seb ig seminar · 2015-09-02 · funding and debt management 3. orkla in the bond market. orkla in...
TRANSCRIPT
SEB IG Seminar
2 September 2015
Geir Solli
SVP Group Treasury
1
Agenda
1. Introduction to Orkla
2. Funding and debt management
3. Orkla in the bond market
Orkla in figures
3
13.000employees1
90factories
OPERATING REVENUES
NOK 30 BILLION 1EBITA
NOK 3.2 BILLION 2MARKET VALUE
NOK 60 BILLION
The Leading Nordic supplierof branded consumer goods
1 Continued operations 2 2014
Business areas
4
Corporate Centre and Group Functions
Orkla
Foods
Operating
revenues:
12.232
EBITA:
1.495
Orkla Confectionery &
Snacks
Operating
revenues:
4.987
EBITA:
693
Orkla
Food
Ingredients
Operating
revenues:
6.534
EBITA:
359
Orkla
Home &
Personal
Operating
revenues:
4.960
EBITA:
854
Gränges (16%)
Orkla
Investments
Hydro Power
Financial Investments
Real Estate
Sapa JV (50%)
Jotun (42.5%)
FY 2014; NOK million
3 phases of Orkla’s history
5
Revenues BCG Total Revenues ; NOK billions
0
5
10
15
20
25
30
35
40
45
50
55
60
65
1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014
1986 – 2003
Consolidating Norwegian and Nordic BCG Industry
1986/91 – Consolidating the Norwegian BCG sector
1994/97 – Consolidating the Nordic BCG sector
2000 – Establishing Carlsberg Breweries (40% ownership)
2001 – Acquisition of Berlingske
2004 – 2008
Broader focus
2009 – 2015
Focus on BCG
1 2 3
2004: Divestment
Carlsberg Breweries stake
2005:
Acquisition of Elkem
Acquisition of Sapa
2006: Sale of Orkla Media
Acquisitions:
Jordan (2012)
Rieber (2012)
NP Foods (2014)
Cederroth (2015)
Divestments:
Elkem (2011)
REC (2013)
Sapa JV established (2013)
Orkla Brands Russia (2014)
IPOs:
Borregaard (2012)
Gränges (2014)
Orkla’s transformation
2011
New strategic
direction to become a
focused BCG company
2012 – 2013
Major structural actions
on Group level executed
to implement strategy
2014-2016
Operational focus
and finalize
organizational
changes
2014 – 2016
Operational focus.
Leveraging on
organisational changes
in BCG
6
Branded Consumer Goods:
80% of net sales from the Nordic region
7
36%
22%
7%
11%
Baltics:
4%
Other countries:
- India: 2%
- Czech Rep. 2%
- Other Eur. 14% (mainly ingred.)
- Other: 1%
Note: Net sales 2014
…and GDP in main markets is expected to
grow at a stronger / faster rate than Europe
Orkla’s categories in the largest markets are
growing…
Attractive markets with growing categories
Source: IMF World Economic Outlook April 2015; Nielsen week 24 2015
Real GDP; annual change in %
2.9%
Norway 2.8%
Denmark
Sweden
0.3%
Growth in Orkla’s categories last twelve months
-1
0
1
2
3
2014 2015 2016 2017 2018 2019
Finland
EURO area
Sweden
Norway
Denmark
8
IMF estimate
Competitive advantage: broad portfolio of brands with
strong market positions in stable Nordic markets
Source: AC Nielsen, retail market share RTM Q4 20149
Personal Care 42%
Home Care 73%
Biscuits 51% 35% 10%
Confectionery 29% 6%
Food supplements 78% 52% 33% 29%
Textiles (grocery) 77% 33%
Snacks 28% 32% 40% 43%
Frozen pizza 72% 37% 34%
Ketchup 76% 56% 32% 47%
Preserved vegetables 71% 64% 34% 54%
Jam/marmalade 48% 47% 41%
Caviar (cod roe spread) 77% #1
Examples
Acquisition of Cederroth: Significantly strengthens
Orkla Home & Personal’s position in the Nordics
• The acquisition will strengthen Orkla’s position as
one of the leading Nordic suppliers of personal
care, health, wound care and household cleaning
products
• 2014: Sales: SEK 1,894m, EBITDA: SEK 174m
• 850 employees
• Transaction signed 15 Jan 2015
• Completion 31 August.
Product portfolio examples
Poland
11%Finland
Norway
Denmark
8%
Spain
8%
RoW
6%
4%
47%
16%
SwedenOther
21%
House-
hold7%
Health
16%
Wound Care
17%
Personal
Care
39%
Sales by geography Sales by category
10
Strategy - focus on improving operations
11
Strategy
Operational
focus
• Future growth and value creation from a focused Nordic based BCG company
• Focus on organic growth as the key long-term value driver
• Going from a very decentralized model to a more optimized model
• Leveraging on our substantial local presence, skills and insights
• Deliver on initiated and ongoing structural processes
• Focus on activities that drive organic growth and improve margins
– Strong innovation programs
– Increase sales force effectiveness
– More cross-market initiatives
– Strengthen relations with our customers
• Optimizing supply chain
Branded Consumer Goods YTD 2015:
Volume-driven organic growth in first half of 2015
12
Organic growth performance1,2
1Reported growth adjusted for FX and M&A2For organic growth, data before Q4-14 includes Orkla Brands Russia
2011 2014 YTD-152012 2013
2.3%
-2.8%
1.1%
2.5%
0.7%
2.3%
Orkla Food Ingredients
-0.6%
3.0%
Orkla Home & Personal
Orkla Confectionery
& Snacks
Orkla Foods
3.3%
(1) RTM EBIT (adj.) margin diluted due to the acquisition of Rieber
Branded Consumer Goods YTD 2015:
Improving operations in Branded Consumer Goods
13
RTM EBIT (adj.) margin performance
2011
12.2%
2012
12.6%
RTM
Q2-15
12.0%11.8%
2014
11.6%
2013 (1)
-0.1%-p.
Orkla Confectionery
& Snacks1.4%-p.
Orkla Foods 0.3%-p.
Orkla Home & Personal
0.7%-p.Orkla Food Ingredients
EBIT (adj.) margin change
YTD 2015 per business area
Net Interest Bearing Debt/Gearing
14
Net gearingNet interest bearing debt (NOK million)
2014
8,4967,353
2012 Q2-15
5,661
2013
4,786
2011
10,645 0,31
0,16
0,28
0,18
0,24
20132011 2012 2014 Q2-15
Funding strategy – key priorities
• Maintain financial flexibility
– Undrawn, committed bank facilities + cash shall cover 12 m. maturities + known capital needs + strategic reserve
• Diversified sources
– Bilateral long term bank facilities (Revolving Credits)
– Norwegian bonds
– Niche lenders (e.g. Nordic Investment Bank)
– Private Placement markets (USA, Germany)
• Long-term bank relations
– Defined relationship bank group
• Standardised terms & conditions
– Senior, unsecured (neg. Pledge)
– No financial covenants
Debt maturity profile per Q2 2015
16
Amounts in NOK million
5,500
4,000
3,000
3,500
6,000
5,000
4,500
0
2,000
1,500
500
1,000
2,500
202120172015 2018 20202016 Later2019
Drawn amountsUnutilised credit facilities
Average maturity 3.7 years
Funding sources per Q2 2015
- NIBD NOK 7,4 bn
Amounts in NOK billion
5.8
5.2
1.5
3.6
Bonds and PP
Cash, cash equivalents
and interest bearing assets
Unutilised credit facilities
Banks
Bonds in the Norwegian market – NOK 3 bn outstanding
Notional Outstanding
• ORK 09 2007/17 1300 723
• ORK 10 2007/17 1200 914
• ORK 80 2013/24 1000 705
• ORK 82 2015/22 1500 659
Buy-backs/exchanges in ORK 09/10: 863 mill
ORK 80/82 held in Treasury: 1136 mill.
o All bonds listed on Oslo Børs
o Nordic Trustee documentation since 2013 (ORK 80/82)
o EMTN documentation on ORK 09/10
o Fixed or FRN depending on investor preference
o Arranger mandates to relationship banks
Orkla is a long-standing issuer in the Norwegian bond
market
19
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1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
Outstanding volumes
Orkla will host an investor day in London on Friday 11 September 2015 (11.15- 16.00 UK time) at the London Stock
Exchange. The programme will cover a strategic update of the Group, and include in-depth presentations on the
development of the business segments.
Venue:
London Stock Exchange
10 Paternoster Square, London EC4M 7 LS
The presentations may also be viewed live on a webcast at: www.orkla.com
20
Capital Markets Day 11 September 2015
Thank you!
Contacts:
Geir Solli, SVP Group Treasury, [email protected], +47 9954 2789
Arvid Østbø, VP Group Funding, [email protected], +47 9177 6830