Slide 1: Fourth quarter and full-year results 2016
1 Fourth quarter and full-year results 2016 9 February 2017 Peter A. Ruzicka, President & CEO
Slide 2: Highlights 2016: Sales and profit growth from working as One Orkla
Highlights 2016: Sales and profit growth from working as One Orkla Operating revenues EBIT (adj.) up 14% up 19% EPS Proposed dividend up 30% NOK 2.60 per share 2
Slide 3: Our targets 2016-2018: Delivering on our strategy and accelerating performance
Our targets 2016-2018: Delivering on our strategy and accelerating performance Targets presented at Investor Day 2015: 2016 Keep the strategy on track Deliver organic growth at least in line with market growth Target annual EBIT (adj.) growth of 6-9%1 in BCG Maintain a stable dividend of at le
Slide 4: Branded Consumer Goods 2016: Organic growth rate impacted by weaker market
Branded Consumer Goods 2016: Organic growth rate impacted by somewhat weaker market Continued organic growth Organic growth in 3 out of 4 business areas1 2.8% 2.5% Orkla Foods 2.3% 1.8% 1.1% 0.7% Orkla Confectionery 4.9% & Snacks Orkla Care 0.6% -2.8% Orkla Food Ingredients -0.5% 2011 2012 2013 2014
Slide 5: Ongoing cost improvements continue to produce results
Ongoing cost improvements continue to produce results Illustrative graph 2009 2010 2011 2012 2013 2014 2015 2016 Organic sales growth1 Underlying fixed costs2 1Reported growth adjusted for currency translation effects and structural changes. 5 2Underlying fixed costs are growth in SG&A and fixed pro
Slide 6: “One Orkla” initiatives throughout the value chain
“One Orkla” initiatives throughout the value chain Cross-country launches Rationalising factory and warehouse footprint Sharing innovations Centralising back office functions and knowledge Exploiting scale economies in Reviewing IT-system strategy sales operations 6
Slide 7: Reallocating capital to Branded Consumer Goods
Reallocating capital to Branded Consumer Goods NOK 1.8 bn freed up from sale of assets NOK 2.7 bn invested in BCG acquisitions Share portfolio Real estate portfolio 7
Slide 8: 57% underlying EBIT improvement in Sapa
57% underlying EBIT improvement in Sapa Underlying EBIT1 (NOK billion) +57% 0.1 2.2 0.3 • Value-add strategy and improved cost position in Extrusion Europe 0.3 0.0 • Successful restructuring in Building 0.3 Systems and Precision Tubing 1.4 • Stable results from Extrusion North America 2015 Extr. Ext
Slide 9: Successful establishment of Sapa JV
Successful establishment of Sapa JV Sapa JV – RTM figures 15.3% Proposed 13.7% dividend3 13.0% 10.8% NOK 9.5% 3.0 bn 8.3% 7.1% 6.4% NIBD 4.8% 2,197 (NOK billion) 1,907 1,991 1,586 2.8% 1,407 1,224 1.4% 889 1,021 0.1 652 1.8 at 31.12.15 0.4% 367 52 190 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15
Slide 10: Financial performance
1 0 Financial performance Jens Bjørn Staff, CFO
Slide 11: Group EBIT (adj.) improved 19% in the quarter
Group EBIT (adj.) improved 19% in the quarter Key figures Q4-15 Q4-16 2015 2016 Operating revenues 9 571 10 286 33 198 37 758 EBIT (adj.) 1 102 1 307 3 609 4 298 Other income and expenses -234 -122 -502 -382 EBIT 868 1 185 3 107 3 916 Profit/loss from associates and JV 89 161 1 111 1 378 Net financi
Slide 12: BCG operating revenues lifted by M&A, negative impact from FX
BCG operating revenues lifted by M&A, negative impact from FX – tough comparisons with Q4-15 9,734 9,314 7.8% 0.1% -3.4% BCG operating Organic growth1 FX M&A BCG operating revenues Q4-15 revenues Q4-16 12 Amounts in NOK million. 1Reported growth adjusted for currency translation effects and structur
Slide 13: Branded Consumer Goods Q4 2016
Branded Consumer Goods Q4 2016 M&A and cost improvements are main drivers behind profit growth 2015 2016 EBIT (adj.) EBIT (adj.) margin (%) 4,300 12.8% 12.8% 3,839 12.0% 11.8% 1,195 1,249 Q4 FY Q4 FY • EBIT (adj.) growth in Q4, despite tough comparisons, driven by cost improvements and contribution
Slide 14: Orkla Foods: Profit growth driven by cost reductions and M&A
Orkla Foods Profit growth driven by cost reductions and M&A 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -0.6% OG1 +2.3% OG1 15,476 1,968 14.7 14.7 13,250 1,701 12.8 12.7 3,822 4,186 561 616 Q4 FY Q4 FY Q4 FY • Sales and EBIT (adj.) growth supported by acquisition of Hamé • Modera
Slide 15: Orkla Confectionery & Snacks: Strong growth in the quarter
Orkla Confectionery & Snacks Strong growth in the quarter 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +2.9% OG1 +4.9% OG1 937 19.0 843 17.3 6,230 5,813 14.5 15.0 314 341 1,818 1,796 Q4 FY Q4 FY Q4 FY • Organic growth in the quarter driven by solid performance across most markets.
Slide 16: Orkla Care: Positive organic growth, profit decline
Orkla Care Positive organic growth, profit decline due to structural changes 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +2.3% OG1 +0.6% OG1 6,740 956 15.9% 881 14.2% 5,534 12.4% 10.8% 1,640 1,730 204 186 Q4 FY Q4 FY Q4 FY • Organic growth for most business units, despite continu
Slide 17: Orkla Food Ingredients: Lower operating revenues and profit
Orkla Food Ingredients Lower operating revenues and profit 2015 2016 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -3.2% OG1 -0.5% OG1 8,161 414 439 5.5 5.4 5.4 7,598 5.1 2,115 2,072 116 106 Q4 FY Q4 FY Q4 FY • Organic sales decline primarily due to price deflation on almonds and butter blen
Slide 18: Orkla Investments
Orkla Investments Volume (GWh): share portfolio Q4: 451 (713) Real estate & into Orkla accounts Hydro Power Book value real Fully consolidated FY: 2,396 (2,849) estate: Power prices1 (NOK/MWh): NOK 1.3 billion Q4: 312 (205) FY: 249 (188) Market value share portfolio: EBIT adj. (NOK million): NOK 0.1
Slide 19: Sapa: Significant underlying and reported earnings growth
Sapa (50/50 joint venture) Significant underlying and reported earnings growth in Sapa 2015 2016 Orkla’s share of Sales volume (tonnes) Underlying EBIT net profit after tax 890 1,363 1,365 2,197 1,407 311 310 190 335 123 128 17 Q4 FY Q4 FY Q4 FY • Continued growth in underlying EBIT • Value-add stra
Slide 20: Jotun (42.5%): Easing sales growth due to Marine and Offshore downturn
Jotun (42.5%) Easing sales growth due to Marine and Offshore downturn 2015 2016 Orkla’s share of Operating revenues Operating profit net profit after tax 16,282 15,785 2,064 569 1,763 471 FY FY FY • Weak Shipping and Offshore markets partly offset by continued growth in the Decorative Paints segment
Slide 21: Changes in net debt 2016
Changes in net debt 2016 2.4 3.4 0.5 0.7 8.1 7.8 2.7 1.2 Net debt 31 Expansion Cash flow Sale of Net paid to Tax, FX effects Net debt 31 December and sale of from shares and shareholders dividends December 2015 companies operations financial received, net 2016 assets financial & other items 21 Amoun
Slide 22: Dividends 1993 – 2016
Dividends 1993 – 20161 Ordinary dividend Special dividend 5.00 5.00 2.50 2.50 2.50 2.50 2.50 2.60 2.25 2.25 2.25 1.90 2.00 1.50 1.00 2.50 0.68 0.39 0.41 0.50 0.60 0.65 0.19 0.23 0.27 0.32 0.80 0.90 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 20
Slide 23: Financial calendar
Financial calendar Event Date Annual General Meeting 20 April 2017 Q1-2017 9 May 2017 Investor Day 1 June 2017 Q2-2017 14 July 2017 Q3-2017 25 October 2017 23
Slide 24: Focus going forward
2 4 Focus going forward Peter A. Ruzicka, President & CEO
Slide 25: Delivering on strategy – One Orkla
Delivering on strategy – One Orkla • Utilise opportunities from acquisitions Operational • Increase supply chain efficiency focus going forward • Activities that drive organic growth and improve profitability • Target annual EBIT (adj.) growth of 6-9%1 in BCG • Deliver organic growth at least in lin
Slide 26: Bare Bra launched in Norway
A selection of recent launches Bare Bra launched in Norway A healthy breakfast and side dish range - no additives or sugar, just good for you 26
Slide 27: Extending the range of vegetarian and vegan products
A selection of recent launches Extending the range of vegetarian and vegan products 27
Slide 28: Snacking made healthier
A selection of recent launches Snacking made healthier Introducing wholegrain cookies, healthy pop corn and biscuits with less salt and fat 28
Slide 29: Relaunch of the whole Grumme range
A selection of recent launches Relaunch of the whole Grumme range New design, more efficient and more environmentally friendly 29
Slide 30: Naturli’ 100% organic and plant based smoothies
A selection of recent launches Naturli’ 100% organic and plant based smoothies Just fruits, no added sugar 30
Slide 31: Q&A
3 1 Q&A Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO
Slide 32: Appendices
‘Orkla Appendices
Slide 33: Group income statement
Group income statement Q4-15 Q4-16 FY 2015 FY 2016 Operating revenues 9 571 10 286 33 198 37 758 EBIT (adj.) 1 102 1 307 3 609 4 298 Other income and expenses -234 -122 -502 -382 EBIT 868 1 185 3 107 3 916 Profit/loss from associates and joint ventures 89 161 1 111 1 378 Interests, net -33 -40 -192
Slide 34: Net financial items
Net financial items Q4-15 Q4-16 FY 2015 FY 2016 Net interest expenses -33 -40 -192 -177 Currency gain/loss 2 4 0 -4 Result from Share Portfolio and dividends 35 56 135 248 Other financial items, net -15 -22 -71 -179 Net financial items -11 -2 -128 -112 34 Amounts in NOK million
Slide 35: Statement of financial position
Statement of financial position 31.12.2015 31.12.2016 Intangible assets 17 676 18 343 Property, plant and equipment 10 523 11 038 Investments in associates and joint ventures etc. 13 029 13 148 Non-current assets 41 228 42 529 Assets held for sale 182 0 Inventories 4 623 5 195 Inventory of developme
Slide 36: Cash flow
Cash flow FY 2015 FY 2016 Operating profit 3 058 3 785 Amortisation, depreciation and write-downs 1 109 1 138 Change in net working capital 404 -228 Net replacement expenditures -930 -1 327 Cash flow from operations 3 641 3 368 Cash flow from operations, Financial Investments 94 45 Tax -727 -506 Div
Slide 37: Sapa (joint venture) – Figures on 100% basis
Sapa (joint venture) – Figures on 100% basis Q4-15 Q1-16 Q2-16 Q3-16 Q4-16 Sales volume (1,000 tonnes) 311 349 366 340 310 Operating revenues (NOK million)1 12 821 13 905 14 071 13 141 12 210 Underlying EBIT1 128 571 804 487 335 Excluded items: Unrealised derivative positions 209 83 116 51 82 Other
Slide 38: Sapa (joint venture) – Key financials by business area
Sapa (joint venture) – Key financials by business area Extrusion Europe 2015 2016 Extrusion North America 2015 2016 Volume (kmt) 563 577 Volume (kmt) 598 585 Sales (NOKm) 20,031 19,600 Sales (NOKm) 21,694 20,298 Underlying EBITDA (NOKm) 1,016 1,271 Underlying EBITDA (NOKm) 1,295 1,335 Underlying EBI
Slide 39: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest-bearing debt (NOK million) Net gearing 8,496 0.28 7,805 8,056 0.23 0.24 5,661 0.18 4,960 0.16 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 39
Slide 40: Debt maturity profile
Debt maturity profile 5,000 Average maturity 3.3 years 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1,000 500 0 2017 2018 2019 2020 2021 Later Unutilised credit facilities Drawn amounts 40 Amounts in NOK million
Slide 41: Funding sources
Funding sources 1.6 Unutilised credit facilities 5.5 Banks 9.0 Bonds and CP Cash, cash equivalents and interest bearing assets 4.2 41 Amounts in NOK billion
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