Orkla Asa · OSL:ORK
Orkla Asa — Investor Day (November 2023)
76 slides from Orkla Asa's investor day presentation, Nov 29, 2023
Slide 1: Presentation material Portfolio Companies not presenting, collated
Presentation material Portfolio Companies not presenting, collated Orkla Capital Markets Day 29 November 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: Portfolio Company Presentation Material
Portfolio Company Presentation Material The European Pizza Company Orkla Home & Personal Care Orkla House Care Page 4-16 Page 17-27 Page 28-42 Health and Sports Nutrition Group Pierre Robert Group Lilleborg Page 43-53 Page 54-61 Page 62-72
Slide 4: Expanding existing business while harnessing portfolio synergies
EXPANDING EXISTING BUSINESS WHILE HARNESSING PORTFOLIO SYNERGIES ORKLA CAPITAL MARKETS DAY 2023
Slide 5: Aspiration
ASPIRATION The European Pizza Company aspires to be the leading The European Europeancollection of sustainable Pizza Company (TEPC) is local pizza the leading brands European collection of sustainable local pizza brands. 5
Slide 6: Our collection, our presence
OUR COLLECTION OUR PRESENCE Consumer 4 823 sales markets restaurants Offline Consumer EUR 419mn EUR 22mn sales consumer EBIT (adj.) Online sales Note: Figures per Q3 / LTM Q3 2023 6
Slide 7: Strong historical growth
STRONG HISTORICAL GROWTH Number of restaurants (#) Consumer sales (EUR million) Organic revenue growth (%) 823 419 358 11.2% 11.3% 11.3% 662 677 217 286 291 133 117 n.a. 2019 2020 2021 2022 Q3’23 2019 2020 2021 2022 LTM Q3’23 -1.3% 2019 2020 2021 2022 LTM Q3’23 EBIT adj. (EUR million) Online sales a
Slide 8: The European Pizza Company is positioned to continue the growth journey in an attractive market
The European Pizza Company is positioned to continue the growth journey in an attractive market Development in total addressable1) European Limited-Service Restaurants (LSR) pizza markets (EUR billion) Forecast +5.3% p.a. 13.5 +4.7% p.a. +6.2% p.a. 10.4 +3.4% p.a. 9.1 7.1 5.6 2008 2009 2010 2011 201
Slide 9: Growth since market entry in 2019, supported by an active M&A strategy
The European Pizza Company has grown continuously since the market entry in 2019, supported by an active M&A strategy Companies acquired M&A strategy # Consolidation date Company Geography Strategy 124 Market leader entry • Acquisition of market leading local brands, holding #1 or strong #2 market 1
Slide 10: Together with franchisees, we adapt to local demands
Together with the franchisees, we adapt to local demands and continuously develop the local brands Entrepreneurship Local ambassador Consistency Growth engine Shared success Franchisees thrive with Franchisees personify Franchisees are provided Partnering with Shared risk and reward strong support,
Slide 11: Capital-light and scalable franchise model
Capital-light and scalable franchise model based on aligned incentives, with consumer sales being the most important value driver Sales and marketing reinforcement Raw materials required to bake and sell supplied by franchisor 1 + + + + Pizza restaurant Pizza restaurant Pizza restaurant Pizza restau
Slide 12: Tools to be the preferred home for local pizza brands
The European Pizza Company has the tools to be the preferred home for local pizza brands and their franchisees Group management team Local management team Local management team Local management team Value chain ownership Common operative platform Best practice sharing Full control of value chain fro
Slide 13: Three growth pillars
Becoming the leading European collection of sustainable local pizza brands through three growth pillars A B C Expand current business Smarter together Continue our M&A journey Key focus on expanding existing Leverage scale to extract synergies Targeted M&A agenda to further drive network, a capital-
Slide 14: Investment highlights
Investment highlights Resilient EUR +10 billion European total addressable1) market with attractive growth expectations Established local sustainable franchised pizza brands with leading domestic positions and strong management teams Strong financial track record driven by organic network expansion
Slide 15: Financial targets 2024-2026
FINANCIAL TARGETS 2024-2026 > 5% consumer sales growth p.a. 2024-2026 EBIT (adj.) of EUR 35-40mn by year-end 2026 Note: Financial targets based on organic portfolio growth 15
Slide 16: Lee
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Slide 17: Turnaround for sustainable profitable growth
Turnaround for sustainable profitable growth Orkla Capital Markets Day 2023
Slide 18: A leading Nordic Home and Personal Care company with strong local brands
NORDIC Our key markets are Norway, Sweden and Finland. Stable and profitable markets STRONG LOCAL We are a leading Nordic Home BRANDS # 1 and 2 positions in Norway and and Personal Care company with challenger positions in Sweden and Finland strong local brands and local value LOCAL VALUE CHAIN chai
Slide 19: Stable and predictable categories
Orkla Home & Personal Care is located in stable and predictable categories Home Care Personal Care NOK 11bn NOK 40bn Market size Nordics Market size Nordics 3.7% 4.1% CAGR (2018-22) CAGR (2018-22) Consolidated category Fragmented category Underlying trends supporting growth Sustainability Holistic C
Slide 20: Nordic heritage brands with winning positions
Portfolio of Nordic heritage brands with winning positions, outperforming international competition in the Norwegian General Food Trade Strong local brands with best selling positions in many segments in Norwegian General Food Trade, and well-established challenger brands in Sweden and Finland Since
Slide 21: Strong competitive edge on sustainability
Leveraging a strong competitive edge on sustainability across the value chain, offering desirable and more sustainable solutions to consumers Strong competency, and experience New and breakthrough innovations Deep knowledge of European across value chain, where with consumer desirable solutions regu
Slide 22: Local value chain with regional scale
Local value chain with a regional scale enables speed, flexibility and greater traceability while reducing risks of potential adverse macro-economic effects Factories positioned Regional scale in value chain in core markets • Orkla Home & Personal Care is the largest producer in the Nordics with pro
Slide 23: Cash conversion and EBIT development
Stable track-record over time, and despite a tough 2022, Orkla Home & Personal Care is regaining financial health EBIT (adj.) & cash development Major changes over time • Orkla Home & Personal Care experienced solid EBIT development ahead of and throughout Covid. EBIT (adj.) 422 Historically a stron
Slide 24: Strong growth ambitions with key strategic pillars
Orkla Home & Personal Care has strong growth ambitions with key strategic pillars enabling the journey Orkla Home & Personal Care has accelerated the transformation journey through completing a restructuring of the Norwegian and Swedish organization 3 Accelerate Drive sustainable growth 2 Grow Strat
Slide 25: Key strategic growth pillars
Key strategic growth pillars to deliver on Orkla Home & Personal Care growth ambitions with focus, precision and speed Grow Core Business Future Core Efficient organization Norway Invest in future core Efficient organization Continue to build strong brands in General Food Leverage Orkla Home & Perso
Slide 26: New organizational set-up
New organizational set-up fit to execute on strategic priorities Orkla Home & Personal Care has Crystal clear prioritizations, and focus A strong entrepreneurial mindset restructured to implement an is set within the organization, closely fostering an execution-oriented organizational set-up fit for
Slide 27: Strategy summarized: EBIT CAGR above 10%
Strategy summarized Orkla Home & Personal Care is to regain strong financial health with an EBIT CAGR above 10% and with a >100% cash conversion, 2023 - 2026 A clearer, future journey With three superior supported by a strong plan competitive advantages Strong local brands • Strong competency and ex
Slide 28: Transforming for long-term value creation
Orkla Capital Markets Day 2023 Transforming for long-term value creation Strictly Private & Confidential
Slide 29: Leading designer, manufacturer and marketer of painting tools
Orkla House Care is the leading designer, manufacturer and marketer of painting tools and accessories in Northern Europe with strong heritage brands which deliver on our target users’ needs with innovative and sustainable products and solutions 29
Slide 30: Brand leadership in Nordics, Benelux and UK
Today, Orkla House Care has brand leadership in the Nordics, Benelux and UK, and an increasing presence in over 50 international markets DIY PRO 1.4bn NOK Sales in 2022 Exports to >50 Office location other markets 30
Slide 31: Over 150 years of experience in painting tools
Leadership comes from over 150 years of experience in designing, manufacturing and supplying superior painting tool products 1845 1928 1946 60s & 70s 21st Century Initiation of Anza founded Unique in-house R&D Manufacturing excellence brush by Damberg competence developing with modern materials and
Slide 32: Painting tools in a global landscape
The business operates in a global landscape, where Painting Tools play a crucial role in the application of surface coatings Large global market for paint Painting Tools & Accessories are a Demand drivers and where used and coatings critical part of the application solution are common across all mar
Slide 33: Value for sellers and a robust base of users
Orkla House Care creates value for sellers and has a robust base of users and segments despite economic headwinds … Allowing Orkla House Care to Branded tools build … Who service end-users with brand focus on the more robust industry margin for paint sellers ... loyal characteristics…. segments Illu
Slide 34: History of robust topline performance
Financially, Orkla House Care has recorded a history of robust topline performance and delivered consistent EBIT rates pre-Covid Operating revenue and EBIT (adj.) margin development (reported Group figures) Nordic UK Benelux Export EBIT (adj.) margin • Acquisitions and strong revenue NOK Millions ma
Slide 35: At the start of a new era
Orkla House Care is now at the start of a new era, with a bold and transformative ambition to optimise its positioning …..but will now focus on leveraging its core assets OHC has acquired leading brands in attractive and competences to build an more integrated and markets and focused on maintaining
Slide 36: Building an integrated platform
The overarching goal during the strategy period is to build an integrated platform, enabling scale in activities and long-term value creation… Activities in the Will enable Orkla transformation journey: By end 2026; an integrated platform House Care to deliver on: Category Development Increased New
Slide 37: Key metrics within first strategic phase to 2026
…whilst continuing to perform against key metrics within first strategic phase to 2026 Margin target Capital efficiency EBIT (adj.) Inventory margin uplift of reduction of +5%-p 2%-p vs 2023 exit rate vs 2023 exit rate 37
Slide 38: Strategic agenda 2024-2030
Orkla House Care will achieve its goals by building organisational alignment behind a refreshed long-term strategic agenda… STRATEGIC AGENDA 2024 → 2030 VALUE- SUPPLY CATEGORY SUSTAINABLE ADDING CHAIN LEADERSHIP BUSINESS INNOVATION EXCELLENCE Product development Leadership in attractive Efficient fo
Slide 39: Leveraging core strengths and unique value chain
...and will unlock greater long-term sustainable value by leveraging its core strengths and optimising its unique value chain Design & prototyping Engineering & User insight & testing understanding End-user Branding & experience positioning Owned In-market production commercialisation Packaging comm
Slide 40: Transforming ways of working
Orkla House Care is also transforming its ways of working to build full alignment to its strategic priorities Strategically aligned goals, KPIs and management systems Simplified operating model driving collaboration and clarity Common ERP platform providing data and creating standarised ways of work
Slide 41: Well placed to capture opportunities
Combining a robust base with a new strategy, Orkla House Care is well placed to capture opportunities and succeed in its journey to grow value Strong brands with leading positions in key European markets Targeting future growth from robust end-user segments Focused on margin expansion through brands
Slide 42: Slide 42
Slide 43: Turning growth into profits
Orkla Capital Markets Day 2023 Turning growth into profits 43
Slide 44: HSNG is the prominent Nordic Sports Nutrition player
HSNG is the prominent Nordic Sports Nutrition player with market leading D2C platforms and own brands cross all markets Retail brand Position Geographical footprint Key facts1 Online sports nutrition + adjacencies Operating revenue EBIT adj. (Revenue share) Online sports nutrition + (7%) (11%) adjac
Slide 45: 14% sales CAGR over five years
Over the last 5 years, HSNG has achieved a 14% sales CAGR, significantly surpassing market growth with improved EBIT in 2023 HSNG P&L Development (NOK million) EBIT adj. Revenue +14.3% -9.0% 34 +24.4% 29 9 46 22 43 47 24 40 50 17 10 1,219 34 922 1,056 1,100 610 763 814 794 743 632 688 325 426 2011 2
Slide 46: Growth in sports nutrition fuelled by health trends
Growth in sports nutrition is fuelled by health trends and innovation which has driven the total Nordic sports nutrition to NOK ~4,4 billion Market value growth by country NOK billion1 Comments • The growth is fueled by long-term trends such as awareness about health and wellness and +5.4% nutrition
Slide 47: Competitive edge: brands, scale and route to market
HSNG’s competitive edge is centered around its strong product and retail brands, unparalleled scale and route to market capabilities Leading sports nutrition D2C Unparalleled scale in the Nordics Unique route to market capabilities platforms and brands • 6 different D2C brands catering to multiple •
Slide 48: Shift focus from growth to profit and cash
Moving forward HSNG will shift focus from growth and investments to profit and cash through 3 key initiatives Shifting from topline growth and building scale… ...towards driving profitability through 3 major initiatives • HSNG has robust brands and hold a commanding market position across the Nordic
Slide 49: Automating warehouse operations
1 Automating HSNG's warehouse operations will not only elevate the customer experience but also yield cost savings Extract profit from new fulfilment centre Implemented automated warehouse live from Q3 2023… Improving profitability Further developing competitive edge • Investment in warehouse automa
Slide 50: Gross margin expansion
2 Gross Margin expansion through increased Own Brands share, extracting costs in supply chain and optimizing pricing Gross margin expansion Gross Margin improvements through supply Increase Own Brands share of sales Revenue management and price optimization chain efficiency gains • Capture potential
Slide 51: Cementing market position through marketing tactics
3HSNG aims to save resources in lower funnel marketing channels and attracting new customers using new marketing tactics Cementing market position Drive profitable growth through profit-based performance marketing Attract new customers through new marketing tactics • Implement bidding with higher pr
Slide 52: 2024-2026 targets: revenue, EBIT margin, cash conversion
During 2024 – 2026 HSNG will grow in line with market while improving EBIT and free cash flow 5% Operating Revenue Grow in line with market… CAGR 5% EBIT adj. margin Improve profitability… 100% Cash Conversion And extract cash 52
Slide 53: HSNG Investment highlights
HSNG Investment highlights Estimated total addressable market (Nordic sports nutrition) of NOK 4.4 billion in 2022 with an expected 1 annual growth of 5.4% until 20271 2 Clear Nordic market leader cross all major channels with leading brands and distribution Unique Nordic and multi-channel footprint
Slide 54: Pierre Robert Group
Pierre Robert Group Creating consumer value through sustainable comfort and omnichannel presence Orkla Capital Markets Day 2023
Slide 55: The Nordic favourite for sustainable comfort
Pierre Robert Group – The Nordic favourite for sustainable comfort Key facts about the company Exceptional distribution in grocery channel 604 26 2006 Operating revenue EBIT (adj.) Established NOK million* NOK million* 73% market share in grocery in Norway Award winning sustainable value chain Key f
Slide 56: Strong brand portfolio with winning positions
Strong brand portfolio with winning positions in Norwegian and Finish grocery, and brand awareness outperforming major textile players in total market • Strong local brands with #1 positions in Norway and Finland Since Since Since Since Since • Nordic heritage 2006 1975 1966 1978 1959 brands with lo
Slide 57: Capitalising on consumer trends and new markets
Driving value by capitalising on consumer trends and growth in new markets Category expansion Sustainability excellence Channel expansion Geographic expansion Pierre Robert brand launched Member of Ethical Trade since 2005 Web-shop launched Entered Finland Entered Finland through strong local Pierre
Slide 58: Better basics, never compromising on comfort
Pierre Robert Group promise better basics, never compromising on comfort, always flattering to wear 1 Key actions Grow the core Strengthen and optimize the core of comfortable and Launch a new favourite brand, targeting urban men, affordable basic textiles, mainly sold in grocery channel with comfor
Slide 59: Exceptional availability through grocery and online
Exceptional availability through grocery stores and online presence 1 Grow the core Key actions Expand high quality, sustainable capsule wardrobe for Step up and increase web-shop investments. Grow Nordic lifestyle in own web-shop with KAPSEL as ecommerce excellence and ensure profitable increase in
Slide 60: Long-term sustainability efforts
Long term systematic efforts to ensure sustainability has put Pierre Robert Group in a strong competitive position for the new directives* to come 1 Grow the core Sustainability achievements Guide for sustainability ambitions Slow fashion Pierre Robert Group enables consumers to buy less and will no
Slide 61: Strategic priorities 2024-2026
Strategic priorities (2024-2026) 2026-targets Grow the core* Environmental, social and governance target Financial target Strategic priorities Leverage omni- channel presence >80% >100 Running items** NOK million Avoid fast fashion accumulated net cash trends and reduce generation surplus (2024-2026
Slide 62: #1 player within professional cleaning
6 2 #1 player within professional cleaning, with resilient business model and steady growth Orkla Capital Markets Day 2023
Slide 63: Lilleborg: Norway's market leader in professional cleaning
Investment highlights Company & market Business strategy Financial targets Case example Lilleborg is Norway’s market leader within professional cleaning solutions for the B2B market. Driving value through deep, targeted expertise and customer insight, in addition to sustainable and proven, innovativ
Slide 64: 190-year legacy on the Norwegian market
Investment highlights Company & market Business strategy Financial targets Case example Lilleborgs company name has a 190-year legacy on the Norwegian market Founded in 1833 by Peter Møller that produced soft soap and toilet B2B-focused, leading provider of professional cleaning solutions in the soa
Slide 65: Strong company culture
Investment highlights Company & market Business strategy Financial update Case example Lilleborg’s foundation is a strong company culture, with a passionate & entrepreneurial spirit Employees are 93% of all employees say they are proud to work in proud to work in the company1 the company Average len
Slide 66: Norway's professional cleaning market is growing
Investment highlights Company & market Business strategy Financial targets Case example Norway’s professional cleaning market is growing and highly attractive A market of NOK 2 billion split in two segments… …with attractive market conditions for Lilleborg 1 Total addressable market, revenue in NOK
Slide 67: Leading positions in both business areas
Investment highlights Company & market Business strategy Financial targets Case example Lilleborg has leading positions in both business areas Professional cleaning Food & beverage Hospitals, schools, Hotels, canteens Facility Aquaculture Food industry Dairy Customers & nursing, day care and restaur
Slide 68: Strong market position with steady growth
Investment highlights Company & market Business strategy Financial targets Case example Lilleborg has a strong market position with steady growth Resilient business model with steady growth… …with a 3% CAGR between 2019 and 2022 750 Operating Revenue3 EBIT (adj.) % 1 600 Market leader on the Norwegi
Slide 69: Value creation through three key pillars
Investment highlights Company & market Business strategy Financial targets Case example Lilleborg creates value through three key pillars… Targeted Close to the Sustainability at Lilleborg’s way of expertise customer the core working … creating value (i.e., improved financial results, more sustainab
Slide 70: Strong ambition and clear strategy
Investment highlights Company & market Business strategy Financial targets Case example …and is guided by a strong ambition and clear strategy Ambition Lilleborg shall be a full-service cleaning supplier that creates value for the customers Strategic Strengthen our Profitable growth Value-added posi
Slide 71: Financial targets 2024-26
Investment highlights Company & market Business strategy Financial targets Case example Financial targets 2024-26 Solid long-term growth Long-term revenue growth Solid financial returns Capital light model CAGR 3-5% CAGR 10-12% Target >90% Operating revenue EBIT (adj.) Cash conversion1 71 1 Cash flo
Slide 72: EnduroPower: creating value for the end-customer
Investment highlights Company & market Business strategy Financial targets Case example EnduroPower Creating value for the end-customer and saving cost for all stakeholders THE CUSTOMER THE CASE THE IMPACT Lerøy Aurora, Skjervøy, Norway. In close collaboration with the customer, Identified yearly sa
Slide 73: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Contribution ratio Contribution ratio is calculated by dividing the contribution margin by operating revenues. Operating revenues minus variable operating expenses constitute the contribution margin. Variable operating expenses are reported on the financial sta
Slide 74: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Change in underlying EBIT (adj.) Change in underlying EBIT (adj.) shows like-for-like EBIT (adj.) growth for the group’s business portfolio and is defined as the group’s reported change in EBIT (adj.) adjusted for effects of the purchase and sale of companies a
Slide 75: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Return on Capital Employed (ROCE) cont. Average capital employed is at all times an average of the closing balance for the five last reported quarters. ROCE shows the return that the Orkla group receives on the capital invested in the various consolidated portf
Slide 76: Alternative Performance Measures (APM)
Alternative Performance Measures (APM) Structure (acquisitions and disposals) Structural growth includes adjustments for the acquisition of the businesses Norstamp, Bubs Godis, Da Grasso, Khell-Food, Denali Ingredients, Lofoten Marine Oils, Healthspan and Hadecoup, and the winding-up of Hamé Foods i