Orkla ASA — Earnings Release 2022

Feb 14, 2023

Weaker profit for Orkla

Weaker profit for Orkla

Orkla's operating revenues rose by 15% to NOK 16,077 million in the fourth

quarter. Operating profit EBIT (adj.) increased by 2% to NOK 1,903 million, due

to marked improvement for Hydro Power, but profit was weaker for the Branded

Consumer Goods business. The group's profit before tax amounted to NOK 1,702

million, which was a decline of 8%.

Orkla's Branded Consumer Goods business achieved 13% growth in fourth-quarter

operating revenues. Organic turnover grew by 10%. Growth was driven by price

increases to compensate for steep increases in energy, raw material, packaging

and freight costs. All business areas had organic growth in the quarter.

Branded Consumer Goods, including Headquarters, saw a 14% decline in operating

profit EBIT (adj.).  Part of the decline was due to accruals and non-recurring

costs. Orkla Food Ingredients and Orkla India achieved improved profit, while

the other business areas had a profit decline due to increased costs and lower

volumes.

Jotun, in which Orkla owns a 42.6% interest, increased operating revenues by 19%

to NOK 6,916 million. Operating profit EBITA rose by 66% to NOK 606 million. The

improvement in sales was particularly strong in Marine Coatings, and all Jotun's

segments contributed positively. Orkla's profit from associates and joint

ventures rose by 40% to NOK 147 million in the fourth quarter. The increase can

be ascribed entirely to Jotun.

Hydro Power increased operating profit EBIT (adj.) by 52% to NOK 631 million in

the fourth quarter. The increase is due to higher power prices than in the same

quarter of 2021. Power prices varied substantially in the quarter, and declined

slightly in relation to the third quarter of 2022.

The group's other income and expenses totalled minus NOK 201 million in the

fourth quarter, compared with minus NOK 88 million, year over year. The majority

of the costs can be linked to projects related to the acquisition and disposal

of businesses, in addition to structural projects within the group.

For the full year, Orkla's operating revenues increased by 16% to NOK 58,391

million. Operating profit EBIT (adj.) showed growth of 21%, and amounted to NOK

7,411 million. Earnings per share (adj.) were NOK 5.46, equivalent to an

increase of 6%. Orkla's Board of Directors intends to propose a dividend of NOK

3,00 per share for the 2022 financial year.

"In 2022 Orkla faced a challenging market situation characterised by substantial

increases in input costs, extensive value chain disruptions and uncertainty

regarding the global food situation. In the fourth quarter, we experienced

increased costs throughout the value chain. Higher inflation and rising interest

rates reduced consumer buying power in most of our markets, which in turn put

pressure on our sales volumes.

­Nevertheless, we have largely succeeded in maintaining our market shares and

good delivery levels. Going forward, Orkla will increase its investments in

brand-building, while also reinforcing our cost improvement initiatives," says

Orkla President and CEO Nils K. Selte, adding:

"As previously announced, Orkla is to become a leading industrial investment

company. The scope will be brands and consumer-oriented companies. Our new

business model will take formal effect as of 1 March 2023. A comprehensive

strategic process has commenced to ensure that the potential inherent in each

portfolio company is fully leveraged, with focus on leading brands, greater

independence and strong entrepreneurship."

In 2022, Orkla acquired companies for NOK 3,099 million, while disposals of

companies amounted to NOK 132 million. The largest purchases were the US ice

cream ingredient company Denali Ingredients (84%), the UK dietary supplement

company Healthspan Group (100%), the Polish pizza chain Da Grasso (74%) and the

Norwegian raw material supplier Vesterålen Marine Olje (95%).

At year-end, the group had 20,471 employees and 119 factories in 22 countries.

Orkla will hold its Capital Market Day on 29 November 2023.

Orkla ASA

Oslo, 14 February 2023

Ref.:

EVP Communication and Corporate Affairs

Håkon Mageli, mob.: +47 928 45 828

SVP Investor Relations

Kari Lindtvedt, mob.: +47 950 75 114

An Excel spreadsheet with key figures is available

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 14 February 2023 at 07:00 CET.