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Orkla ASA: Improvement for branded consumer goods

Oslo / NO. (ok) Norway’s Orkla ASA increased operating revenues in the fourth quarter by 9.4 percent to NOK 12,017 million. Operating profit (Ebit adjusted) amounted to NOK 1,515 million, an improvement of 7.6 percent.

Orkla’s Branded Consumer Goods business achieved 8.1 percent growth in operating revenues and increased operating profit by 12.1 percent. Organic turnover growth was 2.0 percent.

«Orkla finished 2019 with a good quarter in which we achieved improvement in both sales and profit. It is encouraging to see that we have strengthened our performance compared to a weak fourth quarter in 2018. In Branded Consumer Goods there was broad-based profit improvement,» says Orkla President and CEO Jaan Ivar Semlitsch.

Orkla Foods delivered a particularly positive performance in the Swedish market, and there was continued growth for plant-based products. Orkla Confectionery + Snacks made progress in both confectionery and snacks. Orkla Home + Personal Care and Orkla Health contributed to turnover growth in Orkla Care. Orkla Food Ingredients posted profit growth, mainly driven by acquisitions.

In the fourth quarter, Orkla purchased 20 percent of the Icelandic company Nói Síríus, Iceland’s leading chocolate and confectionery manufacturer. During the quarter, Orkla Care took over the remaining 50 percent of the shares in the former joint venture Anza Verimex Holding, which is market leader for the sale and distribution of painting tools in the Netherlands and Belgium.

Hydro Power posted operating profit of NOK 72 million in the fourth quarter, compared with NOK 132 million in the same period of 2018. The decline is mainly due to lower production and a fall in power prices.

Profit from associates and joint ventures amounted to NOK 147 million, compared with NOK -43 million in the corresponding quarter of 2018. The improvement was primarily a result of good profit growth for Jotun. There was strong growth in Protective Coatings, and Marine Coatings and Decorative Paints delivered a positive performance. Orkla sold its stake in the Oslo Business Park property, resulting in a gain of NOK 35 million.

The Group’s other income and expenses totalled NOK -136 million in the fourth quarter, the biggest items being related to the reorganisation of Orkla’s headquarters and other restructuring projects.

Orkla’s profit before tax increased by 46 percent in the fourth quarter to NOK 1,487 million.
In 2019, Orkla increased its operating revenues by 6.8 percent to NOK 43,615 million. Operating profit (Ebit adj.) grew by 6.5 percent in 2019, totalling NOK 5,088 million. At year-end the Group had 18,348 employees.

Full-year earnings per share amounted to NOK 3.84, an increase of 19 percent. Adjusted earnings per share rose by 17 percent to NOK 4.24. Orkla’s Board of Directors intends to propose a dividend of NOK 2.60 per share for the 2019 financial year.