Third quarter results 2019

24 October 2019

Jaan Ivar Semlitsch, President & CEO

Disclaimer

This presentation has been prepared by Orkla ASA (the "Company") solely for information purposes. The presentation does not constitute an invitation or offer to acquire, purchase or subscribe for securities.

Certain statements included in this presentation contain various forward-looking statements that reflect management's current views with respect to future events and financial and operational performance. The words "believe," "expect," "anticipate," "intend," "may," "plan," "estimate," "should," "could," "aim," "target," "might," or, in each case, their negative, or similar expressions identify certain of these forward-looking statements. Others can be identified from the context in which the statements are made. Although we believe that the expectations reflected in such forward-looking statements are reasonable, these forward-looking statements are based on a number of assumptions and forecasts that, by their nature, involve risk and uncertainty. Various factors could cause our actual results to differ materially from those projected in a forward-looking statement or affect the extent to which a particular projection is realized. Factors that could cause these differences include but are not limited to the Company's ability to operate profitably, maintain its competitive position, to promote and improve its reputation and the awareness of the brands in its portfolio, to successfully operate its growth strategy and the impact of changes in pricing policies, political and regulatory developments in the markets in which the Company operates, and other risks.

The information and opinions contained in this document are provided as at the date of this presentation and are subject to change without notice.

No representation or warranty (expressed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of the information contained herein. Accordingly, neither the Company nor its subsidiary undertakings or any of such person's officers or employees accepts any liability whatsoever arising directly or indirectly from the use of this document.

o We have a unique portfolio of strong local brands
o We need to step up growth in our core and scale up jewels
o We need to simplify and empower the whole organization to be faster to market and drive further cost improvement

Financial performance

Jens Bjørn Staff, CFO

Highlights Q3-19: Improved organic sales growth and profit for Branded Consumer Goods

Continued strong performance in Confectionery & Snacks
Good progress in earnings and profitability for Foods and Food Ingredients
Organic sales growth in Care
Impairments reflecting recent challenges in Orkla Care
Continued sales and profit growth for Jotun
Adjusted EPS* increased by +11% to NOK 1.18

Stronger organic growth driven by Confectionery & Snacks and Care

All Alternative Performance Measures (APM) are presented in the appendix

¹Adjusted for loss of Wrigley distribution agreement ⁶

Branded Consumer Goods Q3-19:

Recent M&A and a weaker NOK add ~4% to total top line growth of 6%

Branded Consumer Goods incl. HQ: Good earnings momentum partly offset by decline in Care and higher bonus related costs

Orkla Foods Continued good earnings growth

	Q3-19	YTD Q3-19
Revenues	4,145	12,104
Organic growth	0.8%	1.9%

EBIT (adj.)	616	1,542
EBIT(adj.) growth	10.4%	10.4%

EBIT(adj.) margin	14.9%	12.7%
Change vs LY	0.7%-p	0.7%-p

Organic progress driven by good sales growth in Sweden and India
Continued strong growth in plant based products
Improved revenue management compensates for continued negative effects from weaker SEK and higher raw material prices

Orkla Confectionery & Snacks Sales and EBIT progress supported by good market growth

	Q3-19	YTD Q3-19
Revenues	1,604	4,625
Organic growth	4.2%	4.4%
EBIT (adj.)	294	696
EBIT(adj.) growth	5.8%	9.4%
EBIT(adj.) margin	18.3%	15.0%
Change vs LY	+0.0%-p	+0.6%-p

Continued good organic revenue growth
Overall strong market growth, especially for snacks
Positive effects from cost improvement projects offset by increased raw material costs

10 Revenues and EBIT (adj.) figures in NOK million

Orkla Care Organic sales growth in Care, but profit decline

	Q3-19	YTD Q3-19
Revenues	2,026	6,045
Organic growth	1.7%	-2.0%
EBIT (adj.)	306	847
EBIT(adj.) growth	-2.5%	-3.3%

EBIT(adj.) margin	15.1%	14.0%
Change vs LY	-0.8%	-0.4%

Sales improvement in HPC categories, but volumes still lower in grocery retail
Actions to turn around House Care UK & Poland progressing as planned
Continued weak performance in Orkla Health

Orkla Food Ingredients Strong profit growth driven by M&A and underlying earnings progress

	Q3-19	YTD Q3-19
Revenues	2,641	7,516
Organic growth	0.8%	0.7%
EBIT (adj.)	185	457
EBIT(adj.) growth	15.6%	16.3%
EBIT(adj.) margin	7.0%	6.1%
Change vs LY	0.4%-p	0.5%-p

Good organic growth in bakery ingredients
Profitability positively affected by improved pricing and product mix
Profit and margin accretive M&A

Investments - Kotipizza Continued growth in sales and profit for Kotipizza

NOK million	Q3-19	YTD** Q3-19
Revenues	283	701	• Continued growth in YTD chain sales* with 14% growth (7% like for like YTD and 6% in
Change vs LY*	14.0%	15.5%	Q3)
EBIT (adj.)	27	63	• EBIT (adj.) driven by strong sales growth and
Change vs LY*	22.2%	29.9%	normalized overhead costs
EBIT (adj.) margin	9.5%	9.0%	• Four new Kotipizza restaurants opened during
Change vs LY	+0.6%-p	+1.0%-p	the quarter (total 284)

*Adjusted for FX

**Kotipizza was consolidated as of February 2019 meaning YTD figures only reflect eight months ***Chain sales are defined as gross sales to consumers from all owned and franchise operated restaurants in the Kotipizza Group 13

Investments - Jotun (42.6%) Solid sales and profit growth

NOK million	YTD Aug-19
Operating income	12,875
Change vs LY	8.5%
Operating profit	1,749
Change vs LY	51.6%

Continued growth in operating revenues
- Offshore and Marine markets picking up from cyclical low levels
- Price increases previously implemented in all segments
Earnings growth driven by strong sales growth, improved gross margins and good cost control

Adj. EPS +11% following profit growth in Branded Consumer Goods and strong improvement in Jotun

Key figures	Q3-19	Q3-18	∆ Q3
Operating revenues BCG	10,336	9,783	+6%
EBIT (adj.) BCG	1,401	1,310	+7%
EBIT (adj.) HQ	-64	-51
EBIT (adj.) BCG incl. HQ	1,337	1,259	+6%
EBIT (adj.) Orkla Investments	107	94	+14%
Other income and expenses	-267	-62
EBIT	1,177	1,291	-9%
Profit from associates	166	116	+43%
Net interest and other financial items	-67	-43
Profit before tax	1,276	1,364	-6%
Taxes	-335	-323
Profit after tax	941	1,041	-10%
Adjusted EPS cont. operations (NOK)	1.18	1.06	+11%
Reported EPS cont. operations (NOK)	0.92	1.01	-9%

Closing remarks

Jaan Ivar Semlitsch, President & CEO

Committed to delivering on 2021 targets

2021 targets Immediate priorities

Turn negative trend in affected Orkla Care segments
Finalize review and redesign of current organizational structure
Continue delivering on efficiency agenda
Gearing for profitable growth

Q&A

Jaan Ivar Semlitsch, President & CEO Jens Bjørn Staff, CFO

Appendices

Organic growth

Organic growth shows like-for-like turnover growth for the Group's business portfolio and is defined as the Group's reported change in operating revenues adjusted for effects of the purchase and sale of companies and currency effects. In the calculation of organic growth, acquired companies will be excluded 12 months after the transaction date. Sold companies will be excluded pro forma 12 months prior to the transaction date. Currency effects are neutralised by translating this year's turnover at last year's exchange rates.

Organic growth is included in segment information and used to identify and analyse the turnover growth in the existing business portfolio. Organic growth provides an important picture of the Group's ability to carry out innovation, product development, correct pricing and brand-building.

EBIT (adj.)

EBIT (adj.) shows the Group's current operating profit before items that require special explanation, and is defined as reported operating profit or loss before "Other income and expenses" (OIE). These include M&A costs, restructuring or integration expenses, any major gains and write-downs on both tangible and intangible assets, and other items that only to a limited degree are reliable measures of the Group's current profitability. EBIT (adj.) margin and growth are derived figures calculated in relation to operating revenues.

EBIT (adj.) is the Group's key financial figure, internally and externally. The figure is used to identify and analyse the Group's profitability from normal operations and operating activities. Adjustment for items in OIE which to a limited degree are reliable measures of the Group's current operating profit or loss increases the comparability of profitability over time, and EBIT (adj.) is used as a basis for and indicator of the Group's future profitability.

Change in underlying EBIT (adj.)

Change in underlying EBIT (adj.) shows like-for-like EBIT (adj.) growth for the Group's business portfolio and is defined as the Group's reported change in EBIT (adj.) adjusted for effects of the purchase and sale of companies and currency effects. In calculating the change in underlying EBIT (adj.), acquired companies will be included pro forma 12 months before the transaction date. Sold companies will be excluded pro forma 12 months prior to the transaction date. Currency effects are neutralised by calculating this year's turnover at last year's currency exchange rates. Comparative figures are not restated when implementing IFRS 16, but the effects of the new accounting standard are neutralised in the calculation. Underlying EBIT (adj.) margin and change therein are derived figures calculated in relation to operating revenues.

Underlying EBIT (adj.) growth is used for internal management purposes, including for identifying and analysing underlying profitability growth in the existing business portfolio, and provides a picture of the Group's ability to develop growth and improve profitability in the existing business. The measure is important because it shows the change in profitability on a comparable structure over time. Underlying EBIT (adj.) growth is a heavily weighted factor in determining executive remuneration.

Earnings per share (adj.)

Earnings per share (adj.) show earnings per share adjusted for other income and expenses (OIE) after estimated tax. Items included in OIE are specified in Note 3. The effective tax rate for OIE in 2019 is lower than the Group's tax rate due to the write-down of goodwill with no tax effect and to high non-deductible transaction costs. Other items in other income and expenses, including the gain related to Treschows gate, have a tax effect. The effective tax rate related to OIE in the third quarter was 1% (20% in 2018), whereas it was 5% as at 30 September 2019 (21% in 2018).

If other items of a special nature occur under the company's operating profit or loss, adjustments will also be made for these items. There were no such items in the first nine months of 2019 or in 2018.

Net replacement and expansion investments

When making decisions regarding investments, the Group distinguishes between replacement and expansion investments. Expansion investments are the part of overall reported investments considered to be investments in either new geographical markets or new categories, or which represent significant increases in capacity.

Net replacement investments include new leases, and are reduced by the value of sold fixed assets to sales value.

The purpose of this distinction is to show how large a part of the investments (replacement) mainly concerns maintenance of existing operations and how large a part of the investments (expansion) is investments which must be expected to generate increased contributions to profit in future, exceeding expectations of normal operations.

Net interest-bearing liabilities

Net interest-bearing liabilities, together with equity, constitute the Group's capital. Net interest-bearing liabilities are the sum of the Group's interest-bearing liabilities and interest-bearing receivables. Interest-bearing liabilities include bonded loans, bank loans, other loans, lease liabilities and interest-bearing derivatives. Interest-bearing receivables include liquid assets, interest-bearing derivatives and other interest-bearing receivables.

Net interest-bearing liabilities are the Group's primary management parameter for financing and capital allocation, and is used actively in the Group's financial risk management strategy. The statement of cash flows (Orkla format) therefore shows the change in net interest-bearing liabilities at Group level.

Structure (acquired and sold companies)

Structural growth includes adjustments for the acquisition of the businesses Struer, HSNG, Werners, County's, Igos, Lecora, Easyfood, Kanakis Group, Risberg, Zeelandia, Confection by Design and Vamo, and for the sale of Glyngøre and Mrs. Cheng's.

Orkla Investments Strong performance in Jotun, lower power prices in Hydro Power

Hydro Power

Fully consolidated into Orkla's financial statements

Volume (GWh): Q3: 627 (565) YTD: 1,622 (1,662) Power prices¹ (øre/KWh): Q3: 34.2 (48.4) YTD: 38.2 (41.0) EBIT adj. (NOK million): Q3: 78 (102) YTD: 220 (258)

Financial Investments