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Profit growth for the Orkla group

Orkla’s operating revenues increased in the third quarter by 12% to EUR 1.44 bn (NOK 14.8 billion). Its operating profit EBIT rose by 30% to EUR 217,278 (NOK 2,223 million). All the business areas saw sales improvement, the company announced. Orkla Food Ingredients and Orkla India had organic growth of 21% and 20%, respectively. Orkla Confectionery & Snacks had organic growth of 8%.

The Branded Consumer Goods business including Headquarters saw a decline of 11% in operating profit EBIT (adj.) in the third quarter. The costs of raw materials, packaging, freight and energy were significantly higher, year over year. Moreover, there was high-cost inflation in a number of other areas and a certain decline in volume.

Orkla has carried out several transactions in the third quarter. Orkla Food Ingredients agreed to purchase 84% of the shares in the US company Denali Ingredients, an ice cream ingredients business. Orkla Consumer & Financial Investments has agreed to purchase 74% of the shares in Da Grasso, one of Poland’s leading franchise pizza chains with 193 outlets. Da Grasso is owned by Karolina Rozwandowicz (95%) and Magdalena Piróg (5%). Both will remain shareholders in the company in partnership with Orkla. Once the transaction goes through, Orkla will have an ownership interest of 74%, while the two minority shareholders will have the remaining shares.

Orkla Latvija has sold its convenience business in Latvia and Lithuania, which mainly consists of the sale of fresh sandwiches through convenience stores and petrol stations.

“Orkla has implemented necessary price increases to compensate for the higher costs of our input factors. We have a lag effect concerning our purchasing costs. On the whole, we have entered into long-term contracts and purchased little on-the-spot market. We now see that inflation is impacting broadly on the entire value chain, and costs will continue to increase in 2023. Unfortunately, we will have to make additional price increases, while also taking further action to reduce our cost base. We will continue to invest in brand-building and innovations so that we can always offer our customers and consumers a relevant, attractive range of products,” said Orkla President and CEO, Nils K. Selte.

Photo: Orkla Foods Norway’s factory on Stranda at Sunnmøre, the largest pizza factory in Northern Europe, was visited by the Minister of Agriculture and Food Sandra Borch, on September 12. Credit: Orkla Food Norway, social media