Orkla (ORK) Q1 2025 earnings summary

Executive summary

• Operating revenues increased by up to 2.3% year-over-year, driven by price increases and solid performance across portfolio companies.

• Organic growth was 1.2% in consolidated portfolio companies, with underlying adjusted EBIT growth of 7.6% and margin improvement of up to 0.6 percentage points year-over-year.

• Adjusted EPS rose 19% to NOK 1.68, and profit before tax increased 28% to NOK 2.2 billion.

• Cash flow from operations improved by NOK 0.4 billion to NOK 1.6 billion, supported by EBIT growth and better working capital management.

• Portfolio simplification continued with divestments of Pierre Robert Group and Hydropower, and targeted investments in capacity and technology.

Financial highlights

• Operating revenues reached NOK 17,176 million in Q1 2025, up from NOK 16,797 million in Q1 2024.

• Adjusted EBIT for consolidated portfolio companies grew by up to 10% to NOK 1,831 million, with margins reaching up to 12.0%.

• Profit from associates (mainly Jotun) was NOK 651 million, up 57% year-over-year.

• Net interest-bearing debt/EBITDA stood at 1.6x at quarter-end, with net interest-bearing debt at NOK 15.7 billion.

• Cash conversion ratios remained strong, with cash flow before capital allocation at NOK 0.7 billion.

Outlook and guidance

• Portfolio company targets for 2023–2026 include 8–10% CAGR in underlying adjusted EBIT and EBIT margin targets of 10.1–11% by 2026.

• Jotun expects continued positive sales and solid earnings in 2025, though with a lower operating margin.

• Cocoa prices are expected to remain high and volatile but should normalize over time; volumes secured for most of 2025.

• Indirect impacts from tariffs, FX, and consumer sentiment remain uncertain.

• Macroeconomic conditions are improving, but food inflation in the EU and Norway raises uncertainty about demand.