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1.10.
Orkla’s Branded Consumer Goods operations, including Headquarters, had a 16%
improvement in operating profit. The improvement is a result of factors
including cost-cutting measures related to the coronavirus pandemic,
productivity improvements and positive currency translation effects.
Four out of five business areas had a marked improvement in operating profit in
the second quarter, compared with the same period of 2019: Orkla Consumer
Investments (+46%), Orkla Care (+27%), Orkla Confectionery & Snacks (+26%) and
Orkla Foods (+22%). Due to lockdowns in several markets and government-imposed
restrictions, Orkla Food Ingredients saw a 48% decline in operating profit.
Orkla’s Branded Consumer Goods operations had turnover growth of 6.2%, primarily
due to currency fluctuations and acquisitions of companies. Organic growth was
-3.8% in the second quarter. Orkla had good sales growth in the grocery market,
but a considerable decline in sales to the out-of-home sector.
“We can look back on a half-year marked by the biggest ever peacetime crisis. In
March, there was extensive stockpiling in grocery stores. After a slow start to
the second quarter, volumes have picked up again. It looks as though consumers
turn to well-known, familiar brands in times of crisis like the one we are
currently experiencing. Outside the grocery sector, however, our companies have
seen a substantial reduction in demand due to various restrictions imposed by
the government. Now that society is gradually opening up again, we have also
seen an improvement in out-of-home demand,” says Orkla President and CEO Jaan
Ivar Semlitsch.
“As a supplier of food, household cleaning and personal hygiene products, we at
Orkla have a responsibility to society to ensure that our products are
available. It’s therefore gratifying to see that we have succeeded in
maintaining close to normal supply chain operations during the coronavirus
pandemic, while also fulfilling our top priority of protecting the health and
safety of our employees,” he adds.
Orkla has also taken a number of structural actions:
- Orkla Wound Care has signed and completed an agreement to buy the shares in
Norgesplaster. The company holds good positions in the wound care and first
aid equjpment markets.
- Orkla Foods Sverige has signed and completed an agreement with PepsiCo, Inc.
to purchase the Havrefras brand, including Rug Fras and Mini Fras. The
brands hold strong positions in Scandinavia in healthy breakfast cereals.
- Orkla Foods Norge has signed an agreement to sell SaritaS, Vestlandslefsa
and Li-Klenning. The purpose of the disposals is to streamline the portfolio
and concentrate the business on selected core areas.
- It has been decided to wind up the Swedish business in Pierre Robert Group,
and activity has gradually been reduced in the first half-year.
Hydro Power’s operating profit amounted to NOK -19 million, compared with NOK
69 million in the second quarter of 2019. The decline in profit was due to
substantially lower power prices.
Profit from associates increased by 37% to NOK 248 million. The improvement is
mainly due to good profit growth and margin performance, as well as positive
currency translation effects, in Jotun.
Orkla’s profit before tax rose by 2% to NOK 1,200 million in the second quarter.
Orkla ASA
Oslo, 13 July 2020
Ref.:
Group Director Corporate Communications and Corporate Affairs
Håkon Mageli
Mobile: +47 928 45 828
SVP Investor Relations
Thomas Ljungqvist
Mobile: +47 482 59 618
An Excel spreadsheet with key figures may be found at www.orkla.com
(http://www.orkla.com).
This information is subject to the disclosure requirements pursuant to Section
5-12 the Norwegian Securities Trading Act
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