Norwegian food conglomerate Orkla has posted a 15.2% increase in operating profits in its branded consumer goods business in the third quarter of its financial year, lifting the group's overall profit performance by 8.8%.
Turnover in the branded consumer goods arm was up 10.6%, the group said, with the business citing increased at-home consumption as a key driver of its performance.
Operating profits were up 16% in its Orkla Care division, while Orkla Confectionery & Snacks saw profits up 13%, Orkla Foods was up 11% and Orkla Food Ingredients rose by 4%.
Grocery Brands
"Compared with the third quarter of 2019, consumers travelled less and spent more time at home, which contributed to good growth for our brands in the grocery channel," commented Orkla President and CEO Jaan Ivar Semlitsch.
"Four out of five business areas showed organic growth. The big change from the second quarter of 2020 was that Orkla Food Ingredients and the rest of our Out of Home segment saw a noticeably smaller decline in sales, due to the easing of coronavirus restrictions."
Eastern Condiments
During the quarter, the business announced the acquisition of two thirds of the shares of India-based brand Eastern Condiments, which will "help to double Orkla’s turnover in India," Semlitsch said.
The acquisition is set to be approved by Indian Competition Authorities in the fourth quarter, the group added.
Elsewhere, Orkla's profit from associates increased by 89% in the third quarter, mainly due to good growth at its Jotun paints business.
Looking ahead, Semlitsch added, “Our priorities during the ongoing crisis are to safeguard the health of our employees, prevent the spread of infection and secure deliveries. We are also executing on our strategy of strengthening our footprint in key home markets."
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
