Slide 1: First quarter results 2023
9 May 2023 First quarter results 2023
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by Orkla ASA (the “Company”) solely for information purposes. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities. Certain statements included in this presentation contain various forward-looking
Slide 3: Transformation on track - successful go live 1 March 2023
Transformation on track - successful go live 1 March 2023 Q3-22 Q4-22 Q1-23 Q2-23 New operating model Implementation of Go live New reporting outlined corporate structure new operating model structure • New organization and ambition for • Provide full year indicative top-line • New organization in o
Slide 4: Strong platforms for future value creation
Strong platforms for future value creation • Ongoing strategy process in portfolio companies – strong platforms for future value creation • Nurturing Orkla’s DNA with local consumer insight and brand building expertise • Increased structural flexibility and capital allocation • Orkla Food Ingredient
Slide 5: Summary of financials for the quarter
Summary of financials for the quarter • Group EBIT (adj.) growth of 5% • EBIT (adj.) for Branded Consumer Goods incl. HQ growth of 14% • Organic revenue growth of 13% for Branded Consumer Goods, broad-based and price driven • EPS (adj.) of NOK 1.32 (+6%) *All Alternative Performance Measures (APM) a
Slide 6: Financial performance
Harald Ullevoldsæter, CFO Financial performance
Slide 7: Strong sales growth, EBIT (adj.) driven by BCG incl. HQ
Strong sales growth, EBIT (adj.) driven by BCG incl. HQ Key figures Q1-23 Q1-22 ∆ Q1 Operating revenues BCG 15,755 12,791 +23.2% EBIT (adj.) BCG 1,470 1,277 +15.1% EBIT (adj.) HQ -122 -98 EBIT (adj.) BCG incl. HQ 1,348 1,179 +14.3% EBIT (adj.) Industrial & Financial Investments 258 353 -26.9% Other
Slide 8: Cash flow from operations for the first three months
Cash flow from operations for the first three months Cash flow from operations as at 31.3 (pre-tax) 2023 2022 Orkla Branded Consumer Goods (BCG, incl. HQ) EBIT (adj.) 1,348 1,179 Depreciation 577 491 Change in net working capital -625 -939 Net replacement investments -799 -584 Total BCG cash flow fr
Slide 9: Negative translation effect from debt in foreign currency
Negative translation effect from debt in foreign currency 19,583 = 2.0x EBITDA* 1,444 852 17,188 5 740 834 Net debt 31 Cash flow Taxes & Dividends Expansion FX effects Net debt 31 December from financial and share capex and March 2023 2022 operations items buyback net M&A Amounts in NOK million 9 *
Slide 10: Branded Consumer Goods (BCG)
Branded Consumer Goods (BCG)
Slide 11: Significant organic growth supported by currency translation
Branded Consumer Goods Significant organic growth supported by currency translation BCG revenue, Q1-22 → Q1-23 (MNOK) 7.5% 2.4% 15,755 13.4% 12,791 Q1-22 Organic growth FX M&A Q1-23 All Alternative Performance Measures (APM) are presented in the appendix 11
Slide 12: Organic growth across business areas, driven by price
Branded Consumer Goods Organic growth across business areas, driven by price Organic growth for Branded Consumer Goods Organic growth Q1-23 by business area Orkla Foods Europe 10.3% 13.4% Orkla India 17.6% 9.6% Confectionery 13.6% & Snacks 7.7% Orkla Care 8.5% 4.3% Orkla Food 22.0% Ingredients 1.8%
Slide 13: Continued progress for the three prioritized growth initiatives
Continued progress for the three prioritized growth initiatives Full-year baseline (2021) Reported Q1-23 (YoY)* Consumer Health Revenue Growth Grow at least 50% by 2025 BNOK 4.6** 20% Consumer sales Growth Out of Home MEUR ~337 **/*** 25% A European leader in pizza franchise No of outlets No of outl
Slide 14: Price increases drive profit improvement, while cost increases continue to weigh on margin
Branded Consumer Goods incl. HQ Price increases drive profit improvement, while cost increases continue to weigh on margin ∆ Q1 U.EBIT (adj.), MNOK ∆ R12M U.EBIT (adj.) margin 1.8% 1,348 10.6% 7.5% -1.7% 5.0% 8.9% -0.1% 1,179 Q1-22 Underlying FX M&A Q1-23 R12M Q1-22 Underlying M&A and R12M Q1-23 gro
Slide 15: Orkla Foods Europe: EBIT (adj.) growth despite inflation
Orkla Foods Europe EBIT (adj.) growth despite inflation effects across the value chain Q1-23 Q1-22 Revenues 4,903 4,239 • Broad-based, price driven organic sales growth across all markets Organic growth +10.3% +7.3% • Profitability hampered by higher input costs and EBIT (adj.) 510 469 general infla
Slide 16: Orkla India: Strong sales performance and high profit growth
Orkla India Strong sales performance and consequently high profit growth partially offset by higher investments in advertising Q1-23 Q1-22 Revenues 672 550 • Organic sales growth significantly driven by price increases with moderate volume development Organic growth +17.6% +6.4% • Double-digit sales
Slide 17: Orkla Confectionery & Snacks: Price driven top-line growth
Orkla Confectionery & Snacks Price driven top-line growth. Delayed volume ramp-up at new biscuit factory Q1-23 Q1-22 Revenues 1,994 1,679 • Price driven top-line growth. Market volume decline is flattening out Organic growth 13.6% -1.1% • High input cost inflation continues with additional EBIT (adj
Slide 18: Orkla Care: Top-line growth and positive profit development
Orkla Care Top-line growth and positive profit development Q1-23 Q1-22 Revenues • Top-line growth from strong sales in HSNG, 2,549 2,156 NutraQ and Home & Personal Care International, Organic growth 8.5% 5.9% offset by weak sales in some Health markets • EBIT (adj.) growth from price increases and E
Slide 19: Orkla Food Ingredients: Strong performance from broad-based revenue growth
Orkla Food Ingredients Strong performance from broad-based revenue growth Q1-23 Q1-22 Revenues 4,393 3,124 • Strong organic revenue growth was broad-based across categories and geographies Organic growth +22.0% +21.1% • EBIT (adj.) growth driven by good revenue EBIT (adj.) 238 140 management, but so
Slide 20: Orkla Consumer Investments: Solid consumer sales growth across pizza franchise
Orkla Consumer Investments Continued solid consumer sales growth across pizza franchise network Q1-23 Q1-22 Revenues 1,401 1,170 • Pizza business drives organic sales growth for Consumer Investments, but strong top-line also in Organic growth +9.0% -4.3% other companies, except for painting tools EB
Slide 21: Jotun (42.7%): Strong start to the year
Jotun (42.7%) Strong start to the year Jotun 100% basis Q1-23 Q1-22 • Continued sales growth driven by price Revenues 7,766 6,287 increases as well as moderate volume growth. Double digit growth in all regions except for Revenue growth +23.5% +14.6% Scandinavia. EBITA 1,618 895 • Gross margin recove
Slide 22: Industrial & Financial Investments: Hydro Power profit impacted by lower prices
Industrial & Financial Investments Hydro Power profit impacted by lower power prices and introduction of windfall taxes 2 Hydro Power Fully consolidated into Orkla’s financial statements Volume Power prices1 EBIT adj. (GWh): (øre/kWh): (NOK million): Q1: 503 (511) Q1: 118,0 (149,4) Q1: 255 (345) Fin
Slide 23: Closing remarks
Nils K. Selte, President & CEO Closing remarks
Slide 24: Closing remarks
Closing remarks • Solid Group EBIT (adj.) growth in the quarter • Transformation of Orkla going according to plan • We will create sustainable value through active ownership of brands and consumer companies 24
Slide 25: Q&A
Nils K. Selte, President & CEO Harald Ullevoldsæter, CFO Q&A
Slide 26: Upcoming events
Upcoming events: Second quarter 2023 14 July 2023 Capital Markets Day 2023 29 November 2023
Slide 27: Appendices
Appendices
Slide 28: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest-bearing liabilities (NOK million) NIBD / R12M EBITDA 19,583 2.0x 17,188 1.8x 1.5x 12,758 1.0x 0.9x 17,374 6,551 6,380 15,217 10,834 0.5x 3,037 4,895 4,893 2018 2019 2020 2021 2022 Q1-23 2018 2019 2020 2021 2022 Q1-23 Leasing debt Ex leasing
Slide 29: Funding sources and maturity profile
Funding sources and maturity profile Debt maturity → average maturity 3.3 years Funding sources (in BNOK) MNOK 8,000 1.7 7,000 9.6 6,000 5,000 12.6 4,000 3,000 6.5 2,000 1,000 Unutilised credit facilities Banks 0 Bonds and CP 2023 2024 2025 2026 2027 2028 - Cash, cash equivalents and interest bearin
Slide 30: Indicative revenues and EBIT (adj.) per portfolio company
Indicative revenues and EBIT (adj.) per portfolio company NOK Million*** Q1-22 Q1-23 Revenues EBIT (adj.) Revenues EBIT (adj.) Orkla Foods Europe 4 239 469 4 903 510 Orkla Food Ingredients 3 124 140 4 393 238 Orkla Confectionery & Snacks 1 679 191 1 994 187 Orkla Health */** 1 867 279 2 198 310 Orkl
Slide 31: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Organic growth Organic growth shows like-for-like turnover growth for the Group’s business portfolio and is defined as the Group’s reported change in operating revenues adjusted for effects of the purchase and sale of companies and currency effects. In calculat
Slide 32: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Earnings per share (adj.) Earnings per share (adj.) show earnings per share adjusted for “Other income and expenses” (OIE) after estimated tax. Items included in OIE are specified in Note 3. The effective tax rate for OIE is lower than the group’s tax rate, chi
Slide 33: ‘Orkla
A, ‘Orkla