Growth continues. First quarter results May Peter A. Ruzicka, President & CEO

Transcription

1 1 Growth continues First quarter results May 2017 Peter A. Ruzicka, President & CEO

2 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

3 Branded Consumer Goods Q1-17: Organic growth ahead of our markets Continued organic growth 1 Organic growth in 3 out of 4 business areas 1 3.7% Orkla Foods 1.1% 2.8% 1.7% 2.0% 1.6% Orkla Confectionery & Snacks 3.1% 0.7% Orkla Care 3.6% 0.1% Q Q Q Q4-16 Q1-17 Orkla Food Ingredients -0.6% 3 1 Reported growth adjusted for currency translation effects and structural changes 2 Organic growth figures for Q1-16, Q2-16 and Q3-16 have been restated.

4 Branded Consumer Goods Q1-17: 10% EBIT (adj.) growth in constant currencies % % -20 bps +30 bps 10.4% -3.1% EBIT (adj.) Q1-16 FX FX adjusted growth EBIT (adj.) Q1-17 EBIT (adj.) margin Q1-16 Dilutive effects of M&A Underlying EBIT (adj.) improvement margin Q Amounts in NOK million

5 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 Finland Merging Personal Care and Health in Poland Merging Orkla House Care companies in UK Simplification programme announced in Home & Personal Care in Norway Trimming the portfolio Exiting mayonnaise based salads in Norway Exiting industrial marzipan in Italy 5

6 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

7 7 Financial performance Jens Bjørn Staff, CFO

8 Group EBIT (adj.) improved 10% Key figures Q1-16 Q1-17 Operating revenues EBIT (adj.) Other income and expenses EBIT Profit/loss from associates and JV Net financials and other 2-3 Profit/loss before tax Tax EPS (NOK) Amounts in NOK million

9 Branded Consumer Goods Q1-17: Negative FX effects offset by M&A and organic growth 8,834 8, % -4.0% +8.0% BCG operating revenues Q1-16 Organic growth 1 FX M&A BCG operating revenues Q Amounts in NOK million. 1 Reported growth adjusted for currency translation effects and structural changes

10 Orkla Foods Modest profit growth driven by M&A Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +1.1% OG 1 3,418 3, Q1 Sales and profit growth mainly driven by M&A Modest organic sales growth in the Nordics Q1 Q1 Negative impact on profitability from increased input costs, sales mix effects and dilution from M&A 10 Amounts in MNOK. 1 Reported growth adjusted for currency translation effects and structural changes

11 Orkla Confectionery & Snacks Organic growth up 3% driven by increased volumes Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +3.1% OG 1 1,457 1, Q1 Q1 Q1 Volume driven organic sales growth, partly due to positive Easter effects Profit growth driven by improved product mix and operational improvements 11 Strong profit improvement in Latvia Amounts in MNOK. 1 Reported growth adjusted for currency translation effects and structural changes

12 Orkla Care Revenue growth driven by M&A and positive organic growth Operating revenues EBIT (adj.) EBIT (adj.) margin (%) +3.6% OG 1 1,655 1, Q1 Q1 Q1 Revenue growth driven by M&A and positive organic growth Profit growth reported in all business units except Pierre Robert Strong positive impact from timing of Easter 12 Amounts in MNOK. 1 Reported growth adjusted for currency translation effects and structural changes

13 Orkla Food Ingredients Sales decline due to negative FX and lower raw material prices Operating revenues EBIT (adj.) EBIT (adj.) margin (%) -0.6% OG 1 1,873 1, Q1 Q1 Q1 Reduction in prices of certain raw materials and loss of butter-blend PL contracts hamper revenue growth Weak profit development in Romania 13 Larger negative seasonal effects from increased exposure in ice cream ingredients Amounts in MNOK. 1 Reported growth adjusted for currency translation effects and structural changes

14 Orkla Investments continue to make a strong contribution Fully consolidated into Orkla accounts Hydro Power Volume (GWh): Q1: 536 (546) Power prices 1 (NOK/MWh): Q1: 280 (228) EBIT adj. (NOK million): Q1: 54 (44) Financial investments Book value real estate: NOK 1.3 billion Accounted for using equity method Sapa (50%) Jotun (42.5%) 14 1 Source: Nord Pool Spot, Monthly System Price

15 Sapa (50/50 joint venture) Broad-based profit growth for Sapa in Q Sales volume (kmt) Underlying EBIT Orkla s share of net profit after tax Q1 Q1 Q1 Growth in underlying EBIT for all business areas Positive effects from value add strategy Improved cost position and lower overhead costs 15 Amounts on 100% basis in NOK million unless stated otherwise

16 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 in Norway, Malaysia, Myanmar and the Philippines 16

17 Further reduction in net debt Net debt 31 December 2016 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 items FX effects Net debt 31 March Amounts in NOK billion

18 Orkla Investor Day in Oslo 1 June 2017 Orkla s Group Executive Board will give a strategic and financial update as well as discussing market and company outlook. The Investor Day presentations will be webcast live at on 1 June 2017 between 10:00 12:30 CET. Programme: 10:00 am 12:30 pm Investor Day presentations and Q&A by President and CEO Peter A. Ruzicka, Executive Vice President Operations Johan Clarin and CFO Jens Staff pm 1.30 pm Lunch 1.30 pm 3.30 pm: Tour of the Orkla Growth Fair, including relevant presentations of Orkla s innovation and product development work, product samples and a first look at upcoming innovations 3.30 pm 4.30 pm Refreshments and mingling 18

19 1 9 Focus going forward Peter A. Ruzicka, President & CEO

20 Meeting consumer trends through innovation A selection of new launches Responsible sourcing and sustainability Naturally functional ingredients Vegetarian & vegan Convenience 20

21 Delivering on our strategy through One Orkla Q1-17 takeaways Taking shares in a slightly weaker market Cost improvements from working as One Orkla Financial targets reiterated Financial targets Target annual EBIT (adj.) growth of 6-9% 1 in BCG Deliver organic growth at least in line with market growth Maintain a stable dividend of at least NOK 2.50 per share Maintain NIBD / EBITDA not exceeding Including add-ons, excluding currency effects and large acquisitions and divestments

22 2 2 Q&A Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO

23 2 3 Appendices

24 Group income statement FY 2016 Q1-16 Q1-17 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 Earnings per share diluted (NOK) Amounts in NOK million

25 Net financial items FY 2016 Q1-16 Q1-17 Net interest expenses Currency gain/loss Result from Share Portfolio and dividends Other financial items, net Net financial items Amounts in NOK million

26 Statement of financial position Intangible assets Property, plant and equipment Investments in associates and joint ventures etc Non-current assets Assets held for sale 0 0 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 Amounts in NOK million

27 Cash flow Q1-16 Q1-17 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 Amounts in NOK million

28 Sapa (joint venture) Figures on 100% basis Q1-16 Q2-16 Q3-16 Q4-16 Q1-17 Sales volume (kmt) Operating revenues (NOK million) Underlying EBIT (NOK million) Excluded items: Unrealised derivative positions (NOK million) Other excluded items (NOK million) Sum excluded items (NOK million) EBIT (NOK million) Net income (attributable to majority) (NOK million) Sapa underlying EBIT = EBIT adjusted for unrealised derivative results and material impairment charges, restructuring costs and other special effects

29 Sapa (joint venture) Key financials by business area Extrusion Europe Q1-16 Q1-17 Volume (kmt) Sales (NOKm) Underlying EBITDA (NOKm) Underlying EBIT 1 (NOKm) Extrusion North America Q1-16 Q1-17 Volume (kmt) Sales (NOKm) Underlying EBITDA (NOKm) Underlying EBIT 1 (NOKm) Building Systems Q1-16 Q1-17 Volume (kmt) Sales (NOKm) Underlying EBITDA (NOKm) Underlying EBIT 1 (NOKm) Precision Tubing Q1-16 Q1-17 Volume (kmt) Sales (NOKm) Underlying EBITDA (NOKm) Underlying EBIT 1 (NOKm) Other and eliminations Q1-16 Q1-17 Underlying EBITDA (NOKm) Underlying EBIT 1 (NOKm) Sapa underlying EBIT = EBIT adjusted for unrealized derivative results and material impairment charges, restructuring costs and other special effects

30 Strong balance sheet and financial flexibility Net interest-bearing debt (NOK million) Net gearing Q Q

31 Debt maturity profile 5,000 4,500 Average maturity 3.2 years 4,000 3,500 3,000 2,500 2,000 1,500 1, Later Unutilised credit facilities Drawn amounts 31 Amounts in NOK million

32 Funding sources Unutilised credit facilities Banks 6.7 Bonds and CP Cash, cash equivalents and interest bearing assets Amounts in NOK billion

33 33