AAK Reports Rise in Q3 Profits

Nov 8 2011 --- The largest business area, Food Ingredients, reported again strongly improved profits and continued increase of value added products and therefore strong improvements in operating profit per kg.

Net sales in the third quarter increased to SEK 4,462 million (EUR492 million) (Q3 2010, 3,774 (EUR417 million)) mainly due to increased raw material prices and a better product mix partly offset by a negative currency translation impact of SEK 246 million.

Volume increased by 5 percent due to increases in speciality volumes, including the impact of the Golden Foods/Golden Brands acquisition (SEK 225 million in net sales); commodity volumes were down, mainly as earlier predicted in the UK.

Operating profit, amounted to SEK 246 million (231), an improvement of 6 percent. At fixed exchange rates operating profit improved by 13 percent. Before acquisition related costs of SEK 7 million, operating profit amounted to SEK 253 million, an improvement of 10 percent.

The largest business area, Food Ingredients, reported again strongly improved profits and continued increase of value added products and therefore strong improvements in operating profit per kg.

The business area Chocolate & Confectionery Fats showed strong volume growth and stable margins.

The smallest business area, Technical Products & Feed experienced challenging markets conditions and high raw material prices.

The integration of the newly acquired Golden Foods/Golden Brands is developing according to plan and the integration has been very well perceived by customers and employees.

Earnings per share amounted to SEK 3.48 (3.73), a decrease of 7 percent, due substantially to the impact of revaluing interest rate swap contracts arranged to fix forward interest rates.

“The effects on our industry from the more difficult general economy in Europe are difficult to predict. However, with the dramatic food price inflation in 2010, at least for now behind us, AAK’s customer value propositions for health and reduced costs and the AAK Acceleration program, we remain prudently optimistic for the future”, commented AAK President and CEO Arne Frank.