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A-Brands

Orkla Eyes Annual Organic Growth Of At Least 2.5%

By Dayeeta Das
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Orkla Eyes Annual Organic Growth Of At Least 2.5%

Norwegian conglomerate Orkla aims to achieve annual organic growth of at least 2.5% in the 2022–2024 period and a 4% to 6% underlying annual increase in adjusted EBIT.

The company added that active portfolio management – including acquisitions, disposals, and partnerships – will play an essential role in Orkla's value creation over the next few years.

Orkla also aims to be the leading sustainability player in its home markets and has announced clear, quantifiable targets.

By 2025, it will reduce greenhouse gas emissions from its operations by 65% (Scope 1 & 2) and by 30% in the value chain outside its operations (Scope 3).

Orkla's targets have been validated by the Science-Based Targets Initiative and are aligned with the Paris and Glasgow climate accords.

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In addition, all packaging used by Orkla will be 100% recyclable in 2025.

'A More Dynamic Approach'

Orkla President and CEO, Jaan Ivar Semlitsch, said, "We will adopt a more dynamic approach to our portfolio, without reducing our focus on our more mature markets and categories.

"We will expand in markets and categories that we know well, where we have a strong presence or closely related positions. We will also be open to selling down our interest in or listing some businesses if we find it expedient to do so."

Orkla's portfolio comprises more than 300 local brands that are available in more than 20 countries.

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The company generates 80% of its turnover from its branded consumer goods business.

Over the next few years, Orkla plans to increase its investments in brand-building and advertising based on local consumer insights.

Furthermore, it intends to develop international positions for selected brands such as Möller's and Jordan.

Orkla's activities will primarily focus on three geographical areas – the Nordics/Baltics, Central and Eastern Europe, and South Asia.

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Growth Areas

The company added that it would prioritise three growth areas – plant-based, out-of-home and consumer health.

It hopes to increase the sales of plant-based products to NOK 3 billion (€300 million) by 2025, from NOK 846 million in 2020.

In the consumer health segment, it aims to grow sales by 50% by 2025, equivalent to a turnover of NOK 7 billion (€700 million).

In all three areas, growth will be driven through a combination of organic growth and acquisitions.

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Orkla sells the majority of its branded consumer products through the grocery sector.

Over the next three years, higher growth is expected in other channels, and the group aims to double its revenue from digital sales to 15%.

Orkla reported a 10.3% increase in operating revenues, to NOK 13.14 billion (€1.35 billion), in the third quarter of its financial year.

© 2021 European Supermarket Magazine. Article by Dayeeta Das. For more A-Brands news, click here. Click subscribe to sign up to ESM: European Supermarket Magazine.
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