Orkla ASA — Earnings Release 2018

Feb 6, 2019

Challenging quarter for Orkla

Challenging quarter for Orkla

Orkla achieved operating profit (EBIT adj.) of NOK 1,408 million in the fourth

quarter of 2018, a decline of 2.4%

Fourth-quarter operating revenues rose 1.2% to NOK 10,983 million. The largest

business area, Orkla Foods, posted organic sales growth, but this was offset by

a decline in the other business areas.

Destocking by wholesalers in Poland contributed to weaker results for Orkla

Care. The Norwegian sugar tax was reduced as of 1 January 2019, resulting in

short-term destocking by the Norwegian grocery chains and lower fourth-quarter

profit for Orkla Confectionery & Snacks.

"Towards the end of the year, some companies faced major challenges, but a

majority of the companies achieved growth in revenues and profit. Ongoing cost

reduction programmes are on track. The reversal of the sugar tax in Norway gave

a positive start to the new year," says Orkla President and CEO Peter A.

Ruzicka.

Through the acquisition of the Finnish restaurant chain Kotipizza, Orkla has

attained a leading position in the Finnish pizza market. As of 5 February 2019,

Orkla now owns 99.29% of all shares and votes in the Finnish company.

Orkla Foods Danmark entered into an agreement in the fourth quarter to purchase

Easyfood, a Danish manufacturer of bake-off bakery goods. Orkla Foods Danmark

also purchased the Pama brand, the Danish market leader in the porridge rice

segment.

In the fourth quarter, Orkla Food Ingredients completed its acquisition of the

British chocolate and caramel manufacturer, County Confectionery Ltd, which

primarily serves industrial customers.

Hydro Power reported a 28% increase in EBIT (adj.), which amounted to NOK 132

million.  The rise is due to higher power prices than in 2017.

Profit from associates totalled NOK -43 million, compared with NOK -78 million

in the fourth quarter of 2017. Jotun saw improvement in the fourth quarter,

driven by higher sales in Decorative Paints and Protective Coatings. Sales in

Marine Coatings are still affected by the cyclical downturn in the shipping

industry.

The Group's other income and expenses totalled NOK -296 million in the fourth

quarter, largely as a result of supply chain restructuring and acquisitions. In

Norway, there were workforce reductions in connection with the phasing out of

Orkla's merchandising function, while an improvement programme has been

initiated in the UK painting tool company, Harris. Comparative figures in 2017

were particularly low due to the gain on the sale of the Danish company K-Salat.

Orkla's profit before tax amounted to NOK 1,017 million in the fourth quarter,

down 22%.

Earnings per share from continuing operations amounted to NOK 3.24, compared

with NOK 3.46 in 2017.

For the full year, Orkla's operating revenues increased by 3% to NOK 40,837

million. Operating profit (EBIT adj.) rose by 3% in 2018, to NOK 4,777 million.

At year end, the Group had 18,510 employees.

Orkla's Board of Directors intends to propose payment of a dividend of NOK 2,60

for the 2018 financial year.

Orkla ASA

Oslo, 6 February 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

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.