Quarterly Report • Jul 15, 2016
Quarterly Report
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Second quarter, 2016
Again, a record-high operating profit was achieved with a continued double-digit yearon-year improvement for the Group.
Operating profit reached SEK 368 million (326 excluding non-recurring items), an improvement of 13 percent compared to the corresponding quarter in 2015. The currency translation impact was negative SEK 8 million (positive 39), mainly related to Food Ingredients.
Food Ingredients reported a strong quarter due to a further improved product mix and positive contributions from recent acquisitions.
Chocolate & Confectionery Fats reported an impressive quarter with high single-digit volume growth and a double-digit profit growth.
Techical Products & Feed reported a good quarter, however, with a mixed picture between the segments.
Total volumes continued to grow nicely and were up 6 percent (12). Organic volume growth was 1 percent (last year 4 percent) despite continued declining commodity volumes in Food Ingredients, where the growth in 2015 was exceptional. However, the demand for speciality and semi-speciality products was strong, generating organic volume growth of 5 percent (3).
Business area operating profit:
Operating profit per kilo reached SEK 0.78 (0.73 excluding non-recurring items). The currency translation impact was negative SEK 0.02 (positive 0.09).
Operating profit per kilo in Food Ingredients increased from SEK 0.71 to SEK 0.74, mainly as a consequence of the improved product
mix. At fixed foreign exchange rates operating profit per kilo improved by 7 percent.
Operating profit per kilo for Chocolate & Confectionery Fats improved strongly and reached SEK 1.76 (1.61), an improvement of 9 percent.
Technical Products & Feed reported a stable operating profit per kilo, SEK 0.35 (0.35).
Earnings per share increased by 2 percent, to SEK 5.47 (5.38). Increased financial costs due to extended borrowings in high-interest rate countries (Brazil, China and India) had a very unfavorable impact on earnings per share.
Sales amounted to SEK 5,090 million (4,954). The increase was mainly due to the positive product mix, partly offset by a negative currency translation impact of SEK 221 million, and the effect of acquisitions.
The demand for speciality and semi-speciality products was good, generating organic volume growth of 3 percent (4). The picture between the different segments was mixed though.
The Bakery segment had another challenging quarter globally. Volumes continued to decline, although at a slower pace than during the first quarter 2016.
The Dairy segment continued the strong trend from the last three quarters and reported double-digit organic volume growth despite the very low prices on milk fat. North Latin America, the U.S. and the Nordics showed particularly strong growth in this segment.
Infant Nutrition reported a strong volume development. This was driven by product range Akonino®, which showed an impressive double-digit volume growth.
Foodservice reported organic volume growth with good development particularly in the U.K. and the U.S. Volumes in the Nordics were stable.
Commodity products showed a negative volume development after an exceptional growth in 2015.
Total volumes increased by 15 percent (negative 3). Organic volume growth in the quarter was 11 percent (negative 3).
Organic volume growth within high-end products continued during the second quarter. After some challenging quarters, low-end products were also back to organic volume growth.
After two years of severely deteriorating market conditions in Russia and Ukraine, the strong growth in the first quarter continued also during the second quarter, but still from a low level.
Operating cash flow including changes in working capital amounted to SEK 520 million (389). Cash flow from working capital was positive, amounting to SEK 158 million (83). The strong improvement in working capital was mainly related to good inventory management and increased accounts payables. This was despite the negative impact from substantially increased raw material prices during the last quarters, combined with working capital tied up for the two greenfield investments. The greenfield investments will continue to have a negative impact on working capital during 2016.
Calculated on a rolling 12 months basis, Return on Capital Employed (ROCE) was 16.0 percent (15.7 at December 31, 2015). ROCE improved despite being negatively effected by higher working capital due to increased raw material prices, initial greenfield investments in Brazil and China, and acquisitions. The ROCE for the second quarter was 15.2 percent compared to 15.6 percent for the corresponding quarter 2015.
AAK has after the balance sheet date acquired the leading West Coast based vegetable oils company California Oils Corporation from Mitsubishi Corporation of Japan. California Oils Corporation, also known as CalOils, had last year revenues of approximately SEK 1,350 million and a volume of approximately 110,000 MT, with 65 employees.
A strong presence on the U.S. West Coast has been priority for AAK since several years. The
West Coast encompasses 20 percent of the U.S. population and this expansion has been identified as an important component of AAK's long-term growth strategy. The acquisition of CalOils will transform AAK into a true national speciality and semi-speciality edible oils company in the U.S.
During the second quarter we have inaugurated our new factory in Brazil. Some limited volumes have been delivered. To be able to deliver the whole product range a gradual ramp-up will continue during the coming quarters.
Our China greenfield project continues to develop according to plan.
In regards to Brexit and the UK's EU referendum, our initial assessment is that this will have a limited effect on AAK's operations and results. Nearly all products coming from our UK factories are produced for local customers producing for the local market. There will also be a continued demand for healthy and cost efficient solutions. A limited portion of our production at our UK factories is exported to other countries and here the weaker sterling will bring some limited advantages. Less than 7 percent of the AAK Group's operating profit is generated in the UK.
Our company program for 2014–2016, "AAKtion", is developing according to plan. The program is intended to further strengthen the focus on "Sales-Innovation-Execution".
Based on AAK's customer value propositions for health and reduced costs, and 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 a continued improvement in Chocolate & Confectionery Fats.
Arne Frank Chief Executive Officer and President
| Q2 | Q2 | Q1-2 | Q1-2 | Full year | |||
|---|---|---|---|---|---|---|---|
| SEK million (unless otherwise stated) | 2016 | 2015 | % | 2016 | 2015 | % | 2015 |
| Income statement | |||||||
| Volumes ('000 MT) | 471 | 446 | +6 | 938 | 889 | +6 | 1,833 |
| Operating profit excluding non-recurring items | 368 | 3261) | +13 | 749 | 6471) | +16 | 1,4112) |
| Operating profit including non-recurring items | 368 | 3391) | +9 | 749 | 6601) | +13 | 1,4092) |
| Net profit | 241 | 229 | +5 | 490 | 445 | +10 | 945 |
| Financial position | |||||||
| Total assets | 14,245 | 12,616 | - | 14,245 | 12,616 | - | 13,896 |
| Equity | 6,765 | 6,220 | - | 6,765 | 6,220 | - | 6,650 |
| Net working capital | 3,221 | 3,208 | - | 3,221 | 3,208 | - | 3,087 |
| Net interest-bearing debt | 2,342 | 2,032 | - | 2,342 | 2,032 | - | 2,083 |
| Cash flow | |||||||
| EBITDA | 482 | 445 | +8 | 975 | 871 | +12 | 1,840 |
| Cash flow from operating activities | 520 | 389 | - | 504 | 817 | - | 1,736 |
| Cash flow from investing activities | -194 | -74 | - | -386 | -234 | - | -1,016 |
| Free cash flow | 326 | 315 | - | 118 | 583 | - | 720 |
| Earnings per share | |||||||
| Earnings per share before dilution, SEK | 5.47 | 5.38 | +2 | 11.03 | 10.49 | +5 | 22.17 |
| Earnings per share after dilution, SEK | - | 5.36 | - | - | 10.44 | - | 22.12 |
| Key figures | |||||||
| Volume growth, % | +6 | +12 | - | +6 | +11 | - | +8 |
| Operating profit per kilo (excl. non-recurring | 0.78 | 0.73 | +7 | 0.80 | 0.73 | +10 | 0.77 |
| costs), SEK | |||||||
| Return on Capital Employed (R12 months), % | 16.0 | 15.9 | +1 | 16.0 | 15.9 | +1 | 15.7 |
| Net debt / EBITDA, multiple | 1.20 | 1.15 | +4 | 1.20 | 1.15 | +4 | 1.13 |
1) As a result of the sale of the company's office building in M.P. Bruuns Gade, Aarhus, Denmark, a net profit of SEK 45 million was recorded during the second quarter 2015. At the end of the second quarter 2015 an assessment of previously made non-recurring provisions, and during the last few quarters communicated, has resulted in increased provisions of SEK 32 million. A non-recurring, net positive impact of SEK 13 million has been reported in the Income Statement on page 12. 2) Non-recurring items for the full year 2015 amounted to negative SEK 2 million and consist of acquisition costs of SEK 15 million and SEK 45 million in net profit as a result of the sale of the company's office building in M.P. Bruuns Gade, Aarhus, Denmark. An assessment of previously made non-recurring provisions has resulted in increased provisions of SEK 32 million.
Volumes increased by 6 percent (12) compared to the second quarter 2015. Organic volume growth was 1 (last year 4 percent) despite continued declining commodity volumes in Food Ingredients, where the growth in 2015 was exceptional. However, the demand for speciality and semi-speciality products was strong, generating organic volume growth of 5 percent (3).
Sales amounted to SEK 5,090 million (4,954). The increase was mainly due to the positive product mix, partly offset by a negative currency translation impact of SEK 221 million, and the effect of acquisitions.
Operating profit reached SEK 368 million (excluding non-recurring items 326), an improvement of 13 percent compared to the corresponding quarter in 2015. The currency translation impact was negative SEK 8 million (positive 39), mainly related to Food Ingredients.
Operating profit per kilo reached SEK 0.78 (0.73 excluding non-recurring items). The currency translation impact was negative SEK 0.02 (positive 0.09).
Net financial cost increased, amounting to SEK 39 million (30). The Group's borrowings in highinterest rate countries (Brazil, China and India) have increased due to ongoing greenfield projects and recently made acquisitions.
Operating cash flow including changes in working capital amounted to SEK 520 million (389). Cash flow from working capital was positive, amounting to SEK 158 million (83). The strong improvement in working capital was mainly related to good inventory management and increased accounts payables. This was despite the negative impact from substantially increased raw material prices during the last quarters, combined with working capital tied up for the two greenfield investments. The greenfield investments will continue to have a negative impact on working capital during 2016.
The equity/assets ratio amounted to 47 percent (48 percent at December 31, 2015). Net debt at June 30, 2016, amounted to SEK 2,342 million (SEK 2,083 million at December 31, 2015).
At June 30, 2016, the Group had total committed credit facilities of SEK 6,119 million (5,924 as of December 31, 2015), with SEK 3,832 million of unused committed credit facilities at quarter-end.
The average number of employees at June 30, 2016 was 2,770 (2,738 at December 31, 2015). The increase of employees is related to recently made acquisitions and ongoing greenfield projects.
AAK has after the balance sheet date acquired the leading West Coast based vegetable oils company California Oils Corporation from Mitsubishi Corporation of Japan. For further details, please refer to www.aak.com.
| Operating profit | Q2 2016 |
Q2 2015 |
% | Q1-2 2016 |
Q1-2 2015 |
% | Full year 2015 |
|
|---|---|---|---|---|---|---|---|---|
| Volumes ('000 MT) | 322 | 311 | +4 | 636 | 613 | +4 | 1,258 | |
| +8 % |
Net sales, SEK million | 3,474 | 3,397 | +2 | 6,769 | 6,642 | +2 | 13,556 |
| Operating profit per kilo | Operating profit, SEK million | 238 | 221 | +8 | 467 | 416 | +12 | 903 |
| +4 % |
Operating profit per kilo, SEK | 0.74 | 0.71 | +4 | 0.73 | 0.68 | +7 | 0.72 |
The business area reported negative organic volume growth of 3 percent (positive 9) due to continued declining commodity volumes, where the growth in 2015 was exceptional. The demand for speciality and semi-speciality products was good, generating organic volume growth of 3 percent (4). The picture between the different segments was mixed though.
The Bakery segment had another challenging quarter globally. Volumes continued to decline, although at a slower pace than during the first quarter 2016.
The Dairy segment continued the strong trend from the last three quarters and reported doubledigit organic volume growth despite the very low prices on milk fat. North Latin America, the U.S. and the Nordics showed particularly strong growth in this segment.
Infant Nutrition reported a strong volume development. This was driven by product range Akonino®, which showed an impressive doubledigit volume growth.
Foodservice reported organic volume growth with good development particularly in the U.K. and the U.S. Volumes in the Nordics were stable.
Sales amounted to SEK 3,474 million (3,397). The increase was mainly due to acquisitions and an improved product mix, partly offset by lower commodity volumes, and a negative currency translation impact of SEK 181 million.
Operating profit improved by 8 percent to SEK 238 million (221). The currency translation impact was negative SEK 7 million (positive 20).
Operating profit per kilo in Food Ingredients increased from SEK 0.71 to SEK 0.74, mainly as a consequence of the improved product mix. At fixed foreign exchange rates operating profit per kilo improved by 7 percent.
We are expecting a continued positive underlying development for this business area.
Operating profit
Q2 2016 Q2 2015 % Q1-2 2016 Q1-2 2015 % Full year 2015 +26 % Volumes ('000 MT) 83 72 +15 167 144 +16 312 Net sales, SEK million 1,317 1,253 +5 2,679 2,512 +7 5,315 Operating profit per kilo Operating profit, SEK million 146 116 +26 305 252 +21 553 +9 % Operating profit per kilo, SEK 1.76 1.61 +9 1.83 1.75 +5 1.77
Total volumes for the business area increased by 15 percent (negative 3). Organic volume growth in the quarter was 11 percent (negative 3).
Organic volume growth within high-end products continued during the second quarter. After some challenging quarters, low-end products were also back to organic volume growth.
After two years of severely deteriorating market conditions in Russia and Ukraine, the strong growth in the first quarter continued also during the second quarter, but still from a low level.
Net sales for Chocolate & Confectionery Fats increased by SEK 64 million as a consequence of volume growth and acquisitions. This was partly offset by a negative currency translation impact of SEK 40 million.
Recent years' strong customer co-development, new innovative solutions, and further expansion of our geographical footprint are continuing to yield positive results.
As expected, operating profit improved further, by 26 percent, and reached SEK 146 million (116). The currency translation impact was negative SEK 1 million (positive 19).
Operating profit per kilo improved by 9 percent to SEK 1.76 (1.61).
We are expecting continued improvement in Chocolate & Confectionery Fats.
| Operating profit | Q2 2016 |
Q2 2015 |
% | Q1-2 2016 |
Q1-2 2015 |
% | Full year 2015 |
|
|---|---|---|---|---|---|---|---|---|
| Volumes ('000 MT) | 66 | 63 | +5 | 135 | 132 | +2 | 263 | |
| +5 % |
Net sales, SEK million | 299 | 304 | -2 | 605 | 636 | -5 | 1,243 |
| Operating profit per kilo | Operating profit, SEK million | 23 | 22 | +5 | 52 | 45 | +16 | 88 |
| +0 % |
Operating profit per kilo, SEK | 0.35 | 0.35 | +0 | 0.39 | 0.34 | +15 | 0.33 |
Volumes increased by 5 percent (negative 7) compared to the corresponding quarter in 2015. This was mainly related to volume growth for technical fatty acids, offset by lower feed volumes.
Net sales for the business area decreased by SEK 5 million or by 2 percent as a result of a changed product mix.
Operating profit improved by 5 percent, reaching SEK 23 million (22), due to a positive development of the fatty acids business.
Operating profit per kilo was stable at SEK 0.35 (0.35).
The operating profit is expected to be stable or to improve slightly compared to the prior year.
Total volumes were up 6 percent (11) and organic volume growth was 0 percent (4).
Sales amounted to SEK 10,053 million (9,790). The increase was mainly due to acquisitions and an improved product mix, partly offset by lower commodity volumes, and a negative currency translation impact of SEK 369 million.
Operating profit reached SEK 749 million (647 excluding non-recurring items), an improvement of 16 percent compared to the corresponding period in 2015. Operating profit at fixed foreign exchange rates improved by 19 percent.
Including non-recurring items from 2015 operating profit improved by 13 percent compared to the corresponding period in 2015.
Operating profit per kilo reached SEK 0.80 (0.73 excluding non-recurring items). The currency translation impact was negative SEK 0.02 (0.08).
Net financial cost increased, amounting to SEK 77 million (57). The Group's borrowings in highinterest rate countries (Brazil, China and India) have increased due to ongoing greenfield projects and recently made acquisitions.
Operating cash flow including changes in working capital amounted to positive SEK 504 million (817). As previously predicted, cash flow from working capital was negative, amounting to SEK 222 million (positive 169). The substantial increase in raw material prices during the last quarters, combined with working capital tied up for the two greenfield investments, will continue to have a negative impact on working capital during 2016.
AAK has after the balance sheet date acquired the leading West Coast based vegetable oils company California Oils Corporation from Mitsubishi Corporation of Japan. For further details, please refer to www.aak.com.
No significant changes have taken place in relations or transactions with related parties since 2015.
AAK is a global company 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 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 2015.
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 Annual Report for 2015. The accounting policies are unchanged, compared with those applied in 2015. A number of new and amended standards are effective for periods beginning after January 1, 2016. None of these is expected to have a significant effect on the consolidated financial statements of the Group or the Parent company.
New ESMA (European Securities and Markets Authority) guidelines on Alternative Performance Measures (APMs) are effective for the financial year 2016. Accordingly, AAK publishes the explanation of use, definitions as well as reconcilaitions of its APMs to IFRS financial statements.
AAK presents APMs to reflect underlying business performance and to enhance comparability from period to period. APMs should not be considered as a substitute for measures of performance in accordance with the IFRS.
Definitions of Additional Performance Measures can be found at www.aak.com under the Investor tab.
For reconciliation of Alternative Performance Measures, see pages 16–17.
For definitions, see the Annual Report for 2015.
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 the first six months of 2016 amounted to SEK 39 million (37). The result for the Parent Company after financial items amounted to negative SEK 37 million (negative 42).
The costs for Group Functions have increased mainly as a consequence of the increased management ambition related to growth and AAKtion, specifically Innovation involving additional resources for new product development.
Interest-bearing liabilities minus cash and cash equivalents and interest-bearing assets totalled a negative of SEK 1,407 million (negative 1,007 as at December 31, 2015). Investments in intangible and tangible assets amounted to SEK 5 million (0). The Parent Company's income statement and balance sheet are shown on pages 12–13.
AAK 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.
No major changes since year-end.
Malmö, July 15, 2016
Melker Schörling Marianne Kirkegaard Ulrik Svensson Chairman of the Board Board member Board member
Märta Schörling Lillie Li Valeur Arne Frank
Board member Board member Chief Executive Officer and President
Annika Westerlund Leif Håkansson Trade union Trade union representative representative
This report has not been reviewed by the company's auditors.
CFO Mobile: + 46 708 95 22 21 E-mail: [email protected]
This information is information that AAK AB (publ.) is obliged to make public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, through the agency of the contact person set out above, at 11:00 a.m. CET on July 15, 2016.
| Group | Parent | |||||||
|---|---|---|---|---|---|---|---|---|
| Q2 | Q2 | Q1-2 | Q1-2 | Full year | Q1-2 | Q1-2 | Full year | |
| SEK million | 2016 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 |
| Net sales | 5,090 | 4,954 | 10,053 | 9,790 | 20,114 | 39 | 37 | 80 |
| Other operating income | 16 | 74 | 40 | 104 | 194 | 0 | 0 | 0 |
| Total operating income | 5,106 | 5,028 | 10,093 | 9,894 | 20,308 | 39 | 37 | 80 |
| Raw materials and supplies | -3,729 | -3,725 | -7,353 | -7,355 | -15,008 | - | - | - |
| Other external expenses | -488 | -436 | -944 | -868 | -1,833 | -20 | -33 | -96 |
| Cost for remuneration to employees | -405 | -390 | -819 | -768 | -1,590 | -53 | -43 | -88 |
| Amortization and impairment losses | -114 | -106 | -226 | -211 | -431 | 0 | -1 | -1 |
| Other operating expenses | -2 | -32 | -2 | -32 | -37 | - | - | -15 |
| Total operating costs | -4,738 | -4,689 | -9,344 | -9,234 | -18,899 | -73 | -77 | -200 |
| Operating profit (EBIT) | 368 | 339 | 749 | 660 | 1,409 | -34 | -40 | -120 |
| Income from shares in group companies | - | - | - | - | - | - | - | 125 |
| Interest income | 2 | 0 | 3 | 1 | 3 | - | - | - |
| Interest expense | -39 | -24 | -72 | -47 | -99 | -3 | -2 | -4 |
| Other financial items | -2 | -6 | -8 | -11 | -18 | - | - | 0 |
| Total financial net | -39 | -30 | -77 | -57 | -114 | -3 | -2 | 121 |
| Result before tax | 329 | 309 | 672 | 603 | 1,295 | -37 | -42 | 1 |
| Income tax | -88 | -80 | -182 | -158 | -350 | 6 | 9 | -1 |
| Net result | 241 | 229 | 490 | 445 | 945 | -31 | -33 | 0 |
| Attributable to non-controlling interests | 9 | 2 | 23 | 4 | 12 | - | - | - |
| Attributable to the Parent company's shareholders |
232 | 227 | 467 | 441 | 933 | -31 | -33 | 0 |
| Group | Parent | |||||||
|---|---|---|---|---|---|---|---|---|
| Q2 | Q2 | Q1-2 | Q1-2 | Full year | Q1-2 | Q1-2 | Full year | |
| SEK million | 2016 | 2015 | 2016 | 2015 | 2015 | 2016 | 2015 | 2015 |
| Income for the period | 241 | 229 | 490 | 445 | 945 | -31 | -33 | 0 |
| Items that will not be reclassified to profit or loss: |
||||||||
| Remeasurements of post employment benefit obligations |
-15 | - | -15 | - | 19 | - | - | - |
| -15 | - | -15 | - | 19 | - | - | - | |
| Items that may subsequently be reclassified to profit and loss: Translation differences Fair-value changes in cash flow hedges Tax attributable to fair value changes in cash flow hedges |
197 7 -2 |
-161 8 -2 |
-44 13 -3 |
170 8 -2 |
44 25 -6 |
- - - |
- - - |
- - - |
| 202 | -155 | -34 | 176 | 63 | - | - | - | |
| Total comprehensive income for the period | 428 | 74 | 441 | 621 | 1,027 | -31 | -33 | 0 |
| Attributable to non-controlling interests Attributable to the Parent company's shareholders |
11 417 |
0 74 |
22 419 |
4 617 |
7 1,020 |
- -31 |
- -33 |
- 0 |
| Group | Parent | |||||
|---|---|---|---|---|---|---|
| SEK million | 30.06.2016 | 30.06.2015 | 31.12.2015 | 30.06.2016 | 30.06.2015 | 31.12.2015 |
| Assets | ||||||
| Goodwill | 1,583 | 1,349 | 1,567 | - | - | - |
| Other intangible assets | 348 | 121 | 377 | 4 | 0 | 3 |
| Tangible assets | 4,571 | 3,911 | 4,295 | 4 | 1 | 1 |
| Financial assets | 41 | 50 | 52 | 5,486 | 5,475 | 5,476 |
| Deferred tax assets | 119 | 118 | 97 | 6 | 9 | - |
| Total non-current assets | 6,662 | 5,549 | 6,388 | 5,500 | 5,485 | 5,480 |
| Inventory | 3,594 | 3,049 | 3,599 | - | - | - |
| Accounts receivables | 2,544 | 2,571 | 2,426 | - | - | - |
| Other current receivables | 960 | 1,070 | 1,024 | 209 | 71 | 193 |
| Cash and cash equivalents | 485 | 377 | 459 | 0 | 0 | 0 |
| Total current assets | 7,583 | 7,067 | 7,508 | 209 | 71 | 193 |
| Total assets | 14,245 | 12,616 | 13,896 | 5,709 | 5,556 | 5,673 |
| Equity and liabilities | ||||||
| Shareholders' equity | 6,688 | 6,171 | 6,597 | 4,231 | 4,532 | 4,590 |
| Non-controlling interests | 77 | 49 | 53 | - | - | - |
| Total equity including non-controlling | ||||||
| interests | 6,765 | 6,220 | 6,650 | 4,231 | 4,532 | 4,590 |
| Liabilities to banks and credit institutions | 2,476 | 2,176 | 2,132 | - | - | - |
| Pension liabilities | 153 | 142 | 128 | 8 | - | - |
| Deferred tax liabilities | 479 | 351 | 454 | - | - | - |
| Non-interest-bearing liabilities | 291 | 155 | 288 | - | - | - |
| Total non-current liabilities | 3,399 | 2,824 | 3,002 | 8 | - | - |
| Liabilities to banks and credit institutions | 204 | 94 | 287 | - | - | - |
| Accounts payables | 2,176 | 2,079 | 2,383 | 10 | 7 | 6 |
| Other current liabilities | 1,701 | 1,399 | 1,574 | 1,460 | 1,017 | 1,077 |
| Total current liabilities | 4,081 | 3,572 | 4,244 | 1,470 | 1,024 | 1,083 |
| Total equity and liabilities | 14,245 | 12,616 | 13,896 | 5,709 | 5,556 | 5,673 |
No changes have arisen in contingent liabilities.
| SEK million | Total equity capital |
Non controlling interests |
Total equity incl. non-controlling interests |
|---|---|---|---|
| Openings equity January 1, 2016 | 6,597 | 53 | 6,650 |
| Profit for the period | 467 | 23 | 490 |
| Other comprehensive income | -48 | -1 | -49 |
| Total comprehensive income | 419 | 22 | 441 |
| Non controlling interest Dividend |
- -328 |
2 - |
2 -328 |
| Closing equity June 30, 2016 | 6,688 | 77 | 6,765 |
| SEK million | Total equity capital |
Non controlling interests |
Total equity incl. non-controlling interests |
|---|---|---|---|
| Openings equity January 1, 2015 | 5,755 | 45 | 5,800 |
| Profit for the period | 441 | 4 | 445 |
| Other comprehensive income | 176 | - | 176 |
| Total comprehensive income | 617 | 4 | 621 |
| New issue of shares Dividend |
83 -284 |
- - |
83 -284 |
| Closing equity June 30, 2015 | 6,171 | 49 | 6,220 |
During 2015, 441,200 new shares have been issued which have increased equity by SEK 83 million.
| SEK million | Asset | Liability |
|---|---|---|
| Financial instruments reported in balance sheet June 30, 2016 | ||
| Raw material hedge contracts | 133 | 181 |
| FX hedge contracts | 128 | 155 |
| Interest rate swaps | 3 | 46 |
| Total derivatives financial instruments | 264 | 382 |
| Fair value adjustment inventory | 105 | -2 |
| Total financial instruments | 369 | 380 |
| Q2 | Q2 | Q1-2 | Q1-2 | Full year | |
|---|---|---|---|---|---|
| SEK million | 2016 | 2015 | 2016 | 2015 | 2015 |
| Operating activities | |||||
| Operating profit | 368 | 339 | 749 | 660 | 1,409 |
| Depreciation and amortization | 114 | 106 | 226 | 211 | 431 |
| Other non-cash items | 22 | -36 | 14 | -51 | -100 |
| Cash flow before interest and tax | 504 | 409 | 989 | 820 | 1,740 |
| Interest paid and received | -34 | -31 | -72 | -57 | -114 |
| Tax paid | -108 | -72 | -191 | -115 | -270 |
| Cash flow before changes in working capital | 362 | 306 | 726 | 648 | 1,356 |
| Changes in inventory | 68 | 110 | -1 | 186 | -292 |
| Changes in accounts receivables | -20 | -8 | -138 | -19 | 126 |
| Changes in accounts payables | 123 | -78 | -195 | -205 | 148 |
| Changes in other working capital items | -13 | 59 | 112 | 207 | 398 |
| Changes in working capital | 158 | 83 | -222 | 169 | 380 |
| Cash flow from operating activities | 520 | 389 | 504 | 817 | 1,736 |
| Investing activities | |||||
| Acquisition of intangible and tangible assets | -194 | -174 | -386 | -334 | -994 |
| Acquisition of operations and shares, net of cash acquired | - | - | - | - | -123 |
| Proceeds from sale of property, plan and equipment | - | - | - | - | 1 |
| Divestment of operations and shares | - | 100 | - | 100 | 100 |
| Cash flow from investing activities | -194 | -74 | -386 | -234 | -1,016 |
| Cash flow after investing activities | 326 | 315 | 118 | 583 | 720 |
| Financing activities | |||||
| New share issue | - | 33 | - | 83 | 107 |
| Changes in loans Dividend paid |
58 -328 |
-20 -284 |
227 -328 |
-267 -284 |
-344 -284 |
| Cash flow from financing activities | -270 | -271 | -101 | -468 | -521 |
| Cash flow for the period | 56 | 44 | 17 | 115 | 199 |
| Cash and cash equivalents at start of period | 414 | 342 | 459 | 264 | 264 |
| Exchange rate difference for cash equivalents | 15 | -9 | 9 | -2 | -4 |
| Cash and cash equivalents at end of period | 485 | 377 | 485 | 377 | 459 |
| Q2 | Q2 | Q1-2 | Q1-2 | Full year | |
|---|---|---|---|---|---|
| 2016 | 2015 | 2016 | 2015 | 2015 | |
| Number of shares, thousand | 42,288 | 42,160 | 42,288 | 42,160 | 42,288 |
| Earnings per share, SEK* | 5.47 | 5.38 | 11.03 | 10.49 | 22.17 |
| Earnings per share incl dilution, SEK** | - | 5.36 | - | 10.44 | 22.12 |
| Earnings per share incl full dilution, SEK*** | - | 5.36 | - | 10.46 | 22.16 |
| Equity per share, SEK | 158.15 | 147.06 | 158.15 | 147.06 | 156.77 |
| Market value on closing date, SEK | 599.50 | 491.30 | 599.50 | 491.30 | 627.50 |
* 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). No outstanding share options since December, 2015. *** 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. No outstanding share options since December, 2015.
| 2015 | 2016 | ||||||
|---|---|---|---|---|---|---|---|
| Full | |||||||
| SEK million | Q1 | Q2 | Q3 | Q4 | year | Q1 | Q2 |
| Food Ingredients | 195 | 221 | 230 | 257 | 903 | 229 | 238 |
| Chocolate & Confectionery Fats | 136 | 116 | 166 | 135 | 553 | 159 | 146 |
| Technical Products & Feed | 23 | 22 | 11 | 32 | 88 | 29 | 23 |
| Group Functions | -33 | -33 | -31 | -36 | -133 | -36 | -39 |
| Total AAK Group excl non-recurring | 321 | 326 | 376 | 388 | 1,411 | 381 | 368 |
| items | |||||||
| Acquisition costs and non-recurring | - | 13 | - | -15 | -2 | - | - |
| items | |||||||
| Total legal operating profit AAK | 321 | 339 | 376 | 373 | 1,409 | 381 | 368 |
| Group | |||||||
| Financial net | -27 | -30 | -28 | -29 | -114 | -38 | -39 |
| % | Q2 2016 |
Q2 2015 |
Q1-2 2016 |
Q1-2 2015 |
Full year 2015 |
|---|---|---|---|---|---|
| Food Ingredients | |||||
| Organic volume growth | -3 | 9 | -3 | 8 | 5 |
| Acquisitions/divestments | 7 | 12 | 7 | 13 | 8 |
| Volume growth as reported | 4 | 21 | 4 | 21 | 13 |
| Chocolate & Confectionery Fats | |||||
| Organic volume growth | 11 | -3 | 11 | -5 | -2 |
| Acquisitions/divestments | 4 | - | 5 | - | 1 |
| Volume growth as reported | 15 | -3 | 16 | -5 | -1 |
| Technical Products & Feed | |||||
| Organic volume growth | 5 | -7 | 2 | -4 | -2 |
| Acquisitions/divestments | - | -2 | - | -2 | -1 |
| Volume growth as reported | 5 | -9 | 2 | -6 | -3 |
| AAK Group | |||||
| Organic volume growth | 1 | 4 | 0 | 4 | 3 |
| Acquisitions/divestments | 5 | 8 | 6 | 7 | 5 |
| Volume growth as reported | 6 | 12 | 6 | 11 | 8 |
| SEK million | Q2 2016 |
Q2 2015 |
Q1-2 2016 |
Q1-2 2015 |
Full year 2015 |
|---|---|---|---|---|---|
| Operating profit (EBIT) | 368 | 339 | 749 | 660 | 1,409 |
| Add back depreciation and amortization | 114 | 106 | 226 | 211 | 431 |
| EBITDA | 482 | 445 | 975 | 871 | 1,840 |
| R12M | Full year | ||
|---|---|---|---|
| SEK million | 30.06.2016 | 2016 | 2015 |
| Total assets | 14,245 | 13,516 | 13,896 |
| Cash and cash equivalents | -485 | -425 | -459 |
| Financial assets | -7 | -5 | -8 |
| Accounts payables | -2,176 | -2,181 | -2,383 |
| Other non-interest bearing liabilities | -1,693 | -1,569 | -1,571 |
| Capital employed | 9,884 | 9,336 | 9,475 |
| Operating profit (Rolling 12 months) | 1,498 | 1,498 | 1,409 |
Return on Capital Employed (ROCE), % 15.2 16.0 14.9
| Full year | ||
|---|---|---|
| SEK million | 30.06.2016 | 2015 |
| Inventory | 3,594 | 3,599 |
| Accounts receivables | 2,544 | 2,426 |
| Other current receivables | 960 | 1,024 |
| Accounts payables | -2,176 | -2,383 |
| Other current liabilities | -1,701 | -1,574 |
| Working capital | 3,221 | 3,092 |
| Full year | ||
|---|---|---|
| SEK million | 30.06.2016 | 2015 |
| Current interest bearing receivables | 7 | 8 |
| Cash and cash equivalents | 485 | 459 |
| Pension liabilities | -153 | -128 |
| Non-current liabilities to banks and credit institutions | -2,476 | -2,132 |
| Current liabilities to banks and credit institutions | -204 | -287 |
| Other interest-bearing liabilities | -1 | -3 |
| Net debt | -2,342 | -2,083 |
| SEK million | 30.06.2016 | Full year 2015 |
|---|---|---|
| Shareholders' equity | 6,688 | 6,597 |
| Non-controlling interests | 77 | 53 |
| Total equity including non-controlling interests | 6,765 | 6,650 |
| Total assets | 14,245 | 13,896 |
| Equity to assets ratio, % | 47.5 | 47.9 |
For information regarding cocoa and cocoa butter please refer to information at www.icco.org
AAK will host a conference call on July 15, 2016 at 1 p.m. CET. The conference call can be accessed via our home page www.aak.com.
The annual and quarterly reports are also published on www.aak.com.
The interim report for the third quarter 2016 will be published on October 26, 2016.
A capital market day will be held in Stockholm, Sweden, on November 16, 2016.
The fourth quarter and year-end report for 2016 will be published on February 3, 2017.
This report contains forward-looking statements. Such statements are subject to risks and uncertainties as various factors, many of which are beyond the control of AAK AB (publ.), may cause actual developments and results to differ materially from the expectations expressed in this report.
The report has been translated from Swedish. The Swedish text shall govern for all purposes and prevail in the event of any discrepancy between the versions.
Fredrik Nilsson CFO Mobile: + 46 708 95 22 21 E-mail: [email protected]
We develop and provide value-adding vegetable oil solutions in close collaboration with our customers, enabling them to achieve long lasting business results.
We do so through our in-depth expertise in oils & fats within food applications, working with a wide range of raw materials and broad process capabilities.
Through our unique co-development approach we bring together our customers' skills and know-how with our capabilities and mindset. By doing so, we solve customer specific needs across many industries – Chocolate & Confectionery, Bakery, Dairy, Infant Nutrition, Foodservice, Personal Care, and more.
AAK's proven expertise is based on more than 140 years of experience within oils & fats. With our headquarters in Malmö, Sweden, 20 production facilities and customization plants, and sales offices in more than 25 countries, our more than 2,700 employees are dedicated to providing innovative value-adding solutions to our customers.
So no matter where you are in the world, we are ready to help you achieve long lasting results.
We are AAK – The Co-Development Company.
AAK AB (publ.)
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