Chief Executive´s comments
Record high operating profit driven by an extraordinary performance in
Food Ingredients Operating profit adjusted for hurricane Sandy
("Sandy”)* reached a record high for the fourth quarter of SEK 292
million (265), an improvement of 10 percent compared to the
corresponding quarter in 2011. Operating profit per kilo adjusted for
Sandy* amounted to SEK 0.74 (0.69), a significant improvement largely
attributable to a continuing trend away from low margin commodity
volumes. In addition, Food Ingredients had a very favourable product mix
and unusually high production yields.
Business Area operating profit adjusted for Sandy*:
· Food Ingredients reached a record high fourth quarter of SEK 220
million (151), an improvement of 46 percent
· Chocolate & Confectionery Fats reported operating profit of SEK 82
· Technical Products & Feed reported stable profits at SEK 21 million
Operating profit for the fourth quarter including Sandy* effects
amounted to SEK 271 million (265), an improvement of 2 percent.
Earnings per share increased by 4 percent, from SEK 4.82 to SEK 5.01.
Sales amounted to SEK 4,205 million (4,483), reflecting lost sales
related to Hurricane Sandy and lower raw material prices.
Continued very strong operational cash flow Continuing strong cash flow
in the fourth quarter amounted to SEK 439 million (499), including a
reduction in working capital of SEK 112 million (289).
With the raw material price evolution during the second half of 2012,
AAK will display a continuing reduction in working capital in the first
half of 2013.
Increased dividend The proposed dividend is SEK 5.25 (4.75) per share an
increase of SEK 0.50 or 11 percent.
Business development During the fourth quarter Group volume increased by
2 percent. Food Ingredients continued to demonstrate very strong
development, particularly in Bakery and Infant Nutrition, while
commodity volumes in the UK continued to decline. Further, Scandinavia
lost some low margin volumes. Chocolate & Confectionery Fats continued
as expected to be challenged and Technical Products & Feed stabilized.
Hurricane Sandy ("Sandy”)* The AAK plants in New Jersey, US which were
affected by Hurricane Sandy are back in operation. Sandy* negatively
impacted operating profit in the fourth quarter by estimated SEK 21
AAK Acceleration and recent acquisitions We continue to see positive
effects of the AAK Acceleration program (Growth-Efficiency-People).
Recent acquisitions are developing in line with plans.
Concluding remarks The impact on our industry from the more difficult
general economy in Europe is, as we all know, really difficult to
However, based on AAK’s customer value propositions for health and
reduced costs, our customer product co-development and solutions
approach, and the AAK Acceleration program, we continue to remain
prudently optimistic for the future. The main drivers are expected to be
our strong Food Ingredients business and the expected recovery in our
Chocolate & Confectionary Fats business.
The performance of the Chocolate & Confectionary Fats business is
expected to stabilize in the first part of 2013 and, provided the cocoa
butter price remains at the current more normal level – see page 19 - it
is expected to start improving significantly during the second half of
Arne Frank CEO and President
The information is that which AarhusKarlshamn AB (publ) is obliged to
publish under the provisions of the Stock Exchange and Clearing
Operations Act and/or the Trading in Financial Instruments Act. The
information was released to the media for publication on February 7,
2013 at 08.15 am CET.
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