The Orkla Group. Oslo Stock Exchange 6 September Hilde Myrberg EVP

Transcription

1 The Orkla Group Oslo Stock Exchange 6 September 2007 Hilde Myrberg EVP

2 Agenda Orkla organisation Financial performance Strong business portfolio Strong corporate culture Strong balance sheet Elkem Solar project JV within aluminium extrusion 2

3 Key Figures 2006 Employees: Revenues: NOK 53 billion Norway 23 % Other Nordic countries 24 % Central and Eastern Europe 10 % Other European countries 30 % Asia 5 % America 8 % EBITA: NOK 5 billion Business areas: 5 Orkla Branded Consumer Goods Orkla Aluminium Products Orkla Materials Orkla Associates Orkla Financial Investments Market Cap*: NOK 100 billion Shareholders: * As of 4 Sep

4 NOK mill. Orkla Branded Consumer Goods Orkla Aluminium Products Orkla Materials Orkla Associates Orkla Financial Investments Share portfolio Revenues: EBITA : ROCE : 16 % Sapa JV Heat Transfer Building System Revenues: EBITA : 839 ROCE : 11 % Revenues: EBITA : ROCE : 11 % % in REC Revenues : EBITDA : Market cap: * Rep. in Orkla: % in Jotun Revenues : EBIT : 645 Rep. in Orkla: 151 Real Estate Mkt value port: ** EBITA : 185 Return port : 27.4 % * 29 Aug 2007 ** As of Q2-07 4

5 Sales by geographical area Key figures for

6 Long term value creation 25.7 % compounded annual return last 25 years 46.4 % 25.7 % 19.9 % 13.8 % 12.1 % 28.6 % 20.5 % 32.5 % From 1982 From 1997 From 2002 From 2004 Orkla Oslo Stock Exchange YTD= 4 Sep 2007, dividend reinvested 6

7 YTD Substantial shareholder value created Value of NOK 1 invested , dividend reinvested ORKLA OSEBX S&P 500 YTD= 4 Sep x 33x 20x

8 Dividend distribution 1) in NOK Ordinary dividend Special dividend 1) Before split 1:5 on 20 April

9 Agenda Strategic direction 9

10 Driving value today and tomorrow Strong business portfolio create more opportunities Strong corporate culture strengthened competence base to realise opportunities successfully Strong balance sheet increased financial flexibility 10

11 Orkla basic thinking 1. Strategic flexibility 2. Understand the success formulas for each business sector Meaningful market positions differentiation, strength and size Clear strategic and operational agenda for each unit Strong local management and functional expertise 3. Exploiting corporate synergies Competence building through the Orkla Academies Support to line organisations from Corporate Development M&A, marketing, innovation and sales, operations, purchasing 4. A culture that promotes value creation 11

12 Strong business portfolio: Creates more industrial options and strategic flexibility Orkla s frontier of opportunities Branded Consumer Goods Aluminium Products Materials Associates Financial Investments Executed with strong commercial opportunism 12

13 Main positions: Branded Consumer Goods Aluminium Products Solar Energy Materials Financial Investments The leading Nordic FMCG company with approx. 80 % of revenues from #1 brands The world s largest aluminium extrusion company % in REC Elkem Solar Building solar-grade silicon plant Elkem (Energy, Primary Aluminium and Silicon-related operations) Borregaard One of the largest privately held Nordic equity portfolios: Market value NOK 20 billion 13

14 A balanced portfolio of assets - in high growth and high cash flow phase High growth phase REC Elkem Solar Jotun Sapa Orkla Brands Elkem Silicon Orkla Foods Borregaard Chemicals Elkem Aluminium Hydro power High cash flow phase 14

15 The objectives of Orkla s Financial Investment division Deliver good returns Be an engine for Orkla s development 15

16 Orkla leveraging industrial and financial expertise Industrial activities Financial thinking Industrial thinking Financial Investments Industrial value creation Industrial options Financial value creation Orkla s long-term value creation 16

17 Engine for Orkla s development Financial Investments Industrial options Financial value creation Borregaard Lilleborg Stabburet Jotun (42.5 %) Nora Industrier Ringnes -> BBH Nora Foods Nidar Netcom Dyno Carema Elkjøp Lindex Storebrand Capio Nokia Freia Elkem Sapa REC (39.75 %) 17

18 Driving value today and tomorrow Strong business portfolio create more opportunities Strong corporate culture strengthened competence base to realise opportunities successfully Strong balance sheet increased financial flexibility 18

19 Strong corporate culture - The Orkla Way Ambitious targets Structural measures Developing people - creating value Development of leadership capacity and functional expertise Lean supply chain based on HES performance Improvement orientation Customer focus and Innovative ability 19

20 Strong corporate culture: Value creation through M&A J/V Sapa- Alcoa 6 Orkla Media sold 80 5 EBITA Industry division Sales Industry division Elkem/Sapa Chips 70 4 Carlsberg Breweries Berlingske Carlsberg Breweries sold Nora Industrier Abba and Procordia Pripps Ringnes 100 % * : EBITA: 12 m rolling, excluding contribution from Alcoa s share in JV Revenues: 12 m rolling, including contribution from Alcoa s share in JV (per approx. NOK 16 bn) 20

21 Strong corporate culture: Active industrial ownership Enabling skills and capabilities Strategy/M&A Governance Performance culture Financial competence/capacity Functional skills Marketing & innovation Sales Lean supply chain Technology 21

22 Competence building is business oriented and systematic Competence board CEO Group executive management Human resources director Company culture Functional skills Leadership development Introduction programmes Follow-up programmes Integration programmes Orkla Brand Academy Orkla Sales Academy Orkla Production Academy Orkla Purchasing Academy Orkla B2B Academy Orkla Finance Academy Management programmes Mentor programmes Management Audit 22

23 Strong corporate culture: Value creation through cost cutting Ambition: Cost base reduction NOK 1.95 billion ( ) NOK million Orkla Foods Orkla Brands Elkem Sapa Borregaard Orkla Group 23

24 Value creation through innovations 24

25 Driving value today and tomorrow Strong business portfolio create more opportunities Strong corporate culture strengthened competence base to realise opportunities successfully Strong balance sheet increased financial flexibility 25

26 Strong balance sheet: Net gearing 0.3 as of Q2 NOK billion Net gearing Q1-07Q Equity Net interest-bearing liabilities Net gearing 26

27 Orkla and solar energy Source: European Photovoltaic Industry Association

28 Orkla has three solar positions Ownership Characteristics REC % (NOK 40 bn market value 1 ) Orkla s primary solar interest World s largest producer of silicon materials for PV applications World s largest producer of multicrystalline wafers Significant producer of cells and modules Orkla ownership below 40 % Elkem Solar 100 % Solar silicon production New plant for Elkem Solar Grade Silicon ESS being built Cost efficient proprietary polysilicon refining technology All capacity until 2012 already sold. Options on further capacity Sapa Building Systems 100 % Aluminium building systems installations Integrated solar application on building exteriors 1 Market value of Orkla s position using the share price of REC as of 29 August 2007 (NOK 204.5) 28

29 Three solar positions - give Orkla exposure across the solar value chain Industry value chain Si-metal Polysilicon Ingot Wafer Cell Module System / installation Metallurgical process Chemical or metallurgical refining Casting Cutting Surface treatment and circuit wiring Assembly Orkla s positions Elkem Elkem Solar Building System 29

30 Elkem Solar - Investment in new production plant for Solar Grade Silicon Elkem Solar in Kristiansand: Investment in new production plant for Solar Grade Silicon Investment: NOK billion Total employees: 200 Capacity: MT Expansion potential: MT Shipments from: 2 H

31 Orkla Aluminium Products 31

32 The new Sapa structure Orkla 100 % Alcoa Sapa Holding Employees: 14, % 100 % > 50 % < 50 % Heat Transfer Building System Sapa JV Net sales 2006: Employees: NOK 3.4 billion 1,000 NOK 3.1 billion 1,500 12,400 NOK 26.0 billion* Products: Aluminium strip used in various types of heat exchangers in the automotive industry Building solutions based on aluminium profiles for the European construction industry Extruded aluminium profiles for a number of industries; e.g. automotive, construction and telecom 32 Orkla Aluminium Products *Pro forma estimates 2006

33 Sapa JV -the global leader in soft alloy extrusions Europe North America Sapa JV 19 % Sapa JV 27 % Hydro 13 % Indalex 16 % Alcan 6 % Hydro 10 % Aleris 3 % Kaiser 8 % Market leader in important markets, e.g. France, UK, Benelux, Poland, France, Portugal, Sweden, Spain Strongest position on the East Coast 33 Orkla Aluminium Products

34 Sources of value creation Industry characteristics Main challenge Sources of value creation Growth: above GDP growth Profitability in the industry generally too low Sapa is the best performer of the larger companies Small producers perform surprisingly well Negligible scale effect demonstrated How to create scale effects and differentiation 1. Customer intimacy: Sapa influences customers solutions, either by proposing new design or by reducing costs 1. Cost improvement including: Plant restructuring, procurement Genesis, Redesign, Benchmarking The Toyota Way 3. Improved EHS performance (especially at Sapa) 34 Orkla Aluminium Products

35 Major opportunities Creating global leadership Opportunity to shape the industry Good geographical complementarities Broad product range Improving financial performance Customer intimacy Production improvements Bring JV financial performance, over the business cycle, up to a level approaching Sapa Profiles Exploring further growth potentials 35 Orkla Aluminium Products

36 36