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Orkla Targets Margin, Sales Growth as Consumer Shift Accelerates

Orkla ASA (ORK) is targeting improved revenue growth and increased margins as the Norwegian industrial group accelerates its transformation into a branded consumer goods company.

From 2016, Orkla plans to boost organic revenue growth at its foods unit to 2 percent to 3 percent compared with a year to date decline of about 1.1 percent, it said in a presentation released today. It’s also aiming to increase the adjusted margin on earnings before interest and tax at the unit to more than 15 percent. That compares with 13.9 percent in the 12 months to the end of the second quarter, it said.

Orkla, which has interests ranging from frozen pizza and snacks through to underwear and paints, has sold assets as it focuses on becoming a consumer goods producer. It has spun off its Borregaard ASA biochemicals operation and is combining its Sapa aluminum-products unit with Norsk Hydro ASA’s. (NHY) It’s also bought Rieber & Soen ASA, which sells ready-made foods, sauces and soups, and toothbrush-maker Jordan AS.

To contact the reporter on this story: Stephen Treloar in Oslo at streloar1@bloomberg.net

To contact the editor responsible for this story: Alastair Reed at areed12@bloomberg.net

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