Weaker global economic growth and higher raw material prices created challenging operating conditions for Sapa and Orkla Brands in 2011, but Borregaard’s chemicals business saw strong markets. Overall, the Orkla Group achieved operational improvement in 2011.
During 2011, the Board of Directors has focused on redefining the Group’s strategic priorities and direction. The Board decided to concentrate future growth on branded consumer goods in segments in which Orkla holds strong commercial positions and has demonstrated its sustained ability to create long-term value.
The Board also decided to divest the Group’s share portfolio, and the process of selling off portfolio assets began in 2011. A decision was also made to seek structural solutions for Borregaard’s chemicals business. Preparations have begun, with a view to implementing a structured process in the course of 2012. In the Board’s view, Sapa can realise substantial value potential by optimising operations and profitability. Well-defined plans have been drawn up to improve profitability over the next two-three years. The Board wishes to realise this potential before considering structural alternatives for Sapa.
In 2011 the REC share price fell from NOK 17.79 to NOK 3.32. This entailed a total accounting charge of NOK -5.8 billion in 2011, and had a negative effect on result per share of NOK -5.6.
In line with its strategy, the Group has freed up capital totalling NOK 18.0 billion, through the sale of Elkem’s silicon operations and financial assets.
The Group strengthened its financial position and flexibility during the year, in the light of which the Board voted to recommend, at an extraordinary general meeting on 3 November, payment of an extraordinary dividend of NOK 5.00 per share.
The Board of Directors proposes to pay an ordinary dividend of NOK 2.50 per share for the 2011 financial year.
The annual financial statements have been prepared and presented in accordance with the International Financial Report Standards (IFRS). The Board of Directors confirms that the going-concern assumption applies.
*Figures as reported in 2007-2010. For the industrial activities.