annual report annual 2012 ORKLA AnnuAL RepORt / 2012 analyStS Brokerage house ContaCt telephone e-mail ABG Sundal Collier petter nystrøm +47 22 01 61 35 [email protected] Arctic Securities kenneth sivertsen +47 21 01 32 32 [email protected] Carnegie preben rasch-olsen +47 22 00 93 59 [email protected] Credit Agricole Cheuvreux Daniel ovin +46 87 23 51 75 [email protected] Danske Market Equities martin stenshall +47 85 40 70 73 [email protected] DNB Markets haakon aschehoug +47 22 94 82 32 [email protected] Fondsfinans per haagensen +47 23 11 30 23 [email protected] Goldman Sachs markus iwar +44 207 552 1264 [email protected] Handelsbanken Capital Markets kjetil lye +47 22 94 07 00 [email protected] Norne Securities AS Vilis eizentas +47 21 95 37 47 [email protected] Pareto Securities eirik Vegem Dahle +47 22 87 87 43 [email protected] RS Platou Markets terje mauer +47 22 01 63 24 [email protected] SEB Enskilda atle Vereide +47 21 00 85 33 [email protected] SpareBank1 Markets lars-Daniel Westby +47 24 14 74 16 [email protected] Swedbank Securities henning C. steffenrud +47 23 23 80 35 [email protected] UBS Investment Bank David hallden +46 84 53 73 00 [email protected] Financial calendar For orkla aSa date event 18.04.2013 Annual General Meeting 19.04.2013 Share traded ex. dividend* 30.04.2013 Dividend payment* 02.05.2013 1st quarter 2013 18.07.2013 2nd quarter 2013 30.10.2013 3rd quarter 2013 *Subject to the approval of the proposed dividend at the General Meeting. Associated Non-core Business areas company Sapa (part of future JV) Aluminium profiles and building systems Orkla EBITA1 (NOK million): Confectionery Orkla Home Orkla Orkla Food Jotun Orkla Foods & Snacks & Personal International Ingredients (42.5%) 233 Sapa Heat Transfer Rolled aluminium products EBITA1 (NOK million): 309 Operating revenues Operating revenues Operating revenues Operating revenues Operating revenues Operating revenues* Hydro Power (NOK million): (NOK million): (NOK million): (NOK million): (NOK million): (NOK million): EBITA1 (NOK million): 7,972 4,794 4,025 2,133 5,435 11,351 208 Shares and EBITA1 EBITA1 EBITA1 EBITA1 EBITA1 EBIT* financial assets (NOK million): (NOK million): (NOK million): (NOK million): (NOK million): (NOK million): Value (NOK billion): 1,114 780 702 -5 228 1,126 3.6 Orkla Eiendom (real estate) Number of Number of Number of Number of Number of Number of Book value man-years man-years man-years man-years man-years man-years (NOK billion): 3,061 2,231 1,787 4,432 2,224 6,379 1.8 Corporate centre and support functions * The figures are on a 100% basis. 1 Operating profit before amortisation and other income and expenses. Design and production: Cox Design, Oslo | photo: Guri Dahl/tinagent.no | photo cover: Mari Svenningsen | print: tS trykk AS. 2 ORKLA AnnuAL RepORt 2012 COntentS Contents the orkla group 03 message from the CEO 04 the Board of Directors of orkla ASA 06 report of the Board of Directors 08 the group executive Board 22 Corporate governance 24 annual Financial statements 2012 32 notes to the Financial statements 37 Financial statements for orkla ASA 81 historical key figures 90 additional information for valuation purposes 91 group Directory 92 governing bodies and elected representatives 95 orkla’s business areas 96 • Branded Consumer goods 97 • orkla Foods 98 • orkla Confectionery & snacks 100 • orkla home & personal 102 • orkla international 104 • orkla Food ingredients 106 • Jotun 108 • sapa (part of future JV) 109 • sapa heat transfer 110 • hydro power 111 • orkla eiendom (real estate) 111 share information 112 orkla’s hr strategy 117 sustainability report 2012 118 sponsorships 119 3 Orkla annual repOrt 2012 the Orkla grOup The leading nordic branded consumer goods company orkla asa is an international group listed on the oslo stock exchange and headquartered in oslo, norway. The group is the leading nordic supplier of branded consumer goods and concept solutions to the grocery and out-of-home sectors. orkla also holds several SALES REVENUES PER strong positions in india, russia and austria. moreover, orkla food ingredients is a major supplier BUSINESS AREA to the european bakery market. Orkla Foods 7,839 (27 %) in addition to its branded consumer goods business, Orkla Confectionery & Snacks 4,760 (17 %) orkla still operates in the real estate, hydropower and Orkla Home & Personal 3,986 (14 %) aluminium sectors and has financial investments. Orkla International 2,077 (7 %) Orkla Food Ingredients 5,378 (19 %) as of 31 december 2012, orkla had around 28,000 employees, of whom some 14,000 were employed in Sapa Heat Transfer 3,913 (14 %) its branded consumer goods business. in 2012, the Hydro Power 533 (2 %) group had a total turnover of around noK 30 billion. Other 73 (0 %) Total sales revenues NOK 28,559 million. Key figures Key Figures* 2012 2011 2010 2009 2008 Operating revenues (NOK million) 30,001 61,009 57,338 56,228 65,579 EBITA1 (NOK million) 3,295 4,041 3,944 2,448 4,240 EBITA1 margin (%) 11.0 6.6 6.9 4.4 6.5 Ordinary profit before tax (NOK million) 3,873 -923 20 1,071 -2,015 Diluted earnings per share (NOK) 1.6 -0.8 -0.9 2.5 -2.8 Return on capital employed industrial activities2 (%) 12.9 10.7 10.5 5.2 9.4 Total dividends per share (NOK) 2.503 2.50 7.50 2.25 2.25 Equity ratio (%) 53.9 51.8 53.6 51.7 47.7 * Figures as reported in 2008–2011. 1 Operating profit before amortisation and other income and expenses. 2 See definition on page 90. 3 Proposed dividend. Operating revenues ebita1 earnings per share group operating revenues totalled group eBITA1 totalled earnings per share 30.0 nOk 30.0 billion. 3.3 nOk 3.3 billion. 1.6 were nOk 1.6 in 2012. 4 Orkla annual repOrt 2012 Message from the ceO MESSAGE FROM THE CEO in 2012, orKla TooK maJor, decisive sTeps ToWards becoming a pure branded consumer goods company WiTh focus on The nordic marKeTs. even While maKing comprehensive sTrucTural changes, We delivered saTisfacTory resulTs. The acquisitions of the branded goods sary to develop strong local products and We are also making changes in our companies Jordan and rieber & søn are brands in competition with international existing portfolio of companies. To increase important milestones in themselves. They companies. our competitive edge in the swedish are companies with long-standing tradi- market, abba seafood and procordia are tions, strong brands, good management a good solution has been found for to be merged and form one of sweden’s and a strong corporate culture, which fit orkla’s substantial investment in alumi- largest food companies. by combining in well in orkla. With these acquisitions, nium by ensuring the continuation of the best of these two companies, we we are translating our strategy into action. parts of sapa through a joint venture with will create a new company that will furthermore, these purchases will generate hydro. Together, we can create a stronger strengthen the competitiveness of our cost synergies that justify the price that company with a broader base of expertise well-known swedish food brands, and we are paying. in addition we expect to and a highly experienced management give them greater impact in the swedish realise substantial revenue synergies in team. in today’s very demanding markets, market. the coming years. the new company will be better equipped to restructure operations and create value. orkla’s branded consumer goods businesses Jordan is market leader in the nordic This will enhance orkla’s possibilities of are market leaders in attractive categories. region in the toothbrush, toothpick, realising the substantial inherent value in We are well positioned in geographical dental floss and painting equipment our aluminium business. The transaction markets that are prosperous and relatively segments. in norway, Jordan is also a is awaiting approval by the competition stable. We have a powerful business model leading supplier of dishwashing brushes authorities. a resolution is expected in which offers reasonable economies of scale and microfibre cloths to the grocery the first half of 2013. while also giving us a local footing that sector. The company also exports pro- enables us to be responsive to the market ducts to many countries outside the orkla also made a number of adjustments and adapt to customer needs. last, but nordic region. Jordan gives orkla a whole to the rest of its portfolio in 2012. We not least, we have human and financial new strength in the oral hygiene category, substantially reduced our shareholding resources that will enable us to continue and offers exciting potential for lilleborg. in rec, and orkla now has a stake of to develop our operations. large organisa- 15.6% in the company. borregaard was tions only perform well when there is rieber & søn complements stabburet in listed on the oslo stock exchange on 18 consensus on and commitment to the norway. Through this acquisition, we are october 2012. our share portfolio is strategy that has been adopted. There expanding our portfolio of strong number gradually being sold off, and will largely is full agreement in orkla’s board one and number two positions in the be divested in the first half of 2014. We of directors and orkla’s executive nordic region. rieber & søn also signi- expect to sell sapa heat Transfer, which management on the strategic choices ficantly widens the geographical scope will not be part of the future joint venture that we have made.