Orkla ASA — Earnings Release 2021

Apr 29, 2021

Orkla reports strong profit growth

Orkla reports strong profit growth

Orkla's operating profit (EBIT adj.) increased by 13.5% to NOK 1,297 million in

the first quarter. Operating profit for Branded Consumer Goods, including

Headquarters, rose by 9.5%.

Group operating revenues amounted to NOK 11,503 million, on a par with the first

quarter of 2020. Organic growth for Branded Consumer Goods was 0.5%, compared

with a very good first quarter last year.

"The start of 2021 for Orkla's Branded Consumer Goods business has been very

positive. We achieved strong profit improvement and organic growth, despite

facing strong comparables as a result of consumer stockpiling of food and

cleaning products in the corresponding period of 2020. The first quarter was

also impacted by the COVID-19 pandemic. There was good market growth in the

grocery sector, but activity was still lower in the Out of Home sector. The

outlook in most of our home markets is now brighter. Now that vaccination is

underway, we can look forward to further easing of infection control

restrictions," says Orkla President and CEO Jaan Ivar Semlitsch.

"Acquisitions will continue to be an important part of Orkla's growth strategy,

and in the first quarter we made several purchases to strengthen Orkla's

position in selected categories, channels and geographies. I am particularly

pleased that the acquisition of the Indian company Eastern Condiments has now

been completed. Furthermore, by acquiring NutraQ we will take a new and

important step into a growing health and wellness market. The acquisition will

bring us a new sales channel and exciting growth opportunities," Mr Semlitsch

says.

Orkla Consumer Investments saw particularly good profit improvement in the first

quarter, largely related to strong top-line growth in the painting equipment

market. Orkla Confectionery & Snacks made progress, primarily due to high market

growth in the grocery sector. Orkla Food Ingredients also had positive profit

growth, driven by acquisitions and lower fixed costs. Profit growth for Orkla

Care was virtually flat. Orkla Foods experienced a decline in profit, mainly due

to the substantial consumer stockpiling that took place in March 2020.

Profit from associates increased by 55% to NOK 331 million, chiefly due to good

sales growth and cost control at Jotun. Sales increased in Decorative Paints,

especially in the Middle East, South East Asia and Scandinavia. Sales growth in

Powder Coatings and Protective Coatings was also encouraging. In Marine

Coatings, however, sales continued to decline as a result of lower activity in

the newbuilding and ship maintenance markets.

Hydro Power posted operating profit of NOK 86 million in the first quarter,

compared with NOK 39 million, year over year. The increase is due to

substantially higher power prices than in the same quarter of 2020 as a result

of normalisation of power transfer capacity and the resource situation.

The Group's other income and expenses amounted to NOK -143 million in the first

quarter. A total of NOK 72 million was expensed in the period in connection with

the ongoing ERP project.

Orkla's pre-tax profit increased by 24% to NOK 1,434 million. Earnings per share

increased by 25% to NOK 1.15. Adjusted earnings per share rose 21% to NOK 1.27.

In January, Orkla Care, through its wholly-owned Swedish subsidiary Health and

Sports Nutrition Group AB ("HSNG"), completed its purchase of 100% of the shares

in Proteinfabrikken AS. Besides its own products, Proteinfabrikken sells and

distributes a number of other sports nutrition, food and fitness equipment

brands, with most of the sales going to Norway.

Orkla Health entered into an agreement in February to purchase 100% of the

shares in NutraQ 2 AS ("NutraQ"), a leading supplier of subscription-based

health and beauty products in the Nordic region. The purchase price for NutraQ

is NOK 3.1 billion at enterprise value. This acquisition offers Orkla the

possibility of strengthening its position in a growing health and wellness

market and will bring Orkla Health new competence and a new sales channel, and

will expand its international scope of opportunity. The agreement is subject to

the approval of relevant competition authorities.

In March, Orkla completed the purchase of 67.82% of the shares in the Indian

company Eastern Condiments Private Limited ("Eastern"). The purchase price

valued Eastern at a total of approximately NOK 2.4 billion at enterprise value.

Eastern will be merged into MTR Foods, and Orkla will have an ownership stake of

90.01 per cent. With this acquisition, Orkla has become a significant employer

in India and now has more than 4,000 employees in the country. The new entity

will consist of nine factories in six states.

In March, Orkla also announced its acquisition of 80% of the shares in the

Finnish company Seagood Oy Fort Deli ("Fort Deli"). Fort Deli holds a strong

position in the Finnish HoReCa market and is an established supplier of frozen

products, sauces and condiments in Finland. This purchase strengthens Orkla's

position in one of its home markets and increases its exposure to the food

service and Out of Home market. In the same month, Orkla acquired the business

of the Polish sales and distribution company Ambasador92, a leading player in

the sale and distribution of bakery and confectionery products.

Orkla ASA

Oslo, 29 April 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 subject to the disclosure requirements pursuant to Section 5

-12 the Norwegian Securities Trading Act