Orkla Investor Day in London - Leveraging core strengths within branded goods
At its Investor Day in London today, Orkla’s President and CEO Bjørn M. Wiggen confirmed that the group’s strategic focus will be growth within the branded goods sector. By leveraging the group’s core strengths in brand building and M&A, the group intends to take advantage of the increasing number of opportunities to acquire branded goods companies, particularly in the Nordic region.
In the period from 2005, the profile of Orkla’s business shifted significantly The acquisition of Elkem brought Elkem Solar, REC and Sapa into the portfolio, requiring significant capital and focus to be devoted to businesses outside the branded goods area.
“Last year we recognized that the group’s portfolio had become too broad, and have subsequently sold Elkem, Borregaard Forests and reduced the Share Portfolio, says President and CEO of Orkla Bjørn M. Wiggen.
There is an increasing number of strong branded goods companies seeking new ownership in the Nordic region, as well as in other regions were we have our operations today. Private Equity companies are rolling their portfolios into other sectors while other companies see that limited access to capital can be a constraint to their further development. This creates significant growth opportunities for Orkla.
Orkla’s main strengths are in brand building and in its extensive M&A experience and capacity.
“There is a clear opportunity to leverage our strengths and to strongly reinforce Orkla’s position as the leading Nordic branded goods group”, says Bjørn M. Wiggen.
Orkla’s focus will be on acquiring companies or brands with strong market positions in clearly defined and relevant markets, based on customer insight and differentiated market offerings. Target companies must be able to demonstrate stable cash flow through a cycle, as well as a potential for future growth.
At the Investor Day, Orkla confirmed that the Share Portfolio, REC, Borregaard and Sapa are outside its future growth scope. It is planning to divest its share portfolio. It will also seek an appropriate structural solution in respect of the Borregaard biorefinery business. Orkla confirmed that it would continue to work closely with REC (where it holds a 39.7% stake) with the intention to improve performance and subsequently exit, subject to market conditions. Orkla will work to strengthen its Sapa business to ensure that it achieves its operational targets but confirmed that this business is outside the scope of its long term growth plans.
At the same time as Orkla has a strong balance sheet to support its growth ambitions, we were pleased to announce the proposed NOK 5 per share Special Dividend this morning”, Mr. Wiggen concludes.
Oslo, 14 September 2011
SVP Corporate Communications and Public Affairs
Johan Chr. Hovland
Telephone +47 917 63 491
SVP Investor Relations
Telephone +47 977 13250
VP Investor Relations
Siv M. Skorpen Brekke
Telephone +47 930 56 093