Slide 1: Second quarter results 2022
14 July 2022 Second quarter results 2022
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: Summary of financials for the quarter
Summary of financials for the quarter • Group EBIT (adj.) growth of 39% mainly driven by strong results for Hydro Power • Organic revenue growth of 12.1% in Branded Consumer Goods, driven by both price and volume • Profit decline in Branded Consumer Goods mainly due to cost inflation • Adjusted earn
Slide 4: Going forward, our high ambitions remain unchanged, with focus on accelerating progress
Going forward, our high ambitions remain unchanged, with focus on accelerating progress We maintain our We will accelerate We will make our existing strategy our delivery businesses more independent More autonomous businesses and increased focus on ownership role at Group level 4
Slide 5: Establishing more autonomous businesses and increased ownership focus will drive shareholder value
Establishing more autonomous businesses and increased ownership focus on Group level will drive shareholder value Further increase Create more Actively decide Continue Increase information entrepreneurship optionality for whether to invest in, investments into transparency around and focus in struct
Slide 6: Financial performance
Harald Ullevoldsæter, CFO Financial performance
Slide 7: Strong sales growth, EBIT growth driven by Hydro Power
Strong sales growth, EBIT growth driven by Hydro Power Key figures Q2-22 Q2-21 ∆ Q2 Operating revenues BCG 13,524 11,532 +17.3% EBIT (adj.) BCG 1,232 1,240 -0.6% EBIT (adj.) HQ -84 -86 EBIT (adj.) BCG incl. HQ 1,148 1,154 -0.5% EBIT (adj.) Industrial & Financial Investments 605 111 Other income and
Slide 8: Cash flow from operations in the first half
Cash flow from operations in the first half Cash flow from operations as at 30.6 (pre-tax) YTD Q2-22 YTD Q2-21 Orkla Branded Consumer Goods (BCG, incl. HQ) EBIT (adj.) 2,327 2,362 Depreciation 993 890 Change in net working capital -1,851 -648 Net replacement investments -1,416 -1,088 Total BCG cash
Slide 9: Acquisitions and dividend increase net interest bearing debt
Acquisitions and dividend increase net interest bearing debt 17,596 = 2.0x 318 EBITDA* 1,273 2,984 12,758 677 940 Net debt 31 Cash flow Taxes & Dividends Expansion FX effects Net debt 30 December from financial and share capex and June 2022 2021 operations items buyback net M&A Amounts in NOK millio
Slide 10: Branded Consumer Goods (BCG)
Branded Consumer Goods (BCG)
Slide 11: Organic growth of 12.1% driven by both price and volume/mix
Branded Consumer Goods Organic growth of 12.1% driven by both price and volume/mix BCG revenue, Q2-21 → Q2-22 (MNOK) BCG revenue, YTD Q2-21 → YTD Q2-22 (MNOK) 5.9% 13,524 7.4% 26,315 12.1% 9.9% -0.7% -1.9% 11,532 22,808 Q2-21 Organic FX M&A Q2-22 H1-21 Organic FX M&A H1-22 growth growth All Alternat
Slide 12: Growth spread across most business areas
Branded Consumer Goods Growth spread across most business areas Organic growth for Branded Consumer Goods Organic growth Q2-22 by business area 9.9% Foods 11.6% Confectionery 8.8% & Snacks Care 8.3% 4.3% 3.7% Food 22.0% Ingredients 1.8% 1.6% 1.6% 1.3% Consumer -4.4% 0.4% Investments 2016 2017 20181
Slide 13: Continued progress for the three prioritized growth initiatives
Continued progress for the three prioritized growth initiatives Full-year baseline (2021) Reported Q2-22 YTD (YoY)* Consumer Health Revenue Growth Grow at least 50% by 2025 BNOK 4.6** 41% Consumer sales Growth Out of Home MEUR ~337 **/*** 151% A European leader in pizza franchise No of outlets No of
Slide 14: Profit conversion impacted by widespread cost increases
Branded Consumer Goods incl. HQ Profit conversion impacted by widespread cost increases ∆ Q2 U.EBIT (adj.), MNOK ∆ R12M U.EBIT (adj.) margin 1,154 6.4% 1,148 11.6% -1.5%-p 10.2% 0.1%-p -6.4% -0.4% Q2-21 Underlying FX M&A Q2-22 R12M Q2-21 Underlying M&A and FX R12M Q2-22 growth margin All Alternative
Slide 15: Orkla Foods: Strong sales but profit hampered by higher input cost and energy prices
Orkla Foods Strong sales but profit hampered by higher input cost and energy prices Q2-22 YTD Q2-22 Revenues 4,957 9,745 • Broad-based organic sales growth in Q2 across all markets Organic growth +11.6% +9.4% • Strong sales for grocery and export while recovering EBIT (adj.) 480 1,011 trend continue
Slide 16: Orkla Confectionery & Snacks: Price driven top-line growth
Orkla Confectionery & Snacks Price driven top-line growth. EBIT (adj.) performance hampered by increased input costs Q2-22 YTD Q2-22 Revenues 1,764 3,443 • Market contraction in certain areas in grocery post covid, rebound in other channels Organic growth 8.8% 3.8% • Steep increase in raw material c
Slide 17: Orkla Care: Strong top-line growth, weak profit performance continues
Orkla Care Strong top-line growth, weak profit performance continues Q2-22 YTD Q2-22 Revenues 2,126 4,282 • Strong top line growth despite volume decline for Home & Personal Care Norway as grocery is Organic growth 8.3% 7.0% contracting post pandemic EBIT (adj.) 225 508 • Margins affected by cost in
Slide 18: Orkla Food Ingredients: Strong performance fueled by price and volume
Orkla Food Ingredients Strong performance fueled by price increases and volume growth Q2-22 YTD Q2-22 Revenues 3,659 6,783 • Strong price and volume driven organic growth Organic growth 22.0% 21.6% • EBIT (adj.) growth from sales growth, supported by acquired companies, but somewhat dampened by EBIT
Slide 19: Orkla Consumer Investments: Lower home improvement activity
Orkla Consumer Investments Lower home improvement activity drives sales and earnings decline for painting tools business compared to strong last year Q2-22 YTD Q2-22 Revenues 1,153 2,323 • Continued sales decline for painting tools compared to exceptionally strong demand last Organic growth -4.4% -4
Slide 20: Investments - Jotun (42.6%): Strong sales growth
Investments - Jotun (42.6%) Strong sales growth for Jotun Jotun 100% basis YTD Q2 • Solid sales growth in all segments driven by price Revenues 13.397 increases and volume growth Revenue growth 18,6% • Margin pressure due to higher raw material prices only partly offset by price increases so far EBI
Slide 21: Closing remarks
Nils K. Selte, President & CEO Closing remarks
Slide 22: Closing remarks
Closing remarks • Ensure continued service delivery of products • Mitigate cost inflation • Establish an organizational structure with more autonomous businesses • Increase focus on ownership role at Group level 22
Slide 23: Q&A
Nils K. Selte, President & CEO Harald Ullevoldsæter, CFO Q&A
Slide 24: Upcoming event: Third quarter 2022
Upcoming event: Third quarter 2022 27 October 2022
Slide 25: Appendices
Appendices
Slide 26: Orkla Investments: Power price surge boosts Hydro Power earnings
Orkla Investments Power price surge boosts earnings in Hydro Power to record levels Hydro Power Fully consolidated into Orkla’s financial statements Volume Power prices1 EBIT adj. (GWh): (øre/kWh): (NOK million): Q2: 579 (549) Q2: 163,1 (46,9) Q2: 579 (112) YTD: 1,090 (1,026) YTD: 156,2 (47,9) YTD:
Slide 27: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest-bearing liabilities (NOK million) NIBD / R12 EBITDA 17,596 2,0x 12,758 1,5x 1,0x 0,9x 15,750 6,551 6,380 10,834 0,5x 3,037 4,895 4,893 14 0,0x 2017 2018 2019 2020 2021 Q2-22 2017 2018 2019 2020 2021 Q2-22 Leasing debt Ex leasing debt Amount
Slide 28: Funding sources and maturity profile
Funding sources and maturity profile Debt maturity → average maturity 3.3 years Funding sources (in BNOK) MNOK 9,000 1.5 8,000 7.9 7,000 6,000 11.6 5,000 4,000 5.7 3,000 2,000 1,000 Unutilised credit facilities Banks 0 Bonds and CP 2022 2023 2024 2025 2026 2027- Cash, cash equivalents and interest b
Slide 29: 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 30: 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 low in the first half of 2022, chief
Slide 31: ‘Orkla
A, ‘Orkla