The Orkla Brands business area, which consists of the former companies Orkla Foods and Orkla Brands, was consolidated in terms of management and organisation in the first quarter. While the new business area will continue to base its strategy and organisation on a multi-local model, it aspires to achieve inter-company synergies beyond those previously available.
First-quarter operating revenues for Orkla Brands totalled NOK 5,361million (NOK 5,285 million)1. Taking account of the acquisition and disposal of companies, growth was about 5 %. The fact that Easter was early this year had a negative effect in some markets and a positive effect in others, with the result that the net impact was limited. Orkla Brands reported growth in EBITA of NOK 24 million in the first quarter, of which NOK 20 million can be ascribed to a provision for costs related to the winding-up of Topp last year. The winding-up and sale of loss-making businesses, and the contribution to profit from new businesses, have also contributed positively.
Prices of finished products have been raised, but raw material prices are expected to continue to rise, coupled with a sharp increase in labour costs, and further price increases will be implemented. Prices on the Norwegian raw material market are also expected to rise due to the agricultural wage settlement this spring.
Several of the large Nordic businesses in Orkla Brands are showing good underlying2 growth. Work continues on implementing structural measures in businesses in the former Eastern Europe. The situation has still not been resolved, but results from the businesses are somewhat better than in 2007. Bakers still faces challenging markets. The businesses in Russia reported lower profit in the first quarter, and further price increases will be carried out to turn this trend around.
1 The figures in brackets refer to the corresponding period of the previous year.
2 Excluding acquisitions, divestments and currency translation effects