Orkla ASA — Earnings Release 2022

Oct 27, 2022

Profit growth for the Orkla group

Profit growth for the Orkla group

Orkla's operating revenues increased in the third quarter by 12% to NOK 14.8

billion. Operating profit EBIT (adj.) rose 30% to NOK 2,223 million. Group

profit before tax amounted to NOK 2,245 million, an improvement of 29%. Hydro

Power and Jotun both had strong top-line and profit growth.

Adjusted earnings per share for the third quarter were NOK 1.58, an increase of

15% from the same period in 2021.

Operating profit EBIT (adj.) for Hydro Power amounted to NOK 773 million in the

third quarter of 2022, compared with NOK 89 million year over year. The increase

is due to substantially higher power prices than in the same quarter of 2021.

Profit from associates totalled NOK 238 million in the third quarter, compared

with NOK 164 million year over year. Jotun had strong top-line growth as a

result of higher sales volume and increased prices. All the segments, Decorative

Paints, Protective Coatings, Powder Coatings and Marine Coatings, achieved a

double-digit sales growth percentage  in the quarter. Jotun's operating profit

EBITA increased by 75%.

Orkla's Branded Consumer Goods business posted an organic increase of 9% in

third-quarter operating revenues. There was a certain decline in volume, partly

as a result of normalised sales levels in the wake of the pandemic and

extraordinary sales volumes in the Norwegian grocery market ahead of the price

increases that took place from 1 July.

All the business areas saw sales improvement. Orkla Food Ingredients and Orkla

India had organic growth of 21% and 20%, respectively. Orkla Confectionery &

Snacks increased had organic growth of 8%. Both Orkla Foods Europe and Orkla

Care had organic growth of 4%. Orkla Consumer Investments reported growth of 1%.

The Branded Consumer Goods business including Headquarters saw a decline of 11%

in operating profit EBIT (adj.) in the third quarter. The costs of raw

materials, packaging, freight and energy were significantly higher, year over

year. Moreover, there was high cost inflation in a number of other areas and a

certain decline in volume.

"Orkla has implemented necessary price increases to compensate for the higher

costs of our input factors. We have a lag effect with respect to our purchasing

costs. On the whole, we have entered into long-term contracts and purchase

little on the spot market. We now see that inflation is impacting broadly on the

entire value chain, and costs will continue to increase in 2023. Unfortunately,

we will have to make additional price increases, while also taking further

action to reduce our cost base. We will continue to invest in brand-building and

innovations, so that we can always offer our customers and consumers a relevant,

attractive range of products," says Orkla President and CEO Nils K. Selte.

Orkla has carried out several important transactions in the third quarter. Orkla

Food Ingredients entered into an agreement to purchase 84% of the shares in the

US company Denali Ingredients, a leading ice cream ingredients business in the

USA. The seller is Denali Companies LLC, owned and operated by the founding

family of Wally and June Blume. As part of the transaction, the seller and

Denali Ingredients CEO Neal Glaeser will invest in Denali Ingredients and become

co-owners in the company with a combined stake of ~16%. Mr Glaeser will continue

to head the business. This acquisition strengthens Orkla's position as a leading

supplier of ingredients to the ice cream and chocolate industry, and increases

its exposure to higher-growth markets and categories. At the same time, a

process has been initiated to seek a long-term partner for Orkla Food

Ingredients.

Orkla Consumer & Financial Investments has entered into an agreement to purchase

74% of the shares in Da Grasso, one of Poland's leading franchise pizza chains

with 193 outlets. Da Grasso is owned by Karolina Rozwandowicz (95%) and

Magdalena Piróg (5%). Both will remain shareholders in the company in

partnership with Orkla. After completion of the transaction, Orkla will have an

ownership interest of 74%, while the two minority shareholders will have the

remaining shares.

Orkla Latvija has sold its convenience business in Latvia and Lithuania, which

mainly consists of the sale of fresh sandwiches through convenience stores and

petrol stations.

Orkla ASA

Oslo, 27 October 2022

Ref.:

EVP Corporate Communications and Corporate Affairs

Håkon Mageli, mob.: +47 928 45 828

SVP Investor Relations

Kari Lindtvedt, mob.: +47 950 75 114

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 27 October 2022 at 07:00 CEST.