Quarterly price update Q1 2012 OFI presentation

Quarterly price update Q1 2012OFI presentation Orkla Brands Purchasing April 12, 2012

Agenda – Q1 presentation OFI Speaker Category Time • Kine B. Jakobsen Welcome 09:30-09:35 Flour 09:35-09:45 Sugar (world) 09:45-09:55 • BjørnWiman Sugar (EU) 09:55-10:10 • MattiasWivesson Meat 10:10-10:20 • Angela SundbäckVeg.oils10:20-10:30 • Johanna Falk Additives10:30-10:40 • NiklasMyrbäck Cocoa 10:40-10:50 • MikaelMcKeown Dairy 10:50-11:00 • Per Lindström Packaging11:00-11:15 • KineB. Jakobsen Wrap-up 11:15-11:20

Wheat Market prices up 2-13% during Q1 but are expected to fall back 0-5% in Q2-Q3 1 yeargraph Main market events • The 2011 harvest season in Norway was not good, and we have a high degree of imported grains • In Europe, prices have stabilised in the 200-210 range • Global inventories are increasing as the growth in supplies outweighs the growth in demand. In Europe this is mainly due to an increase in acreage • Uncertainties in Europe relating to damages to the winter wheat • Logistical challenges in Russia has decreased export volumes 5 yeargraph Going forward • Logistical problems in Russia due to winter conditions will ease and hence bring more grain to the market before the new European crop season • European prices are expected to decline due to a supplysurplus, butbeforewe know more aboutthestateofthewinterwheat and getthe spring wheatplantedthe market remainsindecisive • Ifno major weatherabnormalitiesoccurweshouldexpect a pricedeclineof 0-5% to the 190-200 EUR/mtlevel Source: Mintec, Demetra, Handelsbanken, Kairos

Sugar (World) Market prices up 2-10% during Q1 but are expected to fall back to December 2011 levels in Q2 1 yeargraph Main market events • World sugarpricesmainly in a sideways trend sinceDecember 2011, but Q1 endswithsome major upwardmovements due to fearsof dry weather in Brazil • Ahead of the Brazilian chrushing season the production is expected up 8% on last year • All in all the 2012/13 season is expected to produce a suplus of ~5 mill mt • Brazil, India and Thailand arelookinggood • China’sproducion is declining 5 yeargraph Going forward • A price decline is expected due to supply surplus • Price floor realistic in the 22-23 c/lbs range • Low inventories keep market on toes • Brazilian ethanol price sets floor to any price fall Source: Mintec, Kingsman, Bunge, Kairos

Sugar (EU): EU Reported Sugar price (EU27) is reported to be 683 €/ Mt up from 654€ in Dec Main market events • Deregulation of EU Sugar Market • Status of EU commission reported End stock 2012 / 11, what is the real figure? • EU Commission is investigating the volume of Sugar supply and spot prices around EU • CIUS calls for increased end stock to 3.5 MMT • 1 MMT from import • 600’ Mt from OOQ sugar to Qouta sugar Going forward • Next EU managment commity meeting in mid April • Release of OOQ sugar (200€/Mt in Levy) • Import tenders • CIUS calls for no extra charges • CAP 2020 road map is uncertain, when will decision be taken and how will the sugar market be deregulated • Planting of Sugar beet well on its way Source: EU Com and Kingsman

EU commission aims to have a balanced market and less interested in creating price pressure……. • European Sugar producers will most certainly try to press prices upwards 10 – 50 € / MT in Germany and France • Planed meetings with the Sugar producers in April - May • Orkla will send out RFP I in May • Main focus must be to eliminate price differences EU mainland Vs. Scandinavia • Please forward evidence!!!!!!!! • Price indication Company X Q4 2012 • Current price 770 €/mt DDU • Polski Cukier 827 € • Südzucker 825 € • Suiker Unie 788 € • Nordic Sugar 770 € 2015 2020

The shortage on the beef and pork markets in EU gets more severe and prices for main trimmings are expected to increase even further for Q2 2012 Meat (EU) Main market events • Pig and beef cattle prices in the EU remain approximately on the same level as in December 2011. Noted a price decrease for pig of 4-6% compared to prices in November 2011. • Prices for both Pork and Beef trimming to Orkla Brands in EU are about 10% above the prices we had at end of 2011 • Russia and Asia continue to be important export markets for EU beef and pork. • The beef market in Norway is facing a historical shortage of approx. 8 300mt which leads to an expected average price increase of 2,5% for 2012. Going forward • The forecast for both beef and pork trimmings are that availability will further decrease and thus prices will continue to increase in Q2 2012 compared to Q1 2012 • EU beef production is expected to further tighten, especially in Q2 2012. The updated forecast for 2012 is that the volumes will be 3,2% less than in 2011 • The slaughtering of pork in Norway is expected to increase by 2% for 2012 compared to 2011

Vegetable oils Orkla largest veg.oils up ~5% in Q1, but in general fundamentals support the increase to be short term Main market events • World productionofthe 17 major oils and fats continued to increasedpronouncedly in Q1 2012 • Veg.oilpricechangessince 1 Jan 2012: • Palmoil Cif Rotterdam: +7% • Coconutoil Cif Rotterdam: -18% • Palmkernel Cif Rotterdam: -13% • RapeseedoilExw Rotterdam: +2% • SunfloweroilExw Rotterdam: +4% • Palm olein FOB Malaysia: +6% Going forward • In Q2 it is expectedthat world productionwillincrease less thanthe normal demandgrowthseen in previousseasons, causingpressureonprices • Palmoil: Fundamentals support priceincrease, at leastshort term (3-5 months). • Rapeseedoil: Continuedtightsupplies and fundamentals overall support priceincrease. • Sunfloweroil: Overall fundamentals support downwardpressureonprice, particularlybecauseofincreasingsupplysurplus Source: Mintec, Kairo

Agenda – Q1 presentation OFI Speaker Category Time • Kine B. Jakobsen Welcome 09:30-09:35 Flour 09:35-09:45 Sugar (world) 09:45-09:55 • BjørnWiman Sugar (EU) 09:55-10:10 • MattiasWivesson Meat 10:10-10:20 • Angela SundbäckVeg.oils10:20-10:30 • Johanna Falk Additives10:30-10:40 • NiklasMyrbäck Cocoa 10:40-10:50 • MikaelMcKeown Dairy 10:50-11:00 • Per Lindström Packaging 11:00-11:15 • KineB. Jakobsen Wrap-up 11:15-11:20

Wheat Gluten(EU): Market price increased with 13% in Q1 due to scarcity expected increase from Jan – Dec 2012 is 10 to 20% Main cost drivers & development • Wheat gluten correlates to corn gluten with 92% but is also dependent on other protein markets such as milk and soy (77% correlation) • Grain market has a minor effect on gluten price • In general an increasing price trend for soy bean. Since January + 10 to 15% • Recentpricedevelopement in wheat gluten pricessinceJanuary (date ofcontract) until end offebruarywas +13% benchmarks from gluten supplierSyral Going forward • Wheat gluten is a bi productwhenproducingwheatstarchwiththe ratio of 70% wheatstarchgenerates 10% wheat gluten and at the moment there is a scarcity in the market! • Maizeyellow A1 LIFFE Paris FR +8% since Jan 2012 (Bluegraph) & Wheatmilling LIFFE Paris FR +6% since Jan 2012 (Red graph) • Guesstimateofpriceincreases from JanuaryuntilDecember 2012 for wheat gluten is between 10 to 20% Source: Datagain

Food starches(EU): Main cost drivers has increased in Q1, price increases in 2012 for food starches are expected from 0 to 10% Main cost drivers & development • Native food starches has had relatively stable price increase compared to modified starch (green curve) • Cost drivers are grain market and demand in noon food applications • Wheat starch correlates with wheat prices to 81% and with corn starch to 97% • EU native food starches changes in last quarter 2011 +- 0% Going forward • Wheatproductionreviseddown due to winterkill • Maizeyellow A1 LIFFE Paris FR +8% since Jan 2012 (Bluegraph) & Wheatmilling LIFFE Paris FR +6% since Jan 2012 (Red graph) • Guesstimateofpriceincreases from JanuaryuntilDecember 2012 for native foodstarches + 0 to 10% Source: Datagain

Emulsifiers(EU): Main cost driver increased 4-9% in Q1 with weighting on emulsifier price increases in 2012 of 0 to 8% are expected Main cost drivers & development • For most emulsifiers vegetable oils (palm sunflower, soybean oil) are the main cost driver affecting price of 30-80% together with selected acids (glycerine, stearic acid, tartaric acid, ricinoleic acid, acetic acid, lactic acid) • In general an increasing price trend for palm oil sunflower oil and soybean oil since January + 4 to 9% Going forward • Tartaricacid (+80% since Q1 2011 until Q1 2012) as well as Glycerine (in Q4 2011 +20%)has hadhighpriceincreasesince first quarterof 2011 – howevertheseaffectsemulsifiersbetween 10 – 20% ofthe total raw material price • Otheracids reveals a more stable trend • Guesstimateofpriceincreases from JanuaryuntilDecember 2012 for emulsifiers is between 0 to 8% Source: Datagain

Cocoa and Chocolate From verylowlevels in December 2011, prices have started to increaseagain and willlikelycontinuehigher Main market events 1 year development • Supplyimprovedslightly from previousesti-matesbutprices have beenextremelypressured due to an extraordinarystrongcrop in 10/11 • Demandseenrelatively stable for cocoabeansbutstrongeroningredients • Pricedevelopment Q1: • CocoaBeans: +10% • Cocoa Butter: +14% • CocoaPowder: -2% • Milk Chocolate Base: +11% Cocoa Beans Cocoa Butter Cocoa Powder Milk Chocolate Base Index (67% butter and 33% liquor) Going forward • Surplusofcocoabeans from last cropwilldiminishifdemandcontinues to stay stable • Warmweathercausingfearsof less supply in mid-crop (starts May) • If not exceptionalgoodweathercomingmaincrop (October), therewill be a new deficit and thuspriceswillsoar • A stronger USD could lift EUR and GBP prices (EUR and GBP unchanged from last quarter) • Powderexpected to continuedecrease 5 years development Source: MintecDatagain, Kairos, Reuters

Dairy (EU) Market prices down 8-19% during Q1 and are expected to fall somewhat more in Q2 Main market events • NZ auction prices for SMP and WMP are down 2-5% since Dec 2011 • German market price changes since 1 Jan 2012: • SMP: -16% • WMP: -8% • Butter: -19% • Cheese: -8% • EUR is up ~3% vs USD since December, making EU dairies less competitive on world markets Going forward • EU producers of milk powders are facing tougher competition from US dairies on export markets • Milk deliveries are at high levels historically and we are entering northern hemisphere peak production period • Lower world market prices and less competitive currency means EU dairies will move sales attention to local markets. With much EU milk to process, we may well see prices continue to slide in Q2 Source: ZMB, Hoogewegt Horizons, Dairy Trader, Kairos

Flexible packaging Raw materials have started to increase again from end of 2011 and is likely to continue to grow Main market events • Feb 2012 compared to Q4 2011 • PE has increased by 9% • OPP has increased by 7% • PET has increased by 2% • End price effect on Orkla’s flexible packaging portfolio is approx 5% higher prices Going forward • Prices are likely to continue to increase in Q2 • Propylene, ethylene and nafta prices increase due to higher crude oil prices along with temporary reductions in capacity for resin suppliers • Resin suppliers returning to normal capacity in Q2 will limit the long term effect Assumptions: Orkla’s consumption per raw material grade = OPP x 63% + PE x 15% + PET x 9% Raw material share of total price is for Orkla in average approximately 70% Source: PIE (Plastics Information Europe)

Rigid plastics Raw materials have started to increase again from end of 2011 and is likely to continue to grow Main market events • Feb 2012 compared to Q4 2011, • HDPE has increased by 9% • PP has increased by 7% • PET has increased by 2% • Slight end price effect increase on Orkla’s rigid packaging portfolio by 4% Going forward • Prices are likely to continue to increase in Q2 • Propylene, ethylene and nafta prices increase due to higher crude oil prices along with temporary reductions in capacity for resin suppliers • Resin suppliers returning to normal capacity in Q2 will limit the long term effect Assumptions: Orkla’s consumption per raw material grade = PP x 40% + HDPE x 40% + PET x 20% Raw material share of total FCA price is for Orkla in average approximately 50% Source: PIE (Plastics Information Europe)

Packaging Paper Market pricescontinued to slowlydecrease from Sept-11 to Feb-12 butincreasesareexpected during Q2 Main market events • Increasing demand during Q1 for corrugated board, deliveries rose by 3.2% in January and still rising. • Raw material prices rising while corrugated board prices was declining • German market price changes since 1. Sept 2011: - Brown Kraftliner: -8% - White Top: -4% - Semi Chemical: -10% - Recycled Fluting: -6% - Testliner II: -6% Going forward • Price hikes from €20-80/t are still on top of the agenda • Price increases announced both for Recycled Case Material and Kraftliner • Food Industry is driving demand for corrugated board in 2012 • Have started to make use of corrugated board as a marketing instrument • Expect a moderate 0.25% increase in demand Source: Euwid Germany Price Watch at www.euwid.com

Aluminium Prices for Aluminum is expected to be stable during the coming months 1 year development Main market events • Q1 saw aluminium correcting up ~15% from low levels in December • World supply is in a downtrend, which should push up the price. On the contrary, demand is in an uptrend, which also will push up the price. • The supply/demand balance shows a supply-deficit for 2011 turning into a small supply-surplus in 2012. Any surplus should depress prices. 5 year development Going forward • The inventories in weeks of consumption are in an uptrend, which puts a downward pressure on prices. Similarly, the cost drivers are in a downtrend and therefore also putting a downward pressure on the price of aluminium. • Prices are expected to be stable with smaller adjustments the coming months Source: Mintec, Kairos

Glass Prices for glass will increase with 5-6% in the Nordic Region from 1 January 2012 • Prices will increase from 1st of January 2012 • In the Nordic Region prices increase with 5-6% while in southern part of Europe we see increases of 6-7% • The competition has increased due to reduced volumes in the market. • There is no lack of capacity, but in a longer perspective the suppliers can always close mills to balance supply and demand.

Tinplate Prices for tinplate decreased with 4-5% from January 2012 • Both world supply and demand of tin is in an increasing trend, and has been so since 2009. As the demand has been increasing at a higher pace 2010 ended up with a supply deficit. Although 2011 is forecasted to be a deficit year as well, the size of the deficit is expected to be smaller than in 2010. • The seasonality pattern usually push prices up from January to April, and we could expect something like this. But we do not have a signal of this coming increase yet. • During 2011 prices for tinplate increased with 32-35% • From January 2012 prices for tinplate decreased with 4-5%.

Pleasecontact relevant CategoryManager/Analystifyou have anyquestions or comments. Rememberthatyoucanfindadditional material onthePurchasing portal: http://orklanet.global.corp/purchasing Thankyou for listening!

Quarterly price update Q1 2012 OFI presentation