Slide 1: Growth continues – First quarter results 2017
1 Growth continues First quarter results 2017 9 May 2017 Peter A. Ruzicka, President & CEO
Slide 2: Continued progress from working as One Orkla
Highlights Q1-17: Continued progress from working as One Orkla • Branded Consumer Goods continues to grow • Associates perform strongly • Profit before tax up 4% • Ongoing M&A and restructuring activity 2
Slide 3: Organic growth ahead of our markets
Branded Consumer Goods Q1-17: Organic growth ahead of our markets Continued organic growth1 Organic growth in 3 out of 4 business areas1 3.7% Orkla Foods 1.1% 2.8% Orkla Confectionery 2.0% 3.1% & Snacks 1.7% 1.6% Orkla Care 3.6% 0.7% 0.1% Orkla Food Ingredients -0.6% 2014 2015 Q1-162 Q2-162 Q3-162 Q
Slide 4: 10% EBIT (adj.) growth in constant currencies
Branded Consumer Goods Q1-17: 10% EBIT (adj.) growth in constant currencies 921 10.4% 10.3% +30 bps +10.1% -20 bps 860 -3.1% EBIT (adj.) FX FX EBIT (adj.) EBIT (adj.) Dilutive Underlying EBIT (adj.) Q1-16 adjusted Q1-17 margin effects improvement margin growth Q1-16 of M&A Q1-17 4 Amounts in NOK mil
Slide 5: New restructuring efforts for future cost improvements
Branded Consumer Goods Q1-17: New restructuring efforts for future cost improvements Continuing to optimise factory footprint – 2 additional factory closures decided in Q1 – A total of 24 closures decided since the start of the programme Further rationalisation of SG&A – Merging Foods and C&S in Fin
Slide 6: Further strengthening the core
Branded Consumer Goods Q1-17: Further strengthening the core Investing in existing operations Strengthening our position through add-ons NOK 500 million investment in pizza production over 5 years 6
Slide 7: Financial performance
7 Financial performance Jens Bjørn Staff, CFO
Slide 8: Group EBIT (adj.) improved 10%
Group EBIT (adj.) improved 10% Key figures Q1-16 Q1-17 Operating revenues 8 610 9 081 EBIT (adj.) 817 900 Other income and expenses -30 -87 EBIT 787 813 Profit/loss from associates and JV 462 485 Net financials and other 2 -3 Profit/loss before tax 1 251 1 295 Tax -135 -185 EPS (NOK) 1.08 1.08 8 Amo
Slide 9: Negative FX effects offset by M&A and organic growth
Branded Consumer Goods Q1-17: Negative FX effects offset by M&A and organic growth 8,834 +8.0% 8,362 +1.6% -4.0% BCG operating Organic growth1 FX M&A BCG operating revenues Q1-16 revenues Q1-17 9 Amounts in NOK million. 1Reported growth adjusted for currency translation effects and structural change
Slide 10: Orkla Foods: Modest profit growth driven by M&A
Orkla Foods Modest profit growth driven by M&A 2016 2017 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +1.1% OG1 3,758 377 392 11.0 10.4 3,418 Q1 Q1 Q1 • Sales and profit growth mainly driven by M&A • Modest organic sales growth in the Nordics • Negative impact on profitability from increase
Slide 11: Orkla Confectionery & Snacks: Organic growth up 3%
Orkla Confectionery & Snacks Organic growth up 3% driven by increased volumes 2016 2017 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +3.1% OG1 201 13.9 1,457 1,444 177 12.1 Q1 Q1 Q1 • Volume driven organic sales growth, partly due to positive Easter effects • Profit growth driven by improve
Slide 12: Orkla Care: Revenue growth driven by M&A
Orkla Care Revenue growth driven by M&A and positive organic growth 2016 2017 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +3.6% OG1 1,858 275 14.9 14.8 1,655 247 Q1 Q1 Q1 • Revenue growth driven by M&A and positive organic growth • Profit growth reported in all business units except Pierre
Slide 13: Orkla Food Ingredients: Sales decline
Orkla Food Ingredients Sales decline due to negative FX and lower raw material prices 2016 2017 Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -0.6% OG1 1,873 1,813 59 3.2 53 2.9 Q1 Q1 Q1 • Reduction in prices of certain raw materials and loss of butter-blend PL contracts hamper revenue growt
Slide 14: Orkla Investments continue to make a strong contribution
Orkla Investments continue to make a strong contribution Hydro Power Volume (GWh): into Orkla accounts investments Fully consolidated Q1: 536 (546) Financial Book value real Power prices1 (NOK/MWh): estate: Q1: 280 (228) NOK 1.3 billion EBIT adj. (NOK million): Q1: 54 (44) Jotun (42.5%) Accounted fo
Slide 15: Broad-based profit growth for Sapa in Q1
Sapa (50/50 joint venture) Broad-based profit growth for Sapa in Q1 2016 2017 Orkla’s share of Sales volume (kmt) Underlying EBIT net profit after tax 349 355 778 312 571 209 Q1 Q1 Q1 • Growth in underlying EBIT for all business areas • Positive effects from value add strategy • Improved cost positi
Slide 16: Jotun continues to show volume growth
Jotun (42.5%) Jotun continues to show volume growth Q1-17 comments • Strong growth and profitability in Decorative paints • Downturn in the shipping and offshore industries affect sales and profit negatively • Currency translation effects also impact reported sales negatively • On-going investments
Slide 17: Further reduction in net debt
Further reduction in net debt 8.1 +0.1 -0.7 7.8 +0.1 +0.2 -0.1 +0.1 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 March 2017 2016 companies operations financial received, net assets financial & other items
Slide 18: Orkla Investor Day in Oslo 1 June 2017
Orkla Investor Day in Oslo 1 June 2017 • Orkla’s Group Executive Board will give a strategic Programme: and financial update as well as discussing market and company outlook. 10:00 am – 12:30 pm Investor Day presentations and Q&A by President and CEO Peter A. Ruzicka, Executive • The Investor Day pr
Slide 19: Focus going forward
1 9 Focus going forward Peter A. Ruzicka, President & CEO
Slide 20: Meeting consumer trends through innovation
A selection Meeting consumer trends through innovation of new launches Responsible sourcing Naturally functional Vegetarian & vegan Convenience and sustainability ingredients 20
Slide 21: Delivering on our strategy through One Orkla
Delivering on our strategy through One Orkla • Taking shares in a slightly weaker market Q1-17 • Cost improvements from working as One takeaways Orkla • Financial targets reiterated • Target annual EBIT (adj.) growth of 6-9%1 in BCG • Deliver organic growth at least in line with Financial market gro
Slide 22: Q&A
2 2 Q&A Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO
Slide 23: Appendices
‘Orkla Appendices
Slide 24: Group income statement
Group income statement FY 2016 Q1-16 Q1-17 Operating revenues 37 758 8 610 9 081 EBIT (adj.) 4 298 817 900 Other income and expenses -382 -30 -87 EBIT 3 916 787 813 Profit/loss from associates and joint ventures 1 378 462 485 Interests, net -177 -50 -37 Other financial items, net 65 52 34 Profit/los
Slide 25: Net financial items
Net financial items FY 2016 Q1-16 Q1-17 Net interest expenses -177 -50 -37 Currency gain/loss -4 1 1 Result from Share Portfolio and dividends 248 78 52 Other financial items, net -179 -27 -19 Net financial items -112 2 -3 25 Amounts in NOK million
Slide 26: Statement of financial position
Statement of financial position 31.12.2016 31.03.2017 Intangible assets 18 343 18 690 Property, plant and equipment 11 038 11 043 Investments in associates and joint ventures etc. 13 148 13 604 Non-current assets 42 529 43 337 Assets held for sale 0 0 Inventories 5 195 5 544 Inventory of development
Slide 27: Cash flow
Cash flow Q1-16 Q1-17 Operating profit 796 806 Amortisation, depreciation and write-downs 253 327 Change in net working capital -445 -163 Net replacement expenditures -390 -240 Cash flow from operations 214 730 Cash flow from operations, Financial Investments -27 -6 Tax -132 -223 Dividends received,
Slide 28: Sapa (joint venture) – Figures on 100% basis
Sapa (joint venture) – Figures on 100% basis Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Sales volume (kmt) 349 366 340 310 355 Operating revenues (NOK million) 13 905 14 071 13 141 12 210 14 323 Underlying EBIT (NOK million)1 571 804 487 335 778 Excluded items: Unrealised derivative positions (NOK million) 83 11
Slide 29: Sapa (joint venture) – Key financials by business area
Sapa (joint venture) – Key financials by business area Extrusion Europe Q1-16 Q1-17 Extrusion North America Q1-16 Q1-17 Volume (kmt) 148 154 Volume (kmt) 150 150 Sales (NOKm) 5 366 5 553 Sales (NOKm) 5 265 5 514 Underlying EBITDA (NOKm) 349 390 Underlying EBITDA (NOKm) 414 437 1 1 Underlying EBIT (N
Slide 30: 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 7 816 0.23 0.24 0.22 5 661 0.18 2013 2014 2015 2016 Q1-17 2013 2014 2015 2016 Q1-17 30
Slide 31: Debt maturity profile
Debt maturity profile 5,000 Average maturity 3.2 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 31 Amounts in NOK million
Slide 32: Funding sources
Funding sources 1.4 Unutilised credit facilities 5.7 Banks 6.7 Bonds and CP Cash, cash equivalents and interest bearing assets 3.5 32 Amounts in NOK billion
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