• Underlying EBIT Growth: 17% increase in portfolio companies.
• Cash Flow from Operations: Improved by NOK1.9 billion compared to 2023.
• Organic Growth: 3.3% in Q4.
• Adjusted Earnings Per Share: Improved by 16% compared to the same quarter last year.
• Operating Revenues: Grew by 6% to NOK18.8 billion in Q4.
• Group EBIT: Grew by 25% to NOK2 billion.
• Rolling 12 Months EBIT Adjust Margin: 10.1% in Q4, an increase of 1.1 percentage points.
• Total Cash Flow from Operations (Full Year): NOK7.9 billion, an increase of NOK1.9 billion.
• Cash Conversion: Reached 114% at an aggregated level in 2024.
• Net Interest Bearing Debt: NOK16 billion, equal to 1.5 times EBITA.
• Dividend Proposal: Increase to NOK4 per share plus an additional NOK6 per share.
• Jotun Operating Revenue Growth: 15% increase in Q4.
• Orkla Foods Organic Growth: 1.1% in Q4.
• Orkla Snacks Organic Growth: 6.2% in Q4.
• Orkla Health Organic Growth: 6.2% in Q4.
• Orkla India Organic Growth: 3.6% in Q4.
• Orkla Home and Personal Care Organic Growth: 10% in Q4.

• Warning! GuruFocus has detected 4 Warning Sign with FRA:KP5.
• High Yield Dividend Stocks in Gurus' Portfolio
• This Powerful Chart Made Peter Lynch 29% A Year For 13 Years
• How to calculate the intrinsic value of a stock?

Release Date: February 13, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Orkla ASA (ORKLF) reported a 17% underlying EBIT growth in its portfolio companies, indicating substantial improvements in profitability.
• The company improved cash flow from operations by NOK1.9 billion compared to 2023, driven by EBIT growth and better capital discipline.
• Orkla ASA (ORKLF) plans to increase the ordinary dividend for 2024 and propose an additional dividend of NOK6 per share due to solid performance and asset sales.
• The sale of Orkla's entire hydropower portfolio for NOK6.1 billion is expected to reduce complexity and align with the company's strategy.
• Orkla ASA (ORKLF) achieved organic growth of 3.3% in Q4, driven by volume, mix growth, and price increases, with a 13.4% growth in underlying EBIT for consolidated portfolio companies.

Negative Points

• The Pierre Robert Group has shown weak performance over several years, leading to its sale and strategic repositioning.
• Market prices for cocoa rose steeply during the quarter, impacting Orkla Snacks negatively due to limited short-term ability to pass on cost increases.
• Orkla Health faced pressure on contribution margins due to increased raw material prices, particularly for cod liver oil.
• Orkla India experienced flat organic growth in Q4, with challenges in domestic market sentiment and timing of financial incentives.
• The European Pizza Company saw a decrease in EBIT due to a write-down of receivables for a limited group of franchisees.

Q & A Highlights

Q: Are there any updates on Orkla's position in India, considering rumors of a potential sale? A: Nils Selte, President and CEO, stated that Orkla does not comment on market rumors. The company is exploring opportunities to access the Indian capital markets, which remains unchanged.

Q: Can you provide an update on the structural measures for the remaining assets in the "transform or exit" category? A: Nils Selte mentioned that Orkla does not comment on M&A processes before they are finalized. He expressed satisfaction with the current performance of most companies and will provide updates when available.

Q: With the upcoming Capital Markets Day, is there an expectation for a margin upgrade? A: Nils Selte clarified that the main purpose of the Capital Markets Day is to provide insights into how Orkla creates value in its portfolio companies, rather than announcing a margin upgrade.

Q: How should we expect cost development in the Orkla Health segment for 2025? A: Arve Regland, CFO, indicated that the increased costs in Q4 were largely one-off related. While there will be continued investment in the organization, cost levels are expected to normalize moving forward.

Q: What is the current status of Orkla's market share development, particularly against private labels? A: Nils Selte reported positive to flat market share development across Orkla's portfolio companies. The growth of private labels has stabilized following the inflation period.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.