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In the first quarter, Orkla’s branded consumer goods business achieved 13.4%
growth in operating revenues. Organic turnover growth was 7.7%.
The biggest improvement was posted by Orkla Food Ingredients and Orkla Foods,
which had organic turnover growth of 21.1% and 7.2%, respectively. Both business
areas were positively affected by the reopening of several markets after the
strict infection control measures against the pandemic in the first quarter of
2021. Orkla Care had organic sales growth of 5.9%, while Orkla Confectionery &
Snacks and Orkla Consumer Investments had an organic decline in turnover of
-1.1% and -4.3%.
Branded Consumer Goods, including Headquarters, saw a -2.4% decline in operating
profit EBIT (adj.) in the first quarter. A substantial part of the decline was
due to the higher purchasing costs of raw materials and packaging, coupled with
rising freight and energy prices.
“These are exceptional times, where the situation in Ukraine is affecting both
the availability and prices of a number of raw materials and input factors.
Furthermore, we are seeing a sharp surge in energy prices from an already high
level. A protracted conflict is likely to generate even greater uncertainty and
imbalance in the global flow of goods. It is crucial for Orkla to maintain its
good delivery performance and deal with cost increases,” says Nils K. Selte, who
was appointed new Orkla President and CEO on 11 April.
“The strategy communicated on Orkla’s Capital Markets Day on 23 November of last
year remains unchanged. My role is to ensure that we accelerate our pace, growth
and value creation. To achieve our goals, we will make adjustments in our
current organisational model. Our ambition is for our companies to have
sufficient autonomy and decision-making authority to ensure that they have the
necessary flexibility and speed to act on the opportunities and changes that
arise,” Mr Selte states.
“In the time to come, we will assess our portfolio of companies and products. We
will be more open to divestments, partnerships or stock market listing of
businesses if we find it expedient,” he adds.
Profit from Orkla’s associates and joint ventures totalled NOK 238 million in
the first quarter, compared with NOK 331 million in the same period of 2021. The
decline is due to Jotun’s lower contribution to profit as a result of
substantially higher raw material prices. Jotun had year-over-year growth of 15%
in first-quarter sales.
Hydro Power had operating profit EBIT (adj.) of NOK 345 million, compared with
NOK 86 million in the same period of 2021. The increase is due to significantly
higher power prices than in the first quarter of 2021.
The Group’s other income and expenses in the first quarter totalled NOK -162
million, compared with NOK -143 million year over year. Orkla has decided to end
its ownership of its Russian business, Hamé Foods ZAO, which produces long shelf
life food products in the Russian market. Write-downs and expenses related to
this business amounted to NOK 116 million.
Adjusted earnings per share were NOK 1.24 for the quarter, a decline of 2% from
the same period of 2021.
In January, through its subsidiary Orkla Health, Orkla Care completed an
agreement to buy 95% of the shares in Vesterålen Marine Olje. The company has
been an important supplier of raw materials for Möller’s Tran cod liver oil and
is an acquisition of strategic importance for Orkla with respect to both the
health area and sustainability.
In February, through its subsidiary Orkla Health, Orkla Care acquired 100% of
the shares in Healthspan Group Limited, a leading supplier of dietary
supplements in the UK market. Healthspan was established in 1996 and has since
built up a strong brand and a broad range of dietary supplements and skin care
products. With this transaction Orkla has strengthened its position in consumer
health and online sales.
In April, Orkla Food Ingredients purchased 70% of the shares in the Belgian
company Hadecoup. Orkla has thereby strengthened its position in the sale and
distribution of ice cream ingredients and accessories in the Benelux region.
Orkla ASA
Oslo, 5 May 2022
Ref.:
Executive Vice President Corporate Communications and Corporate Affairs
Håkon Mageli, mob.: +47 928 45828
Senior Vice President Investor Relations
Kari Lindtvedt, mob.: +47 950 75114
An Excel spreadsheet with key figures may be found
athttps://investors.orkla.com/
This information is considered to be inside information pursuant to the EU
Market Abuse Regulation and is subject to the disclosure requirements pursuant
to Section 5-12 the Norwegian Securities Trading Act.
This stock exchange announcement was published by Kjetil Sørum, Investor
Relations Manager at Orkla ASA, on 5 May 2022 at 07:00 CEST.
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