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2016-10-26

AAK: AAK's Interim report for the third quarter 2016 - all-time high operating profit

· Operating profit, excluding acquisition costs of SEK 15 million,
reached SEK 431 million (376), an improvement of 15 percent and an
all-time high record. This despite a currency translation impact of
negative SEK 10 million (positive 27), mainly related to Food
Ingredients.

· Total volumes continued to grow nicely and were up 11 percent (2).
Organic volume growth was 4 percent (2). The demand for speciality
and semi-speciality products was strong, generating organic volume
growth of 5 percent (2).

· Food Ingredients improved by 9 percent, reaching SEK 251 million
(230). The picture between the different segments was mixed, with
several showing very good development:

- The Dairy segment continued its trend and reported, yet again, solid
organic volume growth.

- The Bakery segment, however, had another challenging quarter.
Volumes continued to decline, although at a slower pace than during
the year's first two quarters.

- Infant Nutrition reported strong double-digit volume growth. This
was particularly driven by an extraordinary volume growth for our
product range Akonino® but also by InFat®, sold through Advanced
Lipids AB, a joint venture of AAK and Enzymotec.

- Foodservice reported organic volume growth with good development
particularly in the U.K., the U.S. and the Nordics.

· Chocolate & Confectionery Fats reported a result of SEK 190
million (166), an improvement of 14 percent.

- Total volumes increased by 23 percent (4) and organic volume growth
was 15 percent (4).

- We saw continued organic volume growth for both high-end and low-end
products with the latter showing particularly strong growth after
some challenging quarters.

- After two years of severely deteriorating market conditions in
Russia and Ukraine, the strong growth during the first two quarters
continued, but still from relatively low levels.

· Technical Products & Feed reached SEK 24 million (11). Last year's
low result was, as communicated at the time, due to a planned and
extended maintenance stop.

· Earnings per share were stable at SEK 6.00 (6.03). Increased
financial costs due to extended borrowings in high-interest rate
countries (Brazil, China and India) and increased earnings in
countries with high tax rates had a very unfavorable impact on
earnings per share.

· Operating cash flow including changes in working capital amounted
to negative SEK 135 million (258). Cash flow from working capital was
negative, amounting to SEK 467 million (negative 81). This was, as
expected and communicated, due to the substantially increased raw
material prices during the last quarters, combined with working
capital tied up for the two large greenfield investments.

· Calculated on a rolling 12 months basis, Return on Capital
Employed (ROCE) was however unchanged, 15.7 percent (15.7 percent at
December 31, 2015).

· As communicated earlier, AAK has during the third quarter acquired
the leading U.S. West Coast based vegetable oils company California
Oils Corporation from Mitsubishi Corporation of Japan. California
Oils Corporation, also known as CalOils, had last year revenues of
approximately SEK 1,350 million and a volume of approximately 110,000
MT.

· Our new factory in Brazil, which was inaugurated during the second
quarter, is progressing according to plan. Some limited volumes have
been delivered. To be able to deliver the whole product range a
gradual ramp-up will continue during the coming quarters. Our China
greenfield project also continues to develop according to plan.

Concluding remarks:
"Based on AAK's customer value propositions for health and reduced
costs, and our customer product co-development and solutions
approach, we continue to remain prudently optimistic about the
future", says Arne Frank, CEO and President, AAK Group. "The main
drivers are the continued positive underlying development in Food
Ingredients and the continued improvement in Chocolate &
Confectionery Fats."

The Interim report for the third quarter 2016 will be presented today,
October 26, 2016 at 1 p.m. CET at a Press & Analyst telephone
conference. For participation, please see instructions under the
Investor tab at the AAK website, www.aak.com.

For further information, please contact:
Fredrik Nilsson
CFO
Mobile: +46 708 95 22 21
E-mail: fredrik.nilsson@aak.com

This information is information that AAK AB (publ.) is obliged to make
public pursuant to the EU Market Abuse Regulation and the Securities
Markets Act. The information was submitted for publication, through
the agency of the contact person set out above, at 08:50 a.m. CET on
October 26, 2016.

AAK is a leading provider of value-adding vegetable oils & fats. Our
expertise in oils & fats within food applications, our wide range of
raw materials and our broad process capabilities enable us to develop
innovative and value-adding solutions across many industries -
Chocolate & Confectionery, Bakery, Dairy, Infant Nutrition,
Foodservice, Personal Care, and more. AAK's proven expertise is based
on more than 140 years of experience within oils & fats. Our unique
co-development approach brings our customers' skills and know-how
together with our own capabilities and mindset for lasting results.
Listed on the NASDAQ OMX Stockholm and with our headquarters in
Malmö, Sweden, AAK has 20 different production facilities, sales
offices in more than 25 countries and more than 2,800 employees. We
are AAK - The Co-Development Company.

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http://news.cision.com/aak/r/aak-s-interim-report-for-the-third-quarter-...
http://mb.cision.com/Main/871/2108869/580255.pdf
http://mb.cision.com/Public/871/2108869/af8b5044ff982493.pdf

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