Everyone, and welcome to Orkla's 2nd Quarter and First Half Year Results. I must say I'm quite satisfied with the results and the underlying development in operations so far this year. Adjusted EBIT for the group improved by 18% to NOK 789,000,000 compared with Q2 2014. The improvement was driven by both positive development in branded consumer goods and property gains in Orkla Investments. In branded consumer goods, the improved adjusted EBIT margin was a result of both top line development and cost savings achieved through continuous improvements and restructuring projects.
I'm also pleased to report the 5th consecutive quarter with organic growth. Year to date, the organic growth is now 2.3%. Several of the Norwegian business units had particularly strong sales towards the end of the quarter. This is expected to have an opposite effect in Q3. Furthermore, we continue to deliver on strategy.
During the quarter, we have reduced ownership in Grenies from 31 percent to 16%, and this transaction resulted in a profit of NOK 425,000,000 in Q2. The acquisition of Seadroat is currently being considered by Norwegian and Swedish Competition Authorities. The transaction has already been approved by the authorities in Finland, Poland, Austria and Germany. Norwegian and Swedish competition authorities have objections regarding a few of the brands included in transactions, and we are currently engaged in a constructive dialogue with authorities in both countries. The brands affected by the competition authorities' concerns account for less than 10% of Severod's turnover.
We have communicated that the transaction is expected to be completed no later than within Q3 2015. However, given the latest development, we must be prepared that the process may take somewhat longer time. Earnings per share increased by 45 percent to NOK 1.71, up from NOK 1.18 in first half of twenty fourteen. Looking at the first half of the year in total, organic growth for branded consumer goods reached 2.3%. The increase was largely driven by positive volumemix development.
In Orkla Foods, the revenue increase was broad based, while in Orkla Confectionery and Snacks, the improvement was to a large extent driven by Norway. Also, Orkla Food Ingredients continued to report positive organic growth. In Oklahoma, personal development was mixed. Lilleborg and Piado Barr Group reported volume driven revenue increase, whereas the decline in total organic growth mainly relates to Orkla House Care and Orkla Health. The situation in Orkla Health is still challenging with declining sales due to negative growth in some categories.
However, part of the decrease was explained by the strategic choice to close down the production site, Denomega in Leknes in Norway. The graph on the left illustrates the rolling 12 month adjusted EBIT margin development. Compared to the full year 2014, the margin improved by 0.2 percentage points to 12% at the end of Q2. Looking at the short term trend, we have seen improvement in recent quarters. But in a longer term perspective, we see that there is still a way to go, and so we will continue our operational focus to improve margins further.
3 out of 4 business areas delivered improved adjusted EBIT margin in the first half of the year despite challenging markets and a very challenging currency situation. Internal restructuring and cost improvements were the main drivers behind the growth. Pizza is one of Orkla Foods' key categories. In Q2, a new Grandiosa variant, the 4x Cheese, was launched. In addition, the original variants were relaunched with improved quality and taste without palm oil and with Norwegian ingredients such as meat and cheese.
In Q2, we also launched a new range by Big One, California Style. These pizzas deliver on the consumer demand for a thinner American type of crust with more taste. Both the relaunch of Grande OSA and the launch of the new variants have been well received by the consumers. FunLite Squeeze It was launched in Sweden during Q2. It is a small and convenient pouch.
Just squeeze 1 to 2 times into a bottle or glass of water, and you get thirst quenching sunlight squash. This small pouch gives you 6 liters of Sunlight. The large expands Sunlight into new beverage occasions, easy to use at home or on the go, and it is also a great example of packaging innovation. Like in many of the categories, the trend within nuts is towards healthier products. As a result, Orkla Confectionery and Snacks has launched 4 types of oven roasted nuts with less salt.
The nuts are roasted for better taste and more crunch. The products are roasted completely without added oil. Thus, you can enjoy them with a clear consignance both weekdays and weekends. The product series is planned to be launched under the brand Anyday Nuts in Denmark, Finland and Sweden during Q3. In Sweden, 2 types of ecological nuts are also planned.
All the products are produced at the same factory. This is an exciting example of how we work to launch healthier and more enjoyable innovations across business units and across borders. So it's the same product launched in all countries, but with somewhat different names in Norway versus the other countries. Under the Jordan brand, Lilibor has launched a dispenser with wet wipes for convenient and hygienic cleaning. The wipes are disposable and biodegradable, of course.
The dispenser has contributed to significant category growth after 6 weeks of sale. And we also have started to see sales of refill wipes. I already use this at home, and I think it's a great substitute for the traditional smelly and hygienic kitchen clothes. I suffer from a severe condition that we in Norwegian call gluttonargi. These innovations have contributed to volume growth in the quarter.
And now Jens will present further details on the financial results.
Thank you, Peter. I'll now take you through the financial performance in the second quarter. Oikla had operating revenues of SEK 7,700,000,000 in the 2nd quarter, an increase of 7%. As Peter mentioned, we saw positive organic growth in the Branded Consumer Goods area in the quarter despite negative Easter effects. Good sales volumes at the end of the quarter contributed positively to operating revenues.
Adjusted EBIT ended at $789,000,000 and that's up 18% from last year. The growth was related to improved results for both the Branded Consumer Goods business as well as good performance in Orkla Investments. I'll come back to the details regarding these areas later. Other income and expenses amounted to a negative SEK 55,000,000 mainly related to acquisition and integration costs from structural changes. Profit from associates totaled €545,000,000 of which Grenngis shares gave a profit of €425,000,000 In addition, good performance in Jotun contributed positively.
Sapa had underlying growth, but restructuring costs dragged the results down, leading to limited profit contribution in the quarter. The group's net financial costs decreased in the quarter, mainly related to lower interest rates and lower debt level. In addition, value increases of interest rate swaps contributed positively. This resulted in a profit before tax of SEK 1,300,000,000 in the 2nd quarter, and that's up from SEK 881,000,000 in the same period last year. Earnings per share increased by 54% to NOK 1.09 in the 2nd quarter.
Let's look at the adjusted EBIT bridge from Q2 2014 to Q2 2015. To keep it simple, I will from now on use the term EBIT throughout my presentation when referring to adjusted EBIT. As I mentioned, the group's growth in EBIT was 18% or $120,000,000 in the quarter. Branded consumer goods had a growth of 11% or $79,000,000 The positive development was supported by growth in all segments, especially Foods and Orkla Food Ingredients. In addition, EBIT in Orkla Investments improved by $45,000,000 and that's mainly related to the sale of 2 land plots in Switzerland.
Orkla HQ increased slightly due to incentive programs linked to the group's positive developments. Let's now look closer at Branded Consumer Goods. In Q2 2015, branded consumer goods had an increase of 6% in revenues year on year. This increase was driven by positive currency translation effects from a weaker Norwegian kroner and contribution from acquisitions. The organic growth was 0.2% in the quarter.
The positive Easter effects that is described in Q1 had an adverse effect on the organic growth in Q2. And when we adjust for this, the growth was still approximately 2.7%. The organic revenue growth in the quarter was supported by strong sales towards the end of June. We usually see higher sales in the end of June prior to the holiday period and price adjustments. This year, this effect was somewhat higher than normal.
It's hard to estimate exactly, but we expect an adverse effect of approximately 0.5% on organic growth in Q3. All in all, I'm pleased to report the 5th consecutive quarter with organic growth and a growth of 2.3% for the first half year, as Peter mentioned. In Oikawa Foods, we saw 2nd quarter increase in revenues to NOK 3,100,000,000, and that's an organic growth of 1.9 percent and an increase in EBIT of 9% to NOK 389,000,000 despite negative Easter effects. Orkla Foods had broad based sales growth among the business units. In Orkla Foods Norway, the sales increase was driven by launches within key categories and especially strong end of the quarter.
In Orkla Foods Sweden and Orkla Foods Finland, the distribution agreement of Tropicana Juice and new launches had positive effects. The EBIT margin improved by 0.8 percentage points and ended at 12.5% for the quarter. The main drivers for the EBIT growth was sales increases and overall positive effects of cost improvements throughout the value chain. Oikla Confectionery and Snacks reported operating revenues of SEK 1,300,000,000 in the quarter. The inclusion of NP Foods resulted in considerable structural growth.
Organic growth was 0.4% in the quarter. The quarter was negatively affected by the timing of Easter in all Nordic countries. For the first half year, Confectionery and Snacks had 2.3% organic growth. The improvement in both the quarter and for the first half year was mainly driven by Norway. EBIT ended at $132,000,000 resulting in an EBIT margin of 9.8%.
Sales growth and cost improvements had a positive effect on the margin development in the Nordic Companies and in Karlve in Estonia. However, margin was diluted due to the inclusion of NP Foods that has a seasonally weak quarter in Q2. Revenues in Orkla Home and Personal in the 2nd quarter ended at SEK 1,200,000,000, which implies an organic decline of 2.8 percent, driven by mainly Orkla House Care and Proxonell. Orkla House Care sales was negatively affected by the loss of a large customer in UK. In addition, wet weather has hampered the sales of outdoor painting tools compared to a very warm and sunny spring in 2014.
Lilvolk Torsohnel had a strong Q2 last year with several new contracts in the industry sector and has not been able to fully compensate this in the Q2 of 2015. The situation in Orkla Health is still challenging with the declining revenues due to negative market development in some categories. However, a large part of the decrease that we see in Orkla Health was also explained by the strategic choice that we made to close down the production site, Denomega Lechnes, which delivered nonprofitable fish oil to the corporate markets. Liliborg saw growth in the quarter by continued rise in the international business. The revenue increase in PI Aero Group was related to successful innovations and increased distribution both in Norway and Sweden.
Reported EBIT in the 2nd quarter ended at $178,000,000 for Home and Personal. The EBIT margin improved by 0.4 percentage points in spite of significantly higher input costs due to a weaker Norwegian and Swedish kronor. Polka Food Ingredients reported operating revenues of SEK 1,800,000,000 in the quarter. The quarter was negatively affected by the timing of Easter, but adjusted for this, Oika Food Ingredients showed organic growth. For the first half year, Food Ingredients had a 3.3% organic growth, driven by broad based improvements and good contribution from the sale of ice cream ingredients.
EBIT ended at SEK 121,000,000, resulting in an EBIT margin of 6.7%. In addition to underlying improvements, broad based, the newly acquired company, Aisunion, contributed significantly to the EBIT growth due to seasonally high sales. Let's look at the results from Oikla Investments. During the Q2, the shareholding in Gregis was reduced from 31% to 16%. The remaining shareholding is included in financial Switzerland related to the legacy Borigoy industrial sites.
The shareholding in Grenngis and our remaining share portfolio represents a combined market value of roughly NOK 1,300,000,000. Oikla Investments also manages a real estate portfolio with a book value of approximately NOK 1,750,000,000. Let's look at some further details regarding the Grenggis sale. On the 22nd May 2015, Oikla sold a 15% stake in Grengis at the price per share of SEK 66. At NOK 425,000,000 gain was recognized in Q2, and the cash effect from the sale was NOK 660,000,000.
Oikla's remaining 16% stake has been reclassified as available for sale. The book value of the remaining shareholding was NOK 672,000,000 at the 30th June. Yesterday, the market value of Oikla's holding was NOK 690,000,000. The Sapa joint venture continues to make good progress with solid growth in underlying results in Q2 and year to date compared to last year. Strong North American markets and effects from synergy and restructuring initiatives contribute positively.
Currency translation effects had a positive impact on results both in the quarter year to date. The sharply falling metal premiums, the Midwest premium in North America had a negative effect on underlying EBIT. The Sapa synergy and restructuring program continues to ahead of plan. Sapa underlying results reflects the operating performance of the business. Unrealized derivative effects booked through the P and L and nonrecurring items, such as restructuring charges, are treated as excluded items.
Excluded items totaled a negative SEK 418,000,000 in the quarter, out of which, a minus SEK 158,000,000 was related to unrealized derivative effects, The remaining minus $260,000,000 was mostly related to restructuring activities in Southern Europe and China. Oikla's share of net profit after tax was SEK 7,000,000 for the quarter. Biotun only reports financial results on a 4 month basis. As a result, we cannot present official figures for Rhoton for the Q2, but the slide you see here illustrates the development for the period to January to April 2015. Jotun reported all time high sales and operating profit for the first 4 months of 2015, with good performance in all four segments in addition to positive currency translation effects.
Underlying sales growth when we adjust for the currency effects is 12% with growth across all segments and regions. The most significant drivers for the growth are increased sales in both decorative paints and protective coatings in the Middle East and Southeast Asia as well as high preseason sales of decorative paints in Scandinavia. Also, the Marine Coating segments continues to develop positively. EBIT in hydropower was slightly lower than last year, and that's mainly explained by lower production volumes and lower prices. As of the end of the second quarter, estimated snow reservoir levels at Souda are significantly above normal levels.
I'll now take you through the capital structure. Starting with changes in net debt. Net debt ended net debt at the end of Q1 was SEK 6,200,000,000 During the quarter, the sale of Graenge's shares reduced net debt by SEK 500,000,000 and cash flow from operations ended at $1,100,000,000 Due to paid dividend in the quarter, net debt for Orkla increased to SEK 7,400,000,000 with a net gearing of SEK 0.24. Oikla's net interest bearing debt had an average maturity of 3.7 years. Oikla's financial position is robust with cash reserves and credit lines that exceed known capital expenditures in the next 12 months.
Finally, I would like to remind you that we will arrange an Investor Day at the London Stock Exchange on Friday, September 11. You're welcome to register for this event on our website. And with that, I would like to leave the floor back to Peter for some final remarks.
Thank you, Jens. Well, the Q2 results show that we continue to deliver on our strategy and our plans. We have managed to take out synergies from structural changes, and hence, we have improved our margin. 3 out of 4 business areas achieved positive growth in very demanding markets and with a very difficult currency situation, as mentioned, and with tough international competition. And year to date, we have 2.3% organic revenue growth in Branded Consumer Goods.
During the quarter, we have made some add on acquisitions in Orkla Foods and Orkla Food Ingredients. We acquired Anamma Food, a Swedish producer of Vegam Food and Bio Quell. Bio Quell holds strong positions in Austria in categories such as muesli, nuts, dried fruits, health and organic foods, as well as distribution of soy based products. In addition, the agreement to acquire Aisoneon was completed in the quarter. I am very glad to see that the increased focus on operations is reflected in improved financial results.
Furthermore, it has recently been announced that Executive Vice President of Operations, Johan Klarien, has become part of the group executive board. The work that Johan and his team have embarked upon has been and will continue to be central in achieving margin improvements going forward. I still see a lot more potential for growth and operational improvements, and I hope to see some of you on our Capital Markets Day in London in September, where we will elaborate further on our plans and actions to achieve continued organic growth and improved margins going forward. But before we move on to the Q and A session, I want to deliver on a promise that I made last quarter. Do any of you remember?
I got some questions about Aqua Derma, and I promise to come back to that this on Q2. So I'll just give you an update on our major launches this year, the skincare range, aqua derma. When Aqua Derma was launched in early 2015, it was Lilibor's largest product launch since Define in 2002. As many of you know, I am personally a big fan of this product, its great product line. And I have been excited to see if the market agrees with me.
We recently received updated sales figures from Nielsen, which show that after 4 months, AquaDarma is the 4th biggest facial cream brand in the grocery trade with a market share in value of 12%. I think that's quite good in such a short time. And in fact, the launch of AquaDerma has turned a declining trend into growth in the skincare category for the first time in many, many years. Although it is still early days and too soon to conclude whether or not this will be a success, it is great to see that these products have been well received by customers and consumers. With this, I wish you all a great summer.
And please don't forget to enjoy more of your favorite Orkla brands during your vacation. And we have, of course, many more than this. Thank you very much. And then we will move on to Q and A.
You were saying that Orkla Health has some problems in some categories. Could you elaborate a bit more on which categories, which part of Orkla Health and why that is weaker?
I think in general, the categories Orkla Health is representing has a negative development in total in the trade. So it's not only Ortho Health. Actually, we are gaining somewhat gaining market shares, but the total categories are declining.
Just and just to add on from my also my comment in the presentation that a huge part of the decline is related to the closure of the Dener Mega Leggnis also.
Sigu Sanna. I have two questions. First about Sederod. 10% of this of Sederate's products is the competition authorities have some questions about that. Can you tell exactly which products they have question about?
In yes, you get the question? And the second question is about advertisements. I see on television that you Orkla is a main buyer of advertisements on television. But due to currency situation, is that challenging to buy that advertisements abroad in Denmark and Finland and Sweden.
We
did get this much more money using by these advertisements abroad now after the Norwegian krone has lost their value?
Maybe I can answer the latter one first. And then we often pay have this cost in the local currency. I think the overall FX situation with the weakening of Norwegian kroner and Swedish kroner hasn't really affected this cost, at least in real terms.
And to your first question, there are 2 products that are under the competition authorities concerned. 1 is weight control in Sweden, Alevo and the other one is liquid soap in Norway.
I'll try one more. On Confectionery and Snacks, Norway is driving the organic growth. Is that Niedad, who is taking back market share? Or is it the nuts that have had such a success we can expect that to happen in the rest of the Nordics as well when you're launching this in other markets?
I think in Confectionery Snacks in Norway, we have, as we like to say, a broad based improvement in actually in all the categories, more or less all the categories. So development is good, but also, of course, the nuts has contributed to the growth.
Hello. Do you expect further margin improvements? Do you have a target for that? Or where do you see the margins going forward?
During Capital Markets Day 2013, September 20 13, we communicated targets for the different business areas. We will on Capital Markets Day in a a little bit behind those plans, approximately 1 year for foods and for confectionery and snacks, while home and personal is more or less on the targets. We don't guide about the future, but as I said several times in my presentation and have said before that we expect improved margins from cost reductions and restructurings in the business. Okay. No further questions?
Okay. Thank you, everyone, for joining us, and I wish you all nice summer holiday. And please make sure that you buy one of these in the stores and use it on your kitchen. That will help on the hygiene and help some of our margins.
Aloska, 2 1 in SBN1 Markets. You mentioned organic growth in Q3 of minus 0.5%. Can you please elaborate? And what is your expectation for Q4?
We didn't say organic growth of minus 0 point 5% in Q3, but we said that we believe that the piping effect the end of Q2 might have a negative impact of 0 point 5% in Q3 of 0.5
But do you expect organic growth in the future?
As I said, we don't guide. But of course, we hope to continue the positive development. We delivered now the 5th quarter in a row with positive organic growth, and we hope that we will continue to deliver. That's our very clear goal.