Regulatory News:
AAK (STO:AAK)
· 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.
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 Malm�, 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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AAKFredrik Nilsson CFOMobile: +46 708 95 22 21E-mail:
fredrik.nilsson@aak.com