Orkla’s Annual Report now published

Orkla’s Annual Report for 2021, which also includes its Sustainability Report, has been published today.

As stated in the Annual Report, operating revenues increased by 7.0% to NOK 50,441 million in 2021. Operating profit EBIT (adj.) rose 11.9% in 2021 to NOK 6,145 million.

In 2021, earnings per share (adjusted) amounted to NOK 5.17, an increase of 2.6%. Orkla’s Board of Directors will propose to the General Meeting that the dividend for the 2021 financial year be increased by 25 øre to NOK 3.00 per share. As at 31 December 2021, the Group had 21,423 employees and 114 factories in 22 countries.

Last year, Orkla acquired companies for a total of NOK 7,030 million. The largest acquisitions were the health and wellness company NutraQ, the Indian spice company Eastern Condiments (67.8% interest) and the Netherlands pizza chain New York Pizza (75% interest). In addition, New York Pizza purchased three German pizza chains in September and October.

In January 2022, Orkla Health completed an agreement to purchase 95% of the shares in Vesterålen Marine Olje. The company has been an important supplier of raw materials for Möller’s Tran cod liver oil and is a strategically significant acquisition for Orkla with regard to both health and sustainability.

In February 2022, Orkla Health purchased 100% of the shares in Healthspan Group Limited, a leading supplier of dietary supplements in the UK market. Healthspan was established in 1996 and has since built up a strong brand and a broad range of dietary supplements and skin care products. A total of 92% of the company’s sales are made direct to consumers. Healthspan Group Limited has around half a million active customers.

Russia’s invasion of Ukraina

Orkla has decided to cease its Russian operations, Hamé Foods ZAO, which produces long shelf life food products for the Russian market. The book value of the assets in the company totalled NOK 150 million as at 31 December 2021.

In addition, Orkla has stopped its imports and exports related to Russia and Belarus. Orkla’s aggregate operating revenues in Russia and Belarus amounted to approximately NOK 290 million in 2021. Imports totalled NOK 23 million.

Orkla has no factories in Ukraine, but has in the past made some purchases of tomato products and tomato paste from the region. Ukraine is one of the world’s four largest exporters of important agricultural products such as wheat, barley, maize and rapeseed. Ukraine is also the world’s largest producer and exporter of sunflower oil and, together with Russia, accounts for a total of 80% of global sunflower oil production.

Vegetable oils and grain-based products are among Orkla’s largest purchasing categories, according to the Annual Report.

“A prolonged conflict could affect both the availability and prices of a number of raw materials and other input factors. Furthermore, we are seeing a sharp rise in energy prices from an already high level, and expect the conflict to create greater uncertainty and imbalance in the global flow of goods. All these elements are expected to affect Orkla in 2022, but the extent of their impact and the consequences are still unclear,” states the Report of the Board of Directors.

“It is hard to witness the tragic situation currently unfolding in Ukraine. The war has cost the lives of many people and caused inconceivable suffering. This affects us all deeply, and our companies in neighbouring areas quickly took the initiative to distribute food and personal hygiene products to the victims of the war, both at the border and inside Ukraine. We have also contributed NOK 5 million to the Red Cross, in addition to donations to other aid organisations,” says Orkla President and CEO Jaan Ivar Semlitsch.

“The Group has three main priorities in this situation,” he adds. “As a supplier of critical importance to society, we are intent on maintaining a good level of service in our home markets. The increases in costs are such that we have to compensate for them by raising prices. At the same time, it is important for us to achieve our long-term targets in priority growth areas such as plant-based products, consumer health and Out of Home, in addition to growing organically with our existing portfolio.

Sustainability Report

“We at Orkla are committed to creating sustainable growth, and we have come a long way towards making sustainability work an important, integral part of our business plans. Since we produce food products and other consumer goods, UN Sustainable Development Goal 12 – responsible consumption and production – forms the very core of our sustainability efforts,” Jaan Ivar Semlitsch emphasises.

Orkla has cut greenhouse gas emissions from its own operations by 65% from 2014 to 2021 (relative to turnover). Measured in absolute figures, the change was 56%. The proportion of energy from renewable sources is now 47%. Orkla is therefore well on its way to reaching its target of reducing greenhouse gas emissions from its own operations by 65% by 2025 and by 80% by 2040.

Orkla’s targets have been validated by the Science Based Targets Initiative and entail a reduction in greenhouse gas emissions in line with the 1.5 degree target limit set in the Paris Agreement.

“Reducing greenhouse gas emissions is one of our foremost environmental responsibilities. There is strong engagement in Orkla in this respect,” Mr Semlitsch affirms.

Orkla’s Annual Report is published in an electronic version. The Annual Report is attached as a pdf file, and may also be found on Orkla’s newly launched webpages: www.orkla.com/annualreport or www.orkla.no/arsrapport