Orkla’s goal is to achieve long-term value creation that is greater than for relevant, competitive investment alternatives. For shareholders, this is expressed in terms of the long-term performance of the Orkla share and the dividend paid out.
There is a long-term connection between the return on the Orkla share and the underlying value created through efficient operations. Orkla gradually improves its underlying operations, which in turn results in higher cash flow and thereby long-term value creation for shareholders. For Orkla and for investors with a long investment horizon, it will therefore be important to measure value creation in terms of the performance of the Group’s underlying operations. This is discussed in further detail in the section entitled “Underlying value creation”.
Over time, Orkla shareholders have received a good return on their shares. In the period from 1 January 1996 to 31 December 2005, the average annual return was 19.0 %, while the average return on the Oslo Stock Exchange was 12.6 %. In 2005, the price of the Orkla share, excluding dividends, increased by
40.5 %. Including dividends, the return for Orkla shareholders was 46.3 %, while the Oslo Stock Exchange Benchmark Index increased by 40.5 % in the same period.
At the end of 2005, the Orkla share was listed at NOK 279.50. The market value was therefore NOK 57.6 billion, which is NOK 16.6 billion higher than on 31 December 2004.
Over time, Orkla’s shareholders must receive a competitive return on their shares through a combination of the dividend that is paid out and the increase in the share price. As long as Orkla’s underlying growth is satisfactory, shareholders will experience a steady, stable increase in the dividend that is paid out at the same time as the dividend level is increased. For Orkla, the interests of existing shareholders are of paramount importance. In the past three years, Orkla has paid out an ordinary dividend that has averaged 31 % of earnings per share. This dividend is supplemented by buybacks of Orkla shares at times when the price of the Orkla share is considered to be favourable. On average, in the past five years Orkla has bought back 0.6 % of outstanding shares each year. The average buyback price has been at the low end of the share price interval in the year concerned.
The Board of Directors proposes a dividend of NOK 7.50 per share for 2005. The dividend will be paid out on 11 May 2006 to registered shareholders on the date of the Annual General Meeting.
Orkla is committed to creating superior, long-term value for shareholders, employees and the communities in which the Group operates. Orkla’s aim is to operate more efficiently and grow more quickly than its competitors.
