Introduction to OrklaBI, Oslo

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

1

My personal 7-step program

2

23

1

4

5

6

7

Orkla in numbers

3

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

4

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

40

50

45

60

65

55

35

30

25

20

10

5

15

0

NO

K bi

llion

2004 – 2010Broader focus

2011 – 2016Strategy 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 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…

6

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

80

100

120

140

160

180

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

10

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

11

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

12

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

1

Continuous cost improvements

2

Accelerate purchasing savings

3

Strengthen capabilities4