Transforming into a Branded Consumer Goods business. Rune Helland Direktør IR Orkla ASA

Transcription

1 Transforming into a Branded Consumer Goods business Rune Helland Direktør IR Orkla ASA

2 Agenda Significant structural changes towards a focused Branded Consumer Goods company Strategy going forward taking advantage of our scale Financial targets 2015/2016 Dividend policy

3 Branded Consumer Goods share of total value of Orkla 100% 70% 75% 32% Based on sum of the parts valuations of Orkla

4 Orkla growth story - Branded Consumer Goods CAGR Turnover 7% EBITA 11% * 30,000 Net sales, NOK million 25,000 20,000 15,000 NORA ACQUISITION ORKLA INTO BEVERAGES VOLVO AGREEMENT 10,000 Carlsberg Breweries Sold 5,000 BORREGAARD ACQUISITION Note: 40% of Carlsberg Breweries included in 2001, 2002 and *The graph includes Riebers sales in (Pro Forma). CAGR does not include Rieber.

5 Full agreement to new strategic direction Orkla to become a focused Branded Consumer Goods Company in the Nordic area Best provider of value creation over time ROCE (%) Orkla BCG 10 WACC 10% This is where Orkla has clear competitive advantages Owner of strong #1 brands with long heritage Orkla is the #1 BCG company in the Nordics and has scale advantages Knowledge and competence about the Nordic consumer 5

6 Orkla has competitive advantages in the Nordic area Owner of strong #1 brands with long heritage Examples Fabrics cleaner Biscuits 81% 51% 38% 11% Confectionery 30% 6% Food supplements 77% 35% 49% 29% Textiles (grocery) 78% 29% Snacks 29% 36% 45% 47% Frozen pizza 79% 36% 33% Ketchup 78% 55% 43% 40% Preserved vegetables 81% 70% 52% Jam/marmalade 53% 50% 43% Caviar (cod roe spread) 77% #1 6 Source: Nielsen. Retail Market Share; RTM per July/September 2013

7 Orkla has compitetive advantages in the Nordic area Orkla is the #1 BCG company in the Nordics and has scale advantages ILLUSTRATIVE Local focus Global focus Nordic revenue 7

8 Orkla s transformation to a Branded Consumer Goods company 2013 New strategic direction to grow within Branded Consumer Goods Major actions executed to implement strategy Organise and act as a Branded Consumer Goods company 8

9 Corporate structure today Business areas Associated company Non-core Orkla Foods Orkla Confectionery & Snacks Orkla Home & Personal Orkla International Orkla Food Ingredients Jotun (42.5%) Sapa (JV) Extruded aluminum products EBITDA : NOK 939 m Gränges (Heat Transfer) Rolled aluminum products EBITDA : NOK 443 m Hydro Power EBITDA : NOK 268m Shares and financial assets Value: NOK 1.0 b EBITDA : NOK 1,356 m EBITDA : NOK 941 m EBITDA : NOK 762 m EBITDA : NOK 69 m EBITDA : NOK 343 m EBITDA : NOK 1,374 m (100%) Real estate Book value NOK 2.5 b Corporate centre and support functions

10 Orkla s strategic direction Orkla will strengthen its leading position and exploit economy of scale in local Nordic markets within Branded Consumer Goods Orkla will create value through operational improvements, organic and structural growth Orkla will divest its non core assets 10

11 Financial targets EBIT (adjusted) 1 margin R12M pr Q2 EBIT (adjusted) 1 margin 2015/2016 Organic revenue growth YTD pr Q2 Organic revenue growth From 2016 Orkla Foods 13.9% 2 > 15.0% % 2-3% Orkla Confectionery & Snacks 15.4% > 16.5% -3.6% 2-4% Orkla Home & Personal 17.1% > 17.5% -2.2% 3-5% 11 1 Adjusted for other income and expenses; 2 Rieber only included in 2 months.

12 Rieber & Søn and Orkla are a perfect match Similar strategy and focus Strong positions Local consumer insight and taste preferences Multi-local model Complementary Competence Products and categories Technology + Overlapping geographies 12

13 Rieber: Realising cost synergies well on track Expected cost synergies of MNOK , whereof ~50% to be realized in 2013 Run-rate effect realized per end of year 80% 100% Split cost synergies 42% 12% 100% 50% 46% FTEpayroll Purchasing Other Total 13

14 Income synergies....through sharing competencies and technologies 14

15 Merger of the Foods companies in each of the Nordic countries Rieber & Søn has been merged with the existing food companies in Norway, Sweden and Denmark Cost synergies of NOK million when fully implemented The two existing food companies in Sweden merged in Q1 Annual cost synergies of NOK 30 million from 2014 Management teams in Norway, Sweden and Denmark reduced from 7 to 3 Operational from the beginning of Q Norway Sweden Denmark Revenues (MNOK): 3200 Revenues (MNOK): 2700 Revenues (MNOK): Norway 200 Denmark 15

16 Merger of the Confectionery & Snacks companies in each of the Nordic countries Potential annual cost synergies of NOK million Management teams in Norway, Sweden and Finland reduced from 7 to 3 Operational during Q Norway Sweden Finland Revenues (MNOK): Revenues (MNOK): Revenues (MNOK):

17 Dividend policy In the transformation period the Board intends to keep dividend at NOK 2.50 supported by profit and cash flow from non-core assets Long term dividend capacity depends on future profit and size of the Branded Consumer Goods area 17

18 Back-up

19 Orkla Group - Branded Consumer Goods Average organic sales growth* of 3% the last 5 years, driven by price Organic sales growth 1 6.5% 3.7% 1.9% 1.7% -0.1% -2.3% RTM H Adjusted for acquired and divested companies, currency translation effects and contract production to the process chemicstry industry. Divested bakery business exluded for all years.

20 Orkla Group - Branded Consumer Goods Strong local brand positions, high margin level in the Nordics EBIT margin (adjusted) % Orkla Home & Personal Orkla Confectionery & Snacks Orkla Foods Orkla BCG average Orkla Food Ingredients Orkla International 20 1 Presented ex. contract production to the process chemicstry industry. 2 Divested bakery business exluded for all years.

21 Orkla Group - Branded Consumer Goods Gross margin Cash conversion 1 31% 32% 32% 100% 99% 78% RTM H Cash flow from operations / EBIT (adjusted).

22 Orkla Foods Organic sales growth 1 3,7% 2,4% 2,0% 0,5% -1,3% -1,9% -1,5% -2,3% 2010 H Retail channel All channels Adjusted for acquired and divested companies and currency translation effects. Divested bakery business exluded for all years.

23 Orkla Foods RTM EBIT (adjusted) in NOK million EBIT margins (adjusted) 1 1,200 1, % 14.0% 14.3% 14.4% 13.9% 1,100 1,050 1, Q Q Q4 Q4 Q RTM H Consolidation of Rieber will lower EBIT margin by around 1.5-2% points Divested bakery business exluded for all years.

24 Orkla Foods Gross margin Cash conversion 1 29% 33% 32% 105% 81% 88% RTM H Cash flow from operations / EBIT (adjusted).

25 Orkla Confectionery & Snacks Organic sales growth 1 RTM EBIT (NOK million) EBIT margin (adjusted) 1 2.5% 1.8% 1.4% % 18.0% 15.9% 16.4% 15.4% 0.5% % H Q Q Q4 Q RTM H Divested bakery business exluded for all years.

26 Orkla Confectionery & Snacks Gross margin Cash conversion 1 36% 36% 35% 101% 101% 76% RTM H Cash flow from operations / EBIT (adjusted).

27 Orkla Home & Personal Rolling 12 months operating revenues (NOK million) 5,000 4,500 4,000 3,500 3,000 Q Q Q Q4 Q Organic sales growth Average 6.8% -1.4% 4.8% 1.1% 1.0% 2.5% Adjusted for acquired and sold companies, currency translation effects and contract production to the process chemistry industry.

28 Orkla Home & Personal RTM adjusted EBIT 1 (NOK million) EBIT margin (adjusted) % 19.5% % 16.7% 17.4% % 16.0% % % Adjusted for contract production to the process chemistry industry.

29 Orkla Home & Personal Gross margin Cash conversion 1 51% 50% 49% 117% 95% 88% RTM H Cash flow from operations / EBIT (adjusted).