Good morning, everyone, and welcome to the presentation of Orkla's Q3 results. It's early in the morning, and I guess that not all of you have had time to have breakfast, so I'm happy to offer you this breakfast bar from Nutrilett. It's a great product. High on fiber, high on protein, low on sugar. Please try it. Actually, this is also a very good example of what we talked about, cross-country initiatives. This is launched in Norway and Finland, and it will be launched in Sweden and Denmark in the beginning of next year. This is also a good example of closer customer cooperation. This is launched exclusively in consumer cooperative in Norway, but of course, it will be available for the rest of the market next year. Overall, I'm quite satisfied with the results in Q3.
As we communicated at Capital Markets Day, we will have focus on operations, focus on growing top line and margin improvement, meaning taking out cost, especially in the supply chain. This is the sixth quarter in a row with increased organic growth. Growth of approximately 2.3%. Also our EBIT growth is according to the targets we communicated in London some weeks ago of 6%-9% increase. EBIT adjusted for the group increased by 13%. Branded Consumer Goods increased EBIT adjusted by 15%, despite a weak Norwegian currency, which is really challenging for us. We had some substantial negative transaction effects due to currency. We also, of course, had positive translation effects. Jens will come back to the details later in his presentation. I'm also very happy to see that the largest associated companies, Jotun and Sapa, also delivered very nice profit development.
Actually, Jotun, they had record high both top and bottom line results in the first eight months of the year. Also Sapa had significant underlying improvement in the EBIT, more than doubling from Q3 last year. During the quarter, the Cederroth acquisition was approved by competition authorities and the integration has started. We will, of course, report on that in the coming quarters. In the Baltics, the integration of NP Foods is at full speed, and in the Baltics, we have also reorganized our operations, moved some parts into Orkla Confectionery & Snacks, some food parts from Orkla Confectionery & Snacks into the Orkla Foods business, to have more clean and focused business areas in the Baltics. This is, of course, to improve our competitiveness in the market. As mentioned, we report now for the sixth time organic growth of 2.3%.
What is also nice to see is this is not only price, it's also volume and mix improvement, which you'll also see now for the last quarters. However, as you can see from the right side, there is a mixed picture. Orkla Foods had very nice improvement of 4.2%, but I have to remind you that we are comparing with a relatively weak quarter last year. Actually, the opposite is the case for Orkla Confectionery & Snacks. We are comparing with a very strong quarter last year, but despite that, Orkla Confectionery & Snacks adds volume on top of that. In Orkla Home & Personal, we see a mixed picture. It is especially Home Care, Lilleborg, and Pierre Robert Group that has seen some decline in the quarter.
That is due to very tough situation with the currency because both Lilleborg and Pierre Robert, they have a lot of traded goods, imported traded goods. We also saw a very strong piping effect in Q2 that we also announced in July. Orkla Food Ingredients, as usual, they are in line with their targets and they report 4% organic growth in the quarter. When it comes to market share development, we also see a mixed picture. Overall, in the food retail chain, we still see a slight decline in market shares. However, we see a better trend than we have seen the last years and the last quarters. It is a slow improvement. However, we see a growth in other channels, and especially Orkla Food Ingredients gain market shares in their market.
Overall, we believe market share is quite stable, but in the food retail channel, slightly decline. That is not satisfactory, but more positive. Now let's look at some of the exciting new products that we have launched this autumn. Pizza, as you know, is an important category for Orkla, especially Orkla Foods Norway. We have approximately 70% market share in the frozen pizza segment in Norwegian food retail. This quarter, we launched an Italian-inspired pizza from Orkla Foods Norway. This is a high quality Tipo 00 flour that gives a better base with more crust. This is also a very good example of closer cooperation with our customers. This is developed and launched together with a large Norwegian customer, and it's launched exclusively in their stores for a limited period.
You will find it in the stores, and I hope you have time to taste it. It's a great product. Another example is from Orkla Confectionery & Snacks. We have launched also hand-cooked OLW Naturchips, all-natural potatoes that is launched. It's produced in Latvia in one factory and it's launched in Sweden, Denmark, Finland and Latvia. This is a good example how we share best practice and we share production facilities to reduce cost in supply chain and also to increase speed to market. Some of you might think, "Why didn't you launch this in Norway?" First of all, we already have a similar product in Norway, but the most important thing is that Norway is not member of EU. Unfortunately, we have an import duty of 26 NOK per kilo of potatoes, that will not be competitive.
Here in Scandinavia, the winter is coming closer, and we can feel it's getting colder outside. Pierre Robert, they continue to build on their unmatched market position in food retail stores in the Nordics. They have extended their product range with super soft Merino wool, with some new products, hats, gloves and also wool collection T-shirts that really is nice for this time of the year and the winter. This is launched in Norway and Sweden. The graph on the left side shows the rolling 12-month adjusted EBIT margin. Compared with the full year 2014, the EBIT margin improved by 0.2 percentage points to 12% at the end of Q3. Overall, I am pleased with this performance, which is achieved despite negative currency effects and dilutive effects from acquisitions.
We mentioned that, I think, also in Capital Markets Day in London, that acquisition of NP Foods and Cederroth will have a substantial dilution effect on our margins. Orkla Confectionery & Snacks see a quite strong dilutive effect in the Baltics and altogether, and also Home & Personal with Cederroth. In Q3, only one month of Cederroth is in the figures. It is only September, so we will get the full effect in Q4 from the dilution of Cederroth. However, our aim is, of course, to raise the margin to the old levels we had before those acquisitions. This is also a reminder why we decided to move away from margin targets to have EBIT growth targets. In the quarter, we also had substantial negative impact from the weak Norwegian currency. Another aspect of weaker Norwegian currency is positive currency translation effects.
Adjusted for the positive currency translation effects, EBIT growth in Branded Consumer Goods was about 9%. That is in line with the announced targets in London some weeks ago. In general, we see three currency effects. We have one positive translation effect, but we see increased input prices in raw material. However, I believe in the long run that weakened Norwegian currency will strengthen our relative competitiveness in the market. Since we have local production, we are not exposed 100% to the currency. In some areas we are, like Pierre Robert, but in general, roughly 50%. Our international competitors, they have 100% exposure to the weak Norwegian currency. We also continue to optimize our factory footprint and the whole supply chain.
Since 2014, we have announced closure of 14 factories, and this quarter we announced closure of two small factories, one in Home & Personal and one in Orkla Food Ingredients. We have to date six factories being announced closing. Overall, I think we deliver quite solid EBIT growth, also adjusted for the currency translation effects. We see a continued positive organic growth, even though I am still not happy. I think we should be somewhat higher because it is slightly below the growth rates in our largest markets. We see successful innovations launched, large innovations launched across markets, across countries that really contribute to the growth and to the margin. We also see in the quarter strong contribution from associated companies, from Jotun and Sapa.
I also have to mention that a big part of the improvement in both Jotun and Sapa is related to currency, but also the underlying business is improving both in volume and especially in cost. Going forward, we will of course work hard to improve profitability in a difficult market. Organic growth is important to improve margin and improve top line. Of course, also cost initiatives to take out cost in the supply chain and at the same time work as one Orkla and utilize the strength and the knowledge within the whole of Orkla. Jens will give you some more detail about the financials.
Thank you, Petter. I will now take you through the details around the financial performance in the third quarter. Let's start with the group P&L. We see a broadly positive development in income this quarter. Orkla had operating revenues of NOK 8.4 billion in the third quarter, an increase of 15%. As Peter mentioned, we saw continued positive organic growth in the Branded Consumer Goods area in the quarter, and we also benefited from positive currency translation effects to NOK and contributions from acquisitions. Adjusted EBIT almost touched NOK 1 billion, and that's up 13% from last year. The growth was related to improved results for the Branded Consumer Goods, both from underlying improvements as well as structural growth and currency translation effects. I'll come back to more details on the development in the Branded Consumer Goods area later on. Oh, sorry for that.
Other income and expenses amounted to a negative NOK 96 million. This was mainly related to acquisitions and integration costs and write-downs. Profits from associates totaled NOK 239 million, mainly driven by strong performance in Jotun. The group's net financial costs increased in the quarter, and that's mainly due to negative effect on interest rate swaps, which hedging account is not applied. The underlying funding cost is, however, reduced. This resulted in a profit before tax of NOK 1.1 billion in the quarter, and that's up from NOK 907 million the same period last year. Earnings per share increased by 57% to NOK 0.80 in the third quarter. Now let's look at the breakdown of the EBIT. Here you can see the adjusted EBIT bridge from Q3 2014 to Q3 2015.
To keep it simple, I will from now on in my presentation use the term EBIT when referring to adjusted EBIT. As I mentioned, the group's EBIT was 13% or NOK 114 million in the quarter. Branded Consumer Goods experienced a growth of 15% or NOK 135 million. The positive development was supported by growth in all segments and especially in Orkla Foods and Orkla Food Ingredients. Approximately one third of the growth in EBIT was driven by currency translation effects. EBIT in Orkla Investments, which comprise the hydropower and real estate operations, decreased by NOK 5 million, and that's mainly related to 15-year low electricity prices. Orkla HQ costs increased partly due to periodical effects as well as incentive programs linked to the group's positive development. Let's look closer at the Branded Consumer Goods area. In Q3 2015, Branded Consumer Goods had an increase of 15% in revenues year-on-year.
This increase was driven by positive currency translation effect from weaker NOK and contribution from acquisitions. The organic growth was, as Petter mentioned, 2.3% in the quarter. All business areas except Orkla Home & Personal contributed to this positive organic growth. Let's now review the performance of each business area starting with Orkla Foods. Year-on-year comparison for Q3 showed that Orkla Foods delivered organic growth of 4.2% and an increase in EBIT of 20%. It's important to keep in mind, however, that Q3 last year was a weak quarter. The sales growth was broad-based among the business units. In Orkla Foods Sverige and Orkla Foods Finland, the distribution agreement of Tropicana juice and new launches had positive effects. Orkla Foods Norge had sales increase driven by launches within key categories and high campaign activity.
In general, there was a high level of campaign activity in this quarter, which is expected to be at a lower level in the fourth quarter. Last year, the campaign program had the opposite profile with a higher level of activity in the fourth quarter. The EBIT margin improved by 0.9 percentage points and ended at 13.2% for the quarter. The main drivers for the EBIT growth were sales increase and overall positive effects from cost improvements throughout the value chain. Now on to Orkla Confectionery & Snacks. Orkla Confectionery & Snacks reported organic growth of 1.2% in the quarter. The sales improvement was mainly driven by the Danish company, but also the Norwegian and Swedish companies. The inclusion of NP Foods resulted in considerable structural expansion. The EBIT growth was primarily driven by strong sales and improved profitability in Denmark.
Following the acquisitions of NP Foods, Orkla has decided to restructure its operations in Latvia. This work is extensive and somewhat dampened the EBIT growth. Overall, EBIT margin was pulled back in the quarter due to the dilutive effect from the inclusion of NP Foods. We are also comparing, as Petter mentioned, performance to a strong half of 2014. Nevertheless, the underlying margin growth was positive despite increased raw material prices, especially in Norway. Moving on to Orkla Home & Personal. Orkla Home & Personal suffered an organic revenue decline of 2.6% in the third quarter, and this was mainly down to Lilleborg and Pierre Robert Group. The decline for Lilleborg was to a certain extent expected, as sales in Norway were higher than normal in the latter part of Q2, prior to the holiday season and price adjustments.
Nevertheless, Lilleborg's strong performance over time was also challenged by increasing competition in some home care categories in the Norwegian market. Pierre Robert Group showed a decline after two strong quarters. The setback is caused by phasing of campaigns between the third and the fourth quarter, limited success with summer campaigns, and changes in the retail market. Orkla Health showed improvements after a weak first half of the year. However, the market is still challenging. The acquisition of Cederroth has been approved by the competition authorities in all relevant countries on the condition that the two brands, Asan and Allévo, are sold. The sales process are ongoing. Cederroth's results are included in Home & Personal results as from September. The EBIT margin ended at 19.1% in the quarter. The decrease versus last year was caused by dilution from the inclusion of Cederroth as the main item.
Several business units also experienced significantly higher input costs due to a weakened Norwegian kroner. As we look ahead to Orkla Food Ingredients, we see stronger performance. Orkla Food Ingredients delivered organic growth of 4% in the third quarter and reported an increase in EBIT of 32%. The improvement is caused by broad-based sales growth, benefiting from stronger market positions, stable raw material prices, and an improved product mix. The EBIT margin increased by 0.5 percentage points and ended at 6% in this quarter. The main driver for this EBIT improvement was organic revenue growth. In addition, the weak Norwegian kroner impacted a bit positively due to translation effects. Strong organic growth and acquisitions has made the ice cream ingredients business an increasingly important part of the food ingredients.
Ice cream ingredients normally has a strong season in both Q2 and Q3 and contributed strongly to the EBIT growth in this quarter. This is a very seasonal business, therefore, we expect weaker contribution in Q4 and in Q1. Let's now look at the results from Orkla Investments. During the third quarter, there were no major changes to our assets in Orkla Investments. The shareholding in Gränges and our remaining share portfolio represent the combined market value of roughly NOK 1.2 billion. Orkla Investments also manages a real estate portfolio with a book value of approximately NOK 1.7 billion. The Sapa joint ventures continue to make good progress with solid growth in underlying results in Q3 and year to date compared to last year. A strong North American markets and effect from synergy and restructuring initiatives contributed positively.
As Petter mentioned, the currency translation effects had additional positive impact on results both in the quarter and year to date. Orkla's share on net profit from Sapa was NOK 54 million. In the quarter, there were some restructuring costs, as well as unrealized derivative effects of NOK 135 million and NOK 95 million, respectively. Jotun only reports financial figures on a four-monthly basis. As a result, we cannot present official figures for Jotun for the third quarter, but this slide illustrates the development for the period January to August 2015. Jotun delivered all-time high sales and operating profit year to date. The reported growth in revenue is highly affected by positive currency translation effects. But adjusted for these currency effects, the organic revenue is still at double digit level with growth across all segments and regions. The revenue growth is primarily driven by improved deliveries in the marine coatings segment.
In addition, decorative paints in the Middle East and Southeast Asia contributed positively. Increased sales volumes, better margins, combined with good cost control, contributed to the underlying growth in profits. In hydropower, all-time high production volume in Q3 is explained by cold spring, late snow melting of substantial snow reservoirs, and a rainy summer. This resulted in extremely low power prices, the lowest in 15 years, which in turn resulted in a drop in EBIT from NOK 46 million to NOK 22 million. I will now take you to the changes in the net debt. Net debt at the end of 2014 was NOK 5.7 billion. Net expansion payments year to date totaled NOK 2.2 billion, primarily related to the Cederroth acquisition. Cash flow from operations amounted to NOK 2.2 billion. The net sale of shares and other financial items was NOK 0.2 billion in the period.
Due to the weakening Norwegian kroner, debt denominated in other currencies increased by NOK 0.4 billion year to date, resulting in total net debt of NOK 8.9 billion at quarter end. This is well under the target of net interest-bearing debt to EBITDA below 2.5 to three times. Orkla's net interest-bearing debt had an average maturity of 3.6 years and an average interest rate of 2.9% year to date. Orkla's financial position is robust, with cash reserves and credit lines that exceed known cash outlays over the next 12 months. I'll now hand the floor back to Peter.
Okay. Thank you, Jens. To sum up, I will just revisit this slide where we communicated the targets for the period going forward at Capital Markets Day. I think we see that results indicate that we are on the right track. As I said at Capital Markets Day, our main focus will be on improving operations. We have to utilize the strengths, the knowledge, the capacities within Orkla, and operate as one Orkla. We have to share ideas, products between business areas and countries. Of course, we have to take our synergies throughout Orkla, and especially in the supply chain, to improve margins and to reduce costs. However, we also still see a lot of areas for improvement. A lot of challenges, but areas for improvement and challenges also means potential. We will continue to focus on accelerating our performance in the coming periods.
I also have to remind you that the competition out there is really tough, and we see some very strong headwinds from a weakening Norwegian currency and the transaction effects related to the weak currency. That is a challenge for us. I'll then open up for Q&A.
Carnegie. There was a lot of talk about market shares, and you're still a bit disappointed on your market share in the retail channel. It seems like also within foods, and it seems like Lilleborg is losing some market share. Could you go a bit more in detail on who is challenging you? Is it new competitors? Is it private labels? How do you think about this going forward?
Well, as I mentioned, in the retail channel, we still see a slight decline in market shares. However, overall, if you look at all the channels, market shares are relatively stable. Somewhat differing from category to category. We see increased sale of a lot of our categories in new, call it new channels. DIY stores, internet, and so on. When I'm talking about weakening market shares, this is in the Nielsen universe, and they're only measuring in the retail channel. Overall, also in Lilleborg, we maintain our market shares.
Yes, we have a question from the web from Petter Nystrøm from ABG. Regarding food, you say campaign activity was slightly higher in the third quarter, which is expected to have an opposite effect in the fourth quarter. Can you quantify this? Also, what's the like-for-like in foods excluding distribution of Tropicana juice?
To the first question, I cannot quantify that. Like-for-like in foods excluding Tropicana. Jens?
Well, we've agreed with PepsiCo that we don't disclose any sales figures there. When you look at the food's organic growth of 4.2% in the quarter, and adjust for the combination of the international business and the Tropicana business, then call it underlying growth in foods is around 2%. That's my answer. Then, we didn't say that the campaigns would have an opposite effect. We said that the profile was somewhat different and that the campaign activity was higher in Q3 and that this campaign activity happened more in Q4 last year. Different profile.
No further questions? Okay. Thank you everyone for joining us here this morning.