Slide 1: Third quarter results 2021
Third quarter results 2021 29 October 2021 Jaan Ivar Semlitsch, President & CEO
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 9% in Q3-21 • Reported profit improvement in Branded Consumer Goods and Hydro Power • Adjusted EPS* decreased by -6% to NOK 1.37 in the quarter 3 *All Alternative Performance Measures (APM) are presented in the appendix
Slide 4: Highlights for the quarter
Highlights for the quarter • Broad based organic revenue growth of 4.1%* predominantly volume driven • Cost inflation and supply chain disruptions will be mitigated over time • Good momentum in strategic growth areas. Out of Home strategy starting to materialize 4 *All Alternative Performance Measur
Slide 5: Building a European pizza franchise
Building a European pizza franchise • 105 franchise outlets added in Germany • Regional focus on Netherlands, Belgium, Germany and Finland - 635 outlets currently in our network • Attractive fundamentals in the Out-of-Home pizza segment 5
Slide 6: Financial performance
Financial performance Harald Ullevoldsæter, CFO
Slide 7: Strong sales growth and 3% EBIT (adj.) growth in BCG incl. HQ
Strong sales growth and 3% EBIT (adj.) growth in BCG incl. HQ Key figures Q3-21 Q3-20 ∆ Q3 Operating revenues BCG 12,914 11,781 +10% EBIT (adj.) BCG 1,695 1,625 +4% EBIT (adj.) HQ -76 -54 EBIT (adj.) BCG incl. HQ 1,619 1,571 +3% EBIT (adj.) Orkla Industrial & Financial Investments 93 0 Other income
Slide 8: Positive cash flow from operations year to date
Positive cash flow from operations year to date Cash flow from operations as at 30.9 (pre-tax) YTD Q3-21 YTD Q3-20 Orkla Branded Consumer Goods (BCG, incl. HQ) EBIT (adj.) 3,981 3,894 Depreciation 1,392 1,329 Change in net working capital -824 159 Net replacement investments -1,739 -1,605 Total BCG
Slide 9: Acquisitions increase net interest bearing debt
Acquisitions increase net interest bearing debt = 1.7x 14,028 EBITDA* 382 7,218 6,380 3,126 2,811 497 Net debt 31 Cash flow Taxes & Dividends Expansion FX effects Net debt 30 December from financial and share capex and September 2020 operations items buyback net M&A 2021 Amounts in NOK million 9 * I
Slide 10: Branded Consumer Goods
A ‘Orkla Branded Consumer Goods
Slide 11: Organic top line growth of 4.1% in Q3 and 3.8% YTD
Branded Consumer Goods Organic top line growth of 4.1% in Q3 and 3.8% YTD BCG revenue, Q3-20 → Q3-21 (MNOK) BCG revenue, YTD Q3-20 → YTD Q3-21 (MNOK) 7.5% 12,914 4.1% 35,722 3.8% 4.1% 11,781 34,078 -2.0% -3.1% Q3-20 Organic FX M&A Q3-21 YTD Organic FX M&A YTD growth Q3-20 growth Q3-21 11 All Alterna
Slide 12: Strong comeback in Out of Home and grocery holding up
Branded Consumer Goods Strong comeback in Out of Home and grocery holding up Organic growth Q3-21 by business area Organic growth YTD Q3-21 by business area Foods 4.7% Foods 0.9% Confectionery Confectionery 2.2% 2.5% & Snacks & Snacks Care 3.8% Care 3.5% Food Food 7.3% 8.4% Ingredients Ingredients C
Slide 13: Profit conversion negatively impacted by cost increases
Branded Consumer Goods incl. HQ Profit conversion negatively impacted by cost increases ∆ Q3 U.EBIT (adj.), MNOK ∆ R12M U.EBIT (adj.) margin 8.8% 1,619 11.6% 1,571 11.5% -0.4%-p 0.2%-p -3.9% -1.7% Q3-20 Underlying FX M&A Q3-21 R12M Q3-20 Underlying M&A and FX R12M Q3-21 growth margin 13 All Alternat
Slide 14: Orkla Foods: Improved sales in Q3 and profit growth despite higher input costs
Orkla Foods Improved sales in Q3 and profit growth despite higher input costs Q3-21 YTD Q3-21 Revenues 4,857 13,621 • Broad-based organic sales growth in Q3 across Organic growth +4.7% +0.9% most markets • Growth in channels like food service, EBIT (adj.) 718 1,742 convenience and grocery, while exp
Slide 15: Orkla Confectionery & Snacks: Organic revenue growth offset by higher input costs
Orkla Confectionery & Snacks Organic revenue growth offset by higher input costs and lower production efficiency Q3-21 YTD Q3-21 Revenues 1,847 5,185 • Organic growth in most markets in the quarter. Organic growth 2.2% 2.5% Continued high market growth, however at a lower pace EBIT (adj.) 280 719 •
Slide 16: Orkla Care: Growth in top line combined with stable fixed cost development
Orkla Care Growth in top line combined with stable fixed cost development Q3-21 YTD Q3-21 Revenues 2,020 5,458 • Sales growth driven by Orkla Health, Wound Organic growth 3.8% 3.5% Care and HSNG categories • NutraQ contributes with structural growth EBIT (adj.) 359 866 EBIT (adj.) growth 30.1% 6.1%
Slide 17: Orkla Food Ingredients: Strong top-line, cost increases hampering margin growth
Orkla Food Ingredients Strong top-line, cost increases hampering margin growth Q3-21 YTD Q3-21 Revenues 3,189 8,706 • Continued strong organic growth from both Organic growth +7.3% +8.4% volume and price • Margin development negatively impacted by cost EBIT (adj.) 205 490 increases EBIT (adj.) growt
Slide 18: Orkla Consumer Investments: Foothold in Dutch and German pizza delivery markets
Orkla Consumer Investments Establishing a strong foothold in the Dutch and German pizza delivery markets through acquisitions of New York Pizza and three German chains Q3-21 YTD Q3-21 • Negative organic growth mainly due to sales Revenues 1,134 3,113 decline for painting tools in Q3 compared to a Or
Slide 19: Investments - Jotun (42.6%)
Investments - Jotun (42.6%) Solid progress for Jotun, but short term uncertainty due to raw material price inflation and reduced ship newbuildings Jotun 100% basis YTD Aug-21 • Sales growth in Decorative, Protective and Revenues 14,975 Powder segments. Continued slowdown in Marine coatings from lowe
Slide 20: Closing remarks
A ‘Orkla Closing remarks
Slide 21: Reported growth in a demanding environment, further actions implemented
Reported growth in a demanding environment, further actions implemented Summing up Q3 Outlook • Broad-based organic growth • Uncertainty regarding cost inflation and • Mixed profit conversion for Branded supply of input factors Consumer Goods • Cost inflation will be mitigated through • Good momentu
Slide 22: Q&A
Q&A Jaan Ivar Semlitsch, President & CEO Harald Ullevoldsæter, CFO
Slide 23: Save the date: Orkla Capital Markets Day
Save the date Orkla Capital Markets Day 23 November 2021
Slide 24: Appendices
Appendices
Slide 25: Profit growth in Hydro Power from significant increase in power prices
Orkla Investments Profit growth in Hydro Power from significant increase in power prices Hydro Power Fully consolidated into Orkla’s financial statements Volume Power prices1 EBIT adj. (GWh): (NOK/kWh): (NOK million): Q3: 406 (853) Q3: 0.81 (0.05) Q3: 89 (-3) YTD: 1,432 (2,182) YTD: 0.59 (0.09) YTD:
Slide 26: Strong balance sheet and financial flexibility
Strong balance sheet and financial flexibility Net interest-bearing liabilities (NOK million) NIBD / R12 EBITDA* 14,028 1,7x 1,0x 0,9x 6,551 6,380 12,273 0,5x 3,037 4,895 4,893 14 0,0x 2017 2018 2019 2020 Q3 2021 2017 2018 2019 2020 Q3 2021 Leasing debt Ex leasing debt 26 Amounts in NOK million * In
Slide 27: Funding sources and maturity profile
Funding sources and maturity profile Debt maturity → average maturity 3.4 years Funding sources (in BNOK) MNOK 10,000 1.8 9,000 8,000 7.9 7,000 9.8 6,000 5,000 4.2 4,000 3,000 2,000 Unutilised credit facilities 1,000 Banks 0 2021 2022 2023 2024 2025 2026- Bonds and CP Cash, cash equivalents and inte
Slide 28: 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 29: 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. The effective tax rate for OIE is lower than the Group’s tax rate in both 2021 and 2020 chiefl
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