borregaard is outside Orkla’s future growth scope • Internal restructuring of assets underway to facilitate a structural solution 98
Slide 99: Improved markets for Borregaard Chemicals in 2010
Improved markets for Borregaard Chemicals in 2010 • Improvements for all main Amounts in NOK million Ope ating revenues Operating e en es 2010 2009 Change segments Borregaard Chemicals 3 750 3 815 -2 % • Tight supply and higher prices lead to satisfactory progress for EBITA 2010 2009 Change speciali
Slide 100: Continued strong results for Borregaard in Q3-11
Continued strong results for Borregaard in Q3-11 Q3 • Continued favourable market Operating revenues Amounts in NOK million Q3-11 Q3-10 Change conditions in key segments Borregaard Chemicals 985 933 6% • Significant improvement in EBITA Q3-11 Q3-10 Change results for speciality cellulose Borregaard
Slide 101: Jotun (42.5% ownership)
j otun (42.5% ownership) Ee Developing people — creating value (33 O R IK LA
Slide 102: Jotun – within our branded goods scope
Jotun – within our branded goods scope • Orkla’s ownership: 42.5% • One of the world’s leading/fastest growing manufacturers of paints and coatings g • Represented on all continents via subsidiaries and JVs • Orkla has confirmed its long-term interest in Jotun 102
Slide 103: Jotun - long term value creation
Associated Company: Jotun - long term value creation • 9th largest l t paint i t company in i the th world, ld and d the th ffastest t t growing i • Decorative paints (14%), Marine coatings (52%), Protective coatings (20%), Powder Coatings (8%) • Represented on all continents via subsidiaries and JV
Slide 104: Decades of growth and profitability
Decades of growth and profitability….. Jotun today NOK million Consolidated figures 104
Slide 105: Strong in selected segments and markets
Strong in selected segments and markets Market size : USD 80 billion Jotun sales : USD 2.4 billion Decorative Powder Protective Marine 105
Slide 106: Very strong positions in selected markets
Very y strong gppositions in selected markets Decorative Protective Marine Share Position Share Position Share Position UAE - Abu Dhabi 42% 1 50% 1 - - Saudi Arabia 15% 1 17% 3 17% 3 Egypt 10% 3 48% 1 50 % 1 Yemen 6% 3 55% 1 - - Syria 10% 4 - - - - Jordan 15% 3 - - - - Oman 52% 1 48% 1 - - UAE - Dub
Slide 107: Strong growth and stable profitability
Stronggg growth and stable profitability Annual volume growth % Manageable cost / Working capital % EBITA % ROCE % 107
Slide 108: Reported figures 2010 and second interim 2011
Reported figures 2010 and second interim 2011 Amounts in NOK million Amounts in NOK million Jotun 2010 2009 Change Jotun T2-11 T2-10 Change Revenues 12 003 11 219 7% Revenues 4 660 4 404 6% EBIT 1 343 1 157 16 % EBIT 439 595 -26 % Profit/loss before tax 1 304 1 096 19 % Profit/loss before tax 428 58
Slide 109: REC (39.7% ownership)
REC (39 7% ownership) (39.7% 109
Slide 110: 39.7% share in REC defined as a financial holding
• 39.7% share in REC defined as a financial holding to Orkla • Value potential in a world leading producer of polysilicon • Orkla will support REC in their work on operational i improvements andd structurall solutions l i 110
Slide 111: Renewable Energy Corporation – Key figures
Renewable Energy Corporation – Key figures • REC iis among ththe world's ld' llargestt producers of polysilicon and wafers for solar applications • Revenues 2010: NOK 13,766 million • EBITDA 2010: NOK 3,535 million • Market cap: NOK 29.7 29 7 billion* *31 December 2010 For more information see www w
Slide 112: Reported figures 2010 and Q3-11
Reported figures 2010 and Q3-11 Q3 11 Amounts in NOK million Amounts in NOK million REC Q3-11 Q3-10 Change REC 2010 2009 Change Revenues 3 001 3 783 -21% Revenues 13 776 8 831 56 % EBITDA 370 827 -55% EBITDA 3 532 1 803 96 % EBIT* EBIT -1 1 282 155 EBIT 1 018 -829 Profit/loss before tax - 445 -1 003
Slide 113: Hydro power
Dhinsa itl qe a ——— a » Hydro power EI eee opie — creating value 'G; O R K LA
Slide 114: Hydro Power assets in Orkla
Hydro Power assets in Orkla Assets owned: Plant Capacity Sauda1 1.9 TWh Salten (Nordland) Borregaard2 0.6 TWh 1) Leased from Statkraft until 2030 2)) Not part p of reversion/lease regime g Assets sold in 2009: Bremanger (Sogn og Fjordane) Plant Capacity Price Borregaard (Østfold) Sauda Salten 1.
Slide 115: Hydro Power Q3-11: High volumes, lower prices
Hydro Power Q3-11: High volumes, lower prices • A significant drop in prices Amounts in NOK million EBITA Q3-11 Q3-10 Change during September hampers profit in a quarter with strong Hydro Power 93 98 -5% production • High precipitation and inflow Energy spot price Q3-11 50 gave profit increase for S
Slide 116: Hydro Power figures 2010
Hydro Power figures 2010 Amounts in NOK million • Lower EBITA compared with last Operating revenues 2010 2009 Change year Hydro Power 1 321 1 353 -2 % • 2009 figures include NOK 397 million from sold power plants EBITA 2010 2009 Change Hydro Power 177 801 -78 % • Satisfactory profit in line with las
Slide 117: Share Portfolio
Share Portfolio 117 Developing people — creating value (33 O R IK L A
Slide 118: Strategic direction: Orkla Share Portfolio
Strategic g direction: Orkla Share Portfolio • Share Sh P Portfolio f li will ill be b divested di d • Different exit-routes to be considered • Market value as of 30 September 2011 NOK 7.4 billion • 77% Listed 118
Slide 119: Share Portfolio as of Q3-11
Share Portfolio as of Q3-11 Share Portfolio OSEBX • Market value of the Share MSCI Nordic S&P 500 Portfolio NOK 7.4 billion • Net sales NOK 2.5 billion at 5,3% 30 Sep 2011 1,8% 3,0% 1,2% 1,9% • Return on the Share Portfolio in -1,3% -1,2% first half 2011 -15.6% -2,1% -8,7% • 91% of the portfolio is
Slide 120: Largest holdings in the Share Portfolio as of Sep 2011
Largest g holdings g in the Share Portfolio as of 30 Sep 2011 Amounts in NOK million Principal holdings Industry Market value Share of portfolio Share of (%) equity (%) Tomra Systems Industrials 867 11% 15.5 % Amer Sports Consumer Discretionary 479 6% 5.3 % yj Tikkurila Oyj Materials 317 4% 7.2 % Sc
Slide 121: Orkla
= es {E} ORKLA
Slide 122: Financial Calendar
Financial Calendar • 9 February F b 2012 - Fourth F th quarter t resultslt 2011 • 19 April 2012 - Annual General Meeting • 3 Mayy 2012 - First q quarter results 2012 • 20 July 2012 - Second quarter results 2012 • 31 October 2012 - Third quarter results 2012 122
Slide 123: For more information: www.orkla.com
For more information: www.orkla.com I Investor t Relations R l ti contacts: t t Rune Helland SVP Investor Relations Di Dir: +47 47 22 54 44 11 Mob: +47 97 71 32 50 Mail: rune.helland@orkla.no Siv Merethe S. Brekke VP Investor Relations Dir: +47 22 54 44 55 Mob: +47 93 05 60 93 Mail: siv.merethe.brek