AAKs Interim Report First Quarter 2014 Agenda First quarter 2014 - - PowerPoint PPT Presentation

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AAKs Interim Report First Quarter 2014 Agenda First quarter 2014 - - PowerPoint PPT Presentation

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Arne Frank CEO Fredrik Nilsson CFO Anders Bystrm Director IR AAKs Interim Report First Quarter 2014 Agenda First quarter 2014 Business area information AAKtion Q & A The first choice for value-added vegetable oil solutions 2

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SLIDE 1

Arne Frank

CEO Fredrik Nilsson CFO Anders Byström Director IR

AAK’s Interim Report First Quarter 2014

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SLIDE 2

Agenda

The first choice for value-added vegetable oil solutions 2

First quarter 2014 Business area information AAKtion Q & A

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SLIDE 3

First quarter 2014

3

Volum e ´ 0 0 0 MT Sales SEK m illion EBI T SEK m illion EBI T/ kg SEK EPS SEK Net debt SEK m illion

+ 1 9 %

Fixed FX + 1 8 %

+ 1 6 % + 3 % + 3 %

Organic

  • 1 %

+ 2 1 %

400 (388) 287 (242) 4,129 (4,011) 4.57 (3.78) 0.72 (0.62)

+ 0 %

2,260 (Dec 13: 2,255)

The first choice for value-added vegetable oil solutions

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SLIDE 4

First quarter 2014

4

 Operating profit, AAK Group

  • Record high first quarter result
  • Operating profit was SEK 287 million (242), an

improvement of 19 percent

  • Operating profit per kilo continued to improve at

SEK 0.72 (0.62), an improvement of 16 percent  Operating profit, business areas

  • Food Ingredients reached a result of SEK 174

million (158), an improvement of 10 percent

  • Chocolate & Confectionery Fats improved

significantly by 38 percent to SEK 116 million (84)

  • Technical Products & Feed improved by 12 percent

to SEK 29 million (26)

The first choice for value-added vegetable oil solutions

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SLIDE 5

Financial summary

5 The first choice for value-added vegetable oil solutions

600 800 1,000 1,200 1,400 100 150 200 250 300 350 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Rolling 12 months, SEK million Quarter, SEK million

AAK Group - Operating profit

Quarter Rolling 12 months 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.80 0.30 0.35 0.40 0.45 0.50 0.55 0.60 0.65 0.70 0.75 0.80 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Rolling 12 months, SEK/Kg Quarter, SEK/Kg

AAK Group - Operating profit per kilo

Quarter Rolling 12 months 1,200 1,300 1,400 1,500 1,600 1,700 1,800 250 275 300 325 350 375 400 425 450 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Rolling 12 months, '000 MT Quarter, '000 MT

AAK Group - Volume

Quarter Rolling 12 months

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The first choice for value-added vegetable oil solutions 6

Cash flow

Cash flow from operating activities incl. change in working capital amounted to SEK 81 million (213)

  • As earlier predicted and communicated working capital increased and the increase amounted to

SEK 176 million (decrease by 4 last year) 

Working capital is expected to continue to increase due to the expected growth in Chocolate & Confectionery Fats SEK m illion Q1 2 0 1 4 Q1 2 0 1 3 Full year 2 0 1 3 EBITDA 378 330 1,460 Paid interest

  • 29
  • 26
  • 96

Paid tax

  • 75
  • 97
  • 261

Non-cash items

  • 17

2

  • 20

Change in working capital

  • 176

4 217 Cash flow from operating activities incl change in w orking capital 8 1 2 1 3 1 ,3 0 0 Cash flow from investments

  • 167
  • 95
  • 732

Free cash flow

  • 8 6

1 1 8 5 6 8

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SLIDE 7

The first choice for value-added vegetable oil solutions 7

Working capital days Rolling 12 months

1

  • 1

Change since year-end 2013

61 60 58 56 56

  • 40
  • 30
  • 20
  • 10

10 20 30 40 50 60 70 80 90 100 110

  • 40
  • 30
  • 20
  • 10

10 20 30 40 50 60 70 80 90 100 110 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Inventory Accounts receivables Accounts payables Others AAK Group

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Raw material prices

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 10 percent change in all raw material prices

will effect working capital by + / - SEK 250 million

 Time lag of six to nine months

The first choice for value-added vegetable oil solutions

200 400 600 800 1,000 1,200 1,400 1,600 1,800 USD/ton Price development - Palm oil and rapeseed oil

Rapeseed oil Palm oil

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8,0% 10,0% 12,0% 14,0% 16,0% 18,0% Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14 Rolling 12 m onths Quarter

9

ROCE – First quarter 2014

Quarter Q1 2 0 1 4 FY 2 0 1 3 Q1 2 0 1 3 EBIT (R12M) 1,162 1,117 997 Fixed assets 4,525 4,427 4,032 Working capital 2,784 2,581 2,776 ROCE 15.9 15.9 14.6

The first choice for value-added vegetable oil solutions

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SLIDE 10

Business trends first quarter 2014

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Share of volum e Nord W E UK USA CEE CI S Asia LA

Food Ingedients Chocolate & Confectionery Fats Technical Products & Feed AAK Group

Share of volum e Nord W E UK USA CEE CI S Asia LA

Food Ingredients

63%

Chocolate & Confectionery Fats

19%

Technical Products & Feed

18%

AAK Group

100%

The first choice for value-added vegetable oil solutions

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Food Ingredients

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First quarter 2 0 1 4

 Operating profit improved by

10 percent to SEK 174 million (158)

  • Solid development for the speciality and semi-

speciality products while the demand for commodity volumes were materially down  Operating profit per kilo at SEK 0.69 (0.63).

Relatively high during the quarter due to a favourable product mix

 Volume growth by 1 percent

  • For comparable units volumes decreased by

2 percent

+ 1 0 %

The first choice for value-added vegetable oil solutions

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Food Ingredients –

  • rganic volume growth

The first choice for value-added vegetable oil solutions 12

  • 9 %

+ 2 %

2 0 1 3 Q1

  • 7 %

+ 1 %

2 0 1 4 Q1

  • 2 %
  • 2 %

Speciality & semi-speciality Commodity Total

  • 1 %

+ 7 %

2 0 1 3 FY

+ 4 %

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Food Ingredients

13 The first choice for value-added vegetable oil solutions

300 400 500 600 700 800 900 50 100 150 200 250 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Rolling 12 months, SEK million Quarter, SEK million

Food Ingredients -Operating profit

Quarter Rolling 12 months 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 0.30 0.40 0.50 0.60 0.70 0.80 0.90 1.00 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Rolling 12 months, SEK/kg Quarter, SEK/kg

Food Ingredients -Operating profit per kilo

Quarter Rolling 12 months

+ 1 0 % + 1 0 %

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Chocolate & Confectionery Fats

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First quarter 2 0 1 4

 Operating profit improved

significantly by 38 percent and reached SEK 116 million (84)

  • The CBE margins improved driven by the increase

in cocoa butter prices  Operating profit per kilo at SEK 1.51 (1.17)

  • Improved by 29 percent mainly due to

‒ Higher CBE margins ‒ Better product mix with increased volumes of CBE and Personal Care

 Total volume increased by 7 percent

  • Organic growth was less than 1 percent

+ 3 8 %

The first choice for value-added vegetable oil solutions

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Chocolate & Confectionery Fats

15 The first choice for value-added vegetable oil solutions

0.50 0.70 0.90 1.10 1.30 1.50 1.70 0.50 0.70 0.90 1.10 1.30 1.50 1.70 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Rolling 12 months, SEK/kg Quarter, SEK/kg

Chocolate & Confectionery Fats - Operating profit per kilo

Quarter Rolling 12 months 200 300 400 500 600 40 60 80 100 120 140 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Rolling 12 months, SEK million Quarter, SEK million

Chocolate & Confectionery Fats - Operating profit

Quarter Rolling 12 months

+ 2 9 % + 3 8 %

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Cocoa butter price

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For information regarding cocoa and cocoa butter please refer to information at www.icco.org

The first choice for value-added vegetable oil solutions

1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000

USD/ton

Price development - Cocoa butter

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Technical Products & Feed

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First quarter 2 0 1 4

 Operating profit improved to SEK 29 million

(26)

  • Improvements in the more cyclical parts of this

business area  Volumes increased by 6 percent

+ 1 2 % + 9 %

The first choice for value-added vegetable oil solutions

50 70 90 110 130 150 5 10 15 20 25 30 35 40 45 50 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Q3 11 Q4 11 Q1 12 Q2 12 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Q4 13 Q1 14

Rolling 12 months, SEK million Quarter, SEK million

Technical Products & Feed - Operating profit

Quarter Rolling 12 months

+ 1 2 %

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Business area guidance

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 Food Ingredients

  • We continue to remain optimistic for the future of

this business area considering the speciality and the semi-speciality strategy and the strong health

  • profile. Operating profit growth for the full year

2014 is expected to be, with certain quarterly variations, approximately at the 2013 growth rate  Chocolate & Confectionery Fats

  • The performance of this business area is expected

to continue to improve compared to the same quarters last year, however not necessarily with the same pace as the first quarter 2014  Technical Products & Feed

  • For 2014, the operating profit is expected to be

stable or to improve slightly compared to the prior year

The first choice for value-added vegetable oil solutions

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The first choice for value-added vegetable oil solutions 19 Sales Customer co-developm ent Innovation Service Quality Productivity Ahead of plan On plan Behind plan

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AAK strategic investment in Brazil

The first choice for value-added vegetable oil solutions 20

 A new speciality and semi-speciality

edible oils factory in Jundiai, São Paulo, Brazil

 This investment is expected to

approximately amount to SEK 400 million

  • ver a two-year period

 The start-up of the new factory is planned

for the latter part of 2015

 The factory will strengthen our ability to

locally supply Bakery and Dairy solutions as well as further develop our Chocolate & Confectionery business in Brazil

 The new factory will include an Innovation

Center

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 A leading bakery fats supplier to the

bakery markets in Belgium, the Netherlands, France and Germany

 The acquired business had revenues of

approximately SEK 970 million and volumes of approximately 100 kMT in 2013

 The transaction will include

  • Production facility in Merksem, Belgium
  • Variety of bakery fat solutions, margarines

and pumpable shortenings

  • Experienced sales force
  • Team of application specialists
  • Bakery innovation center

The first choice for value-added vegetable oil solutions 21

AAK acquires bakery fats specialist in Belgium

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 Strengthens AAK’s position in the western

continental Europe bakery fats market

 Creates cross-selling opportunities in

Bakery and CCF for existing as well as acquired customers and product ranges

 Innovation center and know-how further

strengthens local customer co- development within bakery

 Adds value to European supply chain

through

  • Enabling internal volume transfers
  • Reduced Group CAPEX need
  • Cost synergies
  • Transportation cost reductions

The first choice for value-added vegetable oil solutions 22

Strategic rationale

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Concluding remarks from CEO

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 Based on AAK’s customer value propositions for

  • Health and reduced costs
  • Customer product co-development and solutions

approach  We continue to remain prudently optimistic

about the future

 The main drivers are

  • Continued positive underlying improvement in

Food Ingredients

  • Continued improvement in Chocolate &

Confectionery Fats

The first choice for value-added vegetable oil solutions

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Questions & answers

The first choice for value-added vegetable oil solutions 24

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Financial calendar

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Financial calendar 2 0 1 4

May 8, 2014 Annual General Meeting July 17, 2014 Second quarter report 2014 October 29, 2014 Third quarter report 2014 November 12, 2014 Capital Market Day – Karlshamn, Sweden February 3, 2015 Fourth quarter and year- end report 2014

The first choice for value-added vegetable oil solutions

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Investor Relations contacts

26

Arne Frank

Chief Executive Officer and President Phone: + 46 40 627 83 00 Fredrik Nilsson Chief Financial Officer Phone: + 46 40 627 83 34 Mobile: + 46 708 95 22 21 E-mail: fredrik.nilsson@aak.com Anders Byström Director External Accounting and Investor Relations Phone: + 46 40 627 83 32 Mobile: + 46 709 88 56 13 E-mail: anders.bystrom@aak.com Further Investor Relations material can be found at www.aak.com/ en/ Investor

The first choice for value-added vegetable oil solutions

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The first choice for value-added vegetable oil solutions