Orkla ASA reported strong fourth-quarter and full-year 2025 results, driven by organic growth and improved profitability despite challenges in certain markets, particularly regarding cocoa prices. The Norwegian consumer goods company posted a profit before tax of 2.1 billion NOK in the fourth quarter, a 24% increase compared to the same period last year, according to a press release and earnings call highlights.
Organic Growth and Profitability
Orkla’s operating revenues reached 18.8 billion NOK in the quarter, up 2.1% year-over-year. The company’s consolidated portfolio companies delivered an organic growth of 4.5% in the fourth quarter, marking the strongest growth since the fourth quarter of 2023. Underlying EBIT (adjusted) grew by 17% during the quarter, influenced by timing effects and one-off items. Adjusted earnings per share improved by 25% year-over-year.
Reported EBITDA reached 2 billion NOK, a 12% increase, while profit from associates amounted to 505 million NOK, a 36% increase, largely due to Orkla’s 42.7% ownership in Jotun. Full-year operating revenues totaled 71.5 billion NOK, a 3.3% increase compared to 2024, with EBIT (adjusted) reaching 7.5 billion NOK, representing a 7.8% increase.
Segment Performance
Organic growth varied across Orkla’s segments. Orkla Snacks saw a 7% increase, primarily driven by price increases in the chocolate segment. Orkla Food Ingredients experienced robust growth of 8.3%, while Orkla Health grew by 5.2%. Orkla India also performed strongly, with organic growth of 8.1%. The European Pizza Company reported 8.1% organic growth, with consumer sales growth of 9.7%.
However, Orkla Foods experienced more modest growth of 0.4%, split equally between price and volume. Notably, while chocolate prices increased, the overall volume of chocolate sold decreased, suggesting consumers are responding to higher prices.
Cocoa Prices and Consumer Impact
The company acknowledged significant increases in raw material costs, particularly for cocoa, impacting the profitability of its confectionery business, Nidar. Despite these increased costs, Orkla managed to deliver better-than-expected results, partially through price increases in the chocolate segment.
While Orkla increased prices, the company clarified that it does not directly set retail prices. those are determined by grocery chains. Orkla President and CEO Nils K. Selte, in an interview, stated that the company is not passing the cost directly onto consumers, but the price increases are ultimately reflected in what consumers pay.
Competition from Private Label Brands
Orkla has previously advocated for legislation to prevent the imitation of branded products by private label brands, arguing that artificially low prices from these brands threaten the position of established brands on store shelves. Selte indicated that private label brands do not currently pose a significant threat, as they face similar production costs. He emphasized the importance of continued product development and marketing to maintain consumer preference for Orkla’s brands.
When asked directly about the potential for an increase in private label brands in 2026, given rising cocoa prices, Selte stated that private label brands are not significantly present in the market and that consumer taste preferences are a key factor. He added that producing private label brands costs the same as producing branded products.
Geographic Performance and Future Outlook
While overall results were positive, Norway experienced weaker development compared to other regions, attributed to fewer promotional campaigns. Tsjekkia and Sweden were key drivers of organic growth during the period.
Looking ahead, Selte emphasized the need for stronger volume growth and cost efficiencies in 2026. He expressed satisfaction with the overall performance, noting the improved operating profit and volume growth across many parts of the portfolio. Jotun continued to deliver solid performance, while Orkla Snacks achieved volume growth and improved profitability despite challenging market conditions.
Financial Details
Cash flow from operations in 2025 was 7.8 billion NOK, a decrease of 0.3 billion NOK from the previous year. Net debt stood at 14.2 billion NOK, equivalent to 1.4 times EBITDA. Orkla is proposing an ordinary dividend of 7,000 NOK per share, totaling approximately 1 billion NOK.
The EBITA adjusted margin for the consolidated portfolio was 10.6%, and the return on capital employed improved to 12.4%. Cash flow before capital allocation was 6.9 billion NOK, on par with 2024.
