Introduction to Orkla BI, Oslo 2018-02-13 Mikael Harder, SVP - - PowerPoint PPT Presentation

Introduction to Orkla BI, Oslo

2018-02-13 Mikael Harder, SVP Production Strategy & Development

My personal 7-step program

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2 3 1 4 5 6 7

Orkla in numbers

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40

OPERATING REVENUES1 18,178 EMPLOYEES2 8.5 MILLION CONSUMER UNITS SOLD DAILY

The Leading Nordic supplier

• f branded consumer goods

EBIT (ADJ.)1 MARKET VALUE2

4.6 87

NOK BILLION

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Our business idea:

Improving everyday life with healthier and more enjoyable local brands

As the leading Nordic supplier of branded consumer goods (BCG) Orkla aspires to be «Your friend in everyday life»

Transition from conglomerate to leading Branded Consumer Goods company – how did we get here?

1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 40 50 45 60 65 55 35 30 25 20 10 5 15 NOK billion

2004 – 2010 Broader focus 2011 – 2016 Strategy to focus on BCG 1 2 3

Acquisitions: Elkem (2005) Sapa (2005) Divestments: Stake in Carlsberg Breweries (2004) Orkla Media (2006) (2012) (2012) (2015) (2015) (2016)

1986 – 2003 Consolidating Norwegian and Nordic BCG Industry

1986 – 1991: Consolidating the Norwegian BCG sector 1994 – 1997: Consolidating the Nordic BCG sector 2000: Establishing Carlsberg Breweries (40% ownership) 2001: Acquisition of Berlingske

Revenues from industrial activities Revenues BCG

Divestments: Elkem (2011) Borregaard Skoger (2010) REC (2013) Borregaard (2013) Orkla Brands Russia (2014) Asan (2016) IPO’s: Borregaard (2012) Gränges (2014) Establishment of joint ventures: Sapa JV (2013) (2016) (2016) D(2016) (2016) (2016) (2016) Acquisitions:

Orkla’s Business areas represent many categories…

6 Corporate Centre and Group Functions

Orkla

Confectionery & Snacks

Orkla Food Ingredients Orkla Care

Orkla Investments

Hydro Power Financial Investments (42.5%)

Orkla Foods

Orkla Venture

…with a strong presence in the central and Nordic European markets and continued growth in other parts of the world

>100 mill NO revenue Significant operations *FY 2015 adjusted for acquisition of Hamé and Cederroth

31% 4% 22% 7% 10% 5%Re

Baltics: 5% Rest of Europe: 20%

Orkla has outperformed peers and OBX the last three years

Peer group consists of P&G, Unilever, Colgate Palmolive, Reckitt Benckiser, Henkel, Nestlé and Mondelez

10.14 1.15 4.15 7.15 10.15 1.16 4.16 7.16 10.16 1.17 4.17 7.17 60 80 100 120 140 160 180

18.08% 41.71% 62.17%

Source: FactSet Prices Orkla ASA vs. Peers

Orkla OBX Peer group

Orkla’ s business model – how do we stand out?

Local Market proximity and product tailoring Synergies Multinational Optimised Utilising market proximity Extracting synergies across categories and markets

times/year

Orkla Supply Chain- an arena for further improvements

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8.5

SUPPLY CHAIN EMPLOYEES

~11000

CONSUMER UNITS PRODUCED DAILY

~27

COST BASE (NOK BILLION)

million

As of 31 December 2017

percent

FACTORIES

104 98

DELIVERED ON TIME

3.6

INVENTORY TURNOVER

7-8

Factory closures per year

15%

Turnaround achievement

>25%

Reduction in no. of suppliers by 2018

20-30%

Reduced environmental impact

We have strengthened our competitive position by increasing efficiency and lowering costs

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Continuous cost improvements 2

• Intensified focus on factory performance improvement

projects – 39 projects initiated

• Track record of ~15% improvements on addressable

cost base on completed turnarounds

• The footprint programme is progressing at a

historically high pace across all business areas

• Revenue per factory increasing (40+%) despite high

pace in acquisitions

Rationalise manufacturing & warehouse structure 1 Accelerate purchasing savings 3

• Centralisation of procurement enables leverage as

“One Orkla” to take out significant cost

• Leap forward in responsible sourcing

Strengthen capabilities 4

• Step change in digitalised performance management

and build up of Centres of Excellence

• Ahead of plan in reducing environmental impact
• Supply chain orchestration to optimise working capital

OUR PROGRESS IN BRIEF

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Making our supply chain a competitive advantage for Orkla

Being the preferred supply chain partner for

• ur customers

End to end cost competitiveness and

• ptimised capital utilisation

Increased innovation speed and ability

Rationalise manufacturing & warehouse structure

1

Continuous cost improvements

2

Accelerate purchasing savings

3

Strengthen capabilities

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