Interim%20report%20presentation%20Q3%202011-11-07

Interim Report Third quarter 2011

Arne Frank CEO

Anders Byström CFO Fredrik Nilsson Head of IR

2

Agenda

The first choice for value-added vegetable oil solutions

Third quarter 2011

Business Area information

AAK Acceleration

Other major events

Q & A

3

Third quarter


Net sales in the third quarter increased to SEK 4,462 (3,774) million

• Increased raw material prices and better product mix

• Negative currency translation impact of SEK 246 million

• Volumes increased by 5 percent due to increases in speciality volumes, including the impact of the Golden Foods/Golden Brands acquisition (SEK 225 million in net sales); commodity volumes were down, mainly as earlier predicted in the UK.

Operating profit, amounted to SEK 246 million (231), an improvement of 6 percent

• At fixed exchange rates operating profit improved by 13 percent

Earnings per share amounted to SEK 3.48 (3.73)

• Decrease of 7 percent, due substantially to the impact of revaluing interest rate swap contracts arranged to fix forward interest rates

4 The first choice for value-added vegetable oil solutions

Food Ingredients

• Operating result amounted to SEK 143 million (124)

• The result includes negative translation effects of SEK 8 million

• Continued increased portion of high value products

• The business area had a favourable product mix and generally also very high yields in the plants

• Volumes increased by 3 percent compared to last year mainly due to the acquisition in US

+15%

+22%

Third quarter

5

Third quarter


Chocolate & Confectionery Fats

• Operating result amounted to SEK 112 million (102)


• Margins in Chocolate & Confectionery Fats continued to be stable but with an slightly unfavourable product and customer mix.

• Volumes increased by 13 percent compared to last year

Technical Products & Feed

• Operating profit amounted to SEK 15 million (29)

• The reduced profitability in the business area during the third quarter was due to increased raw material costs for fatty acids, crushing margins under pressure and the planned but longer than normal maintenance stop in Karlshamn

+10%

+18%

-48%


Focus the analysis on:

• Volume

• Operating profit

• Operating profit per kilo

• Return on Net Operating Assets

• Net Debt / EBITDA

0

200

400

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1 000

1 200

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1 600

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Rolling 12 m

onths, '000 MT

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rter,

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AAK Group - Volume

Quarter Rolling 12 months

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Rolling 12 m

onths, SE

K/K

g

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AAK Group - Operating profit per kilo


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AAK Group - Operating profit


Financial summary


Focus the analysis on:

• Volume

• Operating profit

• Operating profit per kilo

• Return on Net Operating Assets

• Net Debt / EBITDA

3,87 3,89 3,96 4,12 4,254,56 4,42

4,174,40

3,85

3,10

2,452,16

2,46 2,482,20

2,512,77 2,90

0,00

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2,00

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5,00

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11

NET DEBT/EBITDA

6,0%

7,0%

8,0%

9,0%

10,0%

11,0%

12,0%

13,0%

14,0%

15,0%

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Q4 10

Q1 11

Q2 11

Q3 11

Return on Net Operating Assets - Rolling 12 months

Financial summary


Third quarter 2011

Operating profit amounted to SEK 143 million (124*), an increase of 15 percent


• At fixed exchange rates, operating profit was up 22 percent compared to last year

• Volumes increased by 3 percent

• Continued increased portion of high-value products • Infant Nutrition

• Dairy industry

• Bakery

• Favourable product mix

• High yields in the plants

Food Ingredients


Acquisition of Golden Foods/ Golden Brands - Financial impact

July to December 2011 • Limited impact on AAK Group

operating profit Operating profit per kilo in line with current group average from January 2012 Full year volume (2012) in the range of 70 000 - 80 000 MT Integration on track The acquisition is reported in the Food Ingredients business area


Food Ingredients

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Q2 11

Q3 11

Rolling 12 m

onths, SE

K m

illion

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rter,

SE

K m

illio

n

Food Ingredients - Operating profit


0,00

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Q1 07

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Q1 11

Q2 11

Q3 11

Rolling 12 m

onths, SE

K/kg

Qua

rter,

SE

K/k

g

Food Ingredients - Operating profit per kg


11



Third quarter 2011

The operating result reached SEK 112 million (102)

• The result included a negative translation impact of SEK 8 million

• At fixed exchange rates, operating profit was up 18 percent compared to last year

• Volume increased by 13 percent

• The general market conditions were stable • Slightly unfavourable product and customer mix

12



0

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Rolling 12 m

onths, SE

K m

illion

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rter,

SE

K m

illio

n

Chocolate & Confectionery Fats - Operating profit


0,000,200,400,600,801,001,201,401,601,802,002,202,40

0,000,200,400,600,801,001,201,401,601,802,002,202,40

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

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Rolling 12 m

onths, SE

K/kg

Qua

rter,

SE

K/k

g

Chocolate & Confectionery Fats - Operating profit per kg


13

Technical Products & Feed


Third quarter 2011

Operating profit was SEK 15 million (29*)

• Volumes in the third quarter 2011 increased by 1 percent

• The reduced profitability in the business area during the third quarter was due to

• Increased raw material costs for fatty acids

• Crushing margins under pressure

• The planned but longer than normal maintenance stop in Karlshamn

-10

10

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50

70

90

110

130

150

0

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Rolling 12 m

onths, SE

K m

illion

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rter,

SE

K m

illio

n

Technical Products & Feed - Operating profit



Cash flow

Raw material prices during the first nine months 2011 has decreased, which will positively affect cash flow the first half of 2012 and could potentially have a positive impact already in the fourth quarter of 2011

We have now largely reversed negative cash flow impact of the dramatic raw material price increases during the last six months 2010

SEK million Q3 2011

Q3 2010

YTD 2011

YTD 2010

Cash flow from operating activities 257 255 692 585 Change in working capital -68 -340 -902 -360 Cash flow from operating activities incl change in working capital

189 -85 -210 225

Cash flow from investments -410 -65 -573 -244 Free cash flow -221 -150 -783 -19


Raw material prices

Significant raw material price increases during the last six to nine months

• Negative cash flow impact

• 10 percent change in all raw material prices will effect working capital by +/-SEK 250 million

16

AAK Acceleration – 12 Priority Projects

Growth 1. Bakery 2. Dairy 3. CCF 4. Infant Nutrition 5. Food Service 6. Merger & Acquisition 7. Fast-growing Economies - China - Brazil

Efficiency 8. Purchasing 9. Productivity

People 10. Sales Management & Sales Processes 11. Mobilize Ourselves 12. Internal Communication


17

Concluding remarks from CEO


We continue to see very positive effects of the AAK Acceleration program, both in terms of organic growth in speciality products, acquisitive growth and productivity

Speciality volumes increased particularly well in Infant Nutrition, Dairy Industry, Bakery and Chocolate & Confectionery Fats

The acquisition of Golden Foods/Golden Brands significantly strengthens our ability to supply combined existing and new customers with a broader portfolio of speciality oils and fats solutions in the US

The effects on our industry from the more difficult general economy in Europe are difficult to predict. However, with the dramatic food price inflation in 2010, at least for now, behind us, AAK’s customer value propositions for health and reduced costs and the AAK Acceleration program, we remain prudently optimistic for the future


Questions & Answers

Presentatör

Presentationsanteckningar

Marketplace Where we - meet customers - share knowledge - develop products - promote and sell products Supply Chain Where and how we source our raw materials - Minimizing environmental impact - Supplier requirements - Partnerships for improvements Environment Where we produce our products - 11 production sites - The machinery - Consumption and emission - Our major environmental impact Workplace Our staff at all locations - Production sites - Sales offices - Sourcing sites Communities Our neighbours where we operate - Contributing to and being a part of the community - License to operate - Reputation

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The first choice for value-added

vegetable oil solutions

20

Investor Relations Contacts


Arne Frank Chief Executive Officer and President Phone: +46 40 627 83 00

Anders Byström Chief Financial Officer Phone: +46 40 627 83 32

Fredrik Nilsson Head of Investor Relations and Group Financial Manager Phone: +46 40 627 83 34 Mobile: +46 708 95 22 21 E-mail: [email protected]

Further Investor Relations material can be found at www.aak.com/en/Investor

mailto:[email protected]�

http://www.aak.com/en/Investor�


Financial calendar

Financial calendar 2012 9 February, 2012 Interim report for the

fourth quarter and full-year 2011

3 May, 2012 Interim report for the first quarter 2012

15 May, 2012 Annual General Meeting

19 July, 2012 Interim report for the second quarter 2012

7 November, 2012 Interim report for the third quarter 2012


Cocoa Butter

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Raw Material Price - Rapseed and Palm

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Interim%20report%20presentation%20Q3%202011-11-07

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