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AAK

Earnings Release Jul 20, 2011

2874_ir_2011-07-20_567a1f45-0b72-4975-974d-efa4aa131f5c.pdf

Earnings Release

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AAK Interim Report Quarter 2, 2011

  • Net sales in the second quarter increased to SEK 3,907 million (3,594) mainly due to increased raw material prices and a better product mix, partly offset by a negative currency translation impact of SEK 361 million. Volumes decreased by 8 percent due to lower commodity volumes, consistent with the previous quarter. Speciality volumes continued to increase.
  • Operating profit, excluding non-recurring items of SEK 3 million, amounted to SEK 196 million (164), an improvement of 20 percent. At fixed exchange rates operating profit improved by 32 percent.
  • Earnings per share amounted to SEK 3.04 (2.65), an improvement of 15 percent.

Second quarter 2011 Operating profit AAK Group

First six months 2011 Second quarter 2011

  • Net sales in the first six months increased to SEK 7,750 million (7,104) mainly due to increased raw material prices and a better product mix, partly offset by a negative currency translation impact of SEK 640 million. Volumes decreased by 6 percent due to lower commodity volumes. Speciality volumes continued to increase.
  • Operating profit excluding non-recurring items of SEK 3 million amounted to SEK 400 million (342), an improvement of 17 percent. At fixed exchange rates operating profit improved by 26 percent.
  • Earnings per share amounted to SEK 6.42 (5.44), an improvement of 18 percent.

Financial summary

SEK Million Q2 Q2 Q1-2 Q1-2
2011 2010 % 2011 2010 %
Net Sales 3,907 3,594 + 9 7,750 7,104 + 9
Gross Contribution 831 852 -2 1,662 1,692 -2
Operating profit 196 164 +20 400 342 +17
Operating profit per kilo 0.60 0.46 + 30 0.59 0.48 +23
Financial net -30 -16 +88 -45 -30 +50
Net result 126 109 +16 265 223 +19
Earnings per share 3.04 2.65 +15 6.42 5.44 +18

Chief Executive´s Report - Record high second quarter operating profit and AAK Acceleration on track

Second quarter 2011

Operating profit for the second quarter 2011, excluding nonrecurring items of SEK 3 million, reached SEK 196 million (164), an improvement of 20 percent. At fixed exchange rates, operating profit improved by 32 percent. Earnings per share improved by SEK 0.39 or up 15 percent from SEK 2.65 to SEK 3.04.

During the second quarter of 2011 commodity volumes continued to decline, consistent with the previous quarter. The largest contributor to this reduction is our business in the UK which is now being restructured to match the future anticipated volumes with a better mix of speciality products.

Volumes of speciality products in Food Ingredients, Chocolate & Confectionery Fats and Technical Products & Feed continued to increase in line with strategy and the action plans defined in AAK Acceleration. Underlying margins in Chocolate & Confectionery Fats continued to be stable.

Continued positive impact of the AAK Acceleration program in Food Ingredients

In the largest business area, Food Ingredients, operating profit reached SEK 120 million (101*), an improvement of 19 percent. A continued increased proportion of high-value products with a more profitable product mix led to an operating profit at fixed exchange rates of SEK 131 million (101), an improvement of 30 percent.

The positive development continued in most speciality product areas, in particular for Infant Nutrition (Baby Food) and Dairy Industry.

In the second quarter of 2011 total volumes declined by 13 percent compared to the corresponding quarter in 2010. This decline is consistent with the trend during the previous quarter largely effected by refocusing in the UK market on speciality products. Accordingly, operating profit per kg in this business area has improved significantly.

Chocolate & Confectionery Fats – Strong volume growth and stable margins

The operating result amounted to SEK 70 million (57), an improvement of 23 percent. Volumes increased by 7 percent compared to last year. Operating profit at fixed exchange rates amounted to SEK 80 million (57), an improvement of 40 percent. Underlying margins in Chocolate & Confectionery Fats continued to be stable. The general market conditions remained stable.

Technical Products & Feed

Operating profit was SEK 28 million (28*). Volumes in the second quarter 2011 decreased by 7 percent compared to the corresponding quarter last year, mainly due to a planned, longer maintenance stop in June affecting primarily low margin feed deliveries. Speciality product volumes in Binol increased.

AAK strengthens its positions in North America by acquiring the flaked shortenings market leader, Golden Foods/Golden Brands

As announced on July 1, 2011 AAK has acquired the Golden Foods/Golden Brands business of Louisville, Kentucky, the leading North American processor of speciality fats and oils and manufacturer of shortenings for the bakery and food service industries.

The acquisition of Golden Foods/Golden Brands in the US is an integral part of the AAK Acceleration program, which calls, beyond organic growth, for selective acquisitions that synergistically benefit our customers; it significantly strengthens our ability to supply existing and new customers with a broader portfolio of speciality oils and fats solutions. As one of the largest speciality oil markets in the world, expansion in the US is also particularly exciting.

The product lines that AAK has acquired expand and complement our existing product portfolio and speciality strategy. The Golden Foods/Golden Brands organization will enjoy some AAK products and create good opportunities for mutual cross selling to the combined customer base. Further, the Louisville, Kentucky location also adds a new geographic dimension to our existing site in Port Newark, New Jersey, with significant advantages for all customers but particularly those located in the Midwest. From

now on, AAK's North American customers will enjoy service from two production sites in the US.

Founded in 1982 and located in Louisville, Kentucky, Golden Foods/Golden Brands employs approximately 160 people and had revenue of approximately USD 120 million in 2010.

The acquisition is expected to have only limited impact on the 2011 Group operating profit, but with material benefits beginning from the first quarter, 2012.

AAK - Additional rationalization program

During the second quarter 2011 the company announced an additional rationalization program in the UK operations in order to fully focus on our speciality strategy. This program was announced already in connection with the company's first quarter report in 2011.

The rationalization implies a further move away from larger volume low margin commodity products to more complex, lower volume speciality products at higher margins. The nonrecurring costs related to this program have been offset by the additional insurance compensation received as announced in the first quarter report 2011.

The ongoing productivity improvements in the Scandinavian units continue in line with plan.

Cash flow

As earlier predicted and communicated cash flow turned negative during the second quarter and the first six months as a consequence of significantly increased raw material prices during the last nine months. We have now most likely seen the major effect of the negative cash flow impact of these raw material price increases, subject to future development of raw material world market prices.

Concluding remarks

We continue to see positive effects of the AAK Acceleration program, both in terms of organic growth in speciality products, acquisitive growth and productivity. Speciality volumes increased organically, especially in Infant Nutrition, Dairy Industry and Chocolate & Confectionery Fats.

The acquisition of Golden Foods/Golden Brands significantly strengthens our ability to supply combined existing and new customers with a broader portfolio of speciality oils and fats solutions in the US.

We are now going into the third quarter and we remain prudently optimistic for the quarter and for the execution of AAK Acceleration.

Arne Frank CEO and President

* Starting with the first quarter of 2011 the Group´s operations in crushing will be reported as part of business area Technical Products & Feed. The crushing operation has previously been reported within the business area Food Ingredients. For further information, see page 17.

The AAK Group, second quarter 2011

Net sales

Net sales increased by SEK 313 million mainly due to increased raw material prices and a better product mix, partly offset by a negative currency translation impact of SEK 361 million.

Specialty volumes continued to increase in all business areas in line with our strategy. Commodity volumes for Food Ingredients and Technical Products & Feed declined during the second quarter.

Gross contribution

Excluding translation effects, gross contribution improved by SEK 47 million, the negative currency translation impact was SEK 68 million.

After including currency translation effects, gross contribution decreased by SEK 21 million.

Operating result

Operating profit for the second quarter 2011 reached SEK 196 million (164), an improvement of 20 percent. At fixed exchange rates, operating profit improved by 32 percent.

Operating profit per kilo increased from SEK 0.46 to SEK 0.60 or by 30 percent due to a higher portion of value added products. Speciality volumes increased; whilst low margin commodity volumes decreased.

Investments

Group investments in fixed assets totalled SEK 95 million (100), mainly comprising regular maintenance investments.

Cash flow

As anticipated, cash flow from operating activities was negative SEK 41 million (negative 5), as a result of the significant raw material price increases during the last nine months.

We have most likely seen the major negative cash flow impact of the raw material prices during the second half of 2010 ( six-nine months timing delay because of contracts). Raw material prices have decreased during the first six months of 2011, which will positively affect cash flow the first half of 2012.

Cash flow, after net investments of SEK 95 million (100), was negative SEK 136 million (negative 105).

Financial position

The equity/assets ratio amounted to 33 percent (34 percent as of 31 December 2010). During the second quarter we have paid SEK 184 million in dividend.

Net debt as of 30 June 2011 amounted to SEK 3,436 million (SEK 2,634 million on 31 December 2010). As of 30 June, the Group had total credit facilities of SEK 6,604 million.

Long term refinancing of SEK 4,200 million was finalized in January 2011 and comprises part of the total committed facilities of SEK 6,000 million for five years or more.

Employees

The average number of employees in the Group as at 30 June 2011 was 1,987 (2,101 on 31 December 2010), a reduction of 114 employees compared to year-end and 137 employees compared to the corresponding quarter last year. The net change consists of a reduction at our sites in Scandinavia, partly offset by increases in focused growth markets.

The Parent Company and Group Functions

The Parent Company is a holding company for the AAK Group. Its functions are primarily concerned with joint Group activities related to development and administration.

Group – Q2 2011

0 100 200 300 400 500 600 700 800 900 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Rolling 12 months, SEK million Quarter Rolling 12 months 6,0% 7,0% Return on Net Operating Assets -Rolling 12 months

1000

Quarter Rolling 12 months

NET DEBT/EBITDA

Q1 07Q2 07Q3 07Q4 07Q1 08Q2 08Q3 08Q4 08Q1 09Q2 09Q3 09Q4 09Q1 10Q2 10Q3 10Q4 10Q1 11Q2 11

Volume and operating profit per kilo

Volume Q2 2011

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11

AAK Group Food Ingredients Chocolate and
Confectionery Fats
Technical Products &
Feed
- 8 percent - 13 percent + 7 percent - 7 percent
358,000 MT to 329,000 MT 218,000 MT to 189,000 MT 69,000 MT to 74,000 MT 71,000 MT to 66,000 MT

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11

Operating profit per kilo

AAK Group Food Ingredients Chocolate and
Confectionery Fats
Technical Products &
Feed
+ 30 percent + 37 percent + 14 percent + 8 percent
0.46 SEK to 0.60 SEK 0.46 SEK to 0.63 SEK 0.83 SEK to 0.95 SEK 0.39 SEK to 0.42 SEK

Business Area Food Ingredients, Q2 2011

Net sales

Net sales for the business area increased by SEK 139 million due to increased raw material prices and a better product mix, partly offset by negative currency translation impact of SEK 217 million.

Volumes for the business area declined in the second quarter by 13 percent, mainly due to structural changes in the UK and generally lower commodity volumes.

Gross contribution

Gross contribution declined to 412 SEK million (443*), mainly due to negative currency translation effects of SEK 37 million.

Operating result

Operating profit amounted to SEK 120 million (101*), an increase of 19 percent. The

result includes negative currency translation effects of SEK 11 million. At fixed exchange rates, operating profit was up 30 percent compared to last year.

Margins continued to improve.

External factors/activities

The "AAK Acceleration" programme addresses significant growth opportunities in our speciality products such as Infant Nutrition (Baby Food), Bakery, Dairy Industry and Food Service.

Acquisition of Golden Foods/Golden Brands

Subsequent to the end of the second quarter 2011 the company acquired Golden Foods/Golden Brands in the US, which will be an integral part of the Food Ingredients business. This acquisition will have only limited impact on the 2011 operating profit, but it will have material benefits beginning from the first quarter, 2012.

Raw material prices for palm and rapeseed oil, SEK/tonne

* Starting with the first quarter of 2011 the Group´s operations in crushing will be reported as part of business area Technical Products & Feed. The crushing operation has previously been reported within the business area Food Ingredients. For further information, see page 17.

** All figures are excluding non recurring items.

Financial summary**

SEK Million Q2 Q2 Q1-2 Q1-2 Full Year Rolling12
2011 2010 % 2011 2010* % 2010* months*
Net Sales 2,345 2,206 +6 4,596 4,224 +9 8,667 9,039
Gross Contribution 412 443 -7 803 856 -6 1,826 1,774
Operating profit 120 101 +19 224 198 +13 454 480
Operating profit per kilo 0.63 0.46 +37 0.58 0.46 +26 0.53 0.59
Volumes ('000 tonnes) 189 218 -13 383 430 -11 861 814

Business Area Chocolate & Confectionery Fats, Q2 2011

Net sales

Net sales for the business area improved by SEK 125 million, or by 12 percent, due to volume growth, better product mix and raw material price increases, partly offset by negative translation effects of SEK 144 million.

Gross contribution

Excluding translation effects gross contribution increased by SEK 40 million.

During the second quarter the business area experienced negative translation effects of SEK 31 million. After including these, gross contribution increased by SEK 9 million.

Operating result

The operating result reached SEK 70 million (57), an increase of 23 percent. This result included a negative

translation impact of SEK 10 million.

At fixed exchange rates, operating profit was up 40 percent compared to last year.

Compared to last year, volume increased by 7 percent and operating profit per kg improved from SEK 0.83 to SEK 0.95. Prices for CBE continued to be stable during the second quarter.

The general market conditions were stable.

External factors/activities

The second quarter is seasonally the weakest quarter in the Chocolate & Confectionery Fats business area. There was continued strong demand in the Americas (North and South) and moderate demand in Europe.

Customers in Russia continue to be mainly focused on standard and economy brands in chocolate and confectionery while demand for premium products is still relatively low.

This is due to disposable income growth being limited and employment levels remaining unstable. (Source: Euromonitor)

Cocoa butter, SEK/tonne

* All figures are excluding non-recurring items

Financial summary*

SEK Million Q2 Q2 Q1-2 Q1-2 Full Year Rolling12
2011 2010 % 2011 2010* % 2010* months*
Net Sales 1,146 1,021 +12 2,303 2,124 +8 4,474 4,653
Gross Contribution 320 310 +3 646 643 +0 1,394 1,397
Operating profit 70 57 +23 151 133 +14 341 359
Operating profit per kilo 0.95 0.83 +14 0.99 0.92 +8 1.14 1.18
Volumes ('000 tonnes) 74 69 +7 152 145 +5 298 305

Business Area Technical Products & Feed, Q2 2011

Net sales

Net sales for the business area improved by SEK 49 million, or 13 percent, mainly due to increased raw material prices and a better product mix.

Volumes in the second quarter 2011 decreased by 7 percent compared to the corresponding quarter last year. During the second quarter there was a planned, and slightly longer than normal, maintenance stop which resulted in reduced low

commodity volumes, mainly affecting the feed product segments.

Gross contribution

Gross contribution was unchanged in the second quarter 2011.

Operating result

Operating profit was SEK 28 million (28*), unchanged compared to the corresponding quarter last year. The improvement in operating profit per kilo was mainly due to reduced low margin commodity volumes.

External factors/activities

The biolubricant business continued to enjoy signs of market recovery. However, crushing margin seems to be under pressure in Europe.

* Starting with the first quarter of 2011 the Group´s operations in crushing will be reported as part of business area Technical Products & Feed. The crushing operation has previously been reported within the business area Food Ingredients. For further information, see page 17.

Financial summary

SEK Million Q2 Q2 Q1-2 Q1-2 Full year Rolling 12
2011 2010* % 2011 2010* % 2010* months*
Net Sales 416 367 +13 851 756 +13 1,667 1,762
Gross contribution 99 99 +0 213 193 +10 405 425
Operating profit 28 28 +0 67 53 +26 118 132
Operating profit per kilo 0.42 0.39 +8 0.49 0.38 +29 0.42 0.47
Volumes ('000 tonnes) 66 71 -7 138 139 -1 282 281

The AAK Group, first six months 2011

Net sales

Net sales increased by SEK 646 million due to increased raw material prices and better product mix, partly offset by a negative currency translation impact of SEK 640 million.

Commodity volumes for Food Ingredients continued to decline in the second quarter, but speciality volume increased in Food Ingredients, Chocolate & Confectionery Fats and Technical Products & Feed.

There are no major changes in the general market conditions for speciality products compared to last year.

Gross contribution

Excluding currency translation effects, gross contribution improved by SEK 92 million, while negative currency translation impact was SEK 122 million. After including currency translation effects, gross contribution decreased by SEK 30 million.

Operating result

Operating profit, excluding nonrecurring items of SEK 3 million, reached SEK 400 million (342), an improvement of 17 percent. At fixed exchange rates, operating profit amounted to SEK 432 million (342), an improvement of 26 percent.

Operating profit per kilo increased from SEK 0.48 to SEK 0.59 or by 23 percent due to a higher share of value added products. Volumes increased in the case of speciality products whilst low margin commodity volumes decreased.

Investments

Group investments in fixed assets totalled SEK 163 million (179), mainly comprising regular maintenance investments.

Cash flow

As anticipated, cash flow from operating activities was negative SEK 399 million (positive 310), as a result of the significant raw material price increases during the last six to nine months.

Cash flow, after net investments of SEK 163 million (179), was negative SEK 562 million (positive 131). Further, during the second quarter we paid a dividend of SEK 184 million.

General information

Related parties

No significant changes have taken place in relations or transactions with related parties since 2010.

Insurance compensation

As announced in the first quarter report 2011, the company did during the second quarter finalize the insurance case related to business interruption in 2008 and 2009.

The net impact of this settlement is basically offset by UK restructuring costs. The restructuring cost included some elements of non cash flow nature.

Risk and uncertainty factors

All business operations involve risk – a controlled approach to risk taking is a prerequisite in maintaining good profitability. Risk may be dependent upon events in the outside world and may affect a specific sector, market or country, and the risk may also be purely companyspecific.

At AAK, effective risk management is a continuing process carried out within the framework of operational management and forms a natural part of the day-to-day monitoring of operations.

External risks

The AAK Group is exposed to the fierce competition that characterises the industry, as well as fluctuations in raw material prices affecting working capital.

Financial risk

The operations of the AAK Group involve exposure to significant financial risks, particularly currency risks and raw material price risks.

Operational risk

The raw materials used in the operation are agricultural products, and availability may therefore vary due to climatic and other external factors.

Accounting principles in 2011

This interim report is prepared in accordance with the Swedish Annual Accounts Act and IAS 34, Interim Financial Reporting. For information regarding the accounting policies applied, see the 2010 Annual Report. The accounting policies are unchanged, compared with those applied in 2010.

As from 1 October 2010, AAK has started to use full hedge accounting based on fair value hedging in accordance with IAS 39. Therefore the company does not report any IAS 39 impact commencing the first quarter 2011.

Definitions

For definitions see the 2010 Annual Report.

Events after the balance sheet date

On July 1st the company acquired Golden Food/Golden Brands in the US. For further information see page 3.

The Parent Company

The Parent Company's invoiced sales during second quarter 2011 were SEK 21 million (22).

The result for the Parent Company after financial items amounted to negative SEK 21 million (0).

Interest-bearing liabilities minus cash and cash equivalents and interest-bearing assets totalled negative SEK 26 million (positive 160 as at 31 December 2010). Investments in intangible and tangible assets amounted to SEK 0 million (0).

The Parent Company's balance sheet and income statement are shown on pages 18-19.

Accounting policies

AarhusKarlshamn AB (publ) is the Parent Company of the AAK Group. The Company has prepared its financial reports in accordance with the Annual Accounts Act and RFR 2 Reporting for legal entities.

Changes in the balance sheet

No major changes since yearend.

The Board of Directors and the CEO declare that the interim report gives a full and fair view of the operation, position and performance of the Company and the Group, and describes the significant and uncertainty factors faced by the Company and the Companies which are members of the Group.

Malmö, July 20, 2011

Melker Schörling Carl Bek-Nielsen Martin Bek-Nielsen Mikael Ekdahl Chairman of the Board Vice Chairman Board member Board member

Arne Frank Annika Westerlund Leif Håkansson Chief Executive Officer Trade union Trade union and President representative representative

John Goodwin Märit Beckeman Harald Sauthoff Ulrik Svensson Board member Board member Board member Board member

This report has not been reviewed by the company's auditors.

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 July 20, 2011 at 11 am CET.

AAK Group - Consolidated income statement

Q2 Q2 Q1-2 Q1-2 Rolling 12 Full year Full year
SEK Million 2011 2010 2011 Q 4
2010
months*
Q 4
Full year
2010*
Full yea
2010
Net sales 3,907 3,594 7,750 7,104 15,454 14,808 14,808
Other operating income 61 6 73 12 85 27 46
Total operating income 3,968 3,600 7,823 7,116 15,539 14,835 14,854
Raw materials and supplies -3,110 -2,836 -6,179 -5,511 -12,023 -11,310 -11,271
Other external expenses -256 -275 -495 -553 -1,111 -1,169 -1,169
Cost for remuneration to employees -307 -291 -563 -566 -1,143 -1,146 -1,146
Amortisation and impairment losses -96 -92 -180 -185 -371 -376 -376
Other operating expenses 0 -2 -3 -4 -9 -10 -10
Total operating income -3,769 -3,496 -7,420 -6,819 -14,657 -14,011 -13,972
Operating result (EBIT) 199 104 403 297 882 824 882
Interest income 2 1 3 4 7 8 8
Interest expense -21 -14 -39 -29 -69 -59 -59
Other financial items -11 -3 -9 -5 -7 -3 -3
Total financial net -30 -16 -45 -30 -69 -54 -54
Result before tax 169 88 358 267 813 770 828
Income tax -43 -27 -93 -79 -191 -187 -202
Net result 126 61 265 188 622 583 626
Attributable to non-controlling 1 -1 2 0 4 4 2
interests
Attributable to the Parent company´s 125 62 263 188 618 579 624
shareholders

* Rolling 12 months and full-year 2010 are excluding the IAS 39 effect and non-recurring items.

AAK Group – Comprehensive income

Q2 Q2 Q1-2 Q1-2 Rolling 12 Full year
SEK Million 2011 2010 Q 4
2011
Q 4
2010
Full year
months
Full yea
2010
Income for the period 126 61 265 188 703 626
Exchange differences on translation 26 69 -40 10 -279 -229
of foreign operations
Total comprehensive income for 152 130 225 198 424 397
the period
Attributable to non-controlling 1 2 1 2 1 2
interests

AAK Group – Condensed balance sheet

SEK Million 30.6.2011 30.6.2010 31.12.2010 Q 4
Assets
Goodwill 584 621 580
Other intangible assets
Tangible assets
95
2,698
97
2,926
102
2,718
Financial assets 165 170 133
Total non-current assets 3,542 3,814 3,533
Inventory 3,027 2,185 2,299
Current receivables 2,703 2,410 2,880
Cash and cash equivalents 560 241 540
Total current assets 6,290 4,836 5,719
Total assets 9,832 8,650 9,252
Equity and liabilities
Shareholders´equity 3,214 2,949 3,164
Non-controlling interests 20 24 24
Total equity including non
controlling interests 3,234 2,973 3,188
Total non-current liabilities 4,272 3,652 3,486
Accounts payable 1,167 642 838
Other current liabilities 1,159 1,383 1,740
Total current liabilities 2,326 2,025 2,578
Total equity and liabilities 9,832 8,650 9,252

No changes have arisen in contingent liabilities.

AAK Group – Change in equity

Total equity
Total Non incl. non
equity controlling controlling
SEK Million capital interests Q 4
interests
Openings equity 1 January 2011 3,164 24 3,188
Profit for the period 263 2 265
Other comprehensive income -39 -1 -40
Total comprehensive income 3,388 25 3,413
Redemption non-controlling interest - -5 -5
Stock options 10 - 10
Dividend -184 - -184
Closing equity 30 June 2011 3,214 20 3,234
Total equity
Total Non incl. non
equity controlling controlling
SEK Million capital interests Q 4
interests
Openings equity 1 January 2010 2,927 22 2,949
Profit for the period 188 0 188
Other comprehensive income 8 2 10
Total comprehensive income 196 2 198
Dividend -174 - -174
Closing equity 30 June 2010 2,949 24 2,973

AAK Group – Cash flow statement

Q2 Q2 Q1-2 Q1-2 Full year
SEK Million 2011 Q 4
2010
2011
Q 4
2010
Full year
2010
Full yea
Operating activities
Cash flow from operating activities before change in 231 109 435 330 874
working capital
Changes in working capital -272 -114 -834 -20 -117
Cash flow from operating activities -41 -5 -399 310 757
Investing activities
Cash flow from investing activities -95 -100 -163 -179 -331
Cash flow after investing activities -136 -105 -562 131 426
Financing activities
Cash flow from financing activities 490 29 595 -222 -188
Cash flow for the period 354 -76 33 -91 238
Cash and cash equivalents at start of period 207 305 540 322 322
Exchange rate difference for cash equivalents 0 12 -12 10 -20
Cash and cash equivalents at end of period 561 241 561 241 540

AAK Group – Share data

Q2 Q2 Q1-2 Q1-2 Full year
SEK Million 2011 2010 Q 4
2011
Q 4
2010
Full year
2010
Full yea
Number of shares, thousand 40,898 40,898 40,898 40,898 40,898
Earnings per share, SEK* 3.04 2.65 6.42 5.44 14.15
Earnings per share, SEK** 3.04 1.50 6.42 4.60 15.26
Equity per share, SEK 78.59 72.11 78.59 72.11 77.38
Market value on closing date 183.50 145.00 183.50 145.00 188.50

* The calculation of earnings per share is based on weighted average number of outstanding shares excluding the IAS 39 effect (year 2010) and non-recurring items.

** The calculation of earnings per share is based on weighted average number of outstanding shares.

No dilution from outstanding stock options during the second quarter 2011.

Quarterly data – Business areas

Gross contribution

2010 2011
Full
SEK Million Q1 Q2 Q3 Q4 year
Q 4
Q1
Q 4
Q2
Full year
Food Ingredients 413 443 448 522 1,826 391 412
Chocolate & Confectionery Fats 333 310 379 372 1,394 326 320
Technical Products & Feed 94 99 100 112 405 114 99
Total AAK Group 840 852 927 1,006 3,625 831 831

Operating profit

2010 2011
Full
SEK Million Q1 Q2 Q3 Q4 year
Q 4
Q1
Q 4
Q2
Full year
Food Ingredients 97 101 124 132 454 104 120
Chocolate & Confectionery Fats 76 57 102 106 341 81 70
Technical Products & Feed 25 28 29 36 118 39 28
Group Functions -20 -22 -24 -23 -89 -20 -22
Total AAK Group 178 164 231 251 824 204 196
IAS 39 effect 15 -60 -56 140 39 - -
Insurance compensation - - - 19 19 - 48
Non-recurring items - - - - - - -45
Total legal operating profit 193 104 175 410 882 204 199
AAK Group
Financial net -14 -16 -10 -14 -54 -15 -30
Result before tax 179 88 165 396 828 189 169

Operating profit Q2 2011 by segments – Inclusive and Exclusive non-recurring items

SEK Million Excl non
recurring
Non
recurring
Q 4
Incl non
recurring
Q 4
Full year
items items items
Food Ingredients 120 -45 75
Chocolate Confectionery Fats 70 +56 126
Technical Products & Feed 28 0 28
Group Functions -22 -8 -30
Total AAK Group 196 +3 199

Change in reporting for business areas Food Ingredients and Technical Products & Feed

Starting with the first quarter of 2011, the Group´s operations in crushing will be reported as part of the business area Technical Products & Feed. The crushing operation has previously been reported within the business area Food Ingredients.

Since 1st January 2011 the crusher has been operated by product area Feed, which is within the business area Technical Products & Feed. Below are the sales, gross contribution and operating profit for the respective quarters in 2010 according to the new

reporting structure. Earlier reported volumes are unchanged after this change in reporting for AAK business areas as reported volumes include only processed products and not sale of crude oil.

Sales

Full
SEK million 2010 Q1 Q2 Q3 Q4 Year
Food Ingredients New 2,018 2,206 2,154 2,289 8,667
Old 2,062 2,241 2,233 2,391 8,927
Technical Products & Feed New 389 367 416 495 1,667
Old 345 332 337 393 1,407

Gross contribution

Full
SEK million 2010 Q1 Q2 Q3 Q4 Year
Food Ingredients New 413 443 448 522 1,826
Old 442 476 480 554 1,952
Technical Products & Feed New 94 99 100 112 405
Old 65 66 68 80 279

Operating profit

Full
SEK million 2010 Q1 Q2 Q3 Q4 Year
Food Ingredients New 97 101 124 132 454
Old 101 107 130 137 475
Technical Products & Feed New 25 28 29 36 118
Old 21 22 23 31 97

Parent company - income statement

Q1-2 Q1-2 Full year
SEK Million 2011 2010 Q 4
2010
Net sales 21 22 42
Other operating income 1 0 2
Total operating income 22 22 44
Other external expenses -26 -20 -47
Cost for remuneration to employees -19 -23 -44
Amortisation and impairment losses -1 0 -1
Other operating expenses 0 0 0
Total operating expenses -46 -43 -92
Operating result (EBIT) -24 -21 -48
Interest income 82 82 164
Interest expense -79 -61 -140
Other financial items - - -
Total financial net 3 21 24
Result before tax -21 0 -24
Income tax -1 2 8
Net result -22 2 -16

Parent company – Comprehensive income

Q1-2 Q1-2 Full year
SEK Million 2011 2010 Q 4
2010
Net result for the period -22 2 -16
Other comprehensive income - - -
Total comprehensive income for -22 2 -16
the period

Parent company – Condensed balance sheet

SEK Million 30.6.2011 30.6.2010 31.12.2010 Q 4
Assets
Other intangible assets 1 1 1
Tangible assets 4 4 4
Financial assets 7,670 7,689 7,667
Total non-current assets 7,675 7,694 7,672
Current receivables 105 90 54
Cash and cash equivalents 0 0 0
Total current assets 105 90 54
Total assets 7,780 7,784 7,726
Equity and liabilities
Shareholders' equity 3,968 4,142 4,174
Total equity 3,968 4,142 4,174
Total non-current liabilities 3,692 3,540 3,402
Accounts payable 9 3 11
Other current liabilities 111 99 139
Total current liabilities 120 102 150
Total equity and liabilities 7,780 7,784 7,726

Information and contact details

Publication dates

The interim report for the third quarter for 2011 will be published on 7 November, 2011.

The annual and quarterly reports are also published on www.aak.com

Investor Relations contact:

Arne Frank, President and CEO Phone: + 46 40 627 83 00

Anders Byström, Chief Financial Officer Phone: + 46 40 627 83 00

Fredrik Nilsson, Head of Investor Relations Phone: + 46 40 627 83 34 Mobile: + 46 708 95 22 21 E-Mail: [email protected]

AarhusKarlshamn AB (publ) Jungmansgatan 12, 211 19 Malmö, Sweden Phone: + 46 40 627 83 00, Reg. No. 556669-2850, www.aak.com

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