Broad-based growth for Orkla

Orkla’s operating profit (EBIT adj.) increased by 8.8% in the third quarter to NOK 1,571 million. Operating revenues rose 9.5% to NOK 11,909 million.

Orkla’s profit before tax amounted to NOK 1,706 million, an improvement of 33.7%. Adjusted earnings per share increased by 23.7% to NOK 1.46.

The Branded Consumer Goods business, including Headquarters, posted a 15.2% improvement in operating profit. All five business areas had growth compared with the third quarter of 2019: Orkla Consumer Investments (+ 47%), Orkla Care (+ 16%), Orkla Confectionery & Snacks (+ 13%), Orkla Foods (+ 11%) and Orkla Food Ingredients (+ 4%).

Turnover growth for Branded Consumer Goods was 10.6%. Orkla achieved organic growth of 3.8% compared with the third quarter of 2019, whereas in the previous quarter there was a year-over-year organic decline of 3.8%.

“I am very pleased with Orkla’s broad-based progress. Compared with the third quarter of 2019, consumers travelled less and spent more time at home, which contributed to good growth for our brands in the grocery channel. Four out of five business areas showed organic growth. The big change from the second quarter of 2020 was that Orkla Food Ingredients and the rest of our Out of Home segment saw a noticeably smaller decline in sales, due to the easing of coronavirus restrictions,” says Orkla President and CEO Jaan Ivar Semlitsch, who adds,

“Our priorities during the ongoing crisis are to safeguard the health of our employees, prevent the spread of infection and secure deliveries. We are also executing on our strategy of strengthening our footprint in key home markets. In the third quarter, we entered into an agreement to buy 67.8% of the shares in the Indian company Eastern Condiments. This acquisition will help to double Orkla’s turnover in India.”

Eastern, like Orkla’s brand MTR, is well known and popular among Indian consumers. Eastern has close to 3,000 employees and seven factories in four different states in India. The acquisition is expected to be approved by the Indian competition authorities in the fourth quarter of 2020.

Orkla’s profit from associates increased in the third quarter by 89% to NOK 314 million. The improvement is mainly due to good profit growth for Jotun, where there was underlying sales growth in the Decorative Paints and Marine Coatings segments. In addition, raw material costs were somewhat lower.

Hydro Power’s operating result amounted to NOK -3 million, compared with NOK 78 million in the third quarter of 2019. The decline in profit is chiefly explained by lower power prices.