Orkla (ORK) AGM 2012 presentation summary

Strategic repositioning

• Strategic focus shifted to Branded Goods, emphasizing operational improvements, organic growth and value-adding acquisitions; planned divestments included the Share Portfolio, Borregaard and the REC holding.

• Sapa was slated for operational improvement before a structural solution within 2–3 years; plans included strengthening the organization, restructuring Profiles and improving Heat Transfer margins.

• Growth targets centered on existing categories and geographies, where combinations with existing operations could yield the largest synergies.

Branded goods platform

• Branded Goods turnover CAGR was 8% and EBITA CAGR 11% in 1987–2011.

• Around 80% of turnover came from leading market positions; ~70% of retail turnover came from the 10 largest categories, supported by strong local brands and a broad-based portfolio.

• The multi-local model paired local management and customer insight with shared best practices and synergies; local CEOs held profit responsibility and entrepreneurial freedom.

2011 financial performance

• Operating revenues reached NOK 61,009m, up 6% YoY; EBITA was NOK 4,041m, up 2%.

• Loss for the period was NOK 776m versus NOK 917m in 2010; diluted EPS was -NOK 0.8 versus -NOK 0.9.

• Branded Goods revenue rose 4% to NOK 24,621m, while EBITA fell 6% to NOK 2,784m and margin declined to 11.3% from 12.6%; raw-material inflation weighed on results.

• Sapa revenue increased 11% to NOK 30,844m and EBITA rose 9% to NOK 812m; its margin was 2.6% versus 2.7%, with restructuring expected to contribute NOK 250–300m by end-2012.

• Borregaard EBITA rose 123% to NOK 531m; Jotun revenue increased 9% to NOK 10,659m, with 11% volume growth but lower EBIT and pre-tax profit.