AAK

Quarterly Report • Jul 19, 2012

AAK's Interim Report for the second quarter, 2012

Chief Executive´s comments

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

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.

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.

Arne Frank CEO and President

Financial overview

	Q2	Q2		Q1-2	Q1-2		Rolling	Full year
SEK Million	2012	2011	%	2012	2011	%	12 mth	2011
Volumes (000 MT)	366	329	+11	732	673	+9	1,485	1,426
Net Sales	4,207	3,907	+8	8,429	7,750	+9	17,374	16,695
Operating profit	211	196	+8	431	400	+8	942	911
Operating profit per kilo	0.58	0.60	-3	0.59	0.59	+0	0.63	0.64
Net financial cost	-31	-30	-3	-55	-45	-22	-108	-98
Net result	129	126	+2	270	265	+2	609	604
Earnings per share	3.14	3.04	+3	6.57	6.42	+2	14.87	14.72

The AAK Group, second quarter 2012

Volumes

Volume increased by 11 percent mainly due to acquired units.

Net sales

Net sales increased by SEK 300 million mainly related to acquired units, organic growth and a positive currency translation impact of SEK 107 million.

Operating result

Operating profit before acquisition related costs for the second quarter was record high reaching SEK 218 million (196), an improvement of 11 percent. The impact of currency translation was positive SEK 6 million.

AAK Louisville has contributed to the Group result according to plan. The contributions of the more recent acquisitions were immaterial.

After acquisition costs of SEK 7 million the operating profit reached SEK 211 million (196), an improvement of 8 percent.

Operating profit per kilo excluding acquisition costs remained stable at SEK 0.60 (0.60) per kilo. Food Ingredients continued to show strong improvements while Chocolate & Confectionary Fats and Technical Products & Feed reported decline. Operating profit per kilo including acquisition costs amounted to SEK 0.58 (0.60).

Net financial cost

Net financial cost was stable at SEK 31 million (30). Borrowing margins were higher, offset by lower average borrowings.

Cash flow and Investments

Cash flow from operating

activities excluding changes in working capital amounted to SEK 155 million (231), lower than last year mainly due to higher taxes paid. Further, positive cash flow arose from a reduction in working capital by SEK 196 million in the second quarter (last year working capital increased by 272).

Cash flow from operating activities including changes in working capital was positive SEK 351 million (negative 41).

After net investments (mainly maintenance investments and acquisitions) totalling SEK 517 million (95), cash flow was negative SEK 166 million (negative 136).

Recent acquisition of Oasis Foods Company

AAK strengthened its position in the North American Food Service market by acquiring Oasis Foods Company (Oasis).

Oasis provides an expansive variety of quality products such as edible oils, margarine, spreads, shortenings, vinegars, mayonnaise and sauces. Founded in 1975 Oasis employs approximately 160 people at Hillside, New Jersey, USA and had revenues of approximately SEK 925 million in 2011.

Oasis is a well-run company and it represents an excellent platform for our North American ambitions. The company´s wide variety of established Food Service products and brands significantly broadens AAK's product offerings in one of the largest food service market in the world. The New Jersey location close to our Port Newark plant provides easy access to some of the largest population centres in the country.

The acquisition is expected to have limited impact on AAK´s operating profit for 2012.

Recent acquisition of Crown-Foods A/S

AAK strengthened its position in the Scandinavian Food Service market by acquiring Crown-Foods A/S in Denmark (Crown).

The acquisition will strengthen AAK's ability to supply a broad portfolio of Food Service products to the Scandinavian customers.

Crown is a local market leader producing sauces and dressings. Founded in 1988 and located in Mørkøv, Denmark, Crown employs approximately 20 people and had a turnover of approximately SEK 60 million in 2011.

The acquisition is expected to have limited impact on AAK´s operating profit for 2012.

Financial position

The equity/assets ratio amounted to 37 percent (36 percent at 31 December 2011). Net debt at 30 June 2012 amounted to SEK 3,211 million (SEK 3,141 million on 31 December 2011). At 30 June 2012, the Group had total credit facilities of approximately SEK 6,000 million.

Employees

The average number of employees at 30 June 2012 was 2,269 (2,065 on 31 December 2011).The net change consists of a reduction in Scandinavia and the UK, in line with the restructuring programs, offset by increases in focused growth markets and recent acquisitions.

Group – Q2 2012

*Excluding acquisition related costs

Net Debt/Ebitda

The AAK Group, first six months 2012

Volume

Volume increased by 9 percent during the first six months mainly due to acquisitions and organic growth.

Net sales

Net sales increased by SEK 679 million mainly due to acquisitions, organic growth and a positive currency translation impact of SEK 136 million.

Operating result

Operating profit for the first six months 2012 before acquisition related costs was record high, reaching SEK 438 million (400), an improvement of 10 percent. The impact of currency was positive SEK 7 million.

Operating profit including acquisition related costs for the first six months 2012 reached SEK 431 million (400), an improvement of 8 percent.

Net financial cost

Net financial cost was higher at SEK 55 million (45). Borrowing margins were higher than the prior year.

Cash flow

Cash flow after changes in working capital for the first six months 2012 reached a record high of SEK 735 million (negative 399), including improvements in working capital of SEK 335 million.

Business Area Food Ingredients, Q2 2012

SEK Million	Q2 2012	Q2 2011	%	Q1-2 2012	Q1-2 2011	%	Rolling 12 mth	Full year 2011
Volumes ('000 tonnes)	229	189	+21	446	383	+16	894	831
Net sales	2,726	2,345	+16	5,326	4,596	+16	10,806	10,076
Operating profit	156	120	+30	293	224	+31	587	518
Operating profit per kilo	0.68	0.63	+8	0.66	0.58	+14	0.66	0.62

Volume

Food Ingredients reported a significant volume growth of 21 percent compared to the corresponding quarter in 2011, mainly from acquired units. For comparable units volume increased by 2 percent representing organic growth.

Net sales

Net sales increased by SEK 381 million mainly due to acquired units, organic growth and a positive currency translation impact of SEK 65 million.

Acquisitions

AAK Louisville, which was acquired 1 July, 2011 has continued to develop in line with plan both as to integration and performance.

The recent acquisitions, Oasis and Crown, are expected to have limited impact on AAK´s operating profit for 2012.

Generally, both acquisitions are expected to contribute positively to AAK's key ratios; however, the acquisition of Oasis will have a diluting effect on operating profit per kilo.

Acquisition related costs are reported under Group Functions and are excluded from business area reporting.

Operating result

Operating profit was a record high, reaching SEK 156 million (120), an increase of 30 percent.

AAK Louisville contributed with approximately one third of the total increase in operating profit.

The quarter continued to demonstrate strong developments in many speciality product areas, in particular Bakery and Infant Nutrition.

Operating profit per kilo improved substantially, by 8 percent from SEK 0.63 per kilo to 0.68 SEK per kilo, as a consequence of the improved product mix.

We continue to remain clearly optimistic for the future of this business area.

Business Area Chocolate & Confectionery Fats, Q2 2012

	Q2	Q2		Q1-2	Q1-2		Rolling	Full year
SEK Million	2012	2011	%	2012	2011	%	12 mth	2011
Volumes ('000 tonnes)	75	74	+1	153	152	+1	321	320
Net sales	1,102	1,146	-4	2,326	2,303	+1	4,977	4,954
Operating profit	65	70	-7	146	151	-3	373	378
Operating profit per kilo	0.87	0.95	-8	0.95	0.99	-4	1.16	1.18

Volume

Total volume in this business area remained stable, as expected with an organic growth of 1 percent.

Net sales

Net sales for Chocolate & Confectionary Fats decreased by SEK 44 million, mainly due to an unfavorable product mix, partly offset by a favorable currency translation impact of SEK 42 million.

Operating result

Operating profit reached SEK 65 million (70). Chocolate & Confectionary Fats continued to be challenged by the prevailing market conditions, particularly

for Cocoa Butter Equivalent (CBE), as previously communicated. The second quarter is, however, traditionally the weakest quarter for this business area.

The record low cocoa butter price (approximately 30-40 percent lower than the three year average) represents a clear challenge for Chocolate & Confectionary Fats in the short to medium term.

Operating profit per kilo at SEK 0.87 per kg (0.95) was down mainly due to customer and product mix changes following an increased focus on

becoming a complete solution provider for our customers, also selling lower margin products. Further, the pressure on CBE margins continued.

The business area remain challenged and is expected to be under pressure even during forthcoming quarters. However, seasonally the third and the fourth quarters are the strongest during the year and this seasonality is expected to continue.

Business Area Technical Products & Feed, Q2 2012

	Q2	Q2		Q1-2	Q1-2		Rolling	Full year
SEK Million	2012	2011	%	2012	2011	%	12 mth	2011
Volumes ('000 tonnes)	62	66	-6	133	138	-4	270	275
Net sales	379	416	-9	777	851	-9	1,591	1,665
Operating profit	20	28	-29	46	67	-31	82	103
Operating profit per kilo	0.32	0.42	-24	0.35	0.49	-29	0.30	0.37

Volume

Volumes decreased by 6 percent compared to the corresponding quarter last year

Net sales

Net sales for the business area decreased by SEK 37 million or by 9 percent.

Operating result

Operating profit of SEK 20 million (28) decreased by SEK 8 million.

The reduction was due to continued pressure on margins for technical fatty acids and in crushing. Some volumes during the annual maintenance stop

have been sourced externally to fulfill customer obligations, at significantly reduced margins.

As previously communicated the next quarter/quarters will continue to be challenging, but profitability is expected to improve.

General information

Related parties

No significant changes have taken place in relations or transactions with related parties since 2011.

Risk and uncertainty factors

AAK is a global group represented in many countries and as such is exposed to a number of commercial and financial risks. Accordingly, risk management is an important process for AAK in its work to achieve established targets.

Efficient risk management is an ongoing process conducted within the framework of business control, and is part of the ongoing review of operations and forward-looking assessment of operations.

AAK's long-term risk exposure is assumed not to deviate from the inherent exposure associated with AAK's ongoing business operations.

For a more in-depth analysis of risks, refer to AAK's Annual Report for 2011.

Accounting principles in 2012

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 2011 Annual Report. The accounting policies are unchanged, compared with those applied in 2011.

Definitions

For definitions see the 2011 Annual Report.

The Parent Company and Group Functions

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

The Parent Company's invoiced sales during second quarter 2012 were SEK 23 million (21). The result for the Parent Company after financial items amounted to negative SEK 23 million (negative 21). Group Functions include acquisition related costs amounting to SEK 7 million.

Interest-bearing liabilities minus cash and cash equivalents and interest-bearing assets totalled negative SEK 145 million (positive 101 as at 31 December 2011). Investments in intangible and tangible assets amounted to SEK 0 million (0).

During the quarter the Company has paid dividends in accordance with the resolution at the Annual

General Shareholder´s meeting.

The Parent Company's balance sheet and income statement are shown on pages 15-16.

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.

Information

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 19 July 2012 at 11.00 am CET.

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 19 2012

Melker Schörling Chairman of the Board

Carl-Bek Nielsen Vice Chairman

Martin Bek-Nielsen Board member

Mikael Ekdahl Board member

Märit Beckeman Board member

Harald Sauthoff Board member

Ulrik Svensson Board member

Arne Frank Chief Executive Officer and President

Annika Westerlund Trade union representative

Leif Håkansson Trade union representative

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

AAK Group - Consolidated income statement

SEK Million	Q2 2012	Q2 2011	Q1-2 2012 Q 4	Q1-2 2011 Q 4	Rolling 12 mth Full year	Full year Full yea 2011
Net sales	4,207	3,907	8,429	7,750	17,374	16,695
Other operating income	14	61	24	73	57	106
Total operating income	4,221	3,968	8,453	7,823	17,431	16,801
Raw materials and supplies	-3,352	-3,110	-6,726	-6,179	-13,897	-13,350
Other external expenses	-274	-256	-557	-495	-1,139	-1,077
Cost for remuneration to employees	-291	-307	-561	-563	-1,097	-1,099
Amortisation and impairment losses	-88	-96	-173	-180	-343	-350
Other operating expenses	-5	0	-5	-3	-13	-11
Total operating costs	-4,010	-3,769	-8,022	-7,420	-16,489	-15,887
Operating result (EBIT)	211	199	431	403	942	914
Interest income	3	2	5	3	8	6
Interest expense	-26	-21	-53	-39	-108	-94
Other financial items	-8	-11	-7	-9	-8	-10
Total financial net	-31	-30	-55	-45	-108	-98
Result before tax	180	169	376	358	834	816
Income tax	-51	-43	-106	-93	-225	-212
Net result	129	126	270	265	609	604
Attributable to non-controlling	1	1	2	2	2	2
interests
Attributable to the Parent company´s	128	125	268	263	607	602
shareholders

AAK Group – Comprehensive income

	Q2	Q2	Q1-2	Q1-2	Rolling	Full year
SEK Million	2012	2011	2012 Q 4	2011 Q 4	12 mth Full year	Full yea 2011
Income for the period	129	126	270	265	609	604
Exchange differences on translation	30	26	2	-40	7	-35
of foreign operations
Fair value changes in cash flow	-13	-	4	-	-15	-19
hedges
Tax related to fair value changes in	3	-	-1	-	4	5
cash flow hedges
Total comprehensive income for	149	152	275	225	605	555
the period
Attributable to non-controlling	1	1	3	1	1	-1
interests
Attributable to the Parent company´s	148	151	272	224	604	556
shareholders

AAK Group – Condensed balance sheet

SEK Million	30.6.2012	30.6.2011	Q 4 31.12.2011 Q 4
Assets
Goodwill	1,070	584	733
Other intangible assets Tangible assets	83 2,869	95 2,698	94 2,801
Financial assets	195	165	144
Total non-current assets	4,217	3,542	3,772
Inventory	2,752	3,027	2,884
Current receivables	2,743	2,703	2,987
Cash and cash equivalents	277	560	331
Total current assets	5,772	6,290	6,202
Total assets	9,989	9,832	9,974
Equity and liabilities
Shareholders´equity	3,632	3,214	3,547
Non-controlling interests	21	20	18
Total equity including non
controlling interests	3,653	3,234	3,565
Total non-current liabilities	3,824	4,272	3,799
Accounts payable	1,462	1,167	1,331
Other current liabilities	1,050	1,159	1,279
Total current liabilities	2,512	2,326	2,610
Total equity and liabilities	9,989	9,832	9,974

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 2012	3,547	18	3,565
Profit for the period	268	2	270
Other comprehensive income	4	1	5
Total comprehensive income	3,819	21	3,840
Stock options	7	-	7
Dividend	-194	-	-194
Closing equity 30 June 2012	3,632	21	3,653

			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

AAK Group – Cash flow statement

	Q2	Q2	Q1-2	Q1-2	Full year
SEK Million	2012 Q 4	2011	Q 4 2012	Full year 2011	Full yea 2011
Operating activities
Cash flow from operating activities before change in	155	231	400	435	902
working capital
Changes in working capital	196	-272	335	-834	-613
Cash flow from operating activities	351	-41	735	-399	289
Investing activities
Cash flow from investing activities	-517	-95	-623	-163	-670
Cash flow after investing activities	-166	-136	112	-562	-381
Financing activities
Cash flow from financing activities	227	490	-163	595	183
Cash flow for the period	61	354	-51	33	-198
Cash and cash equivalents at start of period	215	207	331	540	540
Exchange rate difference for cash equivalents	1	0	-3	-12	-11
Cash and cash equivalents at end of period	277	561	277	561	331

AAK Group – Share data

	Q2	Q2	Q1-2	Q1-2	Full year
SEK Million	2012	2011	2012	2011	2011
Number of shares, thousand	40,898	40,898	40,898	40,898	40,898
Earnings per share, SEK*	3.14	3.04	6.57	6.42	14.72
Earnings per share incl dilution, SEK**	3.12	-	6.54	-	-
Earnings per share incl full dilution, SEK***	3.04	-	6.37	-	-
Equity per share, SEK	88.81	78.59	88.81	78.59	86.72
Market value on closing date	236.50	183.50	236.50	183.50	199.50

* The calculation of earnings per share is based on weighted average number of outstanding shares. ** The calculation of earnings per share is based on weighted average number of outstanding shares including dilution from outstanding subscription options (in accordance with IAS 33).

*** Earnings per share after full dilution is calculated by dividing net income for the period by the total number of average outstanding shares for the period including a conversion of all outstanding share options to ordinary shares.

Quarterly data – Business areas

Operating profit

		2011					2012
					Full
SEK Million	Q1	Q2	Q3	Q4	Q 4 year	Q1 Q 4	Full year Q2
Food Ingredients	104	120	143	151	518	137	156
Chocolate & Confectionery Fats	81	70	112	115	378	81	65
Technical Products & Feed	39	28	15	21	103	25	20
Group Functions	-20	-22	-24	-22	-88	-23	-30
Total AAK Group	204	196	246	265	911	220	211
Insurance compensation	-	48	-	-	48	-	-
Non-recurring items	-	-45	-	-	-45	-	-
Total legal operating profit	204	199	246	265	914	220	211
AAK Group
Financial net	-15	-30	-52	-1	-98	-24	-31
Result before tax	189	169	194	264	816	196	180

Parent company - Income statement

	Q1-2	Q1-2	Full year
SEK Million	2012	2011	Q 4 2011
Net sales	23	21	47
Other operating income	0	1	4
Total operating income	23	22	51
Other external expenses	-25	-26	-55
Cost for remuneration to employees	-20	-19	-36
Amortisation and impairment losses	-1	-1	-2
Other operating expenses	0	0	0
Total operating expenses	-46	-46	-93
Operating result (EBIT)	-23	-24	-42
Income from shares in group
companies	-	-	149
Interest income	77	82	164
Interest expense	-77	-79	-160
Other financial items	0	-	-
Total financial net	0	3	153
Result before tax	-23	-21	111
Income tax	0	-1	-3
Net result	-23	-22	108

Parent company – Comprehensive income

	Q1-2	Q1-2	Full year
SEK Million	2012	2011	Q 4 2011
Net result for the period	-23	-22	108
Other comprehensive income	-	-	-
Total comprehensive income for
the period	-23	-22	108

Parent company – Condensed balance sheet

SEK Million	30.6.2012	30.6.2011	Q 4 31.12.2011 Q 4
Assets
Other intangible assets	1	1	1
Tangible assets	3	4	3
Financial assets	7,064	7,670	7,055
Total non-current assets	7,068	7,675	7,059
Current receivables	101	105	35
Cash and cash equivalents	0	0	0
Total current assets	101	105	35
Total assets	7,169	7,780	7,094
Equity and liabilities
Shareholders' equity	3,881	3,968	4,098
Total equity	3,881	3,968	4,098
Total non-current liabilities	2,500	3,692	2,900
Accounts payable	2	9	14
Other current liabilities	786	111	82
Total current liabilities	788	120	96
Total equity and liabilities	7,169	7,780	7,094

Raw material price trends

Rapseed and Palm Cocoa Butter

For information regarding cocoa and cocoa butter please refer to information at www.icco.org.

AAK in brief

AarhusKarlshamn is one of the world's leading producers of high value-added speciality vegetable fats. These fats are characterized by a high technological content and are used as substitute for butter-fat and cocoa butter, transfree solutions for fillings in chocolate and confectionery products, and in the cosmetics industry. AarhusKarlshamn has production facilities in Denmark, Mexico, the Netherlands, Sweden, Great Britain, Uruguay and the US. The company is organised in three Business Areas; Food Ingredients, Chocolate and Confectionery Fats and Technical Products & Feed. Further information on AarhusKarlshamn can be found on the company's website www.aak.com.

Press and analyst conference

In connection with the release of AarhusKarlshamn AB's interim report for the second quarter 2012, we invite you to a "Press & Analyst Conference" by telephone. The conference will be chaired by Arne Frank, President and CEO. Time: 19 July, 2012 at 1 pm CET.

How to register in advance: A link will be published on our website, www.aak.com. Please click on the section Investor. Those wishing to attend the conference are kindly asked to click on the link for registration and fill in your details and from which country you will call. To participate in the conference call, you must dial the conference number provided in the confirmation, no later than five minutes before 1 pm 2012.

A link to the presentation material will be available on the section Investor on www.aak.com.

Publication dates

The interim report for the third quarter for 2012 will be published on 7 November, 2012.

The fourth quarter and full-year report for 2012 will be published on 7 February 2013.

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

Peter Korsholm, 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: fredrik.nilsson@aak.com