Introduction to OrklaBI, Oslo
2018-02-13Mikael Harder,SVP Production Strategy & Development
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My personal 7-step program
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Orkla in numbers
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40OPERATING REVENUES1
18,178EMPLOYEES2
8.5 MILLIONCONSUMER UNITS
SOLD DAILY
The Leading Nordic supplierof branded consumer goods
1 2017 2As of 31 December 2017
EBIT (ADJ.)1 MARKET VALUE2
4.6 87
NO
K B
ILLI
ON
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Our business idea:
Improvingeveryday 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
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NO
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2004 – 2010Broader focus
2011 – 2016Strategy to focus on BCG
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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 activitiesRevenues 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…
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Corporate Centre and Group Functions
Orkla Confectionery &
Snacks
Orkla Food
IngredientsOrklaCare
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 7.1760
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100
120
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18.08%
41.71%
62.17%
Source: FactSet Prices
Orkla ASA vs. PeersIndexed Price Performance Price (Indexed to 100)
Orkla OBX Peer group
Orkla’ s business model – how do we stand out?
Local
Market proximity and product tailoring
Synergies
Multinational
OptimisedUtilising market
proximityExtracting 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
~27COST BASE
(NOK BILLION)
million
As of 31 December 2017
percent
FACTORIES
104
98DELIVERED ON TIME
3.6INVENTORY TURNOVER
7-8Factory 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
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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 preferredsupply chain partner for
our customers
End to end cost competitiveness and
optimised capital utilisation
Increased innovation speed and ability
Rationalise manufacturing & warehouse structure
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Continuous cost improvements
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Accelerate purchasing savings
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Strengthen capabilities4