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Orkla’s profit before tax increased by 12% to NOK 1,344 million in the second
quarter. Earnings per share rose 9.5% to NOK 1.04 in the quarter. Adjusted
earnings per share rose 3.6% to NOK 1.14.Substantially higher power prices
contributed to a rise in Hydro Power’s operating profit to NOK 112 million in
the second quarter, a year-over-year improvement of NOK 131 million. Jotun, in
which Orkla has an ownership interest of 42.6%, contributed to an increase in
profit from associates of 2.8% to NOK 255 million in the second quarter.
Branded Consumer Goods had organic growth of 6.9% in the quarter. Easing of
coronavirus restrictions and higher demand in the Out of Home sector contributed
to 20.5% organic growth for Orkla Food Ingredients, compared with a weak second
quarter of 2020. Orkla Consumer Investments had organic growth of 13.2%, driven
by increased sales for Orkla House Care and Kotipizza. Orkla Foods had organic
growth of 3.0% in the quarter and Orkla Care 2.5%, while Orkla Confectionery &
Snacks saw a decline of 1.2%.
Branded Consumer Goods, including Headquarters, saw a 5.4% reduction in
operating profit, ascribable to a higher level of activity and increased costs.
The decline was partly coronavirus-related, as the cost base was extraordinarily
low in the second quarter of 2020. Moreover, there was a slight change in
Orkla’s product mix in the quarter.
“The coronavirus pandemic has continued to impact on Orkla in the past quarter.
We have seen high infection rates and lockdowns of society, especially in India,
but the situation has also been challenging in several other countries. I am
pleased that our top-line results were strengthened by volume-based organic
growth, and that parts of the Out of Home sector approached a normal situation.
However, I am not satisfied with our cost and profit performance, but we are
monitoring it closely and will consider taking necessary action,” says Orkla
President and CEO Jaan Ivar Semlitsch, who is concerned about rising raw
material prices:
“Orkla is exposed to a broad range of raw materials. The coronavirus pandemic
has contributed to bottlenecks and disruptions in global value chains. This
situation, combined with increased demand, will result in higher raw material
prices going forward,” Semlitsch points out.
Orkla has made a number of strategically important acquisitions in the second
quarter to strengthen its positions in selected categories and geographies.
In June, Orkla announced its entry into an agreement to purchase 75% of the
shares in New York Pizza, one of the Netherlands’ leading pizza chains. The
transaction valued New York Pizza at EUR 145 million, equivalent to NOK 1.5
billion, at enterprise value. Together, New York Pizza and Kotipizza own 518
franchisee-operated sales outlets, 286 of which are in Finland, 229 in the
Netherlands, two in Germany and one in Belgium.
In the same month, Orkla Health announced that its acquisition of 100% of the
shares in NutraQ has been completed and approved by all relevant competition
authorities. NutraQ is a leading supplier of subscription-based health and
wellness products in the Nordic region. The purchase price valued the company at
NOK 3.1 billion at enterprise value.
In June, completion was also announced of the purchase of the Icelandic company
Nói Siríus, which is the leading manufacturer of chocolate and confectionery in
Iceland. In 2020, the company had a turnover of ISK 3.6 billion (approx. NOK 230
million). With this acquisition, Orkla Confectionery & Snacks is now represented
by its own companies in all the Nordic markets and the Baltics.
Furthermore, Orkla Food Ingredients has completed its purchase of the two
British companies Cake Décor and For All Baking, which manufacture and sell cake
decorations and accessories through online stores, bakeries and grocery chains.
Turnover for the two companies in 2020 totalled GBP 14.4 million (approx. NOK
168 million). On 13 July, Orkla Food Ingredients entered into an agreement to
purchase the Swiss company Hans Kaspar, a leading specialist in the manufacture
of ingredients for chocolate and ice cream producers. In 2020, the latter
company had a turnover of CHF 13.3 million (approx. NOK 125 million).
Orkla ASA
Oslo, 15 July 2021
Ref.:
Group Director Corporate Communications and Corporate Affairs
Håkon Mageli, mob.: +47 928 45 828
SVP Investor Relations
Kari Lindtvedt, mob.:+47 950 75 114
An Excel spreadsheet showing key figures may be found
at https://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 15 July 2021 at 07:00 CEST.
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