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On 1 March 2023 Orkla implemented a new operating model and established 12
autonomous Portfolio Companies.
Orkla is a leading industrial investment company, with focus on strong brands
and consumer-oriented companies. The new comprehensive strategy will be
presented at the Capital Markets Day later today.
“We are developing a company combining the very best elements from two worlds:
building on our DNA of developing brands and combining this with an investment
company mindset. It is this combination that will make us truly unique. As an
industrial investment company our ultimate goal and KPI is to deliver a minimum
annual total shareholder return in the range of 12-14% in the period 2024-2026,”
says Nils K. Selte, Orkla’s President and CEO.
Value creation at Orkla consists mainly of four building blocks: the 11
consolidated portfolio companies, Jotun (42.7% ownership), financial assets, and
structural opportunities.
Focus for the Portfolio Companies will be their individual financial targets in
the period 2024-2026. The value creation potential for Orkla’s consolidated
portfolio companies is estimated to be NOK 40-45 bn.
This represents in the period 2023-2026 for the consolidated portfolio
companies:
· an underlying EBIT (adj.) CAGR of 8-10%
· a margin expansion in the range of 1.5-2.0 percentage points
· a ROCE improvement from 10% to 13%
Orkla will maintain a financial and business risk profile consistent with an
investment grade credit quality, and a net debt to EBITDA ratio of 2.5. Orkla’s
first priority is to pay out a stable and increasing dividend over time, and
secondly to invest in current business and M&A. Any excess capital will be
returned to shareholders either by an extraordinary dividend or large share buy
-back programmes.
Orkla has set clear ambitions for its sustainability work, including
requirements for its Portfolio Companies. The goal is to enable a responsible
transition towards net-zero and sustainable production and consumption. By 2030
greenhouse gas emissions from Orkla’s own operations are to be reduced by 70%
(Scope 1 & 2). All food companies are to create positive health impacts towards
2030. Orkla will achieve a balance in gender representation in management teams
by 2026.
As part of the process of reducing complexity in the portfolio and a more
disciplined capital allocation, Orkla has created a framework to categorise the
Portfolio Companies in three groups:
Grow and Anchor Transform or exit
build
Orkla Food Jotun (42.7% ownership) Orkla Home & Personal Care
Ingredients
Orkla Health Orkla Foods Europe Orkla House Care
Orkla India Orkla Confectionery & Snacks Health and Sports Nutrition Group
The European Pierre Robert Group
Pizza Company
Lilleborg
“The “Grow and build” category consists of companies where we aim to grow
organically and/or through M&A. The companies in the “Anchor” category are seen
as significant cash generators. These companies operate in more stable
categories, and are vital to ensure yearly dividend, handling of debt, and
fueling Orkla’s “Grow and build” companies. The final category is “Transform or
exit”. These are companies where we will work on a plan to either transform or
exit within a limited time frame,” says Mr Selte.
The Capital Markets Day presentation and Q&A sessions will be held in English
and can be viewed as a live webcast here: https://events.webcast.no/viewer
-registration/qU2oj1kk/register
For more information about Orkla Capital Markets Day 2023, please visit this
site: https://investors.orkla.com/English/events-and-presentations/capital
-market-day/Capital-Markets-Day-2023/default.aspx
About Orkla
Orkla is a leading industrial investment company focusing on brands and consumer
- oriented companies. The current investment portfolio comprises 12 companies in
areas such as paints and coatings, foods, confectionery and snacks, health and
food ingredients, among others. In 2022, Orkla had operating revenues of NOK
58.4 billion and net profit of NOK 5.3 billion. Orkla has more than 20,000
employees. Orkla is listed on the Oslo Stock Exchange and its headquarters is in
Oslo.
Orkla ASA
Oslo, 29 November 2023
Contacts:
EVP Communication and Corporate Affairs, Orkla ASA
Håkon Mageli
Tel.: +47 928 45 828
SVP Investor Relations, Orkla ASA
Kari Lindtvedt
Tel.: +47 950 75 114
Kilde
