Turnover growth and good profit improvement at Orkla
Orkla’s operating profit (EBIT adj.) rose by 9%, to NOK 1,102 million in the fourth quarter of 2015. Profit before tax increased by 87%, to NOK 946 million.
Fourth-quarter operating profit for Orkla’s branded consumer goods business totalled NOK 1,195 million, an improvement of 17%. Orkla Foods and Orkla Confectionery & Snacks made particularly strong contributions to profit growth. The improvement was ascribable to positive contributions from acquisitions, new product launches and the effects of internal improvement projects. In the fourth quarter, the branded consumer goods business achieved operating revenues of NOK 9,314 million and organic turnover growth of 4.1%.
“For the seventh consecutive quarter, we have succeeded in achieving organic turnover growth in highly competitive markets. All of the business areas reported growth. I am also pleased with a currency-adjusted profit improvement for the branded consumer goods business that exceeds our long-term target of 6–9%. In addition, we made several important acquisitions in 2015 that will strengthen our operations going forward,” says Orkla President and CEO Peter A. Ruzicka.
Orkla’s purchase of Cederroth was approved by the competition authorities in August, on condition that the Asan and Allévo brands were sold. In December, agreements were entered into on the sale of both brands. Through the acquisition of Cederroth, Orkla has become one of the Nordic region’s leading suppliers of personal care, health, wound care and household cleaning products.
In December, Orkla concluded an agreement to purchase the Hamé food company, which has a number of strong brands in the Czech Republic, Slovakia and Romania. The acquisition of Hamé has doubled Orkla’s turnover in Central Europe. The agreement is contingent upon the approval of relevant competition authorities.
Profit from associates and joint ventures (mainly Sapa and Jotun) amounted to NOK 89 million in the fourth quarter, compared with NOK -252 million in the same quarter of 2014. Orkla’s share of profit from Sapa totalled NOK 17 million in the quarter. Jotun achieved turnover growth in all its market segments, but reported profit was affected by non-recurring accounting-related expenses.
Lower power prices had a negative impact on Hydro Power’s results, and fourth-quarter operating profit amounted to NOK 49 million, compared with NOK 73 million in the corresponding period of 2014.
Diluted earnings per share rose in the fourth quarter, from NOK -0.06 to NOK 0.73.
For the full year 2015, Orkla’s operating revenues increased by 12%, to NOK 33,198 million. Operating profit (EBIT adj.) rose by 12% in 2015, to NOK 3,609 million. At year end, the Group had 14,670 employees. The Board of Directors of Orkla ASA proposes to pay a dividend of NOK 2.50 per share for the 2015 financial year.