Orkla’s operating profit (EBIT adj.) rose by 12% to NOK 1,143 million in the first quarter of 2020. Operating revenues increased by 13% to NOK 11,507 million.
Branded Consumer Goods including Headquarters improved operating profit by 18%. Reported turnover growth for Branded Consumer Goods was 14.7%, of which 5.4% was organic growth.
“Towards the end of this year’s first quarter, Orkla and the society entered highly unusual times which seem set to continue. The authorities have imposed stringent restrictions in all our markets with a view to curbing the spread of the coronavirus. As a supplier of food, cleaning and hygiene products, Orkla has a responsibility to society for ensuring that our products are available during this period. It is therefore gratifying to see that we have succeeded in maintaining close to normal supply chain operations, while safeguarding the health and safety of our employees as our main priority,” says Orkla President and CEO Jaan Ivar Semlitsch.
The coronavirus crisis has consequences for Orkla’s entire supply chain and all its business areas. In the last three weeks of March, Orkla Foods and Orkla Care saw a substantial increase in demand for food, cleaning and personal care products. Much of the increase is due to consumer stockpiling and changes in consumption patterns. The Orkla Food Ingredients and Orkla Consumer Investments business areas experienced reduced demand.
“The turnover of companies that have been negatively impacted by the coronavirus pandemic accounts for around one quarter of Branded Consumer Goods’ turnover. The coronavirus crisis now unfolding is creating extraordinary uncertainty in extraordinary times,” says Jaan Ivar Semlitsch.
Hydro Power had operating profit of NOK 39 million in the first quarter, compared with NOK 73 million year over year. The reduction was due to a substantial power surplus in the Norwegian market and significantly lower power prices.
Profit from associates increased by 29% to NOK 213 million in the first quarter. Jotun’s operating profit rose by 36%. There was good growth in sales of Marine Coatings, driven by high activity in the ship maintenance market. Growth in sales of Decorative Paints, Protective Coatings and Powder Coatings was moderate.
The Group’s other income and expenses totalled NOK -165 million in the first quarter. The largest items were costs related to the reorganisation of HQ, restructuring costs at Orkla Foods and Orkla Consumer Investments, and the write-down of IT systems.
Orkla carried out a number of acquisitions and disposals in the first quarter. Through its wholly-owned subsidiary Idun Industri AS, Orkla Food Ingredients signed and completed an agreement to purchase 70% of the shares in Win Equipment, a leading supplier of soft serve ice cream machines in the Netherlands. Orkla Foods Norge sold the SaritaS brand to the newly established company Indian Gourmet AS.
In April, Orkla Wound Care signed and completed an agreement to purchase 100% of the shares in Norgesplaster. The company holds good positions in the wound care and first aid equipment markets, and with the acquisition of Norgesplaster, Orkla Wound Care has strengthened its presence in the pharmacy channel and the market for first aid products.
Orkla’s profit before tax increased by 16% to NOK 1,152 million in the first quarter. Adjusted earnings per share rose by 24%, coming in at NOK 1.05 in the quarter.
Oslo, 5 May 2020
Group Director Corporate Communications and Corporate Affairs
Mob.: +47 928 45 828
SVP Investor Relations
Mob.: +47 482 59 618
An Excel spreadsheet with key figures may be found at www.orkla.com.
A pre-recorded presentation of the first quarter results is available from the following link: https://events.webcast.no/orkla-asa/presentations/hNtloygYxEKeC8Qd7t2C.
A live Q&A session with President & CEO Jaan Ivar Semlitsch and CFO Harald Ullevoldsæter will be held today at 8.00 a.m. CET. This session may be viewed in a live webcast at: https://events.webcast.no/orkla-asa/presentations/zgtnwohiNaT9HnQpjPHh) or followed by telephone. Dial-in details: +44 (0) 20 3003 2666 (password: Orkla Q1). Questions can be asked in writing in the webcast or by phone.
This information is subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act