Solid foundation for long-term value growth
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Finn Jebsen, President and Group Chief Executive |
In a troubled world, the Orkla Group’s performance was acceptable in 2002. Our Industry division achieved a return on capital employed of 12.7 %, which is marginally higher than in 2001. This is well above our cost of capital and means that we continued to create value for our shareholders. The Financial Investments division did considerably better than a very weak market. Nevertheless, the fact remains that we did not live up to our high internal targets for the year. Although most of the Group’s businesses performed well, a minority did not meet our expectations.
We regard this as a challenge and an inspiration for renewed efforts in 2003. It is only through a strong will to improve and systematic, continuous work that we can achieve lasting progress.
In last year’s annual report, I wrote: “In future our task will be to enhance our strengths”. In accordance with this policy, improvement activities at Orkla have made important progress in 2002. Efforts to improve quality and expertise in individual companies and in the Group as a whole have been systematised and significantly strengthened. We have implemented and disseminated effective methods of improving our procurement and manufacturing operations. We have made further progress in our efforts to make our advertising and marketing more effective. Standards for good product development have been set and circulated. At the same time, our internal management development programmes have been strengthened. On the basis of these human resource development activities, a number of practical improvement projects have been initiated in Orkla companies which are expected to bring results in 2003.
In the course of 2002, the Board of Directors of the Orkla Group has reviewed all business areas as part of the process of formulating the Group’s overarching strategy for the years ahead. A separate article in this annual report describes the results of this process. The strategic plan states that, over time, Orkla aims to achieve superior value creation for its shareholders by growing more quickly and operating more efficiently than its competitors. In the years ahead, the Group will continue to realise an international strategy for growth. It will be based on high quality, special products, such as strong branded products for consumers and niche products, and specialised concepts for our industrial customers. Our goal is to achieve high market shares in all the markets in which we operate. Our focus on efficient operations will ensure that growth is profitable and is based on a sound, strong corporate culture and highly qualified staff. We will continue our investment activities, but will primarily spend the profits on developing our industrial operations. This strategic plan is largely based on the structure and working methods that have proved successful for the Orkla Group over a long period of time. At the same time, our priorities have been clarified and adjustments have been made in many areas.
For the Orkla management, cooperation with the Board of Directors on the development of a strategic plan for the Orkla Group has been an inspiring process. This is the best starting point for our efforts to achieve practical results in accordance with the goals that have been set.
Finn Jebsen
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