Orkla ASA: targets annual organic growth of at least 2.5 percent

Oslo / NO. (ok) At its digital Capital Markets Day event Norway’s Orkla ASA announced new main targets for organic growth, operating profit and sustainability. Active portfolio management – including acquisitions, disposals and partnerships – will play an important role for Orkla’s value creation in the next few years.

Orkla targets annual organic turnover growth of a minimum of 2.5 percent in the 2022-2024 period and annual underlying growth in EBIT (adjusted) of 4-6 percent (mid-single-digit growth).

Orkla’s ambition is to be the leading sustainability player in its home markets. The Group has set clear quantifiable targets. In 2025, greenhouse gas emissions from Orkla’s own operations are to be reduced by 65 percent (Scope 1 + 2) and by 30 percent in the value chain outside its own operations (Scope 3). Orkla’s targets have been validated by the Science-Based Targets Initiative and are aligned with the Paris and Glasgow climate accords. All packaging used by Orkla is to be 100 percent recyclable in 2025.

Orkla has over 300 local brands with a presence in more than 20 countries. Eighty percent of turnover from the Branded Consumer Goods business derives from brands that hold number one or number two positions in their home markets. Over the next few years, Orkla will increase its investments in brand-building and advertising, based on local consumer insights. Furthermore, Orkla intends to develop international positions for selected brands such as Möller’s and Jordan. Orkla’s activities will primarily be concentrated in three geographical areas: the Nordics/Baltics, Central and Eastern Europe and South Asia.

«We will adopt a more dynamic approach to our portfolio, without reducing our focus on our more mature markets and categories. We will expand in markets and categories that we know well, where we have a strong presence or closely related positions. We will also be open to selling down our interest in or listing some businesses if we find it expedient to do so,» says Orkla President and CEO Jaan Ivar Semlitsch.

Orkla has three priority growth areas: Plant-based, Out of Home and Consumer Health. Sales of plant-based products are targeted to increase from NOK 846 million in 2020 to NOK 3 billion in 2025. Orkla aims to be one of Europe’s leading companies for franchised pizza outlets. In the Consumer Health area, the goal is 50 percent growth in sales in 2025, equivalent to a turnover of NOK 7 billion. In all three areas, growth will take place through a combination of organic growth and acquisitions.

A majority of Orkla’s branded consumer products are sold through the grocery sector. In the next three years, higher growth is expected in other channels, and the Group aims to double its revenues from digital sales to 15 percent .

Orkla is maintaining its dividend policy ambition of increasing dividends from the level of NOK 2.75 per share, normally within 50-70 percent of earnings per share. Furthermore, Orkla aims to maintain a financial and business risk profile consistent with an investment grade credit rating.

Orkla is listed on the Oslo Stock Exchange and its headquarters are in Oslo. In 2020, the Group had a turnover of NOK 47.1 billion, and it has around 21,500 employees.