Fourth quarter results 2015

Transcription

1 1 Fourth quarter results February 2016 Peter A. Ruzicka, President & CEO

2 Continued growth in the fourth quarter 4.1% organic growth 1 17% EBIT (adj.) 2 growth in BCG Full-year EPS doubled to NOK Reported growth in Q4 adjusted for FX and M&A 2 EBIT (adj.) = Operating profit in Q4 before other income and expenses

3 Highlights: Strong performance in the quarter Group EBIT (adj.) 1 increased by 9% to NOK 1.1 billion Increase in EPS from NOK to NOK 0.73 Continued growth in Branded Consumer Goods 4.1% organic growth 2 driven by successful innovations and high campaign activity EBIT (adj.) growth of 17% in BCG supported by sales growth and cost improvement programmes Increased contribution from associates Improved operations in Sapa Continued growth in Jotun Continued high M&A and restructuring activity Foothold in Central Europe significantly strengthened through acquisition of Hamé (pending) Further expansion in ice cream ingredients Integration of Cederroth ongoing The Board of Directors proposes a dividend of NOK 2.50 per share for EBIT (adj.) = Operating profit before other income and expenses 2 Reported growth adjusted for FX and M&A

4 Branded Consumer Goods Q4 2015: Sales growth in all business areas Organic growth performance 1,2 4.1% 2.5% 2.8% Orkla Foods 5.2% 1.1% 0.7% Orkla Confectionery & Snacks 7.2% Orkla Care 0.6% Orkla Food Ingredients 3.0% -2.8% Q Reported growth adjusted for FX and M&A 2 For organic growth, data before Q4-14 include Orkla Brands Russia

5 Top-line growth initiatives: Several cross-border innovations 5

6 Top-line growth initiatives: Increased collaboration with customers Nutrilett Breakfast Bar for Coop Norge Pizzabakeriet for NorgesGruppen A range of TORO products launched under Beauvais brand only in Coop Denmark 6

7 Top-line growth initiatives: Orkla Food Ingredients and Orkla Foods launch TORO-bakeriet Project team with members from both Orkla Foods and Orkla Food Ingredients 7

8 Top-line growth initiatives: Grandiosa home-made: sales boosted by relaunch Sales increased by 66% after relaunch of three new varieties of Grandiosa home-made +66% Jan. Feb. Mar. Apr. May Jun. Jul. Aug. Sep. Oct. Nov. Dec. 8 Source: Nielsen

9 Branded Consumer Goods Q4 2015: EBIT (adj.) growth supported by currency R12M EBIT (adj.) Breakdown of BCG EBIT (adj.) growth Q NOK mill % % % Q4-06 Q4-07 Q4-08 Q4-09 Q4-10 Q4-11 Q4-12 Q4-13 Q4-14 Q4-15 Reported EBIT (adj.) growth Currency translation effects EBIT (adj.) growth in constant currency 9

10 Continuous improvements for more profitable operations Significant supply chain improvements 14 factories closed or under closure since factory redesign projects initiated Continued centralisation of procurement, from 54% to 70% Several initiatives to reduce SG&A costs Increased sales force efficiency Cederroth and NP Foods integration programmes initiated Increasing the scope of Orkla Accounting Centre in Tallinn Conversion cost in % of sales SG&A in % of sales

11 Significant re-allocation to Branded Consumer Goods Exits and sales Share portfolio NOK ~1.5 billion in freed-up capital in 2015 Strengthened BCG NOK ~5 billion allocated to BCG in Closed or announced acquisitions (including pending acquisitions Hamé and Kavli)

12 Hamé strengthens Orkla within its key categories Nordics / Baltics Central Europe Category (Position and market share) Ketchup No.1 No.1 No.1-2 No.1 No.1 No.1 No.1 No.1 No.3 No.1 Pâté No No.1 No.1 No.1 No. 2 Preserved vegetables Jams and marmalades No. 1 No.1 No.1 No.1-2 No.1 No.3 No.1 No No.1 No.1 No.1 No. 3 No.2 - No.1 No Ready meals No.1 No.1 No.1 No. 3 - No.3 No.1 No.1 No.1 - Dehydrated No.1 No No.1 No Spices No No.1 No Note: Pending acquisition. Source: Nielsen, Euromonitor

13 Summary Delivering on our strategy and increasing performance Keep the strategy on track Deliver organic growth at least in line with market growth Target annual adj. EBIT growth of 6-9% 1 in BCG Maintain a stable dividend of at least NOK 2.50 per share 13 1 Including add-ons, excluding currency effects and large acquisitions and divestments

14 1 4 Financial performance Jens Bjørn Staff, CFO

15 Group EBIT (adj.) improvement of 9% in the quarter Amounts in NOK million Key figures Q4-14 Q Operating revenues EBIT (adj.) Other income and expenses EBIT Profit/loss from associates and JV Net financials and other Profit/loss before tax Discontinued operations EPS (NOK) From continuing operations 2 Gränges and Orkla Brands Russia are classified as discontinued operations

16 1 6 Branded Consumer Goods

17 Positive organic growth Amounts in NOK million 9, % 5.8% 7, % BCG operating revenues Q4-14 Organic growth 1 FX M&A BCG operating revenues Q Reported growth adjusted for FX and M&A

18 Underlying margin improvement Q4-15 EBIT (adj.) margin bridge Full year EBIT (adj.) margin bridge 13.0% 0.6% -0.8% 12.8% 11.8% 0.6% -0.4% 12.0% Q4-14 Underlying improvement Dilution from M&A Q Underlying improvement Dilution from M&A

19 Orkla Foods Sales growth and margin expansion in Orkla Foods Amounts in NOK million Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +5.2% OG % OG 1 12,232 13,250 1,488 1, ,371 3, Q4 FY Q4 FY Q4 FY Continued sales growth across geographies and channels Price and volume driven growth through new launches, campaign activity and distribution of Tropicana juice Sales growth and continuous improvement programmes drove profit and margin expansion Weakening of the NOK and higher raw material prices put pressure on margins 19 1 Reported growth adjusted for FX and M&A

20 Orkla Confectionery & Snacks Strong organic growth in Orkla Confectionery & Snacks Amounts in NOK million Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +7.2% OG % OG 1 4,987 5, ,448 1, Q4 FY Q4 FY Q4 FY Strong organic growth, primarily in Norway, Sweden, Denmark and Estonia Sales growth partly driven by timing and one-off effects, with negative effect in 2016 EBIT (adj.) growth mainly driven by strong sales The acquisition of NP Foods had a dilutive effect on EBIT (adj.) margin from Q Reported growth adjusted for FX and M&A

21 Orkla Care Orkla Care impacted by FX and acquisitions Amounts in NOK million Operating revenues EBIT (adj.) EBIT (adj.) margin (%) 0.6% OG 1-0.7% OG 1 4,960 5, ,250 1, Q4 FY Q4 FY Q4 FY Organic sales growth driven by 3 of 5 business units Campaigns and new launches were the main drivers Profitability in all segments negatively affected by a weak NOK Margin diluted by the inclusion of Cederroth Cederroth performance in line with expectations, however EBIT (adj.) hampered by higher advertising costs than last year 21 1 Reported growth adjusted for FX and M&A

22 Orkla Food Ingredients Steady growth in Orkla Food Ingredients Amounts in NOK million Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +3.0% OG % OG 1 6,534 7, ,821 2, Q4 FY Q4 FY Q4 FY Continued organic growth Increased competition in the margarine segment Greater exposure to ice cream ingredients hurt profitability in low season Higher investments in sales and marketing 22 1 Reported growth adjusted for FX and M&A

23 2 3 Orkla Investments

24 Hydro Power Real estate Share portfolio Jotun (42.5%) Sapa (50%) Orkla Investments Financial investments 24

25 Sapa (50/50 joint venture) Continued underlying EBIT growth in Sapa Amounts in NOK million Operating revenues Underlying EBIT Orkla s share of net profit after tax 55,252 46,211 1, ,842 12, Q4 FY -55 Q4 FY -360 Q4-313 FY 1% market increase in North America Stable demand in Europe Positive contributions from improvement programmes and restructuring efforts Higher share of value added products Orkla s share of net profit significantly increased 25

26 Sapa (50/50 joint venture) Sapa restructuring and synergy agenda delivered one year ahead of plan Amounts in NOK million 1,407 Significant improvement since establishment of Sapa JV NOK 1 billion in synergies realised Exit of unprofitable business Higher share of value added products -89 Focus on continued operational improvement going forward Leverage on leading market position Increase share of value added products Continuous improvement of cost position U. EBIT 2013 Net FX & metal effects JV synergy Exits & program operational improvement U. EBIT

27 Jotun (42.5%) Growth across all segments and regions in Jotun Amounts on 100% basis in NOK million Operating revenues Operating profit 13,171 16,282 1,314 2,064 FY High revenue growth driven by both improved sales volumes and positive currency translation effects Growth across all segments and regions FY Better profitability through active cost control and improved gross margin Operating profit in Q4 impacted by one-off costs 27

28 Hydro Power Lower power prices only partly offset by higher volumes GWh produced Spot prices (NOK/MWh) EBIT (adj.) (NOK million) 2,572 2, Q4 FY Q4 FY Q4 FY Increased production volumes Higher water reservoirs than normal in Sauda Still low power prices Volume sold on spot market is exposed to regional prices Reduced EBIT (adj.) due to low power prices 28 Source: Nord Pool Spot, Monthly System Price

29 2 9 Net debt and dividend

30 Changes in net debt 2015 Amounts in NOK billion Net debt 31 December 2014 Expansion and sale of companies Cash flow from operations Sale of shares and financial assets Net paid to shareholders Tax, dividends received, net financial & other FX effects Net debt 31 December

31 Dividends Amounts in NOK Special dividend Ordinary dividend Proposed dividend

32 Financial calendar Event Date Annual General Meeting 14 April 2016 Q May 2016 Q July 2016 Q November 2016 Q February

33 3 3 Summary Peter A. Ruzicka, President & CEO

34 Delivering on strategy Strong performance Group EBIT (adj.) 1 increased by 9% 4.1% organic growth 2 in BCG EBIT (adj.) growth of 17% in BCG Strong performance from associates Value creating M&A and restructuring activity Significant strengthening of foothold in Central Europe Further expansion in ice cream ingredients Integration of Cederroth ongoing Operational focus going forward Activities that drive organic growth and improve margins Centralise supply chain and reduce factory footprint 34 1 EBIT (adj.) = Operating profit before other income and expenses 2 Reported growth adjusted for FX and M&A

35 35 Launching healthier alternatives

36 36 Extended skin care range from Dr. Greve

37 37 New chocolate launches in Denmark, Norway and Latvia

38 3 8 Q&A Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO

39 3 9 Appendices

40 Group income statement Amounts in NOK million Q4-14 Q Operating revenues EBIT (adj.) Other income and expenses EBIT Profit/loss from associates and joint ventures Interests, net Other financial items, net Profit/loss before taxes Taxes Profit/loss for the period continuing operations Profit/loss from discontinued operations Profit/loss for the period Earnings per share diluted (NOK)

41 Net financial items Amounts in NOK million FY 2015 Q4-14 Q4-15 Net interest expenses Currency gain/loss Result from Share Portfolio and dividends Other financial items, net Net financial items

42 Balance sheet Amounts in NOK million Intangible assets Property, plant and equipment Investments in associates and joint ventures etc Non-current assets Assets held for sale Inventories Inventory of development property Trade receivables Other receivables Shares and financial assets Cash and cash equivalents Current assets Total assets Paid-in equity Earned equity Non-controlling interests Equity Provisions Non-current interest-bearing liabilities Current interest-bearing liabilities Trade payables Other current liabilities Equity and liabilities

43 Cash flow Amounts in NOK million Operating profit Amortisation, depreciation and write-downs Change in net working capital Net replacement expenditures Cash flow from operations Cash flow from operations, Financial Investments Tax Dividends received, net financial and other Cash flow before capital transactions Paid to shareholders, net purchase/sales own shares Cash flow before expansion Expansion investments Sold and acquired companies Net purchases/sales shares and financial assets Net cash flow Currency translations net interest-bearing liabilities Change in net interest-bearing liabilities Net interest-bearing liabilities

44 Sapa (joint venture) figures on 100% basis Amounts in NOK million Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Sales volume (1,000 tonnes) Operating revenues (NOK million) Underlying EBIT Excluded items: Unrealised derivative positions Other excluded items Sum excluded items EBIT Net income (attributable to majority) Historical figures are marginally changed for Q4-14, Q1-15 and Q2-15 due to adjusted definitions.

45 Strong balance sheet and financial flexibility Net interest bearing debt (NOK million) Net gearing 10,645 4,786 8,496 5,661 7, Q4-14 Q1-15 Q2-15 Q3-15 Q

46 Debt maturity profile Amounts in NOK million 5,500 5,000 4,500 4,000 3,500 3,000 2,500 2,000 1,500 1, Average maturity 3.2 years Later Unutilised credit facilities Drawn amounts 46

47 Funding sources Amounts in NOK billion Unutilised credit facilities Banks Bonds and CP Cash, cash equivalents and interest bearing assets

48 48