AAK Reports Q2 2012 Result

Food Ingredients volume was up 21 percent; for comparable units the growth was 2 percent, comprising increased value added products. Volume in Chocolate & Confectionery Fats remained stable, up 1 percent, and in Technical Products & Feed volume was down 6 percent.

19 Jul 2012 --- Operating profit reached SEK 218 million (196), before acquisition related costs of SEK 7 million, an improvement of 11 percent compared to the corresponding quarter in 2011.

Business Area operating profit:

- Food Ingredients reached a record high second quarter of SEK 156 million (120), an improvement of 30 percent.
- Chocolate & Confectionery Fats reported operating profit of SEK 65 million (70).
- Technical Products & Feed had another challenging quarter but reached SEK 20 million (28).

Earnings per share increased by 3 percent, from SEK 3.04 to SEK 3.14.

Chief Executive´s comments:

Continued strong growth and profit improvements driven by Food Ingredients coupled with very strong operational cash flow

Sales amounted to SEK 4,207 million (3,907).

Very strong cash flow in the second quarter of SEK 351 million (-41). This amount includes changes in working capital which improved by SEK 196 million (-272).

Volume and business development
The second quarter was characterized by a Group volume growth compared to last year of 11 percent.

Food Ingredients volume was up 21 percent; for comparable units the growth was 2 percent, comprising increased value added products. Volume in Chocolate & Confectionery Fats remained stable, up 1 percent, and in Technical Products & Feed volume was down 6 percent.

AAK Acceleration
We continue to see positive effects of the AAK Acceleration program (Growth-Efficiency-People).

Recent Acquisitions
During the later part of the second quarter AAK made two acquisitions; Oasis Foods Company in the US (annual sales SEK 925 million) and Crown-Foods A/S in Denmark (annual sales SEK 60 million). Both companies are active within Food Ingredients - Food Service.

Concluding remarks
The impact on our industry from the more difficult general economy in Europe is difficult to predict. 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, mainly driven by a very strong Food Ingredients business.