Good morning, everybody, and welcome to Orkla's 3rd quarter results presentation. Overall, I am satisfied with the financial performance in Q3. We have favorable profit development in the quarter. Group EBITDA improved by 5% to NOK860 1,000,000 compared to Q3 last year. The improvement was mainly driven by improved operations in branded consumer goods.
Improving we had positive organic growth of 0.4 percent. Still challenging in Orkla Foods and the result for this business area this quarter is somewhat disappointing. 0.3 percentage points improvement in EBITDA margin, primarily driven by Orkla Confectionery and Snacks. In addition to improving operations, Orkla continues to deliver on its strategy in the Q3. We have a successful IPO of Grenies.
Orkla Confectionery and Snacks acquired NP Foods, which will significantly strengthen its size in the Baltic markets. We are still waiting for the approval from the competition authorities. Further, the sale of the Elekta in Poland was completed. Orkla sold 100% of the shares for NOK199 1,000,000. The sales process of Orkla Brands Russia is ongoing and we are in discussions with several interested parties.
Oerlikla's earnings per share in Q3 was NOK0.51, an improvement from NOK0.43 in Q3 2013. Our main challenge ahead is still organic growth as was announced in Q1 and Q2. A number of improvement projects are underway to improve operations and to increase profitability in the future. As communicated earlier, it takes time before the improvements from the transformation materialize, but we see some positive signs this quarter both on top line and bottom line. EBITDA margin in brand consumer goods improved by 0.3 percentage points.
Orkla Confectionery Snacks in Norway was the main driver for the improvement. Further, EBITDA margin improvement in Orkla Food Ingredients was broad based in almost all parts of the company. The development in Orkla Foods continues to be challenging. And as you know, we are still in the transition phase with Foods merging the Reber operation, Tour operation in Norway and Orkla Foods Norway. I will comment on the development in both confectionery snacks and foods in further details later.
For the last two quarters, organic growth has been positive for brand consumer goods. In Q3, organic growth was 0.4%, driven by 3 out of 5 business areas. Ortloconfectionery Snacks delivered a strong quarter and within Oklahoma Personal, especially, Piatto Baird Group has shown very strong sales growth. Growth was driven by new and re launched textile products and successful promotions. Orkla Food Ingredients continues to deliver strong organic growth across its companies.
Orkla Foods with negative 3.4 top line organic growth for the quarter is disappointing, and we are, as you understand, doing a lot of actions to improve that. My focus going forward will be to continue activities to improve organic growth and to improve margins. As mentioned, we had a solid quarter for confectionery and snacks and somewhat challenges in foods. In Confectionery and Snacks, we had a top line and EBITDA margin improvement from several factors. We had strong development in Norway after very demanding integration between the companies both in Norway and Sweden, improved field sales force performance after challenging restructuring process, and synergies gradually realized as planned and as announced earlier.
Positive development also driven by volume growth from strong innovations. For instance, we have the Poly and Smurbuc Stordblatter chocolate tablets launched and Polymertoligris, all three launched at the beginning of the year and with great success. Key activities to increase sales and improve margins going forward is continued strong innovation programs and delivering on the cost initiatives already started. As mentioned, Orkla Foods has had challenges in the quarter. Reduction in EBITDA margin was mainly driven by a negative top line due to fewer innovations promotions, some impact of currency and fixed costs increases.
To improve growth and operations going forward, several activities are being implemented. We are looking into stronger innovations and promotion programs, continued strong initiatives where several restructured projects currently being analyzed, including a redesigned project in Arna in the Edibletsen factory in Bergen, estimated savings of approximately $60,000,000 per year. The integration process and synergy realization related to Eberlinson is according to plan in all companies. In addition, in Q3, the field sales forces in Orkla Foods Norway have been merged together in one sales force and that is also influencing the negative sales development in Q3. As previously communicated, we have started a process to optimize our production structure.
Starting the start of the year, we have 97 factories. So far in 2014, 5 plants are closed or in the process of closure. Four plants are considered for closure and this will continue. The effects from our production structure optimization will be the sum of many small, small, small things, some big factories, some small factories, but some have a lot of small things. We also do redesign projects within the factories and continuous efficiency programs within the factories that are not closed down.
In the following, I will highlight some examples of the innovations that we have done during the quarter, one from each business area. First, in Norway, Piedurbair has launched a collection of soft seamless base layer for active youngsters. Pierre Robert Sport Collection was first launched in 2010 and has been a great success. The sports underwear are colorful, functional and comfortable and available at prices all consumers can afford and you can buy them both in the retail store and in our online store. With the new innovation in Q3, we aim to win the battle of the future Sports Stars by launching base layer for active children in the age 7 to 14 years.
The second example is our Bamideakslai from Orkla Foods Sweden. That has been a success. That's a fish sauce and it's not the one on the picture. And that has been a success and it is now sold in 4 Nordic countries under local brands but with the same product. In the Q3, Abba has also launched a new fish soup.
Abba Fisksoppa is a healthy and convenient meal with only natural ingredients. As mentioned earlier, the positive top line development in Orkla Confectionery Snacks is to a large extent driven by strong innovations. Poly Storplater, big chocolate tablet, was launched in Q1, and that's an example of one of those successful innovations during this year. In Q3, a poly bar filled with poly peanuts and soft caramel was also launched. This is an example of how we continue to utilize our strong brands across categories by launching a chocolate bar under the brand poly, which is more known for nuts.
And by the way, I recommend you all to buy this and try it. It's great. Our 4th example is from Ochta International. Our food company in Czech Republic, Vitana launched several new innovations and relaunches in Q3. This is one example.
It's a new tasty chicken soup with noodles sold in the trade in Czech Republic. And last but not least, from Orkla Food Ingredients, launched in Q3 a new ready to use fillings from Idun, Moshe, Yembakta sold in retail stores. The fillings are ambient, spreadable and bake stable and comes in 3 flavors, cinnamon, chocolate and apple. I will of course also recommend you to try this for the baking. As mentioned, Orkla, we continue to deliver on the strategy that were announced.
The IPO of Gremis and the acquisition of MP Foods are two examples of this. Gremis was well received by investors community and successfully listed on Stockholm 10th October despite very challenging markets. Grenius has experienced strong operational improvement from Q1 2013 to Q2 2014. The EBITDA margin increased by 3 percentage points to 11%. Improved operational performance led to strong cash generation during the year of approximately SEK700 1,000,000 during the period from Q1 'thirteen to Q2 'fourteen.
The offering price was set within the initial range at SEK42.50 per share. Market capitalization on 100% basis was approximately SEK3.2 billion. Our Orklaas ownership after completion of per share and market capitalization was NOK3.2 billion approximately on a 100% basis. Orkla's ownership after completion of the offering is depending on the green shoe utilization, but it will be somewhere between 31% 40%. The remaining Orkla stake is subject to a lockup provision for 180 days post the offering date.
As mentioned, we also announced acquisition of NP Foods in the Baltics and that will significantly strengthen our position in those markets. Total Orkla turnover in the Baltics will increase by almost 65% to NOK 1.4 close to NOK 1,400,000,000 after the acquisition. NP Foods is a leading Baltic confectionery and biscuits player based in Riga, Latvia. Annual turnover is approximately NOK600 1,000,000. It will particularly strengthen our position within chocolate and confectionery in addition to our position in Karlov in Estonia.
Lima is an iconic confectionery brand with 99% brand recognition in Latvia. Other key brands are and product categories include Selga in biscuits, Stobberace, cakes, Gutter, juice and water, Piedro, convenience food. And as mentioned, the acquisition is presently under consideration by the local competition authorities in the Baltic countries. Expected closing is Q1 2015. And with the acquisition of NPE Foods, we will Orkla continues to build on its successful strategy in the Baltic region.
Today, Orkla Foods, confectionery snacks, home and personal and food ingredients are all companies present in the Baltic States. The figures presented show the strong development in top line and margin, EBITDA margin historically for Odfla Companies located in the Baltic region. I will now give the word to our CFO, Jens Staff, to give us some more details on the financial in the quarter. Thank you.
Thank you, Petri. Can you hear me? Okay, good. I'll now walk you through the numbers starting with BCG and then I'll walk you through Oikla Investments. And then finally, I'll comment on Oikla's capital structure as of Q3.
So first, let's have a look at the group level performance. The group's operating revenues was SEK 7,480,000,000 in the quarter compared to Q3 last year the development in operating stable, increased by 5% and ended at 860,000,000 dollars EBITA for Branded Consumer Goods was 903,000,000 in the quarter, while EBITA for Hydropower, Oikla Financial Investments and HQ totaled a negative $42,000,000 I'll revert to the EBITA breach shortly. Other income and expenses amounted to negative $47,000,000 mainly related to restructuring costs within branded consumer goods. Profits from associates was mainly related to Jotun and Sapa joint venture and the net profit from Sapa joint venture was $54,000,000 in the 3rd quarter. The market value of financial assets was approximately $826,000,000 at the end of the quarter.
Profit before tax improved by NOK240,000,000 to NOK 871,000,000 while earnings per share improved from NOK0.43 in Q3 2013 to NOK0.51 in Q3 this year. In Oikla's Q3 reports, Grenggis is classified as discontinued operations. A write down of the book value in Grangeas resulted in a negative profit from discontinued operations in Q3. I'll comment on this further in detail later on in the presentation. Let's look at the EBITDA bridge Q on Q.
Branded Consumer Goods had a 1% underlying EBITDA growth in the quarter. All business areas had improved EBITA in Q3, except for Orkla Foods. In line with Peter's comments, I'll revert back to this in more detail later. Oikre Investments had a total EBITA on par with last year. In total, a positive change of 41,000,000.
This slide show the branded consumer goods had 1.2% increase in revenues Q on Q. This growth was mainly down to a positive currency translation effect. The organic growth was 0.4%, largely driven by satisfactory top line development in Orkla Food Ingredients, Orkla Home and Personal and Orkla Confectionery and Snacks. And now let's look closer at each business area. First, Oiklafoods.
Overall, Oiklafoods posted 3rd quarter sales of NOK 2,600,000,000 dollars which represented an underlying decline of 3.4%. The top line is still challenging in Norway and Denmark. Domestic performance in Norway is still influenced by the integration of Ribe and Son and the focus on synergy realization. And this has adversely affected the top line revenue performance. Sweden, Finland and the Baltics have delivered satisfactory growth through the quarter.
Q3 EBITA declined by 6% and EBITA margin weakened by 0.4 percentage points. The main contributor to the weakened EBITA was decline in top line. This combined with a weakening of the Norwegian and Swedish krona led to increased raw material costs. In addition, production costs increased in Sweden. The realized cost synergies from integration of Ribe and from the merger of Abba and Perkoide last year still contributes positively and will continue to do so both in Q4 and in 2015.
In Q3, realized synergies was €60,000,000 to €70,000,000 and compared to Q3 2013, this was an increase of €40,000,000 to €50,000,000 Oikla Confectionery and Snacks has achieved growth this quarter. Following a challenging restructuring process of this business unit over the last year and a half, we are now able to show top line revenue growth and improved EBITA margin in Q3. This positive development was primarily driven by the Norwegian markets with strong sales growth in all main categories. In addition, the Baltics, Kalev in Estonia and Latvud in Latvia delivered strong sales growth. KIMS in Denmark also improved its EBITA in the quarter.
The Swedish company still experiences top line and EBITA decline, mainly due to a highly competitive market environment and internal organizational changes. As you know, we have merged Volve and JotoborskEx into 1 new strong Swedish entity. And in parallel, we have merged Nidar, Kymz and Satere in Norway to create a strong and unified single unit. The process in Sweden has proven to be more challenging and is taking longer than anticipated. Organizational changes was implemented in Sweden during the quarter.
A new CEO, Henrik Jullin was appointed and started with us the 1st July. Further, a new Factory Director at the Biskitel The walkthrough of Confectionery and Snacks. I think it's then worth mentioning that it's important to note that parts of the reported revenue and EBITDA figures in Q3 and year to date were positively affected by timing of selling days and that this effect will have the opposite effect in Q4 with revenue effect of approximately 40,000,000. And now let's look at Ochla Home and Personal. The business area has delivered top line growth in 4 out of the 5 units in the 3rd quarter.
Axcelus, which was renamed Orkla Health in October to more accurately reflect the profile and identity of this business unit had the quarter somewhat behind Q3 last year, mainly due to weak development in Finland and Poland. Liliborg experienced sales growth both internationally and in Norway. It's important to note that for several of this of the business units, the year to date figures are positively affected by extra selling days in Q1 and also had the phasing of campaign pressure which has given an additional boost to the Q3 sales. Also those effects will have an opposite effect on revenues in Q4 of approximately 50,000,000. Dollars Reported EBITA was 257,000,000 and all business units except Akercellus showed growth in the Q3.
The EBITA margin was somewhat reduced partly due to negative currency effects. Moving on to Oikla International. In Q3, the business area reported revenues of $661,000,000 a decrease of 10% compared to Q3 last year and that is mainly as a result of the performance in Orkla Brands Russia. Organic revenue growth ended at negative 3.4%. MTR had strong revenue growth driven by growth in core categories instant mixes and spice mixes and the organic growth in MTR totaled 19%.
EBITA for Oirgland International was flat compared to Q3 2013 and amounted to negative €5,000,000 EBITA improved for both Vitana and Felix Austria. Despite the negative top line development, EBITDA for Orkla Brands in Russia was flat in the quarter, driven by restructuring programs and other cost improvements. However, the EBITA level for Orkla Brands in Russia is still weak. Finally, on to Oikla Food Ingredients. Oikla Food Ingredients posted revenue of SEK1.6 billion in the quarter and revenue growth was almost 7%, while organic revenue growth was strong at 4%.
Revenue growth was driven by increased volume and more favorable product mix. And compared to Q3 last year, EBITA improved by 21% to NOK 93,000,000 EBITA margin improved by 0.6 percentage points to 5.7%. And the rise in EBITDA was broad based and mainly driven by a sound blend of price management effects, a volume mix increase and internal improvement projects that also contributed to this growth. I'll now go through Oikla Investments. Let's first look at Glen Gis.
In Q3, as Peter mentioned, Grenkis is presented as net figure on one single line as discontinued operations in the profit and loss. The historical P and L figures are restated in the balance sheet. Genghis is presented in 2 lines on 2 lines, asset and liabilities. Cash flow has been restated for 2014 and not for historical figures. The results from Gregus in Q3 was a minus NOK119,000,000, 37,000,000 positive year to date.
The loss in Q3 includes a write down of net assets and Oikla's carrying value was lower than the stock value. That's the reason. There will be no material effect in Q4 related to Gengis as discontinued operations. Oikla sells 60% to 69% of Gringis and the exact percentage will be known at the 11th November. The remaining 31% to 40% will be reported as an associate and accounted for in accordance with the equity method from Q4, 2014.
Opening carrying value will be market capitalization as of the 10th October 2014. The cash flow effect from Genghis IPO in Q4 will equal net proceeds from the sale of shares and net interest bearing debt of NOK392,000,000 And this is different from the SEK939 1,000,000 in net debt that Gregis is reporting and this is due to differences in definition of interest bearing debts. Moving ahead to the Sapa joint venture. Sapa experienced increased demand compared to the same period last year. Demand for extruded products in North America increased by 7% compared to the same quarter previous year, supported by higher activity in both Automotive and Building and Construction segments.
Demand for extruded products were continued to be weak in Brazil. In Europe, demand for extruded products improved 1% compared to the Q3 in 2013. And this is the 3rd consecutive quarter of market growth in Europe after several quarters with decline. Global demand for precision tubing continued to be driven by increased demand from the automotive sector. Demand for extruded products is expected to decline in the 4th quarter mainly due to seasonality.
Underlying EBIT was NOK 201,000,000 a significant improvement compared to the pro form a result from the same period last year. Positive contribution from restructuring programs contributed to the increase. The restructuring programs within Sapa is progressing according to plan and restructuring charges will continue to have a negative impact on net profit in Q4. In the Q3, Oikla's share of the profit was a positive 54,000,000 dollars Jotun has had a good overall growth in Q3 2014. All segments were growing with improved decorative sales in Scandinavia and continued positive development for the marine newbuilding markets.
The increase in costs is primarily tied to market development activities in growth markets as Jotun is continuing to invest and build new factories. And finally, hydropower. Production volumes in hydropower continue on the same trend this quarter and were somewhat higher than the corresponding quarter last year. Power prices in the Q3 were lower than the Q3 last year. However, EBITA improved slightly to $46,000,000 in the period.
Reservoir levels were somewhat lower at the end of the quarter. This last part will be on the capital structure. Starting with changes in net debt year to date. The net debt at the end of the quarter was NOK 8,300,000,000 and the main deviation from the end of last year is paid dividend of €2,500,000,000 Net sales from shares and financial assets contributed €200,000,000 year to date. Cash flow from operation was €600,000,000 in the 3rd quarter and 1 point 3,000,000,000 in the 1st 9 months of 2014.
The seasonal buildup of underlying working capital in branded Consumer Goods was somewhat lower compared to 2013. Oiklau's net interest bearing debt had an average interest cost of 3% in the Q3 of 2014 with an average maturity of 3.6 years. Net interest bearing debt was 8,300,000,000 at the end of the quarter with a net gearing of SEK 0.28. The net gearing is expected to be lower at the year end. So in summary, Ogla's financial position is robust.
Then I'll give the word back to Peter.
Okay. Thank you. Yes, sorry for the technical problems here, but at least I can promise you that we will have substantial saving in rent of these premises that will be visible in Q4. Just a few words on the outlook. Our strategy remains firm.
There's no change. The future growth and value creation will come from a focused Nordic branded consumer goods company. Orkla Investments is still a large part of our value and we will focus on getting the fair values and that is more important than time. In Q3, Orkla Foods signed a distribution agreement with PepsiCo for sale of sale and distribution of Tropicana Juice in Sweden, Denmark and Finland. This cooperation will start Q1 2015.
In terms of strengthening relations with our customers, we believe that Coop's potential acquisition of the Norwegian part of ICA, resulting in 3 relatively equally strong customers is better in the long term for the suppliers. As mentioned, my main operational focus is on activities that drive organic growth and improve margins. In addition, we will deliver on started and the ongoing structural processes and to realize synergies and increase efficiency throughout the company. This is not finished yet and it will take time. But I think we saw in this quarter that we deliver on our strategy and on our plans as we see result from an increased focus on operations, but still we have a large operational job ahead of us and the company is still not streamlined to the extent that we would like.
But it's also important that we in Orkla, we can really make a difference. What you see here is the number of products produced and sold from all Orkla companies today, the top figure is today and the bottom figure is year to date, 2,800,000,000, 2,900,000,000 units, consumer units year to date. And we estimate for 20 14 that we will sell changes to these large volumes will significantly impact both margin and volume. And just to give you some examples, cost reduction of NOK0.1 per unit that constitutes approximately NOK320,000,000 in cost savings, 5% price increase contribute with $640,000,000 And 0.1 gram less salt in our food products constitute approximately 200 tons of less salt making a healthier living for our customers, which is important for us. Thank you all for coming and we are now open for questions.
Yes. Thanks, Pernod from ABG. Can you elaborate a little bit about the development in foods? Is it broad based? Is it tougher competition?
Is it margin pressure? Secondly, is your gearing and your leverage is fairly low going out of Q4. Can you say something about your cash flow priorities going forward both in terms of cash flow distribution to shareholders or investing in more growth initiatives? Thanks. Okay.
I will answer your question on the food business and Jens Stav will take the second part of your question. As mentioned in the presentation, we are still in the process of merging together the parts of Ribeir and Ultrafoods. And especially in Norway, this is and has been a very big operation, merging Toro and Stabura. We are still not finished. And we see that the new organization or the process to go into the new getting into the new organization is taking focus away from the market, away from customers and it's more internally focused.
However, we see this is coming to an end and we believe that when we are finished with the reorganization, we will have a healthier, better platform to develop. Also during Q3, we merged the sales forces of those two companies and that is also has also made disturbances in the sales force in the Norwegian market. And now to the capital.
Yes. So the first priority is to acquire a good BCG assets in the Nordic at a fair price. And if you are not able to find a good gold asset for a fair price, then we will most slightly allocate the excess capital back to our shareholders. And we have a history of allocating back capital as special dividend. We will also continue to buy back loan.
No other questions? Okay. Then I just thank you all for being here and have a nice day.