Continued improvement for Orkla

For the full year, Orkla increased operating revenues by 8.1% to NOK 47,137 million. Operating profit (EBIT adj.) showed a rise of 7.9% in 2020, totalling NOK 5,492 million. At year end, the Group had 18,110 employees and 105 factories in 22 countries.

In 2020, the Branded Consumer Goods business, including Headquarters, achieved growth in operating revenues of 9.1% and operating profit increased by 13.7%.

Earnings per share for the full year were NOK 4.37, an increase of 13.8%. Adjusted earnings per share rose 18.9% to NOK 5.04. Orkla’s Board of Directors intends to propose that the dividend for the 2020 financial year be increased by 15 øre to NOK 2.75 per share.

“I am pleased that we have succeeded in delivering both top and bottom-line growth in the fourth quarter, while also increasing our advertising spend. We saw substantial growth in the traditional grocery channel due to the fact that consumers are travelling less and spending more time in their own homes. The out-of-home sector, which accounts for around 25% of our turnover, has been heavily impacted by comprehensive COVID-19 restrictions,” says Orkla President and CEO Jaan Ivar Semlitsch.

“Since the pandemic broke out in March, our priorities have been to safeguard our employees, maintain production and delivery capacity and have a good cash flow. In light of persistent infection rates in society and outbreaks of new mutant versions of the coronavirus, we are still in full preparedness mode in response to the COVID-19 situation. We have entered 2021 with cautious optimism about the COVID-situation, due to the vaccination programmes that have been implemented in all our home markets,” he adds.

Orkla’s Branded Consumer Goods business, including Headquarters, achieved 5.7% growth in operating revenues in the fourth quarter. Organic turnover grew 1.3% in the quarter, and operating profit rose 7.4%.

All business areas reported sales growth in the fourth quarter. Orkla Care saw an improvement of 16.4%, partly due to good sales of cod liver oil, vitamins, dietary supplements, health foods and fitness equipment. Orkla Consumer Investments achieved 11.1% growth in sales, primarily due to higher demand for paint brushes and other painting equipment. Orkla Foods had a 4.3% improvement in sales in the quarter, with good growth in the grocery channel in the Nordics and India. Orkla Confectionery & Snacks increased operating revenues by 3.8%, while Orkla Food Ingredients had a 2.1% increase in operating revenues. The business areas’ sales figures were positively impacted by exchange rates for translation to Norwegian kroner.

Orkla Foods had a 4.3% improvement in sales in the quarter, with good growth in the grocery channel in the Nordics and India. Orkla Confectionery & Snacks increased operating revenues by 3.8%, while Orkla Food Ingredients had a 2.1% increase in operating revenues. The business areas’ sales figures were positively impacted by exchange rates for translation to Norwegian kroner.

Profit from associates and joint ventures rose in the fourth quarter by 53.1% to NOK 225 million. The improvement was primarily a result of very good profit growth for Jotun. Sales increased in all segments except Marine Coatings, where there was lower activity in the newbuilding and ship maintenance markets. There was significant growth in sales in the Decorative Paints segment in Southeast Asia and the Middle East. In Scandinavia and Turkey, too, there has been strong demand for paint due to increased home improvement activity.

Hydro Power had operating profit of NOK 25 million in the fourth quarter, compared with NOK 72 million in the same period of 2019. The decrease is due to substantially lower power prices.

The Group’s other income and expenses in the fourth quarter totalled a negative NOK 468 million, primarily due to recognition of substantial expenses and write-downs related to ongoing ERP projects. Orkla’s pre-tax profit amounted to NOK 1,290 million in the fourth quarter, compared with NOK 1,487 million year over year.

Several transactions were completed in the fourth quarter. NIC Enterprises Limited, which is part of Orkla Food Ingredients, completed an agreement to purchase 100% of the shares in Gortrush, a well-established supplier of ice cream ingredients and accessories to wholesalers in Ireland, Northern Ireland and the rest of the UK.

Orkla Care Polen divested the company’s skin care business in Poland to simplify its portfolio and concentrate its operations. Orkla Consumer Investments reduced its equity interest in the Danish pizza restaurant chain Gorm’s from 66.67% to 19.99%.

In January, Orkla Care purchased 100% of the shares in Proteinfabrikken through its subsidiary Health and Sports Nutrition Group. Besides its own products, Proteinfabrikken sells and distributes a range of other brands and products in the sports nutrition, foods and fitness equipment segments. In 2014, Orkla Care purchased a 16.7% minority shareholding in Proteinfabrikken.