I'm Ofer Horstvaal. I'm the CEO of Orkla, and welcome to the 3rd quarter results. With me today, I have Mr. Tag Hallmersson, the CFO, to present you the results And then, Keester Oberg, the CEO of Confection and Snacks, will review the business units with you. But first some introductory comments from me.
The Q3 was a demanding quarter, seen in isolation. We cannot be satisfied with neither top line profitability nor cash conversion. On the other hand, change process and integration processes are proceeding according to plan and we are getting the initial results from these programs after initial investments. Furthermore, the speed at which we are leaving the 3rd quarter is more buoyant than the speed at which we entered the 3rd quarter. So we are for the consumer goods business, we are reporting EBITDA of 8 67,000,000, which is an increase of 11%.
The group EBITDA is 909 Contribution from acquired businesses is €120,000,000 If we then look at the business units, Orkla Home and Personal and Orkla Food Ingredients are reporting reasonably satisfactory results. There is still challenges inside the Norwegian Food business related to the integration processes going on there, while the Baltics and Sweden are reporting progress. We have had a good quarter for Gengis, the old Sapa heat transfer. Both volume and profits grow and cash flow generation is also reasonably satisfactory. As you know, the joint venture with Hydro closed on September 1, So SAPA is now reported as an associate company where we own 50%.
I wanted to show you this chart because it underlines another point, which in all the numbers that we talk about is also important and that is that Orkla is growing. I think that you cannot underestimate the importance of increasing the platform from which you want to extract synergies. And as such, the importance longer term of acquiring Wiber and Nuredang is important. And as you can see here, EBITDA is turning up again. And of course, we are very confident that these acquisitions will meet the return requirements that we have.
And I would also like to remind you of the 4 strategic priorities that we outlined at our Capital Markets Day at the end of September, there are 4 things. First of all, we need to reduce complexity. That work continues and will continue for, I think, a long time. We need to extract cost and improve cash flow. We need to drive organic growth.
And we need to improve the skill base inside our own organization. The most common question that we get is how will you grow? And there are two sides to the equation. On the one hand, we need to extract synergies and reduce costs and there are then activities directly related to growth. We will reduce costs through a number of initiatives that we spend a lot of time explaining to you, restructuring synergies, integrating companies, continuous improvements, improving purchasing and so on.
The importance of the cost initiatives is of course that a significant part of the improvements need to be reinvested in the business in order to improve competitive positions. It's that improvement of the competitive position that is a very important element of the growth. Then in addition, we know that great innovations drive growth. And in addition to that, new categories and new channels will also contribute to growth in the years to come. But the 2 are linked.
We need to release financial resources from cost initiatives and skill improvements and those resources we need to reinvest in growth. We at the Capital Markets Day, we also announced our financial objectives. Our ambition is that Orkla Foods by the end of this 3 year transition period will grow organically 2% to 3% and have an EBIT margin of 15%. Orkla, Confectionery and Snacks, our ambition is that they will grow 3% to 4% with a 16.5% EBIT margin. And for Orkla Home and Personal, 3 percent to 5% organic growth with EBIT margin of 17.5%.
We have explained to you that restructuring synergies so far is estimated to be DKK400 1,000,000 to DKK500 1,000,000 and those programs that we have announced are on track. And I think we are realizing synergies in accordance with plan. In addition, we expect gross purchasing savings order of magnitude SEK 400,000,000 as we centralize more of the purchasing function at Orkla. And lastly, continuous improvements, we expect to be order of magnitude SEK 150,000,000 per year. That leaves essentially 2 elements.
The first is that we need to compensate the increase in raw materials and the annual drag from inflation with the price increases. And the other point the other unknown is this of course then the contribution from volume mix, which is the erratic growth. And those three elements are, of course, the elements that will define whether we can reach the financial objectives that we have. I think if you look at the numbers, we feel that financial objectives are realistic and a significant part of the savings in confection and snacks we talk about sort of fifty-fifty will flow down to the bottom line and the rest will be reinvested in the business as we go forward and then as we improve our competitive position. So with that, I leave the word to Terje Andersson to take you through the numbers.
Thank you.
Thank you. I start with the group income statement. Group's operating income increased by 17% in the Q3 compared to last year. Acquired companies, mainly Rebrand Jordan contributed with 1,200,000,000 while currency translation effects were positive with 245,000,000. EBITDA ended at €9,000,000 in the quarter and the EBITDA bridge is shown on this slide.
The growth in brand and consumer goods is driven by acquisitions, while from sale of real estate during 2012 and this explained the negative deviation in the quarter for financial investments. Headquarter and other costs are somewhat higher than last year. Oracle Insurance Company has in the quarter made an allocation for claims by NOK 15,000,000 Other income and expenses totaled NOK228,000,000 in the quarter. These costs are mainly driven by the restructuring program currently running in the group, immediate recognition of M and A costs and impairment of a Danish food brand in the quarter. Cash effect is estimated to be approximately 160,000,000 After the establishment of the Sapa JV September 1, these investments will be presented on the line for associates and joint ventures.
Profit contribution from Sapa JV in September was negative with 35,000,000 Orkla continued to sell shares and financial assets during the Q3 and booked a gain of 56,000,000 in the quarter. Process of selling down the financial share portfolio has been successful and the market value was somewhat below 1,000,000,000 at the end of the quarter. This continued operation is mainly related to 2 months profit from Sapa profiles. And as Augie mentioned, working capital has a seasonal increase in the Q3, but is expected to come down towards the end of the year. And cash flow from operation ended at $561,000,000 in the quarter.
Looking at net debt, net interest bearing debt was €9,900,000,000 at the end of the quarter. This represents an increase by roughly 5,000,000,000 year to date, largely related to the acquisition of Reber and paid dividends, but also due to currency effect on the debt portfolio. The increase was partly offset by the sale of shares and financial assets, a positive cash flow from operation as well as received payment from the Sapa joint venture. Balance sheet still strong and net gearing was 0.33 at the end of the quarter and our financial flexibility is there to support the strategy going forward. Then some comments to the other businesses, starting with Heat Transfer or Grengis, which will be the official name going forward.
Grengis had volume and profit growth in the quarter. EBITDA in the quarter ended at €90,000,000 compared to €65,000,000 last year. Swedish operation achieved volume growth despite a negative trend in the European automotive market. Improvement programs that has been conducted over the last year contributed positively to the EBITDA and margin growth, But further restructuring in Sweden has been announced in the quarter, which will result in a reduction of about approximately 65 employees. Chinese operation in Shanghai contributed also positively with volume growth and positive effects from improvement programs.
Cash flow year to date was approximately 280,000,000 dollars representing a cash conversion of 108%. Hydropower had a quarter on par with last year, significantly higher prices were offset by lower production volume. Total production was 5.45 gigawatt hour compared to 7.60 gigawatt hour last year. Reservoir levels were somewhat lower than normal at the end of the quarter and production volume will be lower this year than last year. Jotun continues its positive growth trend and achieved a 6% increase in sales and 19% increase in operating profit in the 1st 8 months.
Volume growth in all segments except marine and higher gross margin shipbuilding activity in Asia. Year to date sales in Scandinavia were also lower than last year largely due to a cold spring in this region. In line with the company's growth strategy, Jotun has continued its comprehensive investment program during the year and the most important investments are the construction of new factories in Brazil, Russia and China. Jotun has also continued the geographical expansion and has entered several new markets such as Myanmar, Bangladesh and Morocco. And lastly, the FAPA joint venture with Hydro.
After the final approval from Chinese competition authorities, the joint venture with Hydro was established September 1, Integrating the 2 organizations and realization of the synergy potential will be the main focus going forward. Safar JV had pro form a operating revenues of almost SEK 11,000,000,000 in the quarter and the pro form a sales volumes increased by approximately 1%. U. S. Automotive market contributed positively and the total demand for extruded products in North America increased by 2% in the quarter.
Europe on the other hand had a continued decline in the general extrusion demand. The trend is however somewhat more positive in Q3 than previous in the year. As mentioned earlier, Orkla's net profit from the JV in September was booked on the line for associates and joint venture with a negative amount of €35,000,000 And then I leave the floor to Chris Robert.
So I'll take you through some further details on the Branded Consumer and the 5 different business units we have there. Starting off with Orkla Foods. Orkla Foods had a significant growth in the quarter, a bit more than 30%, but that's more or less entirely driven by the Reebra acquisition. And the organic growth is minus 3.5%. And this has really been driven by unsatisfactory performance in the Norwegian market.
And there is no doubt that the integration process has been demanding on both the original Orkla side and the acquired Riva side. And mainly on the innovation side, we have lost a bit of momentum. We have satisfactory performance in Sweden where we're improving our shares and also Finland and Baltics are strengthening their performance both on top line and bottom line. On the comparable side, the sales of real estate from last year were NOK 11,000,000 contributed positively to last year's performance. And overall, we have somewhat weaker market shares and that's mainly driven by the Norwegian performance.
So that means that operating revenues of NOK2.6 million ,000 and the EBITDA of NOK 364,000,000 means an EBIT margin of 14% in the quarter, which is the strongest quarter so far this year, but below last year's level. So a bit further details on the Reber acquisition and these what is important to say is following the plan on the synergies side and the non synergies of $250,000,000 to $300,000,000 will come through. We expect the running rate of $150,000,000 by the end of this year. The effect in Q3 was $15,000,000 dollars and we will see further effects on the P and L as of Q4. As I mentioned earlier, the organic decline of Reber is 8% in the quarter and this is mainly driven by the low innovation rate that we had in the quarter and we expect this also to improve as we come into next year.
And Reebok contributed NOK 71,000,000 of EBIT in the quarter. And as you can see the split of synergies is that half of the synergies more or less comes from FTEs and people. A significant part comes from purchasing and then the others group which totals up to $250,000,000 to $300,000,000 which we are convinced that we will deliver in line with the plan we communicated earlier. Innovations has been strong in the Swedish market and we have had some successful launches of Felix brand and this has helped to improve the performance in the Swedish market. Also the Paloons Health brand position that we have established, we continue to grow and a couple of significant launches in the year.
So we are ahead of the targets on Paloons. But as we said earlier, we are lacking somewhat behind on the innovations in Norway, but we expect that to improve as of next year. We have also started reinvesting in the core brand Toro coming from the Riva portfolio. You might have seen that also on Norwegian market in terms of advertising. And we'll also pass you one of the new innovations on Toro as you leave here today, which is the Toro to Kai Jiang Soup.
Sorry for that pronunciation, Natla. Orca confectionery and snacks, as we said on the Capital Markets Day, we have challenging market conditions. We can see that we're coming out of the quarter somewhat stronger than we entered the quarter, but there's no doubt that this is still very disappointing performance. There's been high activity rates from our competitors both from the private label side and local and international competitors. Markets overall are somewhat stable and we have an organic decline of 3.5%.
Reported growth is slightly ahead of last year, thanks to currency. EBITDA declines, we report 16.1 percent EBITDA margin, which is below last year, but it's the strongest quarter so far this year. Organic revenue growth last quarter sorry, Q2 quarter was minus 4.8 and this quarter is minus 3.6. And we know that we have a stronger somewhat stronger innovation program by the end of this year. We also have a stronger activity program, but we don't anticipate any positive hockey sticks effects.
This will be gradual improvements as we come along and further strengthen our program. This is a turnaround case and we can clearly see the potentials. We have lost a bit of momentum on our core business across the different geographies and lost the different types of competitors in the different markets. We are standing firm behind our 2016 targets of 2% to 4% organic growth on a yearly basis and plus 16.5% EBITDA margin. We do think that we can grow the top line significantly beyond where we are today and that is really investing in the number 1 and number 2 positions that we have across the different geographies.
We see no weaknesses on our brand positions and brand health overall. We have now merged businesses in 3 different markets. Three businesses has been merged into 1 in Norway, 2 in Sweden into 1 business and 2 in Finland into 1. We have lost a bit of momentum as well as we've done in food. When you integrate somewhat internal focus goes up and our competitive short term in the external marketplace hasn't been as strong.
But we are convinced that we have a much stronger business now as we go forward and meeting our customers with one face as a much stronger operation. We have appointed a few new leaders and we had a new CEO in place in Sweden as of 1 October and we are gearing up on our innovation program. And we have some pockets of success this year, but we're not successful on a broad base and that's what we intend to be going forward. To fuel growth, we need to be much more aggressive on cutting costs and therefore on Capital Market Day, we announced a cost saving program of approximately NOK 300,000,000 over a 3 year period. Approximately half of that will come through as August said earlier on the dollars The synergy savings of $50,000,000 to $70,000,000 we still anticipate to come through.
We have announced now that we're integrating field sales operations in Norway, which is not just giving synergies, but it's also actually meaning that we will cover on 2 of our categories significantly more stores than we had done before, so improving our executional power. We have announced efficiency improvements in our biggest sites for biscuits, Kugel, which is significant. We've done some workforce reductions announced last week in Denmark. We kicked off a design to value program going through our end to end supply chain activities on our products. And as August said, there are some significant opportunities in the purchasing side.
And to govern the whole savings program, we have also appointed an SVP operations within confectionery snacks to make sure that we deliver on these plans. Going over to Oklahoma and Personal Care who reports a stable quarter, NOK 1,200,000,000 is an organic revenue percent. The growth is delivered by the acquisition of Jordan. Our largest business, Lilibor, is delivering a solid performance in the quarter both in terms of top line shares and earnings. And we are integrating Jordan ahead of schedule and we can see that those synergies that we had anticipated will come through with a slightly higher speed than earlier seen.
We have a strong quarter for Orkla House Care helped by also good strong weather in the painting area. The weather is somewhat helpful in Q3. And we also have positive developments in the Pierre Robert Group and this is coming from a very strong innovation program. We have strong innovations in the underwear area in both Sweden and Norway and a very good momentum which has also led that we're taking back listings from where private labels have been very strong in these markets before. So that's looking very promising.
We have positive share development across key categories. And the reason why we have an organic decline in revenue is driven by Orkla Professional, which are meeting demanding market conditions. And it's also the fact that we have down prioritized some of the non strategic order and export markets. So that's been done on purpose and that means that the organic revenue growth of minus 1.2%. We have a seasonally very strong quarter from an earnings point of view and EBITDA margin of 21% is more or less in line with what we had same quarter last year.
So we believe these margins to be satisfactory for the quarter. As I mentioned earlier, very strong innovation program and we launched the woolen underwears in both the Swedish and the Norwegian market, gaining some additional listings with our key customers. We're getting into children's underwear or baby underwear as well. We were very successful. Toilet cleaning area with the chlorine brand, we have had some significant success with new innovations that is performing ahead of targets.
So strong performance and solid performance in Orkla Home and Personal Care. Orkla International, we are reporting a significant revenue growth and this is entirely driven by some of the rebar markets are reported into like Poland for example are reported into Orkla International. The organic sales decline is minus 1.5% and that is driven by 12% decline in the Russian market and that is driven by the trade structure changing and we are also restructuring our Russian operation. And we expect that to be completed by mid next year. And that is a significant restructuring to make sure that we stop the bleeding of the Russian business.
MTR in India continue to do very well, 18% growth in India and that is driven by all the core categories of powder and mixes and spice mixes, which are all performing very well. We have also positive development in Austria and Poland, while the Czech market has been quite demanding with very high promotion pressures and therefore margin erosion, but new companies also improved the
profitability by
$10,000,000 So EBITDA margin of minus $8,000,000 all in all includes the $10,000,000 positive from new growth. That is partly driven by the fact that we acquired 1 ice cream ingredients business in the U. K, but it's also an organic revenue growth of 3% in the quarter, so both from acquisitions and organic. We have somewhat positive foreign exchange effects in international or ingredients and $1,500,000,000 in revenue and in EBITDA of $77,000,000 partly improved by the acquired businesses as well, but also good performance from bakery ingredients in the Nordics, while profit growth is stable from all the strong market positions we have across the board. So reporting an EBITA margin of 5.1% in the quarter ahead of the 4.3% we had last year.
And the main driver has been the ice cream ingredient side, which had a strong Q3. So that was all.
Everyone is rushing out to get the innovations. Anything on the web? Okay. Thank you for your questions.