Hereby wish you all welcome, and I declare the general meeting of Orkla ASA to be open. The annual general meeting is scheduled by the chair of the Corporate Assembly in cooperation with the board of directors, pursuant to Article fifteen of the Articles of Association. The notice, dated twenty-seventh
March, two thousand and thirteen, was sent to all shareholders with a known address. It was also announced in the ordinary way in the Aftenposten daily and in a stock exchange bulletin that same day. The board of directors decided, however, in line with Article sixteen, second subsection, that the documents to be dealt with at this general meeting would not be sent out along with the convening letter, but instead be made available to the shareholders on the corporate website.
The corporate website also features the financial statements, along with the directors' report, the statement from the Corporate Assembly, and the auditor's report, as well as the Nomination Committee's recommendations for twenty-seven March, two thousand and thirteen. Shareholders who would nevertheless prefer hard copies of documents have been able to get them at no charge by requesting
them from the company. The documents have been handed out to the shareholders here present, together with the ballots. Are there any objections to the notice? There don't seem to be any objections. The Annual General Meeting is thereby declared to have been legally convened. Pursuant to Article 17 of the Articles of Association, the undersigned, Idar Kreutzer, Chair of the Corporate Assembly, will also chair the meeting. I would like to introduce those present today.
The panel, here we have to my left, Chair of the Board, Stein Erik Hagen, to the extreme left. Furthermore, President and CEO, Åge Korsvold, Chair of the Corporate Assembly, that is myself, and to my right, I have the Secretariat of the AGM, provided by Vice President General Counsel, Karl Otto Tveter. I also would like to confirm and introduce the corporate accountant, Jan- Willem Svendsen, who is
present, and who you will meet later at the AGM. I also would like to just present to you the board of directors of the company today. I will show you a brief summary of their resumes. I will take you through the main features. Chair of the board of directors is Stein Erik Hagen. Stein Erik Hagen is the principal shareholder in Orkla ASA, through Canica AS and various other companies.
He was first elected in 2004. Stein Erik is the owner and executive chairman of the board of Canica AS with related family-owned companies. Then we have Peter A. Ruzicka. He was elected to the board for the first time for the period 2003 to 2005. Subsequently, he became a member of the corporate
assembly and deputy member of the board. Then he was elected to the board again from 2008. In addition to being on Orkla's board, Peter is the managing director of Hakon Group Jernia, and since 2006, of Canica AS, and the chair of board of directors of Jernia AB and Komplett ASA, and member of the board of directors, REC ASA.
Jesper Brodin, Master of Science, he was chair of the board, Nokia Siemens, and he was CFO and senior EVP, and TDC A/S from 2008 to 2011. In addition to being on our board, he is the chair of the board of Nokia Siemens Networks, and he's a member of the board of Skandinaviska Enskilda Banken, SE Bank, as many of us know it by. The next board member is Barbara M. Thoralfsson. Barbara was elected to the board for the first time in 2011. Many will know her as the CEO of NetCom from 2001 to 2005, and in addition to being on our board, she's a board member of SCA AB, and Fleming Invest, and a board member and a member of the audit committee of Telenor ASA.
Bjørg Ven was first elected in 2006. She is an attorney at law and partner in the law firm Haavind, qualified to appear before the Supreme Court, chair of the Stock Exchange Appeals Committee, and chair of the Norwegian State Finance Fund. Grace Reksten Skaugen, elected to the board for the first
time in 2012. She is also chair of the board of directors of Norwegian Institute of Directors. She's deputy chair and head of the Compensation Committee in Statoil ASA. She's a member of the board of directors and head of Finance and Risk Committee in the Swedish Investor AB. Jo Lunder was also first elected to the board in 2012. From 2011, he was the CEO of VimpelCom.
He has no other board offices now, but in addition to being on the board of Orkla, but he has been on the board of a number of companies, including Telenor, TeliaSonera, Aibel, Elopak, Swix, and VimpelCom. So he has a broad portfolio. We also have members on the board elected by and from among the employees. Terje Utstrand, he has been a union representative in Orkla ASA. He's the chair of the board
of members of the Norwegian Confederation of Trade Unions, and Chair of Orkla's International Committee, and Gunn Liabø. She is Union Representative and Shop Steward at Lilleborg AS. She's a member of the Audit Committee of Orkla ASA, and of Orkla's International Committee of Union Representatives. So Sverre Josvanger is Chair of the Members' Council for salaried employees at Orkla.
He's a secretary of Orkla's International Committee of Union Representatives and the Congress's Executive Committee. In addition to the three employees representatives, two employee-elected observers have participated in the board meetings. There are also representatives of corporate executive management and Orkla's business areas present here today. Then the presentations have been duly done. We are going to appoint a shareholder to co-sign the minutes along with the chair of
the meeting. We propose Alf-Inge Gjerde, representing Storebrand. He is nominated. Are there any other nominations? There does not seem to be any other nominations, and the nomination is hereby approved. Today, we have 239 shareholders registered, representing some 49% of the total share capital of the company. The secretariat is compiling now a list of the shareholders here present and the proxies, including absentee ballots and the number of votes they represent.
It will take a few additional minutes before this list is completed. In the ordinary way, I propose that we embark on the ordinary agenda while we wait for the list to be finished. As soon as the list is completed, I will present it to the AGM, if that is okay with you. That seems to be acceptable. Then let's go straight on to the agenda for item one, which is approval of the annual accounts for two thousand and twelve for Orkla ASA and the group, as well as the directors' report, including approval of a share dividend for two thousand and twelve of NOK 2.50 per share, with the exception of the group's treasury shares.
The directors' report on the proposed annual accounts and balance sheet for two thousand and twelve for Orkla ASA and for the group, the statement of the corporate assembly, and the auditor's report have been made available on the company's website and have been sent to all the shareholders who have requested them. The documents have been available for viewing at the company's premises since
twenty-seven March, two thousand and thirteen. I assume that those present have familiarized themselves with the content so that it is not necessary for me to read all the documents aloud. That might have become a very late evening for us. I will now give the floor to President and Chief Executive Officer Åge Korsvold, who, along with the CEO of Orkla Foods, Atle Vidar Johansen, will give a briefing on the group's development and strategic position. Please go ahead. Thank you.
You are aware that the board of Orkla in 2011 decided that we would concentrate on becoming a branded consumer goods company. 2012 was a year that where we took those decisions and made those choices that show how Orkla plans to discontinue non-core activities. From 2013 onwards, we will organize ourselves and act as the branded consumer goods company we now are. When we, on the board in 2011, decided to concentrate on becoming a branded goods company, the portfolio, the way you see behind us, we was a broad conglomerate.
What is important to take note of here is that of the underlying values in the company, a bit more than half was linked to brand activities, while the rest, a bit below 50% of the values of the assets, they were involved in activities that we no longer would define as core activities. The biggest of these involvements is the one in Sapa. In addition to that, we also had share portfolios, we had hydropower, we had... The
transformation process that we are now in the midst of, as a consequence of the strategic choice that the board has made, entails, on the one hand, that we should divest all non-core assets, and then we want to grow within branded goods by reallocating the freed-up capital from the non-core assets that are to be divested. That capital may in principle be used for two things.
It can be paid out as a dividend to shareholders, and it can be reinvested in our operations, and then it's up to the board in the coming years to decide how the distribution between those two areas of application shall be. What I would like to say is that in this transformation process, the board has chosen to maintain a dividend of 2.50 NOK. That is a dividend which is higher than the branded goods today
would support, but it gives us a force of change and a speed into the future that I think will serve us all well. The second part of the transformation process is that we believe that we can improve results and our performances within branded goods. We can strengthen our positions, and we can also expand our activities beyond those we currently have.
If we look back in time and look at today's branded goods operations, how they were created, we know that this is the result of a long series of mergers and acquisitions. It started in 1986 with the Borregaard merger, then Lilleborg and Stabburet entered the portfolio of Orkla, and after that, it has been, in particular, four major transactions. The merger with Nora, the purchase of Borregaard, the purchase of Chips Group, and then the first joint venture, and then sale of the beverages activity.
Next was the purchase of Elkem, and this period that we have now put behind us when the company has been diversified a lot. One thing is to buy companies, but what we are also acquiring through over these years are brand labels and brand positions. I don't think there can be any doubt that a lot of what we've
bought are brands and branding positions that have lived in our local markets for many years, for before Orkla bought them. The oldest brands they go all the way back to the early 1800s, and our brand in emerging markets of India goes back to 1924. So these brand positions have been built up over generations, and they are part of the explanation for our strong position in the local markets.
Now, if we look at the position in the Nordic countries, we can see that we have a large number of categories where we have positions as number one and two, and where the position is the strongest in Norway, but we also hold strong positions in Sweden and the other Nordic countries. And we have a
good position or a good starting point to become far more strong in Denmark and Finland, and that is part of the transformation process that we're about to embark upon. Orkla has had a very clear philosophy that has been that they wanted for their companies, which have been strong and well run, when bought, that they should continue as independent companies. We have called this the multi-local model.
This means that our strategy is to be close to the consumer, to be close to the local market, to have a large insight into local markets, and to do local adaptations, which is a completely different strategy from our multinationalist competitors. I think that an important element in the change in strategy that is about to come now is that on the one hand, we will stick with that our business areas will be decentralized, and
that the decision power should be close to the market. On the other hand, the situation of competition in our markets has changed significantly. The commerce is much more concentrated, and the multinational companies are operating with a far larger force than only a few years ago. So Orkla also needs to use its size.
We need to look at the synergies and to take advantage of the economy of scale that we can avail ourselves of, while at the same time, remaining firm in that our local, anchoring is very central in our model. In this process, with these purchases over, so many years, we have grown to become the largest BCG company in the Nordic countries. Of course, many of our competitors are larger than us overall, but
in the Nordic countries, there's no one else who sells more branded goods than we do. After the purchase of Jordan and Rieber, we have a turnover in the Nordic countries of about 24 billion NOK, and secondly, second are Arla. They are about 20 billion NOK. We can see that Carlsberg, in total, they sell for 60 billion NOK.
There Nordic countries turnover is, I shouldn't say only, but it's 16 billion NOK. So we are large, and the advantage of economy of scale, so that gives us, we need to take advantage of that, and that's part of the transition that we'll face in the coming years. In 2012, as I said, we made a number of decisions and major moves. We had two acquisitions that I think in a very good way illustrate what Orkla is able to do
next to strengthen its position. We bought Rieber, and we bought Jordan. The Jordan acquisition has been carried through, and Jordan is implemented into our organization. For Rieber, we're still waiting approval from the authorities, but we're crossing our fingers. Although it's taken a long time, we're hoping it will soon fall into place.
Then we've also done a huge reorganization in Sapa. Sapa is one of the world's leading creators of aluminum solutions, and we will take the larger part of that and merge with the equivalent activity of Hydro. Then we've created the largest extrusion company in the world, with large and leading positions
in the U.S. and in Europe, and very strong positions in China and South America. I think this is a good solution, and it's Borregaard is listed on the stock exchange. Our share portfolio in REC is significantly reduced, and we are hoping to have reduced that sufficiently by 2013-14. Next, we have five business areas. We think that's a logical way of dividing it.
We first have Orkla Foods, then we have Orkla Confectionery and Snacks, with potato chips and chocolates and candy. Then we have Orkla Home and Personal, and we have Orkla Food Ingredients and Orkla International. This includes Idun, KK, and Credin. And the international is in Russia, and also
then we have our owner shares, 42.5% in Jotun, and also some other shares that we will discontinue, and this process will take three years. We have committed to sit in a joint venture with Hydro until for three years after the agreement is implemented later this year. And then I think we can also believe that the restructuring will be done in about the same time perspective.
We have an ambition, or perhaps even an aspiration, to become the leading consumer goods champion in the Nordic companies, and we would like to call it. We want to be best in growth, in profitability. We want to have the strongest brands. We want to be the Nordic consumer goods champion, pure and simple. This means that we will both serve our customers in the best possible way. We want to have
good products. We shall serve many different stakeholders, but the most important stakeholder to us is the consumer. It's the consumer insight and products that ease the everyday life for the consumers. That is the backbone of our business. Now, to achieve that, we need to do a number of things differently. We work a lot on putting into place a strategy that can make our ambitions real.
When we take a look at everything that we need to done, I think we can divide this into four main areas. One is local brands and innovations, and the other thing is to serve the customers. Then the shops will give us a shelf space. We have about 70 factories in the Nordic countries, and we have a purchasing
budget of about NOK 18 billion. We think that there are large synergies in the coming years within that cost platform that we see there. Ultimately, or perhaps last but not least, it's the people who create the results. Those are the four building blocks upon which we will build our strategy. In 2013, we have some priorities.
The first is to do good integration with Rieber and Søn, where the most important thing is to join Sapa and Rieber. And we want to do the joining of Sapa and Hydro. We have already realized it's a merger between Procordia and Abba to create the largest Swedish food company, and with very large results. And we are merging and restructuring the confectionery and snacks, and we're creating strong national
units and platforms for further growth. And in Norway, this means that Nidar and KiMs and Sætre will become one company to take advantage of the costs and competencies that will provide. And then we will further adapt our support functions to the needs of our consumer goods companies, and this will serve a far more focused corporate group in the coming years. With that, I will give the floor to Atle Vidar Johansen, who is the CEO of Orkla Foods.
Thank you. I will present the status and development trends for Orkla's BCG. Let me start off elaborating on our business model that as Åge mentioned, Orkla is a fairly small global player globally. In our Nordic market, Orkla is one of the largest players. In Norway and Sweden, Orkla is far larger than the global
players. A considerable part of the economies of scale is that many of the companies are innately national. One example is to purchase time in advertising, but also within distribution, sales, recruiting, local scale gives great advantages. So a significant part of the strategy within Orkla's branding area is to build the local scale in our markets to take advantage of these advantages of economies of scale.
At the same time, within most of Orkla's categories, there are national preferences when it comes to taste and other characteristics of the product. Orkla's competence and scale locally gives the possibility to develop very deep or profound insight in about the consumers in each Nordic market, and this is at the bottom of our innovation and market work. Our international competitors will mainly base their
innovation on insights into their largest markets, which are not the Nordic markets. Our strategy is to be a large fish in a small pond. This figure shows that the EBITDA development since 2009, and it has increased by NOK 200 million, but it has been fairly stable since 2009. In the Nordic countries, the EBITDA has increased in the same period.
This graph shows the EBITDA margin for the various business areas in Orkla, and you can see the profitability is at a very good level for many of the sectors, both home and personal. Confectionery, snacks and foods, they deliver from 14% to 18% margins. Within Orkla Food Ingredients that supply ingredients to bakers and similar industry, they have a lower profitability level, and that's natural for that
industry. The profitability in Orkla International is characterized by very demanding situation for the Russian chocolate business. Overall, the development has not been good enough over the past few years, and we still have a considerable potential for improvement. To the branded consumer goods, solid cashflow over time. This shows the tendency is five-year with...
NOK 8.5 billion has been generated over the past five years, and the cashflow has been about 100% of the EBITDA, in other words, of the cash conversion rate. So growth, the. It has, over the past few years, been in the area of 2-3% annually. This is mainly run by increased prices, since this has been taken onto
our price in a satisfactory way. The growth in volumes, however, has been flat in the same period, and the low growth can be related to that there's lower and no growth in the categories where we operate in the Nordic markets, and some more competition. Altogether, our market shares have been maintained during this period.
However, for the time ahead, we need to strengthen our focus on growth, and although I said that in general there is low growth in the Nordic countries, this means that it is still possible to create growth in our home markets. This figure shows the development of sales of one of Orkla's main products, mackerel, over a ten-year period. If you go along some years back, this was characterized by little
dynamics, low growth, and increasing competition from chain brands, and then Stabburet decided to build a brand and to catch up through innovation and improved consumer communication. There was a series of innovations from the little box in two thousand and two, the tube in two thousand and three, and at the same time, the portion cups were launched, and then we had Stabburet, Stabburet salmon.
In the past few years, the sale has been driven by a very good consumer communication, where you know that if you have one slice of bread with fish bread, you could account for omega-three. Sale of Stabburet mackerel with tomato sauce has grown by 310% over 10 years. And this shows you what can be created by Orkla's organization, by a consensus development strategy, and accurate marketing.
These are some examples of what we have launched in the markets through our operations in the first quarter of 2013. We depend on launching many products several times a year in our own markets to create growth. I will not comment upon this in detail, but if we are to look at one of these products, we have a series at the top right-hand corner for you...
A series of chilled meals from Felix. These are soups that are very tasty and also pasta sauces, and the sales start seems very promising, at least. Åge mentioned the importance of taking out synergies and utilizing scale. Orkla wants to create greater and stronger units in national markets. The first step, as we mentioned, was to unite Abba Seafood and Procordia in Sweden. This is one of Sweden's largest and
best food companies, with about 4.6 billion turnover and 1,300 employees, and it will manage valuable brands that all are among the everyday favorites of Swedish consumers. This merger was decided just after end of year, and it was finally carried out on the second of April, and we expect synergies on the cost side and on the income side as a consequence of this merger.
Åge also mentioned the mergers that we have planned within confectionery and snacks, where Nidar, KiMs, and Sætre is one intention. They are to be merged in Norway, and OLW, Ballerina, and Cheese Doodles in Sweden, and we will also have a merger with Panda in Denmark. We want to have three strong units and to have a more efficient structure than what we have presently. The international
competition in this category is particularly strong, and this is Orkla's expectation that this change will strengthen our competitiveness in these categories. Now, a few words about the Rieber transaction. As you know, on the nineteenth of August last year, we signed an agreement of buying 90% of the shares of the Rieber & Søn company from the Rieber family.
The transaction has been approved by the Russian authorities, and for the markets in the EU, we are expecting a decision, and we're also expecting approval from the Norwegian Competition Authorities. We are in the process and dialogue with the authorities about this. The next deadline is in mid-May, and then the Norwegian Competition Authority must either. When we have all of these approvals, we can
carry out the deal, and we will integrate the activities in the different markets and form big national units. Orkla is very well prepared for the integration work that now lies ahead of us. As Åge has said, Orkla is the largest supplier, and we want to be the Nordic consumer goods champion, and we have good market position.
We want to improve them, and we want to exploit local economies of scale and strengthen the work on organic growth and creating more efficient structures, priorities in 2013, is clear. Now we're going to build further Orkla's position as the leading consumer branded goods company and group in Nordic countries, and we want to... We want performance to be improved. Thank you for interesting presentations. Very exciting, CFO Terje Andersen. Could you please give us the main points of the annual accounts for 2012? Please go ahead, Terje.
Thank you. I will take you through the figures for 2012. Orkla has, as Åge Korsvold showed us, carried out structural changes, and it has signed important agreements in 2012. This also substantially influences how we present the corporate financial statements for the year.
Before I address the figures as such, I briefly want to mention the most important consequences. Borregaard, which was stock listed on 18 October last year, and the part of Sapa that will form part of the joint venture agreement with Hydro, are no longer counted in the turnover and results of the group. Instead, we show the net results after tax for these businesses. After we have reduced our ownership
share in REC to 15.6%, REC is no longer an associate company in the books, but a financial asset in line with other share investments. Historic figures for REC have been changed in that the result has been moved from associate companies to discontinued activities.
As regards expansion projects, Jordan is consolidated from the first of September onwards, while Rieber, which was perhaps the most important agreement in twenty twelve, will not have any consequences for the accounting until, for the year, financial year twenty thirteen. As a result, Orkla Group reports a turnover in excess of NOK 30 billion in twenty twelve, which, on a comparable basis, is at par with what we saw in two thousand and eleven. 80% of turnover comes from branded goods, and
we also now accounting-wise come across as a pure branded goods company. The distribution of turnover is approximately one-third in Norway, a bit more in the other Nordic markets, and almost one-third outside of the Nordic countries. The operating revenues or the operating result increased to NOK 3.3 billion. That is the EBITDA.
There was a small progress in the branded goods section, but it was first and foremost the development of Siloens vacated industrial property, and also that contributed to the increased result in 2012. As regards to the distribution of the operating result, we see that the branded good, consumer goods area is dominating. It accounts for 80% of the EBITDA. This will increase from 2013 and the subsequent years.
I will not repeat take you through all of the lines of the group income statement. I will concentrate on a few lines here. I will start with our shareholding portfolio. In line with our strategy, we are doing a reduction in the portfolio of shares. This has been done in a very satisfactory way in 2012. The yield on the share portfolio throughout the year was 90%.
Oslo Stock Exchange increased 15%. The profit was 857 million NOK, in addition to 200 million NOK as dividend. At year-end, Orkla had shareholdings and other investments for 3.5 billion NOK, including shares in Borregaard and REC. The pre-tax result was 3.9 billion NOK. As mentioned earlier, the net
result from Borregaard, Sapa Profiles, and REC are shown on the line for discontinued activities. The negative figure for 2011 is primarily linked to the reduction in value of REC, while 2012 is affected by a write-down of Sapa Profiles activities in Europe by 1.5 billion. Now, comments on the cash flow and balance sheet. We had net interest-bearing debt of 10.6 billion at the beginning of 2012.
A lot of capital has been freed up by reduction of shares and financial assets, and also financial transactions, including the stock listing of Borregaard. 3.2 billion NOK have been repaid to shareholders in the shape of dividend and reacquired stock, while banks and tax authorities have received a total of 1.5 billion NOK. Expansion investments amounted to 2 billion NOK. But as mentioned, there was an
agreement concerning the purchase of Rieber, and the payment of Rieber will be made in 2013. In the blue chart, we see it has been reduced considerably. It was about 5 billion NOK at the year-end of 2012, to get an equity to asset ratio of about 54%. This means that Orkla has a very strong balance sheet and financial freedom to carry out the strategy that Åge Korsvold presented to you.
I would also like to comment upon the results in the various business sectors. Let me start with Branded Consumer Goods. As you have seen, the Branded Consumer Goods is divided into five business areas, and I will start with Orkla Foods, which is the largest one. Orkla Foods has a turnover of eight billion NOK and about 3,100 employees. The turnover is distributed with 40% in Norway, 40% in Sweden, and the rest in the Nordics and the B
altics. As regards turnover, there was a reduction in 2012, but that is due to several bakers at the beginning of 2012. With a review to profit and loss, Orkla increased its operating margin to 14%. It was especially Stabburet in Norway and Abba Seafood in Norway that had good market activities.
For instance, Stabburet sold about 30 million boxes, tins of Stabburet mackerel in twenty twelve. Orkla Confectionery and Snacks are organized as a new business area. They have a turnover of almost 5 billion NOK and about 2,200 man-years. In terms of sales, Norway is the largest country, with about 40%,
while the remaining turnover is distributed among the other Nordic markets. Confectionery and Snacks had a turnover in line with what we saw last year, or the previous year, but the operating result was a bit improved. Nidar had improved results in Norway, while biscuits, both in Norway and Sweden, had a weaker result than in two thousand and eleven. Home and Personal, a turnover of 4 billion NOK in revenues and 1,800 man-years.
About 70% of turnover is from Norway, with Lilleborg being the largest company. Jordan toothbrushes and other oral hygiene products have been included from the first of September and contributes to a turnover growth for Home and Personal in 2012. Lilleborg also had a growth in turnover and results in
2012 in the grocery sector, while Lilleborg Professional had a somewhat weaker result than the previous year. Orkla International, a turnover of 2.4 billion and 4,400 man-years. As you can see, Russia is the largest market, but India and Austria represent 21% and 11% of turnover, respectively. The development in 2012 is mixed, with substantial challenges in Russia linked to the market and change in commercial structures.
The Russian operations thus carry out important structural changes to adapt to this development, and we expect that this gradually will improve results in the future. But the 2012 results are still very weak in Russia. We have more than 10% turnover increase in India, but we have chosen to reinvest a substantial
part of the profit for further growth so that the contribution is somewhat lower than for the preceding year. Orkla Food Ingredients, a turnover of 5 billion NOK and 2,200 man-years. 60% of turnover takes place in the Nordic countries, while the remainder takes place in a number of different European countries.
... Orkla Food Ingredients, they had demanding markets in 2012, characterized by very high raw material prices at the start of the year. They've managed to make up for this, and it ended at the same level as last year. Although the five core businesses represent the strategic core of Orkla, we also have important business areas outside of this, and I will briefly now mention them. We'll start off with Jotun, where Orkla owns 42.5%. Orkla in the accounts, the investment in Jotun is presented as an associated company, so that the EBITDA and turnover of Jotun is not consolidated into the group figures.
Jotun has had very good growth, and despite the reduced demand from the shipbuilding industry, Jotun sales and EBITDA also increased in 2012, with 6% and 18% respectively. Jotun continue to expand their operations and opened new factories both in China and Norway in 2012, and they've initiated projects with factories in Brazil, US, and Russia. Heat Transfer is the business in Sapa that will not be included in the collaboration with Hydro. This business will therefore be consolidated as a subsidiary in 2012. This business provides thin rolled metal strips to be used in heat exchangers, primarily in cars.
And after having struggled with weak profitability at the end of 2011, they've been able to turn this trend around in 2012, and they had a 70% increase in sales to NOK 309 million in 2012. And the part of Sapa that will be included in the collaboration with Hydro are Extrusions and Building Systems, and they had sales of about NOK 25 billion in 2012. As mentioned, this business is not included, but it's shown with a net result on the line for discontinued operations. This industry met very demanding markets in Europe with a further fall in volumes, a drop in volumes of 10% in 2012.
Despite that, considerable restructuring and cost programs were implemented, the result in Europe was considerably lower than in 2012, and the establishment of a common company or a joint company with Hydro will be very important to improve the profitability in Europe. In U.S., the market developed in a positive direction, and Sapa increased the margin in this market, but that's not enough to compensate
for the weak development in Europe and the costs. In the end, the 2012 EBITDA ended up at 233 million NOK. In the end, Orkla's power business consists of our 85% owner share equity interest in Saudefaldence and Borgos, former power plant in Sarpsfossen. Altogether, these two power plants produce 2.4 terawatt hours in a normal year.
The production was fairly high in 2012, but low prices on electricity in Norway were lower than in 2011, and the EBITDA ended up at 202.8 million NOK. That was a very quick review of the results and some comments to the performance of the businesses in 2012. Thank you very much, Terje Andersen. Now, Chair of the Board, Stein Erik Hagen, will explain the assessments underlying the Board of Directors' proposed share dividend for 2012.
Thank you. Orkla's shareholders are to receive a competitive return on their investments through a combination of dividends and growth in the value of their shares over time. Orkla's dividend strategy attaches importance to predictability and stability. Provided Orkla's underlying performance is satisfactory, the owners should get a steady, stable increase in dividend payments.
This dividend policy has been well-received in the market and reinforced by the fact that Orkla has never reduced its ordinary dividend compared with previous years. Moreover, Orkla has occasionally opted to pay extraordinary dividends. Orkla would like to grow in brands and, over time, to become a dedicated brand company headquartered in the Nordic countries. We will nonetheless retain our financial flexibility
and continue to maintain a credit rating as an Investment Grade company. We will have to come back to the question of what dividend capacity the company will have to have once the transformation phase has been completed. During the transformation process, both earnings and the disposal of operations outside of brands will contribute to dividend capacity. Accordingly, it's the board's intention to maintain the dividend at the current level throughout the transformation process.
Based on Orkla's dividend strategy and on the group's financial position, as just outlined by Åge Korsvold and Terje Andersen, the Board of Directors proposes paying a dividend for 2012 of NOK 2.50 per share, which is on par with the ordinary dividend for 2011. Based on the general meeting's decision on a share dividend of NOK 2.50 per share, dividends will be paid out on thirtieth of April of this year to
shareholders as of date of the AGM. The shares will be listed exclusive of dividends tomorrow, the nineteenth of April. Over time, Orkla has allocated substantial capital to its shareholders. Over the past 10 years, NOK 34 billion have been allocated to Orkla's shareholders. In addition to dividends, Orkla also has a program to buy back treasury shares. This program has been used for moderate buybacks.
Under the authorization granted by the AGM in 2011, Orkla bought back a total of fourteen million shares, while the board has not taken advantage of the authorization granted at last year's AGM. Under point five on the agenda, the board will propose that the authorization be renewed. Thank you. Thank you.
Then I would invite state-authorized public accountant Jan Willem Svendsen to present the auditor's report. It was submitted by the elected accountant, Ernst & Young, and the conclusion of the auditor's report will be shown on the screen. Thank you. Our report is included on page 88 in the annual report, and the conclusions are shown on the screen behind me. Our auditor's report is addressed to the AGM and was signed and dated on the seventh of February 2013.
In our auditor's report, we've concluded that, in our opinion, the financial statements of the parent company, Orkla ASA, and the group give an accurate account of the financial position of the parent company and the group as of the thirty-first of December 2012, and the comprehensive income and cash flows during the year under review, and the information disclosed in the directors' report, report on corporate governance, and allocation of the profit/losses are consistent with the financial statements and in compliance with the legislation and regulations. In other words, we have given Orkla ASA a clean auditor's report. Thank you.
Very well. Thank you. I will be reading the statement of the corporate assembly regarding the accounts, and you can see that on page eighty-nine of the annual report, where they say, "To the general meeting of Orkla ASA, the corporate assembly of Orkla ASA has received the Board of Directors' proposed annual report and financial statements for 2012 for Orkla ASA and the group, and recommends that the general meeting approve the financial statements and the proposal of the Board of Directors for the allocation of profit for 2012." Then we are through with the presentation and the information on the annual account. So now you have the opportunity to ask questions and comment.
If anybody would like to ask a question or a comment, you need to introduce yourselves and use either our rostrum here with a microphone, or you need to ask to be handed a microphone by from our staff present in the room. I would just like to mention that the press has been given the opportunity to be present, but they are not entitled to speak unless they are registered as a shareholder or proxy, just so that everybody knows that the press is present. Regarding the next item on the agenda, we'll revert to that under a later point. That is later. It's included in note six to the accounts. So does anybody wish to have the floor to what we have just heard? The floor is open. There doesn't appear to be anyone.
Not very easy to see, because I have lots of light straight in my face, but I don't see that anyone has asked to speak, so I think before we go to the votes, the voting, we have now received an overview of, back to the list of shareholders and the proxies in attendance and the absentee ballots and the number of votes these represent. It's been done by...
It says here, the secretariat has now made a list of how many shareholders have those who are present are altogether 171 shareholders and proxies, and those who have given advanced votes represent altogether 498 million-plus shares, and they represented 0.1% of the represented shares, and they make up 49.3% of the shares entitled to votes, exclusive of the treasury shares. Does anyone have any objections to this listing? There doesn't seem to be anybody.
The board has put the following motion before the AGM, approval of the financial statements for 2012 for Orkla ASA and, or the Orkla group, and the annual report of the board of directors, including approval of a share dividend for 2012 of NOK 2.50 per share, except for shares owned by the group. Is there anyone who does not vote in favor of approving the financial statements for 2012? Please show so now. There doesn't seem to be anyone. Then I will refer the, in total, the advance ballots, 446,320,537 in favor. This means that with those figures, the motion is approved.
Then we will go on to item two on the agenda, and that is the Orkla's terms and conditions policy, remuneration, and executive management, and the group's incentive programs. I would first inform you of the background. This is on the agenda, and in particular, with special emphasis on the rules that apply to the board statement here, now that we've seen senior executives limited liability by the AGM in accordance with the act. The Chair of the board, Stein Erik Hagen, will subsequently review Orkla's terms and conditions policy, and the main points in the board statement, as it appears in note six to the annual Orkla, and lastly, the board will make this, as stated in Section 6-16a , this declaration should consist of four parts.
The first part is payment and other remunerations, and the second part is the statement for coming accounting year, and next is what has been presented in the previous accounting year, and finally there are new or changed agreements with other employees, and you can find this on page 82 in the annual report, and then it's up to the general meeting. Well, we, the general meeting, will process the declaration of the board, and we will do this in the following way. We will have an advisory vote for the coming year, and then we will approve the other for the share-related incentive arrangements, so the general meeting has the possibility, according to the law, to comment on this declaration of the board.
Like with previous periods, the general meeting decided in February not to convene the Corporate Assembly, considered it not necessary. Then, Stein Erik Hagen will review. Right, thank you. So I refer to note six.
...
That means to, the monetary part is divided into two elements. There is a fixed, remuneration and, earning of pension, and then there's a variable element, and that's the annual bonus and a long-term bonus incentive program. The guidelines say that we should be competitive on the, fixed elements from a median consideration, whereas the consideration in the bonus scheme should be above the median.
The board earlier had the possibility to one million as a long-term in, incentive, and this, authority was not, used. The, annual bonus system, rewards, progress. This will be given a good presentation, which is, more specifically itemized or detailed, should, give the maximum bonus should be, the 100% of the annual pay.
Last year, a cash-based long-term incentive program for key personnel for key management would replace the option arrangement, and the main intention of this was to secure the competitiveness to maintain Orkla's many talents.
An amount based on the result of the annual bonus system shall be deposited in a bonus bank. The bank will be regulated on a par with the development of the Orkla until the date of payment. After two years, 50% shall be paid out, and 50% will be paid out three years after the accrual. The annual total payment
from the long-term scheme cannot exceed an annual salary at the date of payment. Any excessive amount shall be added to the bank for payment in the subsequent year, in the following year. Early options issued earlier shall run under current conditions, but shall be adjusted for dividends paid from 2012 onwards. Now, shares for employees.
The group has for several years carried out a system whereby employees can buy a limited number of shares with a 30% rebate in relation to the stock listing price. In 2012, the limitation of the purchase amount was approximately NOK 40,000 before rebate. In 2012, this scheme covered employees in 25
countries, and it applied to about 24,000 employees. It was 1,668 employees who availed themselves of this system in 2012. This is somewhat lower than in previous years. The total number of shares that were bought under this scheme last year was 1,077,558, and the costs to Orkla, that which came as a consequence of the rebate, amounted to about NOK 17 million.
The board, also this year, recommends to the AGM to continue the share scheme for employees on the same conditions as for 2012. Thank you. Any questions or any comments to this presentation or the statement, as it can be seen in the annual report? That does not seem to be the case, and we have come to the advisory vote concerning the board of directors' guidelines for remuneration of executive management for the coming financial year. The proposed motion is that the AGM should adopt the board's guidelines for a remuneration of key management, as described in note six to the accounts of Orkla ASA. Any votes against? No. We have advanced notes and proxies. 142,610,616 have voted in favor.
Two million, eight hundred and ninety-one thousand, five hundred and fifty-four against. Three million, forty thousand, three hundred and fifty-three have abstained. So then this motion has been adopted with the votes I already mentioned. Now, agenda item two, the approval of guidelines for share-related incentive arrangements. Proposed resolution: the general meeting approves the board of directors'
proposal for one, long-term incentive programs, and two, the share scheme for employees described in note six to the accounts of Orkla ASA. Would anyone vote against this proposal? No. We have the following figures for one and for two and three. Item two three, one hundred and twenty-nine million, eight hundred and sixty-seven thousand, seven hundred and sixty-five shares voting in favor, fifteen million, six hundred and thirty thousand and forty voting against, and three million and forty-four thousand, five hundred and eighteen abstains.
Then this motion has also been carried with the votes I just mentioned. Now, let's go on to agenda item three, which is a report on the company's corporate governance. This point will be dealt with in three parts. First, I will give a general explanation for why this item has been put on the agenda. After that, the Chair of the Board will provide more details about the Board of Directors and the group's work on the issue of corporate governance, and finally, we will take comments and questions from the floor.
Now, first, corporate governance, that is, we have a Norwegian translation of this concept. There has been increased focus on corporate governance, and we find a Norwegian code of practice for corporate governance, hereinafter referred to as the code of practice.
The code entails that the board must ensure that the company implements sound corporate governance. The board should provide a report on the company's corporate governance in the annual report, and if the company does not fully comply with this code of practice, this must be explained in the report. It's the comply or explain concept that we know from international corporate governance.
Further, it states that the company should clarify its basic corporate values and formulate ethical guidelines in accordance with these values. Listed companies are to have corporate governance that makes a clear internal allocation of responsibilities and duties between the shareholders, the board of directors, and the day-to-day management, and they must give an overall report in the annual report, as document referred in the annual report. Special reporting requirements also apply pursuant to Section 3-3b of the Norwegian Accounting Act.
The report shall be dealt with at the general meeting as an information item. However, the general meeting will not be required to approve the report. This ensues from Section 5-6 of the public limited companies. This is how the board reports to the AGM, and this follows from Section 5-6, fourth
subsection of the public limited companies like Orkla report in compliance with both Section 3-3b of the Norwegian Accounting Act and by the code of practice. A detailed report on this may be found on pages twenty-three to thirty-one of the annual report. As indicated by this report, Orkla is in compliance with the code of practice for the most part. Since the report has been made available to shareholders in advance of the AGM, we will not reiterate the contents in detail.
However, as the Chairman of the Board will give us an idea of how the Board of Directors and the group deal with this topic on an ongoing basis. We will also refer to two minor points on which the company has reported departures from the code of practice. Please go ahead.
Thank you. As mentioned, I will not refer to the details of the board's report on corporate governance. I just make reference to the annual report in that respect. Instead, I want to focus on how the Board of Directors deals with the corporate governance. First, several points of interest. The objective of Orkla's principles for sound corporate governance is that they should pave the way for long-term value creation, which benefits shareholders, employees, and society at large.
Key principles such as openness, transparency, accountability, and equal treatment build confidence in the group, both internally and externally. Orkla would like to promote sustainable social development. We can do this by engaging in responsible business operations, systematic improvement work related to climate and energy issues, nutrition and health, and by investing in profitable business projects that can
create positive ripple effects for the community and for society. The group's attitudes to corporate social responsibility are rendered concrete in Orkla's goals and values, code of ethics, and guidelines for corporate social responsibility. All three documents are available on the company's website, and the two latter are also described in more detail in Orkla's sustainability report.
Orkla's board takes a proactive view of sound corporate management, and will at all times ensure that Orkla complies with the requirements posted in Section three, three-B of the Norwegian Accounting Act and in the Code of Practice. The board attaches a great deal of importance to the annual treatment of the group's report on corporate governance. Working with the report gives us an annual opportunity for
a reality check, and the process helps increase our awareness of the most important topics dealt with in the report. Ensuring that this will once again... individual cases throughout the rest of the year. For Orkla's board and administration, the systematic work to continuously improve our corporate governance is essential. Transparency, integral position. The paramount principles for sound corporate governance are embodied in Orkla's goals and values, and integrated into the group's governing documents.
The Orkla Way was launched in 2012, offering a new internet portal to access Orkla's governing documents. The Orkla Way has availability and usefulness for the companies, and ensure that the principles for sound corporate governance permeate processes in the group's companies and various bodies, making it an important element of our corporate culture. Efforts are now being made to define a
clear vision of the new Orkla, and to determine which goals and values form the platform for the new structure of the group. The principles for sound corporate governance form the basis also for these efforts. As mentioned by the chair, Orkla is largely in compliance with the guideline, the code. Comply or explain would be an explanation of how the company has organized its activities in a different way. Orkla has reported two minor departures from the Code of Practice.
The first is that in accordance with Article six of the Code of Practice, the entire board of directors should be present at the general meeting. At the general meeting, a variety of the board of directors does not usually participate. This may be due to illness or scheduling collisions. Nor have the types of items dealt with by Orkla's general meetings in recent years been of such a nature that it has been
necessary for all the board members to participate. The Chair of the Board of Directors, the President and CEO, and the rest of corporate executive management at the annual meeting. In answer to point fourteen of the Code of Practice, the board of directors has drawn up general principles for how it will act in the event of a takeover bid.
It was not considered expedient to draw up detailed general principles for how to act in response to a takeover bid. However, the Board of Directors supports the wording of the Code of Practice as related to takeovers, and will comply with it in the event of a takeover bid is received.
Thank you. So are there any questions or comments regarding this report? Or, the one stated in the annual report? No, there doesn't seem to be, so I invite the general meeting to take this report under advisement. Can we do so? We can. And, then this report has been, taken under advisement. Then we will move on to agenda item number four, and this is an important case, naturally. The case is called... The
item is called Change in Orkla's Corporate Democracy System. It's a proposal regarding amendments to the Articles of Association and the instructions for the nomination committee. Corporate democracy has long traditions at Orkla. The group is, however, now in a transition phase, and the group's business model and structure are in the process of being examined and simplified. We have heard this, thoroughly explained.
This process is a natural point of departure for adaptation for the current system of corporate democracy. As part of this work, the board has presented a motion to the general meeting that the corporate assembly of Orkla ASA be discontinued. The motion is based on an agreement between the company and employees that was signed on fourteenth March 2013. The agreement was subsequently approved by the Corporate Democracy Board. And let me add that as the chair of the general meeting, it's my absolute impression that there has been very good communication between the parties here that has led to the motion that is on our table now.
The motion has resulted in several headlines in the media, and many have stated that is spoken in favor of such a development with more direct relations between the board and the shareholders, and others have placed an emphasis on that the corporate assembly is a Norwegian type of body that doesn't exist in other countries, and that should be given weight in an increasingly more international business
everyday life. The new agreement from the company side is currently. The new agreement is a response to desire to establish and develop codetermination arenas for the employees that are more relevant with a view to the group's future structures. The company and the employees see clear advantages to having the common arenas be closer to the operations and the productive processes in the group.
The most important structures of the new corporate democracy scheme in Orkla are, among others, that one of the observers that the employees have in the board will change the status and become a member of the board of directors. And so the employees will have one more board member in addition to the three they have already. And this is further developed to be a contact committee that will be
established and developed in each of the business areas and brands. And where the act gives instructions regarding such representation, the employees will continue to be represented in the company's boards. And other bodies include Orkla's International Committee of Union Representatives and the European Works Council. The motion and the new structure are elaborated in a separate attachment to the notice that has been available on Orkla's website.
The attachment has also been distributed to the shareholders present at this meeting. I would invite Chief Shop Steward Terje Sunde to comment on the agreement. It's an agreement between the company and the employees of the company. The floor is yours, Terje.
Thank you. The corporate assembly has been, and is, an important part of the employees' right to codetermination in larger limited liability companies and corporations. In recent years, the group's trade union representatives have discussed the corporate assembly's legal jurisdiction. This has been a recurring topic, especially in connection with the major acquisitions and disposals. Legislative amendment enacted in nineteen eighty-eight allowed employees and companies to agree on exemptions from corporate assembly arrangement in return for an additional board representation.
As it turned out that, the system has certain weaknesses in actual practice, for example, that the decisions made by the Corporate Assembly are made late in the decision-making processes. Several of Orkla's subsidiaries have such agreements today. As Mr. Kreutzer mentioned by way of introduction, the group is in a transition phase, and this has been an important topic for discussion among the trade union
representatives to safeguard a good structure in our corporation forum and to increase our contact with and influence on the real decision-makers in the new corporate structure, both formally and informally. We are of the opinion that we have achieved this. I refer to the Corporate Democracy Board's recognition of the agreement regarding additional board representation on the board of Orkla ASA, and not the least, the formalization of contact committees in the business areas.
This comes in addition to the schemes that are already established in the group and the subsidiaries. This issue has been discussed broadly in all of our fora and in all the elected, trade union representatives collectively, also through Orkla's International Committee of Union Representatives, have expressed their
support for the motion to discontinue the Corporate Assembly in Orkla ASA. Thank you very much, Terje. Then I will open for questions or comments. Are there any points of view, on this motion? No, there doesn't seem to be any. Then we will, move on to the vote. As indicated by the notice, the discontinuation of the Corporate Assembly will require the deletion or amendments to a number of provisions in Orkla's Articles of Association.
These amendments are described in notice under point 4.1, and in the accompanying memo, to which an annotated version of the Articles of Association is also attached. All of these changes will follow from the one decision. The next point is that if the AGM approves the discontinuation of the corporate
assembly, the guidelines for the nomination committee, adopted by the AGM in 2010, must be updated accordingly. This is stated in Article 4.2, and hereto, an annotated version of the guidelines is attached to the notice. Then the nomination committee will present one recommendation to the general meeting, which also applies to nominations to the board.
As shown in items four point one and four point two on the agenda, the motion is that the Board of Directors be authorized to decide when the amendments to the Articles of Association and to the guidelines for the nomination committee will take effect. The Board will do this as soon as the Corporate Assembly has held the election this spring, and this meeting is scheduled for the twenty-first of May.
What this means is that if the general meeting approves of this, the last meeting we'll have in the Corporate Assembly will be the meeting on the twenty-first of May, where we will elect a new board, and then the Corporate Assembly will be discontinued. The third motion to be voted is an amendment to Article eight, second subsection of the Articles of Association.
It contains a provision about the number of deputy members to the Corporate Assembly. This is related to the Nomination Committee's roster of nominees, as the Nomination Committee has seen no reason to nominate new deputy members in light of the motion to discontinue the Corporate Assembly, and this change will take effect immediately. Then we get to the motions. The Board proposes that for the General Meeting to adopt the following
decisions. First, the amendments to the Articles of Association, pursuant to item four point one, I will not read the whole recommendation. I think you've all had it distributed, and you all know it. It requires at least two-thirds of the votes of those in attendance and of those of the share capital.
And all the proposed amendments are consequences of the motion that the Corporate Assembly be discontinued. So we, in other words, we propose that we do this voting as a package and that we vote over this in an overall vote. Are there any votes against the proposal to amend the Articles of Association as a consequence of dissolving the Corporate Assembly? There appears not to be. So here we have
also some tied mandates and advanced votes, and when we look at this overall, there are one hundred and forty-six million, two hundred and thirteen thousand, four hundred and nine voting in favor. There are one hundred and six voting against, and two million plus who have abstained from voting.
Then we will go to point two, and that's the amendment in accordance with item four point two on the screen. In agreement with what we have just adopted, as for the amendments to the Articles of Association, I would suggest that we vote on these collectively. Anyone who votes against? No, there
doesn't seem to be. So here, the same figures apply, so I will not read them again. It's the same number of votes for this as for the previous. And then it's the last point, and that's the changes to Article eight in the Articles of Association, that there's a flexibility with respect to the number of deputy members to the Corporate Assembly for that one meeting that will be held, that's related to item four point three.
This proposal implies, as mentioned, that the number of shareholder elected deputy members to the corporate assembly can be stipulated as lower than six, as prescribed by the current regulations. This decision calls for at least two-thirds of the votes in attendance and the share capital. Anyone opposed to the proposal to amend the articles of association? No, there doesn't seem to be. And there we have
slightly different figures, but very equivalent. One hundred and forty-six million, two hundred and thirty-six, nine hundred and eighty-six in favor, seventy-nine thousand, one hundred and eighty-six against, and then some abstentions as well. And so then all the proposals related to the discontinuation of the Corporate Assembly in Orkla have been adopted with the required majority. So you've participated now in making an historical decision.
Now we will move on to agenda item number five, authorization for the board to acquire treasury shares. At the annual at the AGM on the nineteenth of April, 2012, the board was authorized to acquire treasury shares up until the AGM in this year. The board of directors has proposed that the authorization be renewed, and Chair of the board, Stein Erik Hagen, will explain the reason for this proposal. Thank you
very much. Authorization for the board of directors to buy back treasury shares has been given on a regular basis ever since legislation opened the door for this in 1998. The buyback of treasury shares for cancellation is one of several possible instruments that the company has for transferring values to its shareholders.
Moreover, the company has a certain need for treasury shares to cover its obligations under current incentive programs adopted by various general meetings. The authorizations have been used for moderate buybacks. From nineteen ninety-eight and up to today, Orkla has acquired a total of 86.2 million shares in Orkla ASA using this authorization. As I mentioned earlier, no treasury authorization
granted by last year's AGM. On average, over the past five years, Orkla has bought back 0.5% of outstanding shares per year. Whether and to what extent buybacks ought to take place under the authorization will depend on a concrete assessment of, among other things, the capital situation and the share price.
As indicated in the notice, it has been proposed that the Board of Directors, once again, this year, be authorized to acquire shares in Orkla ASA with nominal value of up to NOK 125 million, divided among up to 100 million shares. The group's aggregate holding of treasury shares can never exceed 10% of the share capital at any time. It has been proposed this year, as in previous years, that the authorization shall apply for one year. This is in compliance with the code of practice for good corporate governance.
The proposal provides, as in previous years, that any shares that the company might acquire under the authorization can be used for one out of the two following purposes: canceled, and a motion for cancellation will then be put before the general meeting, or be used to fulfill the company's obligations under the incentive programs for employees, such as the general meeting previously and at this general meeting has decided. Treasury Shares are acquired on the stock exchange, and the buying and selling of Treasury Shares has an impact only on the company's equity, not on its income statement. Thank you very much. Does anyone have any comments or questions about the report for this decision?
That does not seem to be the case. The board has indicated two specific purposes for which the authorization can be used. It cannot be used for any other purposes. We will vote on each of the individual purposes separately. Firstly, the general point is that the general meeting of Orkla ASA hereby
authorizes the board of directors to permit the company to acquire shares in Orkla ASA with a nominal value of up to NOK 125 million, divided among a maximum of 100 million shares, provided that the company's holding of treasury shares does not exceed 10% of shares outstanding at any given time. The amount that may be paid for the share shall be no less than 20 NOK and no more than 18 NOK.
The board of directors shall have a free hand with respect to methods of acquisition and disposal of treasury shares. This authorization shall apply from nineteen April twenty thirteen, until the date of the annual general meeting in twenty fourteen. Now, point two, which is one of the purposes, the authorization may be utilized to implement employee incentive programs and employee incentive
programs adopted by the general meeting in accordance with item two, three of the agenda. And the last is the second purpose. The authorization may be utilized to acquire shares for cancellation. Are there any votes against the proposal for an authorization and the use of same as specified in point two above? That does not seem to be the case. We also have some advance votes on this point.
One hundred and thirty-one million, five hundred and fifty-seven thousand, nine hundred and fourteen in favor. Forty million, eight hundred and forty-one thousand, eight hundred and seventy-three voting against. Two million, two hundred and seven thousand, five hundred and thirty-six abstaining from voting on point two. Point three, that the authorization can be used for cancellation. Any votes against?
Advance votes, one forty-five million, five hundred and seventy-three thousand, one hundred and fifty-four in favor. A few against, and two million, and in excess of two million abstaining, and then these motions have been carried with the necessary majorities. Then we go on to agenda item six, which is the minimum notice of an extraordinary general meeting. Pursuant to Section 5-11b of Securities Trading Act and Article fifteen of Orkla's Articles of Association, the deadline for convening a general meeting is twenty-one days.
However, the Securities Trading Act allows the general meeting to decide that a notice of an extraordinary general meeting shall be sent at least two weeks prior to the meeting. That is two weeks prior to the meeting. The background is to facilitate a more effective administrative procedure, if a need were to arise, to convene a general meeting between the ordinary annual general meetings. It is worth
noting that one prerequisite for applying a shorter term of notice is that there is a satisfactory system for electronic participation in the general meeting. That is, there is no need to be present physically to use a proxy or to vote in advance. As of today, such a system does not exist. Once such a system is in place, however, the board would like to have this tool available if there should be a need to convene a general meeting.
A decision on this point calls for a two-thirds majority of the general meeting, and the decision will apply only up until the next annual general meeting. The board has proposed that the AGM adopt such a decision, and the chairman of the board will give a short explanation on this point. Thank you. The board's reason for proposing to the general meeting that it should allow a shorter term of notice for an
extraordinary general meeting is related to the fact that the board of directors has once again, this year, not proposed a general board authorization to increase the share capital. The board of directors decided last year that it is expedient and desirable that the general meeting be involved in the question of capital increases, and the general meeting supported this assessment.
The need for simple, swift administrative procedure can nonetheless still be present if the company were to encounter a situation in which it might be relevant to further develop the group by issuing shares. It is against this background that the Board of Directors see it as an advantage to have the
possibility to elicit the general meeting's point of view on matters, with a shorter deadline of fourteen days instead of the ordinary deadline of twenty-one days. Are there any questions or comments on this point concerning the deadline for convening an extraordinary general meeting? That does not seem to be the case, then let's proceed to the vote on this point.
The Board of Directors proposes that the annual general meeting adopts the following resolution: Until the annual general meeting in 2014, the Board of Directors may decide to convene an extraordinary general meeting on not less than two weeks' notice, if the Board, in accordance with Section 5-8a of the Public Limited Company Act, has decided that votes may be cast electronically at the general
meeting. Are there any votes against this proposal? That is not the case. But some of the advance votes are against. Ninety-four million two hundred and thirty-nine thousand one hundred and eighty-one vote in favor. Fifty-two million and fifty-five thousand four hundred and eighty-four vote against. Two million two hundred and forty-eight thousand six hundred and fifty-eight abstain from voting.
The secretary says that even with these figures, we have more than two-thirds in favor of the amendment, so this has been adopted by the required majority. Then, agenda item seven, election of members and deputy members to the Corporate Assembly. In recent years, the Annual General Meeting has elected members to the Corporate Assembly for a term of office of one year. Thus, all shareholder-
elected members and deputy members of the Corporate Assembly are up for election. Fourteen members, and up to six deputy members, are to be elected. In the light of the process of discontinuing the Corporate Assembly and the decision just adopted, no particular changes are proposed. Making substantial changes now for one meeting would not be logical. We thus propose a re-election insofar as possible.
Nomination committee's roster of nominees is dated twenty-seven March two thousand and thirteen, and has been available to the shareholders on the company website. The recommendation has also been made available to the shareholders here present in the ordinary way. Now, as Chair of the Nomination Committee, I want to present our works and recommendation before we look at the roster of
nominees as such. As I mentioned, and pursuant to this recommendation, recommendation point seven, the Nomination Committee's composition should reflect the interest of the shareholders, and there are some criteria established for what must be in place for this interest to be reflected. It is that the Nomination Committee should have such a composition, that the interest of the shareholders should be reflected. The majority should be independent of the board.
At least one member of the nomination committee should not be a member of the corporate assembly. The day-to-day management or should not be a member, and there should be guidelines for these activities. And we, the nomination committee of Orkla satisfies all these conditions. I am the chair. We also have Olav Svarva, our Nils-Henrik Pettersson. Olav Svarva is also adopted, and he is to be heard as
regards the remuneration. Now, as regards the guidelines for the nomination committee that the AGM established on the twenty-second of April, two thousand and ten, the instructions establish rules concerning elections, remuneration, composition, tasks and responsibilities, and further requirements for the material composition of the roster of nominees.
To satisfy the requirements of independence, there are also rules and procedure as to how the nomination committee should work, and these instructions are available on Orkla's website for investor relations. The way we work is supposed to cater to the obligations of the nominations committee. Among the things that we have done as a preparation for this year's elections, is that we have met with the board, chairman of the board. We have looked at the assessment of the board, that the board carries
out. We have written to the twenty largest shareholders of Orkla, asking for proposals for candidates, nominees, and we can also propose... Also, other shareholders can make such propositions, and we have Russell Reynolds Associates, a recruitment agency, to help us to find excellent candidates to the positions to be covered at any given time.
I think it would be correct to state, and it's a general experience of all of those who have been involved in nomination committees, that it is more extensive, ever more extensive, and you have to do thorough work, and you have to work in a very professional way. Thus far, in this year's process, we have had nine
meetings in the Nomination Committee, and virtually all meetings have had full attendance of the members. This is an effort that is given high priority by the committee's members. As regards this year's elections, we have presented the final nomination, and we will also draw this up for the twenty-first of May meeting of the Corporate Assembly. This is the last meeting then of the Corporate Assembly.
What we present to the AGM, and what we'll talk about afterwards, is the present the election of members reflecting the shareholders and employees, and also establishment of the remuneration for the corporate assembly and the nomination committee. And what we are going to present to the corporate assembly should also include candidates for the chair and deputy chair, and this is for a single meeting. It's a bit particular this time around, but also for that meeting, we must constitute the meeting.
There must be a chair and a deputy chair, and we will do this, and we will present a recommendation. And then we need a recommendation for the chair and deputy chair of the board, the remuneration of the board of directors, and a recommendation for shareholder-elected members for the corporate assembly.
This time, we have received a notice from Birgitte and Jesper Ovesen that they will not stand for election, for re-election, and we will thus recommend two new board members to the board of Orkla. The recommendation from the nominations committee will be presented in the first half of the month of May. Now, let's return to the recommendation of the nomination committee. I think you will now see it on the
screen in its entirety, but I will still read it out loud. The following individuals are nominated for re-election: Johan H. Andresen Jr., Rune Bjerke, Marianne Blystad, Ann Kristin Brautaset, myself, Nils-Henrik Pettersson, Nils Selte, Olav Svarva, Terje Venold, Lars Windfeldt, Gunn Wærsted, Odd Gleditsch Jr., and Gunnar Rydning.
The following have been proposed as becoming new members, no longer deputy members, Scilla Treschow, and the following deputy members have been nominated for re-election: Benedicte Bjørn, Mimi K. Berdal, Kjetil Houg, Camilla Hagen Sørli, and Kirsten Idebøen. You may now ask questions or present comments, and also present alternative candidates. Does anybody want the floor on this point?
There appears not to be. Then let us move on to the vote. There are no alternative nominations, so this means we will just ask, is there anyone who does not vote in favor of the motion? And there appears not to be. Have any of the advance votes opposed? Some people do so on sort of a principle basis. Right. So then, regarding members, 145 million plus in favor, and there are 1,732,657 votes against, and 2.7 million have abstained from casting in advance votes. Regarding deputy members, 144 million plus are in favor, 1.7 million opposed, and 2.67 million abstain from voting.
But then that means that the motion has been approved by the general meeting, in line with the recommendation from the nomination committee. Right, then we will move on to agenda item number eight, election of a member to the nomination committee. The nomination committee's roster of nominees is dated twenty-seventh of March, 2013, and has been accessible to the shareholders on the
company website, and the roster has also been made available to those shareholders present at the meeting. The following member of the nomination committee is up for election. It's Nils-Henrik Pettersson, and Mr. Pettersson is nominated for re-election for a two-year term of office. Are there any other proposals than Mr. Pettersson to be elected as member? No, there is not. So then the question is, does anyone not vote in favor of the motion?
There's not, but out of the advance votes, a hundred and forty-four million, two hundred and ten thousand nine hundred and ninety-two vote in favor, one million six hundred and fifty-four thousand eight hundred and eighty-three votes against, and two million six hundred and seventy-six thousand four
hundred and forty-eight abstain from voting. Then the motion is approved, and Nils-Henrik Pettersson is re-elected for a period of two years. Then we will move on to the last item on our agenda, and this is the approval of the auditor's remuneration, and it will probably be in good form. Is the auditor... Well, he doesn't. He's not entitled to vote anyway.
Pursuant to Article 10 of the Articles of Association, at its meeting on twenty-seventh of February 2013, the Corporate Assembly decided to put forward a motion to the general meeting regarding approval of the auditor's remuneration for auditing services for Orkla ASA. The bill for statutory auditing services for Orkla ASA for 2012, which the general meeting is to approve now, totals NOK 2,404,472. This is up slightly from last year, when we had the NOK 2,334,439. Aggregate remuneration to Ernst & Young AS for the group in 2012 came to about 72 million NOK. This was up from about 55 million NOK in 2011.
Auditing fees to other auditors totaled about NOK 2 million, which was comparable to 2011. Reference, the reason for this increase is related to the high activity level that we had in 2012, and as the president told us, the large transactions, such as Borregaard or Sapa, Rieber, Jordan, where Orkla has had extensive activities. Reference is also made to note six in the accounts of Orkla ASA for a more detailed description. So we propose that the auditor's fee of NOK 2,404,472 be approved. Does anyone vote against this? No. Nobody does, so then this is approved.
But here, too, there are a hundred and sixty-five million who vote in favor, four hundred and seventy-eight thousand nine hundred and fifty-one vote against, and two million six hundred and seventy-five thousand and thirty-six abstain from voting. Now, there are no more items on the agenda that require decisions by the general meeting. I would ask Alf-Inge, yeah, just to remain to co-sign the minutes, and
all the votes have been counted, and the results have been announced. Does anyone wish to say anything before I call the meeting off? No, there appears not to be. There's somebody here. Sorry. Will you come up, or shall we give you a microphone? I have five thousand shares in the company. Will you please present yourself? My name is Arnulf Tvedt. I'm from Bergen, as you may hear from my dialect.
Firstly, I would like to thank what he's done, and then, at the same time, would like to point out that according to these. Let me just put my glasses on. According to the Articles of Association, Article 17, the general meeting should be opened and led by the Chair. Now, you are no longer present, and I was
wondering if we need to correct this article in the Articles of Association. That was my question. Related to the amendment that will be followed now, is that it's the Chairman of the Board that will open the general meeting, and then the Chair will propose a chair of the meeting, and then the general meeting will consider this and elect, and that will normally be another person than the Chairman of the Board.
But the Chairman of the Board will normally open the meeting, and then propose a chair for the meeting. Was that a good answer to your question? Excellent. Does anyone else wish to say anything? No, there appears not to be. Then all that remains is to say thank you for coming, and we wish you all a good day.