Orkla Brands reported first-half operating revenues of NOK 10,843 million (NOK 11,061 million)2. Second-quarter operating revenues totalled NOK 5,440 million (NOK 5,663 million)2. Underlying3 sales grew by 0.3% in the first half-year and -0.8% in the second quarter of 2010 (adjusted for the timing of Easter).
Overall, Orkla Brands saw flat volume growth in the first half-year. Growth is still weakest for the out-of-home channels and exports. Performance in the second quarter was somewhat weaker, particularly for Orkla Brands International.
First-half EBITA1 came to NOK 1,281 million (NOK 1,160 million)2. Underlying3 profit growth was around 13%. However, the growth in profit must be seen in conjunction with last year’s weak start. Orkla Brands Nordic achieved the greatest improvement in profit. Growth was primarily driven by innovations and cost improvements, as well as by currency effects related to purchasing. The cost improvement programmes aimed at reducing purchasing, production and indirect costs are progressing as planned and, seen overall, are on a par with last year.
International price trends for the main raw materials remained variable. On the whole, prices were at the same level as last year.
Second-quarter EBITA1 totalled NOK 657 million (NOK 638 million)2. Underlying3 growth was 6%, but profit was negatively impacted by the timing of Easter. The biggest launches in the quarter were Familiens Juice (juice, Stabburet), Bergene Nøtt (chocolate, Nidar), Fredagsmiks (snacks, KiMs) and the Stor Mia Pai (pie, Stabburet). Stabburet also launched a keyhole-labelled (indicating healthy food) pizza (Grandiosa Biff & Løk) in the quarter. The second-quarter launch programme was somewhat weaker than last year.
Orkla Foods Nordic
Orkla Foods Nordic posted first-half operating revenues of NOK 4,452 million (NOK 4,719 million)2. Second-quarter operating revenues were NOK 2,262 million (NOK 2,436 million)2. There was an underlying3 decline of 4% in the first half-year and 6% in the second quarter. First-half EBITA1 amounted to NOK 472 million (NOK 450 million)2, while second-quarter EBITA was NOK 278 million (NOK 279 million)2. Underlying3 profit had risen 6% at 30 June, while second-quarter profit was on a par with last year.
Procordia and Abba continued their positive performance. A good programme of innovations strengthened their market shares and improved profit. Stabburet also strengthened its market shares, but sales and profit were slightly lower than last year. As expected, Bakers saw weak volume growth, but this was counteracted by cost reductions and profit was slightly higher than last year. The businesses in Denmark and Finland reported profit growth, while the results achieved by the Baltic businesses were somewhat weaker than last year. Overall, Orkla Foods Nordic has improved its market shares.
Orkla Brands Nordic
Orkla Brands Nordic reported first-half operating revenues of NOK 3,781 million (NOK 3,747 million)2. Second-quarter operating revenues came to NOK 1,832 million (NOK 1,877 million)2. Underlying3 growth at 30 June was 3%, while growth in the second quarter was flat. First-half EBITA1 amounted to NOK 715 million (NOK 622 million), while second-quarter EBITA1 was NOK 330 million (NOK 295 million)2. Underlying3 profit had improved by 17% at 30 June, while profit grew 14% in the second quarter. The timing of Easter had a negative effect on both sales and profit figures for the second quarter compared with last year’s results.
Lilleborg, Lilleborg Profesjonell, Göteborgs/Sætre and Axellus in particular achieved profit growth in the first half-year. In several of the businesses, the improvement was ascribable to successful innovations. However, some of the profit growth must be seen in conjunction with the slow start in the first two months of last year, partly due to a weak Norwegian and Swedish krone.
Orkla Brands International
Orkla Brands International posted first-half operating revenues of NOK 840 million (NOK 890 million)2. Second-quarter operating revenues totalled NOK 428 million (NOK 460 million)2. Underlying3 growth in sales was 1% at 30 June, while there was negative growth of -3% in the second quarter. First-half EBITA1 amounted to NOK -15 million (NOK 1 million)2, and second-quarter EBITA1 came to NOK -15 million (NOK 4 million)2. The underlying3 decline in the first half-year and the second quarter totalled around NOK 10 million.
Results for the first half-year were affected by the economic decline in Russia and Austria. The Russian chocolate market saw weak growth with intensified campaign activity in an effort to maintain volumes. Higher raw material prices, primarily for cocoa beans, put further pressure on margins for SladCo and Krupskaya. MTR Foods achieved good sales growth in the first half-year, driven by volume growth in the spices, ready mixes and pasta product segments.
Peterhof was acquired with accounting effect from 1 May 2010. The company is well positioned in the chocolate spread market, and is also a producer of biscuits and instant porridge.
Orkla Food Ingredients
Orkla Food Ingredients reported first-half operating revenues of NOK 1,896 million (NOK 1,870 million)2, and achieved underlying3 growth of 2%. First-half EBITA1 amounted to NOK 109 million (NOK 87 million)2. Underlying3 profit rose by 25%. Second-quarter operating revenues totalled NOK 980 million (NOK 972 million)2, representing an underlying3 decline of -0.5%. Second-quarter EBITA1 amounted to NOK 64 million (NOK 60 million)2, an underlying3 increase in profit of 7%.
Sales growth in the second quarter was somewhat lower than in the first quarter due to more challenging markets, particularly in Central and Eastern Europe as a result of the financial crisis, and to the timing of Easter. The relatively good profit growth in the first half-year was broad-based and driven by the successful implementation of price strategies and volume growth.
The acquisition of Sonneveld has been completed, and will be included in the Group’s results as from the third quarter.
1 Operating profit before amortisation and other income and expenses.
2 Figures in parentheses are for the corresponding period in the previous year.
3 Excluding acquired and sold operations and currency translation effects.