Good growth for Orkla

Operating profit before goodwill amortisation in the fourth quarter of 2004 was NOK 919 million, 25 per cent higher than in the fourth quarter of 2003. In 2004 Orkla's operating profit before goodwill amortisation totalled NOK 2.7 billion, up 13 per cent from 2003. The Branded Consumer Goods business achieved good growth and the restructuring of non-core business in the Chemicals area is proceeding according to plan.

The net asset value of the investment portfolio increased by NOK 3.1 billion during the year. The return on the portfolio was equivalent to 21.6 per cent in 2004.
 
After the sale of Orkla's interest in Carlsberg Breweries, which generated NOK 17.5 billion, Orkla has been working to invest the proceeds in new, strategically interesting positions. In addition to a number of minor acquisitions in the course of the year, Orkla acquired the Russian confectionery and biscuit company SladCo towards the end of 2004.
 
Since the beginning of 2005, the Group has been involved in processes that entail making offers for the remaining shares in Elkem and the Åland-based company Chips Abp. Even if Orkla acquires all remaining shares in these companies (including the minority interest in Sapa), Orkla will still have sufficient capacity to pursue interesting industrial opportunities within its strategic areas of focus.
 
"Orkla is a dynamic company, and we will actively follow up further business opportunities", says Acting Group President and CEO Dag J. Opedal.
 
Operating revenues totalled NOK 32.1 billion in 2004, up about six per cent. Operating profit before goodwill amortisation in the fourth quarter was NOK 919 million, 25 per cent higher than in the fourth quarter of 2003.
 
Group earnings per share therefore amounted to NOK 71.6 at year-end. Excluding the gain on the sale of Orkla's stake in Carlsberg Breweries, earnings per share increased by 18 per cent to NOK 10.9. Adjusted for goodwill amortisation and other revenues and expenses, earnings per share were NOK 15.4, compared with NOK 16.2 in 2003.
 
The Board of Directors proposes an ordinary dividend of NOK 4.50 per share, with an additional dividend of  NOK 5.00 per share.
 
 
BRANDED CONSUMER GOODS
  • Orkla Foods reported operating profit before goodwill amortisation of NOK 1.2 billion in 2004, up 14 per cent from 2003. The improvement programmes are proceeding as planned. Profit growth was ascribable to systematic work on brand-building and focus on operational efficiency. For the year as a whole, operating revenues increased to NOK 12.7 billion, an underlying[1] result on a par with the previous year.
  • Orkla Brands increased its operating profit before goodwill amortisation from NOK 929 million to NOK 953 million. Growth was broad-based, with six out of seven business areas reporting higher operating profit before goodwill than in 2003. Full-year operating revenues for Orkla Brands totalled NOK 4.8 billion, an underlying decline of one per cent.
  • Orkla Media's operating profit before goodwill amortisation was NOK 386 million, up from NOK 242 million the previous year. The main reasons for the improvement were the growth of advertising markets in Denmark and Norway and profit growth for Berlingske. Newspapers Norway made good progress. Orkla Media's operating revenues for 2004 amounted to NOK 8.2 billion.
 
CHEMICALS
Borregaard's operating profit before goodwill amortisation was NOK 356 million in 2004, compared with NOK 344 million in 2003. The core business achieved profit growth and an extensive restructuring programme has been initiated for non-core business. Operating revenues amounted to NOK 6.2 billion in 2004, equivalent to one per cent underlying growth compared with the previous year.
 
FINANCIAL INVESTMENTS
Full-year profit before tax for the Financial Investments division totalled NOK 1.5 billion. While the Oslo Stock Exchange Benchmark Index rose 38.4 per cent and the dividend-adjusted FTSE World Index was up 12.4 per cent, the return on Orkla's investment portfolio was 21.6 per cent. In 2004, net purchases of shares totalled NOK 496 million. In the course of the year, the net asset value of the investment portfolio increased by NOK 3.1 billion to NOK 16.7 billion.
 
FINANCIAL SITUATION
Cash flow from operating activities amounted to NOK 3.4 billion for the year, an improvement of NOK 619 billion compared with 2003. The book equity-to-total-assets ratio increased to 63 per cent.


[1] Excluding acquisitions and divestments and currency translation effects