Orkla ASA — Earnings Release 2017

May 9, 2017

Growth continues

First quarter results 2017 9 May 2017

Peter A. Ruzicka, President & CEO

Highlights Q1-17: Continued progress from working as One Orkla

• Branded Consumer Goods continues to grow
• Associates perform strongly
• Profit before tax up 4%
• Ongoing M&A and restructuring activity

Branded Consumer Goods Q1-17: Organic growth ahead of our markets

1Reported growth adjusted for currency translation effects and structural changes

2Organic growth figures for Q1-16, Q2-16 and Q3-16 have been restated. ³

Branded Consumer Goods Q1-17:

10% EBIT (adj.) growth in constant currencies

New restructuring efforts for future cost improvements

Continuing to optimise factory footprint

• 2 additional factory closures decided in Q1
• A total of 24 closures decided since the start of the programme

Further rationalisation of SG&A

• Merging Foods and C&S in Finland
• Merging Personal Care and Health in Poland
• Merging Orkla House Care companies in UK
• Simplification programme announced in Home & Personal Care in Norway

Trimming the portfolio

• Exiting mayonnaise based salads in Norway
• Exiting industrial marzipan in Italy

Branded Consumer Goods Q1-17: Further strengthening the core

Investing in existing operations Strengthening our position through add-ons

NOK 500 million investment in pizza production over 5 years

Financial performance

Jens Bjørn Staff, CFO

Group EBIT (adj.) improved 10%

Key figures	Q1-16	Q1-17
Operating revenues	8 610	9 081
EBIT (adj.)	817	900
Other income and expenses	-30	-87
EBIT	787	813
Profit/loss from associates and JV	462	485
Net financials and other	2	-3
Profit/loss before tax	1 251	1 295
Tax	-135	-185
EPS (NOK)	1.08	1.08

8 Amounts in NOK million

Branded Consumer Goods Q1-17: Negative FX effects offset by M&A and organic growth

Orkla Foods Modest profit growth driven by M&A

2016 2017

10 Amounts in MNOK. 1Reported growth adjusted for currency translation effects and structural changes

Orkla Confectionery & Snacks

Organic growth up 3% driven by increased volumes

2016 2017

11 Amounts in MNOK. 1Reported growth adjusted for currency translation effects and structural changes

Orkla Care

Revenue growth driven by M&A and positive organic growth

2016 2017

Orkla Food Ingredients Sales decline due to negative FX and lower raw material prices

2016 2017

13 Amounts in MNOK. 1Reported growth adjusted for currency translation effects and structural changes

Orkla Investments continue to make a strong contribution

Sapa (50/50 joint venture) Broad-based profit growth for Sapa in Q1

2016 2017

• Growth in underlying EBIT for all business areas
• Positive effects from value add strategy
• Improved cost position and lower overhead costs

Q1-17 comments

• Strong growth and profitability in Decorative paints
• Downturn in the shipping and offshore industries affect sales and profit negatively
• Currency translation effects also impact reported sales negatively
• On-going investments in Norway, Malaysia, Myanmar and the Philippines

Further reduction in net debt

Orkla Investor Day in Oslo 1 June 2017

• Orkla's Group Executive Board will give a strategic and financial update as well as discussing market and company outlook.
• The Investor Day presentations will be webcast live at www.orkla.com on 1 June 2017 between 10:00 – 12:30 CET.

Programme:

10:00 am – 12:30 pm

Investor Day presentations and Q&A by President and CEO Peter A. Ruzicka, Executive Vice President Operations Johan Clarin and CFO Jens Staff

12.30 pm – 1.30 pm Lunch

1.30 pm – 3.30 pm:

Tour of the Orkla Growth Fair, including relevant presentations of Orkla's innovation and product development work, product samples and a first look at upcoming innovations

3.30 pm – 4.30 pm Refreshments and mingling

Focus going forward

Peter A. Ruzicka, President & CEO

Delivering on our strategy through One Orkla

Q1-17 takeaways	• • •	Taking shares in a slightly weaker market Cost improvements from working as One Orkla Financial targets reiterated
	•	Target annual EBIT (adj.) growth of 6-9%1
		in BCG
	•	Deliver organic growth at least in line with
Financial		market growth
targets	•	Maintain a stable dividend of at least NOK
		2.50 per share
	•	Maintain NIBD / EBITDA not exceeding
		2.5 – 3.0

Q&A

Peter A. Ruzicka, President & CEO Jens Bjørn Staff, CFO

Appendices

Group income statement

	FY 2016	Q1-16	Q1-17
Operating revenues	37 758	8 610	9 081
EBIT (adj.)	4 298	817	900
Other income and expenses	-382	-30	-87
EBIT	3 916	787	813
Profit/loss from associates and joint ventures	1 378	462	485
Interests, net	-177	-50	-37
Other financial items, net	65	52	34
Profit/loss before taxes	5 182	1 251	1 295
Taxes	-807	-135	-185
Profit/loss for the period	4 375	1 116	1 110
Earnings per share diluted (NOK)	4.22	1.08	1.08

Net financial items

	FY 2016	Q1-16	Q1-17
Net interest expenses	-177	-50	-37
Currency gain/loss	-4	1	1
Result from Share Portfolio and dividends	248	78	52
Other financial items, net	-179	-27	-19
Net financial items	-112	2	-3

Statement of financial position

	31.12.2016	31.03.2017
Intangible assets	18 343	18 690
Property, plant and equipment	11 038	11 043
Investments in associates and joint ventures etc.	13 148	13 604
Non-current assets	42 529	43 337
Assets held for sale	0	0
Inventories	5 195	5 544
Inventory of development property	70	72
Trade receivables	5 597	5 789
Other receivables	902	801
Shares and financial assets	107	20
Cash and cash equivalents	1 204	1 044
Current assets	13 075	13 270
Total assets	55 604	56 607
Paid-in equity	1 994	1 992
Earned equity	31 480	32 722
Non-controlling interests	402	399
Equity	33 876	35 113
Provisions	4 146	4 146
Non-current interest-bearing liabilities	7 172	8 910
Current interest-bearing liabilities	2 496	310
Trade payables	4 329	4 396
Other current liabilities	3 585	3 732
Equity and liabilities	55 604	56 607

Cash flow

	Q1-16	Q1-17
Operating profit	796	806
Amortisation, depreciation and write-downs	253	327
Change in net working capital	-445	-163
Net replacement expenditures	-390	-240
Cash flow from operations	214	730
Cash flow from operations, Financial Investments	-27	-6
Tax	-132	-223
Dividends received, net financial and other	22	15
Cash flow before capital transactions	77	516
Paid to shareholders, net purchase/sales own shares	-122	-114
Cash flow before expansion	-45	402
Expansion investments	-40	-54
Sold and acquired companies	-1 504	-94
Net purchases/sales shares and financial assets	925	88
Net cash flow	-664	342
Currency translations net interest-bearing liabilities	201	-102
Change in net interest-bearing liabilities	463	-240
Net interest-bearing liabilities	8 268	7 816

Sapa (joint venture) – Figures on 100% basis

	Q1-16	Q2-16	Q3-16	Q4-16	Q1-17
Sales volume (kmt)	349	366	340	310	355
Operating revenues (NOK million)	13 905	14 071	13 141	12 210	14 323
EBIT (NOK million)1 Underlying	571	804	487	335	778
Excluded items:
Unrealised derivative positions (NOK million)	83	116	51	82	78
Other excluded items (NOK million)	0	0	-42	-67	0
Sum excluded items (NOK million)	83	116	9	15	78
EBIT (NOK million)	655	920	497	350	856
Net income (attributable to majority) (NOK million)	418	639	344	379	625

28 1Sapa underlying EBIT = EBIT adjusted for unrealised derivative results and material impairment charges, restructuring costs and other special effects

Sapa (joint venture) – Key financials by business area

Extrusion Europe	Q1-16	Q1-17
Volume (kmt)	148	154
Sales (NOKm)	5 366	5 553
Underlying EBITDA (NOKm)	349	390
Underlying EBIT1 (NOKm)	223	274

Building Systems	Q1-16	Q1-17
Volume (kmt)	19	20
Sales (NOKm)	1 869	1 830
Underlying EBITDA (NOKm)	110	155
Underlying EBIT1 (NOKm)	75	119

Other and eliminations	Q1-16	Q1-17
Underlying EBITDA (NOKm)	-116	-63
Underlying EBIT1 (NOKm)	-127	-69

Extrusion North America	Q1-16	Q1-17
Volume (kmt)	150	150
Sales (NOKm)	5 265	5 514
Underlying EBITDA (NOKm)	414	437
Underlying EBIT1 (NOKm)	315	330

Precision Tubing	Q1-16	Q1-17
Volume (kmt)	37	36
Sales (NOKm)	1 620	1 651
Underlying EBITDA (NOKm)	144	180
Underlying EBIT1 (NOKm)	86	123

29 1Sapa underlying EBIT = EBIT adjusted for unrealized derivative results and material impairment charges, restructuring costs and other special effects

Strong balance sheet and financial flexibility

Debt maturity profile

Funding sources

6.7 Bonds and CP Banks Unutilised credit facilities Cash, cash equivalents and interest bearing assets