Age Korsvold - President and CEO: Good morning, ladies and gentlemen, and welcome to this presentation of the Second Quarter Results from Orkla. We have – first, I will give some introductory remarks, then Mr. Terje Andersen, the CFO will present the figures to you; and then Atle Vidar Johansen, the CEO of Orkla Foods will take you through the Consumer Goods activities.
There are three main messages in this quarter. Firstly, the financial results are unsatisfactory. We are reporting EBITA of NOK632 million versus NOK698 million last year. Secondly, all the restructuring programs' integration work going on inside our organization are on plan. Thirdly, the divestment in non-core assets continued on plan with one exception where we are now clearly behind plan.
If we then start with the financial performance, there are obviously a multitude of factors explaining this deviation from plan. First and foremost, there are some indications that macroeconomic factors may have affected this quarter, but it's maybe early to say whether this is a change in consumer behavior or it is in fact macroeconomic factors.
Competition is also still intense, but I think for the most part, we need to look inside Orkla to see the explanation for the deteriorating performance in the second quarter.
There is a weak top line development in June in particular. I would also say that the extended approval process for the Rieber acquisition has clearly taken its toll on that organization this year, and as a consequence, both top line and the profit performance for Rieber is clearly behind and below expectations.
The challenging market for Snacks & Confectionery, which has been in place for several quarters continues, and, as you know, this is also the reason why we are restructuring those activities, as I will come back to.
Finally, we are in the middle of a big turnaround in Russia, and that operation continues to perform below expectations. We see weak results affecting our results in the second quarter as well.
There are improvements, however, for Home & Personnel and Orkla Food Ingredients. The divestment of assets continues with the sale of the REC and Borregaard shares. In general, in this quarter, a lot of activity and a lot of focus on the restructuring activities inside the Consumer Goods business.
I have commented for the most part ongoing transition inside the Branded Consumer Goods, the integration Rieber progresses according to plan, the new organization is in place and in general terms we could say that the very demanding face of that integration process where the organization is probably focused mostly on themselves where we set up a new structure where we appoint new leaders. That activity is behind us. I think we can now go forward with a new highly motivated management team and organization and effectuate the plans that we have in place for that activity.
There are also, as you know, integration processes going on. In Denmark, where we merged Orkla and Rieber organizations and in Sweden where we merged Frodinge into the Procordia organization.