Orkla ASA — Earnings Release 2019

Jul 12, 2019

Orkla ASA: Improvement for Orkla's branded consumer goods business

Orkla ASA: Improvement for Orkla's branded consumer goods business

In the second quarter of 2019, Orkla's branded consumer goods business achieved

operating profit (EBIT adj.) of NOK 1,124 million, an improvement of  7%.

Operating revenues rose 4% to NOK 10,051 million. Organic growth was 1.1%.

Three out of four business areas reported good growth in operating profit: Orkla

Foods 13%, Orkla Confectionery & Snacks 12% and Orkla Food Ingredients 11%.

Orkla Care saw a decline of 8%.

"Overall, we are satisfied with our second quarter performance. It is

particularly gratifying to see the progress made by Orkla Foods and Orkla

Confectionery & Snacks, which delivered broad-based growth at both top-line and

bottom-line level. A shift towards more profitable sales gave Orkla Food

Ingredients good growth in operating profit. These improvements were offset by

Orkla Care's profit performance. Improvement initiatives in this business area

will be a priority going forward," says Acting President and CEO Terje Andersen,

who is also pleased that Jotun, in which Orkla has a 42.6% equity interest,

continues to achieve strong profit growth.

During the quarter, Orkla Food Ingredients strengthened its position through the

acquisition of a majority shareholding in the Greek company Stelios Kanakis, the

UK caramel manufacturer Confection by Design, and the Swedish sales and

distribution company Bo Risberg Import.

Orkla Foods Danmark completed its purchase of Easyfood, a Danish manufacturer of

bake-off bakery goods. In addition, Orkla Foods Danmark sold the Glyngøre brand

to Amanda Seafoods. The purpose of the sale was to reduce portfolio complexity

and concentrate operations in priority growth areas.

Hydro Power's operating profit amounted to NOK 69 million, compared with NOK 97

million in the second quarter of 2018. The decline in profit is chiefly due to

lower production volume.

Orkla Financial Investments achieved operating profit of NOK 10 million,

compared with NOK 14 million year over year. Kotipizza Group reported good sales

growth and profit improvement. Orkla has entered into an agreement with the City

of Oslo on the sale of the property at Treschowsgate 16. The sale is conditional

on the approval of the Oslo City Council, and is expected to be completed in the

second half of 2019.

Profit from associates increased by 72% to NOK 181 million. Jotun's operating

profit rose 45% in the first half. Last year's price increases combined with

stable raw material prices had a positive effect. There was good growth in

Protective and Marine Coatings. Following a period of difficult market

conditions in the shipping and offshore industry, sales have started to pick up

in these markets.

Orkla's overall operating revenues rose 5% to NOK 10,542 million in the second

quarter. Operating profit (EBIT adj.) reached NOK 1,109 million, on a par with

the second quarter of 2018.

Orkla's profit before tax increased by 8% to NOK 1,178 million in the second

quarter of 2019. Year to date, earnings per share (adjusted) have increased by

12% to NOK 1.78.

Orkla ASA

Oslo, 12 July 2019

Ref.:

Group Director Corporate Communications and Corporate Affairs

Håkon Mageli

Mob.: +47 928 45 828

SVP Investor Relations

Thomas Ljungqvist

Mobil +47 482 59 618

This information is subject to the disclosure requirements pursuant to section

5 -12 of the Norwegian Securities Trading Act.