AAK Boosted by Recovery in Chocolate & Confectionery Fats

05 Feb 2014

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5 Feb 2014 --- AarhusKarlshamn has reported record high operating profit in the fourth quarter 2013, driven by the expected and continued significant recovery in Chocolate & Confectionery Fats. Operating profit was SEK 328 million (292), an improvement of 12 percent compared to the corresponding quarter in 2012.

Operating profit at fixed exchange rates improved by 14 percent. Operating profit per kilo amounted to SEK 0.77 (0.74*). The improvement was mainly due to the continued recovery in Chocolate & Confectionery Fats.

Business Area operating profit:
• Food Ingredients reached a result of SEK 218 million (220*), in line with the exceptionally strong fourth quarter last year.
• Chocolate & Confectionery Fats improved by 40 percent and reached SEK 115 million (82*).
• Technical Products & Feed improved by 14 percent and reached SEK 24 million (21). Earnings per share increased by 10 percent, to SEK 5.49 (5.01). Sales amounted to SEK 4,286 million (4,205). The increase was mainly due to increased volumes and the positive impact of the Unipro acquisition partly offset by a negative currency translation impact.

During the fourth quarter volumes increased by 8 percent, mainly due to Food Ingredients which increased by 10 percent. Dairy volumes increased significantly and volumes also increased in Infant Nutrition, Bakery and Food Service. Unipro, which was acquired in September 2013, developed according to plan. Chocolate & Confectionery Fats volumes increased by 4 percent with a more profitable product mix. Technical Products & Feed improved as well.

Operating cash flow including changes in working capital amounted to SEK 208 million (439). As expected working capital increased by SEK 118 million (decrease 112). Working capital is expected to continue to increase because of the expected growth in Chocolate & Confectionery Fats. Continued strong ROCE evolution Return on Capital Employed (ROCE), calculated on a rolling 12 months basis, was 16.5 percent compared to 14.2 percent at year - end last year . The ROCE for the fourth quarter was 16.1 percent compared to 14.7 percent for the fourth quarter 2012. Increased dividend The proposed dividend is SEK 6.00 (5.25) per share, an increase of SEK 0.75 or 14 percent.

The company continues to see positive effects of the AAK Acceleration program (Growth - Efficiency - People). In January 2014 we launched the company program for 2014-16, “AAKtion”. The new program is intended to further strengthen the focus on “Sales - Innovation - Execution”.

“Based on AAK’s customer value propositions for health and reduced costs, our customer product co - development and solutions approach, we continue to remain prudently optimistic about the future. The main drivers are the continued positive underlying development in Food Ingredients and the continued improvement in Chocolate & Confectionery Fats,” the chairman’s statement concluded.