Good income growth for Orkla

Orkla’s operating revenues increased by 11.1% in the fourth quarter to NOK 14,027 million. The Group’s profit before tax amounted to NOK 1,841 million, an improvement of 42.7%. Operating profit EBIT (adj.) rose by 18.9%, to NOK 1,871 million.

Operating revenues for the full year increased by 7.0 % to NOK 50,441 million. In 2021, operating profit EBIT (adj.) showed growth of 11.9% and amounted to NOK 6,145 million. This is the highest operating profit EBIT (adj.) ever for Orkla.

In 2021, earnings per share (adjusted) were NOK 5.17, an increase of 2.6%. Orkla’s Board of Directors intends to propose that the dividend for the 2021 financial year to be increased by 25 øre to NOK 3.00 per share. At year end, the Group had 21,423 employees and 114 factories in 22 countries.

“Orkla’s branded consumer goods business had good income growth in 2021. We made several strategically important acquisitions and strengthened our positions in priority growth areas such as plant-based products, consumer health and Out of Home. Orkla has established a platform for generating sustainable, profitable growth with a good cash flow that will also make it possible to pay out solid dividends to our shareholders in the years ahead,” says Orkla President and CEO Jaan Ivar Semlitsch.

Orkla’s branded consumer goods business achieved 8.4% growth in operating revenues in the fourth quarter. Organic turnover growth was 5.5%.

Orkla Food Ingredients posted the biggest improvement with organic turnover growth of 16.1%. This business area had somewhat limited activity in the Out of Home channel in the fourth quarter of 2020 due to the pandemic. Orkla Confectionery & Snacks and Orkla Foods had organic growth of 5.5% and 4.1%, respectively, in the fourth quarter of 2021. Orkla Consumer Investments and Orkla Care, on the other hand, experienced an organic decline of 5.7% and 1.2%, respectively. Both these business areas had comparables in the fourth quarter of 2020 that were positively affected by the pandemic.

Profit from associates and joint ventures totalled NOK 105 million in the fourth quarter, compared with NOK 225 million in the same quarter of 2020. The decline is due to lower contributions to profit from Jotun. There was positive sales growth in all Jotun’s market segments, but the extraordinary rise in raw material prices had a negative impact on profitability.

Hydro Power reported operating profit EBIT (adj.) of NOK 415 million in the fourth quarter, compared with NOK 25 million year over year. The increase is due to substantially higher power prices than in the same quarter of 2020. Long periods of low temperatures and high consumption contributed to the high power prices.

The Group’s other income and expenses totalled NOK -88 million in the fourth quarter, compared with NOK -468 million in the same period of 2020 which included recognition of substantial expenses and a write-down related to ERP projects.

Orkla’s profit before tax rose by 42.7% to NOK 1,841 million in the fourth quarter. Adjusted earnings per share were NOK 1.40 for the quarter, a year-over-year decline of 2.1%.

In 2021, Orkla acquired companies for NOK 7,030 million. The largest acquisitions are the health and wellness company NutraQ, the Indian spice company Eastern Condiments (67.8% interest) and the Netherlands pizza chain New York Pizza (75% interest).

In addition, New York Pizza purchased the German pizza chains Stückwerk, Flying Pizza and Pizza Planet in September and October. Orkla now has 663 franchised pizza outlets, 296 of which are Finland, 255 in the Netherlands and Belgium, and 112 in Germany.

In January 2022, Orkla Health completed an agreement to purchase 95% of the shares in Vesterålen Marine Olje. The company has been an important supplier of raw materials for Möller’s Tran and is an acquisition of strategic importance for Orkla in terms of both the health segment and sustainability.