Orkla (ORK) Capital Markets Update 2025 summary

Progress against financial targets and value creation

• Achieved approximately 40% total shareholder return (TSR) since November 2023, with a continued focus on a 12%-14% annual TSR target through 2026, driven by underlying value creation in portfolio companies.

• Underlying EBIT adjusted growth increased from 6.9% in 2023 to 15% on a rolling 12-month basis; EBIT margin improved from 9% to 10.3%, and return on capital employed rose from 9.9% to 11.7%.

• Portfolio companies reduced from 12 to 10, targeting 7-9 by end of 2026 to support organic value, complexity reduction, and value-adding transactions.

• Orkla Home & Personal Care reclassified as an anchor company after a successful turnaround, with EBIT adjusted more than doubled in two years.

• Cash flow from operations increased, replacement investment as a share of revenue declined from 4% to 3%, and leverage ratio estimated at 1.9x net debt/EBITDA post-hydropower sale.

Strategic priorities and business developments

• Three strategic priorities through 2026: organic value creation, portfolio simplification, and intensified search for value-adding structural transactions and new platform investments.

• Portfolio segmentation into 'Anchor', 'Grow and Build', and 'Transform or Exit' categories, with dynamic reclassification based on performance and strategic fit.

• Ongoing simplification, SKU rationalization, and operational alignment to fuel growth and efficiency, especially in Foods and Snacks.

• Increased autonomy and accountability in portfolio companies, with new operating models and competent boards to drive performance.

• Intensified M&A activity, seeking opportunities that align with core competencies and offer synergy potential.

Portfolio company highlights and operational focus

• Orkla Foods: On track to meet 2026 targets, focusing on growth through portfolio prioritization, simplification (20% SKU reduction), and standardized ways of working.

• Orkla Snacks: Strong 2024 performance with 25% EBIT growth, 13.1% EBIT margin, and 112% cash conversion; mitigating cocoa price volatility with pricing, cost, and capacity initiatives.

• Orkla Food Ingredients: Continued expansion in Europe and the US, leveraging a multi-local model, operational excellence, procurement improvements, and targeted M&A; five acquisitions since 2024.

• Partnership with Rhône to unlock further growth potential in Food Ingredients, with readiness for additional capital deployment.

• ESG: Reduced scope 1 and 2 greenhouse gas emissions by 64.2%, progressing toward a 70% reduction by 2030; revised scope 3 targets approved by SBTi.