Orkla ASA — Earnings Release 2023

Nov 29, 2023

Orkla targeting annual Total Shareholder Return of 12-14%

Orkla targeting annual Total Shareholder Return of 12-14%

At its Capital Markets Day event today, Orkla will announce the new target for

Total Shareholder Return, as well as financial targets for the portfolio

companies in the period 2024-2026.

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