Orkla's operating profit (EBIT adj.) increased by 10% in the first quarter of 2017, to NOK 900 million. Turnover rose by 5%, to NOK 9,081 million.
The improvement was chiefly related to growth in Orkla's branded consumer goods business. Growth in turnover was driven by Orkla Confectionery & Snacks, Orkla Care and Orkla Foods. Orkla Food Ingredients saw an organic decline in the quarter, primarily due to a decline in the price of almonds and butter blends.
Orkla's branded consumer goods business increased its operating profit by 7%, to NOK 921 million. The branded consumer goods business reported 6% growth in turnover and organic growth of 1.6%.
"For the 12th consecutive quarter we can point to organic sales growth in a market where there is strong global competition. There is still growth in most of the markets in which Orkla operates, although the growth is slowing. I am pleased that this time we can report growth that is somewhat ahead of market growth," says Orkla President and CEO Peter A. Ruzicka.
So far this year, Orkla has taken a number of steps to strengthen the competitiveness of its branded consumer goods business. An investment of NOK 500 million is to be made in new technology and rationalisation of pizza production at Stranda, Norway. Orkla Food Ingredients has strengthened its positions in ice cream and bakery ingredients as a result of the acquisition of three sales and distribution companies, in Germany, the Netherlands and the UK.
Orkla's food, chocolate and snacks businesses in Finland have been merged into a single company under common management. Orkla has decided to exit the mayonnaise-based salad category in Norway, close down production of marzipan in Italy and move chocolate production in Latvia to new premises.
Profit from associates and joint ventures rose by 5%, to NOK 485 million. Sapa's profit rose by 49%, and Orkla's share amounted to NOK 312 million. The improvement at Sapa is mainly due to higher earnings from a larger share of value-add business and continuous internal improvements.
Hydro Power increased its operating profit by 23%, to NOK 54 million. The increase is mainly attributable to higher power prices, while production volume declined somewhat.
Orkla's profit before tax increased by 4%, to NOK 1,295 million.
Oslo, 9 May 2017
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An Excel spreadsheet with key figures may be found at www.orkla.com. This information is subject to the disclosure requirements pursuant to section 5-12 of the Norwegian Securities Trading Act.