AAK Reports Record Q1 Profits

26 Apr 2013 --- Record high first quarter operating profit driven by continued strong performance in Food Ingredients Operating profit reached a record high first quarter result of SEK 242 million (220), an improvement of 10 percent compared to the corresponding quarter in 2012.

Due to the strengthening of the Swedish krona there was a negative currency translation impact of SEK 6 million. Operating profit excluding the negative currency translation impact improved by 13 percent. Operating profit per kilo amounted to SEK 0.62 (0.60), a continued improvement largely attributable to a higher proportion of speciality and semi-speciality products.

Business Area operating profit:
• Food Ingredients for the first quarter reached a record high result of SEK 158 million (137), an improvement by 15 percent
• Chocolate & Confectionery Fats improved by 4 percent and reported SEK 84 million (81)
• Technical Products & Feed improved profit by 4 percent and reported SEK 26 million (25)
• Earnings per share increased by 10 percent, from SEK 3.43 to SEK 3.78.

Return on net assets calculated on a rolling 12 month basis was 14.7 percent compared to 14.2 percent at year-end and 13.2 percent at the corresponding quarter last year. Sales amounted to SEK 4,011 million (4,222), mainly as an effect of lower raw material prices and a negative currency translation of SEK 94 million.

Continued good operational cash flow EBITDA improved SEK 25 million, from SEK 305 million to SEK 330 million. Operating cash flow in the first quarter amounted to SEK 213 million (384), including a moderate reduction in working capital of SEK 4 million (139).

With the raw material price evolution during the second half of 2012, AAK expects to display a continuing reduction in working capital during the second quarter.

During the first quarter Group volume increased by 6 percent. Food Ingredients continued to demonstrate very strong development, particularly in Infant Nutrition and Latin America, while commodity volumes in the UK and Scandinavia continued to decline somewhat. Chocolate & Confectionery Fats and Technical Products & Feed improved slightly. 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.

Arne Frank, CEO and President stated: “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 the strong Food Ingredients business and the expected recovery in Chocolate & Confectionary Fats. Irrespective of market conditions, the anticipated improvement in the Chocolate & Confectionary Fats results is however unlikely to be significant until the second half of 2013.”