And welcome to this 4th quarter presentation from Orkla. Before I give the highlights, I would like to say that as you have seen from the press release, the Board has appointed a new CEO. He will be presented in the press conference at 9 o'clock. So in this session, we will focus on the results and also that will be the case in the subsequent Q and A. Overall, the 4th quarter results were relatively weak.
EBITDA at NOK 1026,000,000. The consumer goods business reported an increase in revenues of about 18% to NOK 8,200,000,000 as a consequence of the acquisitions last year. However, we report flat EBITDA at €951,000,000 compared to €947,000,000 last year. The financial performance continues to show significant variation between different business units and operating entities. Orka Foods reports EBITA of NOK 422,000,000 compared to NOK 368 €1,000,000 last year.
The performance in Norway is not satisfactory, while Sweden continues to report good progress. The underlying revenue development in Norway is negative throughout the portfolio. Reboost synergies continues to come in, in accordance with plan, and we remain confident that we will extract DKK 250,000,000 to DKK 300,000,000 in synergies as previously announced. Orkla Confectionery and Snacks continues to be affected by the ongoing restructuring. EBITDA is €234,000,000 compared to €255,000,000 last year.
Denmark and the Baltics showed good progress, while Sweden and Norway is still faced with a very competitive market situation. A cost program is in place and expected to yield about DKK 300,000,000 during the next 3 years. Oracle Home and Personal is positively affected by the successful integration of Yordan. EBITDA is €194,000,000 compared to €186,000,000 last year. And Orkla Food Ingredients reported broad based and satisfactory development.
Sales growth is 13% and EBITDA is €97,000,000 compared to €78,000,000 last year. Finally, inside Orkla International, there are significant variances in performance. MTR in India and Felix Austria continues to outperform. The big negative development is in Russia, where Orkla Brands Drosjora reports negative top line developments of 18% for the year and 20% for the quarter. While the restructuring of the production facilities, which we have told you about in the last few quarters, has generated cost improvements pretty much in accordance with plan.
These are more than offset by significant margin pressure and reduced volumes. The Orkla Brands business in Russia is a result of acquisitions done in 2,000 and 5, 2006. So, unfortunately, Orkla has not been able to successfully develop the Russian business. And as a consequence, a structured sales process has been initiated. Outside of core, Gremers reports slightly improved EBIT of €78,000,000 primarily due to increased sales to the Chinese automotive industry and improved performance at the Swedish plant in Vinsbank.
Cash flow from operations is a highly satisfactory, NOK 432,000,000 for the year. The Board has announced a dividend of NOK 2.50 per share for 20.13, and the share will go ex dividend on April 10, when we have our general meeting. It's important to keep results in perspective given that Orkla is undergoing significant change. So let me remind me of the significant reallocation of capital that has happened in the last 2 years. Orkla has in that period released financial resources of about DKK 12,700,000,000 through sales of various non core assets.
DKK 7,300,000,000 has been reinvested predominantly in Weber and Euridigm, significantly improving the platform from which Orkla expected to generate growth in the future. In addition, Orkla has returned DKK 5,400,000,000 to shareholders through dividends and share buybacks in 2012. As a consequence of the acquisitions, Orkla has been able to generate synergies and improved financial performance from a larger base. We already see that 12 months rolling EBITDA for the consumer goods business is increasing. So going forward, Orkla has 4 strategic priorities.
First, reduce complexity, which we will continue to do by restructuring and simplifying our organization. Secondly, extract cost synergies and improve cash flow, which as you know is an ongoing process, but where results are coming in pretty much in accordance with plans. Thirdly, drive organic growth, which requires improved performance in many parts of the value chain inside Orkla. We have programs in place. We know what we need to do.
However, the reality is, of course, that implementation takes time. Finally, we need to improve Orkla's skill base. Orkla has vast experience and competence inside its organization. But in our drive for performance, there are always ways to improve, and we constantly need to look for new skills and new ways to improve performance. Specifically, I would like to remind you what organization changes we have done inside the Consumer Goods business.
First, we have merged 7 food companies into 3 companies in Norway, Sweden and Denmark, including the integration of Rybir and Stabur, creating a DKK 4,300,000,000 business in Norway. We have merged 7 confectionery and snacks companies into 3 companies in Norway, Sweden and Finland. And we have successfully integrated Durotan into the Foraker Home and Personal Organization. Lastly, we have started the process by which support functions will be upgraded and rationalized, so that we can improve the quality of delivery at a significantly reduced cost. So at our Capital Markets Day in September, we announced our financial targets, which we expect to achieve during this 3 year transitory period.
EBIT margins improvements to levels between 15% 17.5% and organic revenue goals between 2% 5% in the different business units. Needless to say, Orkla Management is committed to deliver those financial targets in the 2 to 3 years to come. So with that, I leave the floor to Mr. Vanishing, the CFO.
Thank you. I will then take you through financial statement and also comment on some of the noncore business units. Starting with the P and L. Group's operating revenues increased by 12.5% in the quarter, mainly ascribable to the acquisition of Reber. Here currency translations effects impacted revenues positively by about NOK 500,000,000 And approximately 86% of the turnover came from branded consumer goods.
Reported EBITA was down SEK 91,000,000 in the quarter. The negative difference is largely attributable to property sales in 2012. Grengis continued to deliver volume and profit growth in 4th quarter, while EBITDA increase for hydropower was related to positive one offs. Total EBITDA for the Branded Consumer Goods, as you see, in line with last year. And currency translation effects impacted EBITDA positively by about NOK 50,000,000 in the quarter.
This slide show a more detailed breakdown of the development for Branded Consumer Goods. For Orkla Fudz, we see a positive impact from the acquisition of Reber. Underlying business in Orkla Fudz is however more mixed, which Atel Vidal will revert to later in this presentation. Orkla International was down NOK 58,000,000 compared to last year, and this is fully related to the challenging market situation and weak performance for Orkla Brands Russia. Also, Confectionery Snacks had weaker performance in the quarter compared to 'twelve, while Orkla Home Personal and especially Orkla Foods Ingredients had satisfactory performance in 4th quarter.
If we go back to the P and L and look at some of the other items, Other income expenses totaled minus SEK 13,000,000 in the quarter. Grengis insurance claim related to the fire in Finn Spang factory in 2010 was finally settled in the quarter, resulting in the recognition of SEK 127,000,000 in other income. This was, however, offset by further restructuring and integration costs, mainly in Orkla Foods and Confectionery Snacks. After the establishment of Sapa JV, the profit impact from this business has been moved from the in the P and L from discontinued operations to profit and loss from associate and joint ventures. Reported loss of NOK 300,000,000 was due to further provisions and write downs related to the ongoing restructuring in Sapa JV.
Jotun, which is the other major part in JV, in the line for JV and joint ventures, had good results also in 2013. Taxes totaled SEK 232,000,000 in the quarter. Going forward, our normal tax rate for Orkla will be in the area of 25% to 26% of operating profit. At year end, net interest bearing debt was NOK 8,500,000,000. This represents an increase of NOK 3,700,000,000 during the year.
According to the strategy, we have freed up close to NOK 5,000,000,000 from establishing Sapa JV and sales of noncore assets. While we have expanded the business Brand and Consumer Goods business through the acquisition of Reber. Cash flow from operating activities amounted to SEK 3,200,000,000, whereas SEK 2,600,000,000 stemming from Branded Consumer Goods. And working capital was in line with last year. Paid dividends and net sale of treasury shares totaled SEK 2,600,000,000 while taxes and interest amounted to SEK 1,200,000,000 At the end of 4th quarter, the group's net interest bearing debt was, as I said, dollars 8,500,000,000 and had an average borrowing rate of 3.4%.
Orkla's net debt is mainly allocated across the currencies where we operate, and this represents a hedge to the underlying equity exposure within the group. And a weaker NOK will give a negative translation effect on the reported net debt in NOK. Net debt has been significantly reduced over the last years, And the increase in 2013, as mentioned, following as mentioned, is related to the acquisition of Weebur. Orkla's equity ratio has been relatively stable but increased to 59.1% at the end of 2013. This increase is, however, largely explained by the accounting effect from restating Sapa as associated company as of September 2013.
Balance sheet still strong and ensure financial flexibility to support the strategy going forward. And the financial flexibility is further supported by a well balanced debt majority profile and significant unutilized credit facilities. The latter here presented in red, and the average majority is 3.6 years. And then some comments to some of the noncore business areas. Grengis, both volume and profit growth in the quarter.
EBITDA ended at 78 €1,000,000 compared to €74,000,000 in 2012. The growth was driven by somewhat higher volumes and contribution from cost programs. Volume growth was related to the operation in Shanghai, which continued to benefit from the strong demand in the Chinese automotive market. Improvement programs in the Swedish operation is progressing according to plan, and the workforce reduction initiated in Q3 has been completed. Reduced working capital, combined with good profit, contributed to a solid cash flow from operation in Q4, and cash conversion represent 128%.
Hydro Power's EBITDA increased from €85,000,000 to €97,000,000 in Q4 this year, And the result was positively affected by a final cash settlement related to termination of a proper contract in Q4. Spot prices somewhat higher compared to same period last year, but production was down 110 gigawatt hour in the quarter. And at the end of the year, the reservoir levels are somewhat higher than normal. Jotun has not released figures for the last 4 months, but have another good year in 20 13 with both top line and profit growth. Wind growth in all segments except Marine, where the global decline in shipbuilding activity led to a decreased demand and turnover.
Margin has been improved largely due to stable raw material prices and good product mix management. Geographically, Europe, Middle East were the primary contributors to the company's positive profit performance. And in line with the company's growth strategy, Jotun has continued this comprehensive investment program during the year, and the most important investments are the construction of new factories in Russia, Brazil and China. Jotun has also continued the geographical expansion and has entered into several new markets such as Myanmar, Bangladesh and Morocco. And then the joint venture with hydro, SAPA.
Q4 is seasonally a weak quarter for Sapa, but total volume was somewhat higher compared to Q4 last year. Positive trend continued in North America, supported by growth in the Automotive and Building segments. Europe, however, demand for extruded projects was stable, while the building and construction industry remained very weak, especially in Southern Europe. Underlying EBIT for the Sapa Group for the Q4 reflects the seasonality and charges related to impairment of inventories and accounts receivables. Sapa's restructuring agenda is progressing according to plan, and reported EBIT is Q4 was minus €312,000,000 Net debt for Sapa at the end of the year was €1,800,000,000 and Sapa has a committed 5 year credit facility of EUR 700,000,000.
And then I hand it over to Atri Wiederke.
Good morning. I will present the performance of the business areas in Orkla's Branded Consumer Goods in some more detail. 2013 was a year of transformation and integration in Nordla Foods. Both the mergers of Prokordia and ABA Seafood in April and the integration of the 3 Oribon and Son business units into the Orkla Foods units has been executed firmly and in accordance with plans. This is now completed from a legal and governance perspective.
In the Q4, Orkla Foods reported an EBITA of SEK422 1,000,000, an increase of SEK54 1,000,000 from the corresponding quarter the year before. The increase comes primarily from the consolidation of the rebrand 7 companies. The operating margin was 14.6% in the quarter. The drop from 2012 is mainly explained by the consolidation of Ribbon and Sun entities, but also reflects a weaker performance in Norway. Okra Foods posted 4th quarter sales of SEK 2,900,000,000.
The underlying sales growth continued to be weak in the Q4 and was down 6%. The decline is primarily related to Norway, where continued weak contribution from product launches and significant loading differences between the quarters, especially in the rebill portfolio, explains the weak performance. I will comment more on Ribeld and Son on the next picture. The integration processes in Sweden have been executed with great success. In the Q4, market share remained strong and both revenues and EBITDA increased in the quarter.
The synergies from the mergers in Sweden are on track. The businesses in both Finland and the Baltic States also have improved in performance in the quarter with top line and EBITDA growth. For Odfjfus, the market share overall are somewhat weaker in the quarter, and this is especially related to Norway and Denmark. As previously announced, the cost synergy potential from the Rybland Sun acquisition is NOK 250,000,000 to NOK 300,000,000 when running at full speed in the end of 2015. Currently, as we enter 2014, the run rate on the cost synergies are somewhat ahead of the targeted NOK 150,000,000 and the integration generated positive cost effects in the Q4 of NOK 30,000,000 to NOK 35 1,000,000.
The main challenge continues to be the sales development in the Rebrand Sun portfolio. In the Q4, the Rebrand Sun Brands reported a decline in revenues of 12.6% from Q4 2012. This number is significantly impacted by heavy loading to customers in Q4 2012. If we measure the sales to consumers from the grocery outlets, the decline in the 4th quarter was 3% compared to the 12.6% in the 4th quarter. This 3% drop is a clear improvement from the trend in the previous quarters.
These are some of the new product launches being introduced in the market now in 2014. We have the Grande OSA Hermax in 2 test variants, which is a new experience to consumer as there's cheese baked into the crust of the pizza, which gives an extra juicy and crispy experience. We also take out the Aban Midas Clark concept, the fish sauce concept into Denmark and Finland under names Nemfisk and Aperia Walmis. We continue to build on the success of the chilled soups launched in Sweden under the Felix band last year and now launches pasta dishes under the same concept. As you can see, Torog Jager Grise for the Norwegian is an old favorite, now launched in a bigger XL pack as a chilled ready meal and with the Nura Lingonberry jam inside.
And also, I have to mention the Stabure Kockeler Cauliflower Soup, which is a genuine taste expertise synergy, where the expertise in and has combined to make a delicious soup. Then we move on to Confectionery and Snacks. Also for Confectionery and Snacks, 2013 was a year of transformation and integration as the 7 operating companies in Norway, Sweden and Finland were merged into 3 companies. The area reported an EBITDA in the Q4 of NOK 2 34,000,000 compared with NOK 255,000,000 in the corresponding quarter in 2012. The revenues were posted at NOK 1 point 4,000,000,000.
The organic growth rate continues to be the main challenge and was negative by 2.7% in the quarter, which is in line with the development for previous quarters in 2013. The markets across the Nordics continue to be challenging with lower volume growth than previously and strong competition. The market shares overall for this area are somewhat lower compared to 2012. There is a comprehensive turnaround program going on in Orkla Confectionery and Snacks addressing both sales cost and capital efficiency and organization. The program is and will be implemented step by step and must be expected to take some time.
In the Q4, we saw sales growth in Denmark and the Baltics and also in Sweden, there was a better development compared to Q4 2012. Here are some of the strong launches coming out in the Q1 2014 from Confectionery and Snacks. We see launches under the biggest brands like the OLW Cheese Stars and the Laban line extension. We also see brands taking cross categories as the Polly chocolate with delicious peanuts inside and Smerboek chocolate with caramel inside. And we also have a healthy profile with nuts without salt and the rye based snacks launched in Denmark first called Then we move to Home and Personal.
Posted sales just below SEK1.3 billion in the 4th quarter along with an EBITDA of SEK1 100 and $94,000,000 The EBITDA was up $8,000,000 in the quarter, driven primarily by the realization of synergies from the Jordan acquisition and a for the year in total, the organic growth was down 1.5%. Lilleborg delivered a satisfactory performance both in the quarter and for the year in total to a large extent related to the fact that the integration of Jordan Personal Home and Home Care has been accomplished successfully. Pjaerobgar saw weaker sales at the end than expected. This was due to that in Norway, we had a mild winter in that season with lower sales of wool collection and less campaigns. On the other hand, we see sales in Sweden for Piero Ber improving due to gradually improved distribution in that market.
Also for Axcelis, Q4 came in somewhat weaker than expected, positive effects in 2013 general from acquired businesses, while the underlying sales and result landed approximately on par with last year. We also saw that the sales to export markets was somewhat lower, while the home markets was somewhat higher than last year. The market shares overall were quite stable in the 4th quarter with a slightly positive trend in the total compared to the same period last year. The EBITA margin was on par with last year. The acquisition of Jordan initially lowered and diluted the operating margin for Home and Personal.
But with the realized cost synergies, we can see that margins are now back to the satisfactory level of 15.3% in the quarter. Some innovations here as well. We see that Axcelis launches a series of new products with a branding in Nutrilet Protein Shapes, which is based on health trends with strongly increased focus on protein content across several food categories. We see that Piero Wer has had great success with the sports collection and launches new and improved products within this category. And Define comes with a new shampoo and conditioner called the Define Ketatine shampoo and conditioner.
And we also see a colorful limited edition under the Selsicol brand. We move on to Orkla International. Posted sales of €916,000,000 in the quarter. The increase from Q4 2012 was due to the consolidation of the rebarance and companies Czech Republic, Slovakia, Poland and Russia. The weaker performance both on the top line and on the EBITDA is caused by a negative development for Orkla Brands Russia.
And as Mr. Kostval announced earlier, a structured process for divesting this business is now initiated. India posted sales growth of 13% quarter. This is somewhat lower growth rates than in the previous quarters, and it's still relatively weak macroeconomic conditions in India, still satisfactory growth. In the quarter, Felix Austria continued a positive development from previous quarters.
The Czech operation, Vitane, that we acquired from Rivel is facing a tough business climate in the retail market with increased promotional pressure, resulting in a weaker performance in the quarter. Orkla Food Ingredients continued good progress from previous quarters. They posted sales of SEK 1,700,000,000 and the organic growth was positive with 2.2%. Many companies contribute to this strong performance. We can mention a stronger contract situation in Norway, good increase for margarine and butter blends in Denmark and a good performance for improvers and mixes in the Netherlands.
Overall, the Orkla Food Ingredients companies have increased their market shares in the quarter. The EBITDA for Orkla Food Ingredients was up $21,000,000 in the quarter, driven by profitable volume growth and many improvement initiatives in several markets. The key priority for 2014 for branded consumer goods will be, 1st and foremost, to grow the top line. We are confident that we have stronger launch programs in 2014 than we had last year, and the product launches this quarter have received overall strong listings in the retail. We see more cross market initiatives than earlier, and we will improve execution in store.
We also see somewhat improved positions with the trade in 2014. Orkla will then continue to realize and extract more cost synergies from the restructuring conducted during 2013. The focus in 2013 was mainly on realizing the synergies in administrative functions and in purchasing. In 2014, this program will continue, and we will continue to drive purchasing efficiency, but now start more heavy programs on manufacturing productivity and footprint and also actions to increase competitiveness and cost efficiency in our strong field sales forces will be initiated. So then I guess Q and A is next.
Thank you.
Danske Bank Markets. First question to Mr. Korchwold. Could you please comment on the view of the stake in Jotun in light of the sales process we see in the share in Russia? And then please also comment on your thoughts on the rest of the noncore assets.
Have, as you know, defined a 3 year transition period. Jotun is not considered to be part of the Branded Consumer Goods business. For the time being, Jotun is what I would define as a we have a whole strategy on Hilton. And if and when we are going to do something with our ownership position, that is something that has to happen in cooperation with the Utun and the Utun shareholders.
Could you please also put some comments on Gringes? Is there any change in your thoughts on holding Gringes?
Well, as you know, we had a structural process that we stopped. I think what you see is a significant improvement in performance and significant cash generation. So I think in the short term perspective, we feel that, that justifies our decision to hold the process. There is no change in our position on Grange. It's a non core business.
Okay. Thank you. And another question relating to Sapa joint venture. I can see that the underlying EBIT is unfortunately sliding down still. And I understand that there's been restructuring programs also.
But in your view, is the restructuring efforts enough with the current market outlook? Or do you see further restructuring efforts needed if we see the market continuing as of now?
Well, I would say that it's still very early days at Sapa. I think the financial results and the year end results that you see today reflects very much the fact that we are merging 2 independent units. So there is a lot of onetime accounting effects reflected in the results. We only closed that transaction in September. And as you know, we have committed to a 3 year holding period simply because we I think we all realize that, that integration process and in particular the synergies that we expect to extract from the merger will take time.
I would say that, that platform is in place, but we are still at a very early stage and in a very early phase of the implementation of the restructuring process in Sapa.
Okay. And the last question for Atelvida regarding Orkla Foods. We see that the organic growth is down 6%, and a lot of it relates to Ribrenson. But could you please comment a bit further on why the integration process has impacted sales that negatively? And actually, what you're doing to get organic growth up?
As I said, the performance of the Ribbons and Sainspan was from our side to the retailer's wholesale operation, that was down 12.6%, while the sales to consumers from the retail outlets was down 3% in the quarter, which is a positive development in the trend. Of course, the long waiting period before we got the approval from the competition authorities has put a toll on the organization and creates some standstill in organization. And that is probably the main reason why we see this safe stop. What we are doing, I'll try to present it to you, we have a stronger program this year, and we also put a lot of resources behind the main rebar brands as Turo, for instance, during the year, as
you will see.
Well, I guess you're done with all your discussions with retailers now, and you have presented all the new products. So you feel confident that we should see organic growth in Norway for 2014?
For confident, we will see a better trend, yes.
Just the last question regarding the sales process of the assets in Russia. Are you able to comment on the timing aspect of this? Do you expect it to maybe be completed in the next 6 months?
Wise from experience, I think that committing to time lines is not very wise. It's a process in place. But obviously, a process such as this is complicated, and I think that good execution is better than speed.
And regarding other M and A activities, any comments on changes in your views on the targets that you're looking at?
The picture is the same. We will continue to do add ons if they represent significant strengths in the portfolio with no transformational acquisitions. The focus is on improving operations. As we see from the strategic priorities, that is the main priority.
Thanks.
We got a few questions from the net. Markus Ivar from Goldman Sachs. Who would be the natural buyer of the Russian asset?
Well, from what we can see, there are both Russian and international interest in that asset.
Markus also would like to know what the organic growth was for Orkla Foods excluding Veedis.
I don't have that exact figure, but the organic growth was down 6% in the quarter as presented.
One more question from Petter Nystrom, ABG. What should we expect on marketing spend in 'fourteen versus 'thirteen?
In general, I would say we expect that to be on the same level, maybe slightly higher.
It's your last chance to have some intriguing questions.
Okay.
Thank you.