Orkla ASA — Earnings Release 2021

Jul 15, 2021

Sales and profit growth for Orkla

Sales and profit growth for Orkla

Orkla's operating revenues increased by 6.1% to NOK 11,772 million in the second

quarter of 2021. Operating profit (EBIT adj.) rose 5.0% to NOK 1,265 million.

Orkla's profit before tax increased by 12% to NOK 1,344 million in the second

quarter. Earnings per share rose 9.5% to NOK 1.04 in the quarter. Adjusted

earnings per share rose 3.6% to NOK 1.14.Substantially higher power prices

contributed to a rise in Hydro Power's operating profit to NOK 112 million in

the second quarter, a year-over-year improvement of NOK 131 million. Jotun, in

which Orkla has an ownership interest of 42.6%, contributed to an increase in

profit from associates of 2.8% to NOK 255 million in the second quarter.

Branded Consumer Goods had organic growth of 6.9% in the quarter. Easing of

coronavirus restrictions and higher demand in the Out of Home sector contributed

to 20.5% organic growth for Orkla Food Ingredients, compared with a weak second

quarter of 2020. Orkla Consumer Investments had organic growth of 13.2%, driven

by increased sales for Orkla House Care and Kotipizza. Orkla Foods had organic

growth of 3.0% in the quarter and Orkla Care 2.5%, while Orkla Confectionery &

Snacks saw a decline of 1.2%.

Branded Consumer Goods, including Headquarters, saw a 5.4% reduction in

operating profit, ascribable to a higher level of activity and increased costs.

The decline was partly coronavirus-related, as the cost base was extraordinarily

low in the second quarter of 2020. Moreover, there was a slight change in

Orkla's product mix in the quarter.

"The coronavirus pandemic has continued to impact on Orkla in the past quarter.

We have seen high infection rates and lockdowns of society, especially in India,

but the situation has also been challenging in several other countries. I am

pleased that our top-line results were strengthened by volume-based organic

growth, and that parts of the Out of Home sector approached a normal situation.

However, I am not satisfied with our cost and profit performance, but we are

monitoring it closely and will consider taking necessary action," says Orkla

President and CEO Jaan Ivar Semlitsch, who is concerned about rising raw

material prices:

"Orkla is exposed to a broad range of raw materials. The coronavirus pandemic

has contributed to bottlenecks and disruptions in global value chains. This

situation, combined with increased demand, will result in higher raw material

prices going forward," Semlitsch points out.

Orkla has made a number of strategically important acquisitions in the second

quarter to strengthen its positions in selected categories and geographies.

In June, Orkla announced its entry into an agreement to purchase 75% of the

shares in New York Pizza, one of the Netherlands' leading pizza chains. The

transaction valued New York Pizza at EUR 145 million, equivalent to NOK 1.5

billion, at enterprise value. Together, New York Pizza and Kotipizza own 518

franchisee-operated sales outlets, 286 of which are in Finland, 229 in the

Netherlands, two in Germany and one in Belgium.

In the same month, Orkla Health announced that its acquisition of 100% of the

shares in NutraQ has been completed and approved by all relevant competition

authorities. NutraQ is a leading supplier of subscription-based health and

wellness products in the Nordic region. The purchase price valued the company at

NOK 3.1 billion at enterprise value.

In June, completion was also announced of the purchase of the Icelandic company

Nói Siríus, which is the leading manufacturer of chocolate and confectionery in

Iceland. In 2020, the company had a turnover of ISK 3.6 billion (approx. NOK 230

million). With this acquisition, Orkla Confectionery & Snacks is now represented

by its own companies in all the Nordic markets and the Baltics.

Furthermore, Orkla Food Ingredients has completed its purchase of the two

British companies Cake Décor and For All Baking, which manufacture and sell cake

decorations and accessories through online stores, bakeries and grocery chains.

Turnover for the two companies in 2020 totalled GBP 14.4 million (approx. NOK

168 million). On 13 July, Orkla Food Ingredients entered into an agreement to

purchase the Swiss company Hans Kaspar, a leading specialist in the manufacture

of ingredients for chocolate and ice cream producers. In 2020, the latter

company had a turnover of CHF 13.3 million (approx. NOK 125 million).

Orkla ASA

Oslo, 15 July 2021

Ref.:

Group Director Corporate Communications and Corporate Affairs

Håkon Mageli, mob.: +47 928 45 828

SVP Investor Relations

Kari Lindtvedt, mob.:+47 950 75 114

An Excel spreadsheet showing key figures may be found

at https://investors.orkla.com/.

This information is considered to be inside information pursuant to the EU

Market Abuse Regulation and is subject to the disclosure requirements pursuant

to Section 5-12 the Norwegian Securities Trading Act.

This stock exchange announcement was published by Kjetil Sørum, Investor

Relations Manager at Orkla ASA, on 15 July 2021 at 07:00 CEST.