Orkla's operating profit (EBITA) amounted to NOK 860 million in the third quarter of 2014, a year-over-year improvement of 5%.
Third-quarter operating profit for Orkla's branded consumer goods business totalled NOK 903 million, up from NOK 868 million in the same period of 2013. Four out of five business areas achieved growth in operating profit. Orkla Confectionery & Snacks and Orkla Food Ingredients delivered particularly strong improvement.
In the third quarter, 96% of turnover derived from the branded consumer goods business. Organic growth in the quarter was 0.4%, and operating revenues totalled NOK 7,200 million. Orkla Confectionery & Snacks, Orkla Food Ingredients and Orkla Home & Personal contributed to the positive sales performance, while Orkla Foods and Orkla International saw a decline.
"For the second quarter in a row, our branded consumer goods operations have achieved turnover growth, despite tough competition in our home markets. In the time to come, however, we will have to focus even more forcefully on innovation and brand-building. At the same time, we must facilitate closer, broader collaboration with the Nordic grocery chains," says Orkla President and CEO Peter A. Ruzicka.
Orkla entered into an agreement in the quarter to purchase NP Foods Group in Latvia. In addition to the nationally very strong chocolate brand Laima, NP Foods holds attractive market positions in the biscuits, cakes, juice, water and ready meals segments. NP Foods Group has an annual turnover of EUR 77 million and 1,100 employees. Completion of the purchase is contingent on the approval of the Baltic competition authorities.
The aluminium company Gränges was listed on NASDAQ Stockholm on 10 October. The IPO valued Gränges at SEK 4.1 billion on a debt-free basis. In connection with the stock exchange listing, Orkla is selling between 60% and 69% of the shares in the company.
Hydro Power posted operating profit of NOK 46 million in the third quarter, up from NOK 42 million in the corresponding period of 2013.
Profit from joint ventures and associates (primarily Sapa and Jotun) amounted to NOK 126 million in the third quarter, compared with NOK 76 million in the same quarter of 2013. Sapa, which is a joint venture with Norsk Hydro, achieved broad-based profit improvement. Demand for extruded aluminium products in North America rose by 7%, driven by growth in the automotive and building and construction industries. In Europe, demand increased by 1%. Strongth growth in the automotive industry was offset to some extent by the continued weak building market in southern Europe. Jotun, in which Orkla has an ownership interest of 42.5%, achieved satisfactory operating profit and higher turnover in all its market segments.
Orkla's profit before tax amounted to NOK 871 million in the third quarter, compared with NOK 631 million in the same period of 2013.
Oslo, 30 October 2014
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An Excel spreadsheet with key figures is available at