Orkla Replaces CEO Amid Push To Become Pure Branded Goods Firm

Norwegian conglomerate Orkla ASA (ORK.OS) said Monday it has appointed an acting chief executive to replace Bjorn Wiggen as president and CEO after "a disagreement" between Wiggen and the board, as the company pushes to become a pure branded goods firm.

The deputy chairman of the board, Age Korsvold, has become acting CEO after Wiggen agreed to step down with immediate effect, Orkla said. Wiggen had been in the post for 19 months.

"The main reason for the change of president and CEO is a disagreement between the board and Bjorn M. Wiggen as regards ways of working," said Orkla Chairman Stein Erik Hagen in a statement.

"The change of CEO entails no change in Orkla's strategy. The company intends to strengthen its position as the leading branded goods company in the Nordic region. At the same time, the company's non-core businesses will be divested," he added.

Korsvold said in a statement: "My primary task will be to drive the transformation of Orkla into a pure branded goods company."

Korsvold was chief executive of Norwegian insurance company Storebrand ASA (STB.OS) from 1994 to 2000, and chief executive of privately owned investment firm Kistefos from 2001 to 2010. He has served on Orkla's board since May 2011.

Orkla has about 30,000 employees in 41 countries and operating revenue last year of NOK61 billion, according to its annual report. It owns a range of companies that produce consumer brands, such as hygiene and cleaning products maker Lilleborg and confectioner Nidar. It also owns Swedish aluminum company Sapa and Norwegian chemical company Borregaard, and holds stakes in Norwegian paint producer Jotun AS and solar energy company Renewable Energy Corp. (REC.OS).

The conglomerate has previously divested Norwegian silicon producer Elkem, agricultural services company Borregaard Skoger AS, investment company Orkla Finans and most of its hydro power units. It will continue making more divestments, Hagen said.

Orkla also said Monday its first-quarter earnings before interest, taxes and amortization rose 13% from a year earlier to NOK888 million, while operating revenue fell 6.7% to NOK14.7 billion.

Profit before tax fell 20% to 1.55 billion.

"The numbers are in line with consensus, both for Orkla Brands, Sapa, and (biorefinery) Borregaard," said DNB Markets analyst Haakon Aschehoug. He said the hydro power results were a bit weaker than expected, but other income was somewhat higher, "so the sum is in line with consensus."

At 0917 GMT, Orkla's shares traded 0.1% higher at NOK42.19.

-By Kjetil Malkenes Hovland, Dow Jones Newswires: [phone]; [e-mail]