Quarterly Report • Oct 25, 2018
Quarterly Report
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Net result amounted to SEK 986 million (863), an improvement of 14 percent.
Earnings per share increased by 16 percent, to SEK 1.39 (1.20).
| Q3 2018 |
Q3 2017 |
Δ % | Q1-Q3 2018 |
Q1-Q3 2017 |
Δ % | R12 months |
Full year 2017 |
|
|---|---|---|---|---|---|---|---|---|
| Volumes, '000 MT | 564 | 543 | +4 | 1,665 | 1,579 | +5 | 2,215 | 2,129 |
| Operating profit, SEK million | 526 | 475 | +11 | 1,440 | 1,315 | +10 | 1,911 | 1,786 |
| Operating profit per kilo, SEK | 0.93 | 0.87 | +7 | 0.86 | 0.83 | +4 | 0.86 | 0.84 |
| Net result, SEK million | 359 | 315 | +14 | 986 | 863 | +14 | 1,335 | 1,212 |
| Earnings per share, SEK* | 1.39 | 1.20 | +16 | 3.83 | 3.32 | +15 | 5.22 | 4.71 |
| Return on Capital Employed (R12M), percent | 15.7 | 15.4 | +2 | 15.7 | 15.4 | +2 | 15.7 | 15.6 |
* Share data recalculated in accordance with the decided share split (6:1) by the Annual General Meeting on May 30, 2018.
The positive trend we have seen over the last few years continued during the third quarter. The main drivers for our profit growth were Dairy and Special Nutrition which both are important focus areas within our company program The AAK Way.
Organic volume growth reached 4 percent (4). Operating profit increased by 11 percent to SEK 526 million (475). Earnings per share increased by 16 percent and operating cash flow was also good in the quarter.
All three business areas showed volume growth as well as profit growth. In addition, most of our geographic markets have seen good progress. However, the slightly weaker development in the US market continued during the third quarter.
Food Ingredients had another strong quarter with Dairy and Special Nutrition leading the way. Our Bakery segment showed good volume growth as well as an improved product mix with a greater proportion of customer co-developed solutions.
Chocolate & Confectionery Fats reported a stable quarter with continued profit growth. We continue to see a greater demand for some of our high-end products compared to our current capacity. Thus, we continue to make investments to remove bottlenecks in order to support future volume growth.
Business area Technical Products & Feed reported strong volume and profit growth in the quarter. The product mix continued to improve within the fatty acids business.
Our company program The AAK Way is progressing well and is yielding good results.
Within priority area Operational Excellence, we continue to expand our capacities and production capabilities. We are, through our joint venture AAK Kamani, making important investments in the fast-growing Indian market. We are currently also completing significant upgrades of our production facility in Louisville, USA.
During the quarter, some 90 AAK leaders from our global organization participated at our Global Leadership Conference. The participants discussed and contributed to how we can develop our business, take advantage of our favorable position in the market and,
above all, how we can further improve the customer experience.
At the end of September, we inaugurated a new Customer Innovation Center in Singapore to further strengthen our capabilities and customer codevelopment approach in the Southeast Asian market. This investment is dedicated to support our existing regional customers and give them access to AAK's global solutions as well as to build new customer relationships to further enhance our growth in Southeast Asia.
After nearly five and a half years with AAK, Terry Thomas, President USA, has decided to retire. Octavio Díaz de León, President North Latin America, has taken over the responsibility for our US organization. Octavio, who joined AAK in 2007, continues to be responsible for North Latin America as well.
Based on our customer value propositions for health and reduced costs, and our customer product codevelopment and solutions approach, we continue to remain prudently optimistic about the future. The main drivers are the continued positive underlying trends in the food industry.
Johan Westman CEO and President
Volumes continued to grow nicely, by 4 percent (8). Organic volume growth was 4 percent (4). Speciality and semi-speciality products grew organically by 2 percent (4).
Sales amounted to SEK 7,034 million (6,553). There was an underlying growth in sales due to a positive product mix, organic volume growth and a positive currency translation impact of SEK 241 million.
Operating profit reached SEK 526 million (475), an improvement of 11 percent compared to the corresponding quarter in 2017.
The currency translation impact was positive SEK 16 million of which SEK 9 million was related to Food Ingredients, and SEK 7 million to Chocolate & Confectionery Fats. Operating profit at fixed foreign exchange rates improved by 7 percent.
Operating profit per kilo reached SEK 0.93 (0.87), an increase of 7 percent. The currency translation impact was SEK 0.03. At fixed foreign exchange rates operating profit per kilo increased by 3 percent.
Net financial cost increased and amounted to SEK 37 million (31). This was due to increased borrowings in high interest rate countries and increased interest rates in a few markets, mainly Turkey.
Earnings per share increased by 16 percent, to SEK 1.39 (1.20), due to higher operating profit and lower tax costs, partly offset by higher financial costs.
Operating cash flow including changes in working capital amounted to SEK 524 million (492). Cash flow from working capital was negative, amounting to SEK 37 million (positive 156).
Continued good inventory control had a favorable impact on cash flow from working capital. This was partly offset by reduced accounts payables mainly as a consequence of lower raw material prices. However, continued volume growth and normal seasonality drove higher accounts receivables which impacted cash flow negatively.
Cash outflow from investing activities amounted to SEK 159 million (175). Capital expenditures were mainly related to regular maintenance investments and capacity increases in several regions.
Calculated on a rolling 12 months basis, Return on Capital Employed (ROCE) was 15.7 percent (15.6 at December 31, 2017). The increased operating profit has been offset by higher working capital during the first quarter this year. ROCE for the third quarter was 15.1 percent compared to 15.3 percent for the corresponding quarter 2017.
The equity/assets ratio amounted to 49 percent (46 percent at December 31, 2017). Net debt at September 30, 2018 amounted to SEK 2,918 million (2,666 at December 31, 2017). At September 30, 2018 the Group had total committed credit facilities of SEK 6,402 million (6,213 as of December 31, 2017), with SEK 3,423 million of unused committed credit facilities.
The average number of employees at September 30, 2018 was 3,461 (3,399 at December 31, 2017). The increase is mainly related to turning temporary employees in some European countries into permanent employees, as well as investing in more resources in West Africa.
At the end of September, AAK inaugurated its new Customer Innovation Center in Singapore to further strengthen its capabilities and customer co-development approach in the Southeast Asian market. The state-of-the-art center will be focused on applications within Chocolate & Confectionery Fats, Bakery, Ice cream and Dairy, and Special Nutrition. The Customer Innovation Center, which is AAK's twelfth, is located at Biopolis, an integrated R&D complex that houses research laboratories of pharmaceutical and biotechnology companies as well as public sector research institutes.
In August, AAK participated at Food ingredients South America. The trade fair, which is the most important event of its kind in Latin America, was held in São Paulo, Brazil. At our stand we held technical mini sessions and offered bakery, dairy and chocolate prototypes, based on our strategies and aligned with global food trends and local preferences, and prepared at our Customer Innovation Center in Jundiaí.
On September 24, AAK's share was added to the stock index STOXX Europe 600. With a fixed number of 600 components, STOXX Europe 600 represents large-, mid-, and small-cap companies across 17 countries in Europe.
| Operating profit + 11% |
Q3 2018 |
Q3 2017 |
Δ % | Q1-Q3 2018 |
Q1-Q3 2017 |
Δ % | R12 months |
Full year 2017 |
|
|---|---|---|---|---|---|---|---|---|---|
| Volumes, '000 MT | 376 | 364 | +3 | 1,128 | 1,069 | +6 | 1,506 | 1,447 | |
| Operating profit | Net sales, SEK million | 4,650 | 4,345 | +7 | 13,825 | 13,197 | +5 | 18,293 | 17,665 |
| per kilo | Operating profit, SEK million | 321 | 288 | +11 | 884 | 808 | +9 | 1,183 | 1,107 |
| + 8% | Operating profit per kilo, SEK | 0.85 | 0.79 | +8 | 0.78 | 0.76 | +3 | 0.79 | 0.77 |
Food Ingredients reported organic volume growth of 3 percent (3). The demand for speciality and semispeciality products continued to be good, generating organic volume growth of 2 percent (3).
The Bakery segment continued the positive trend. Volume growth was particularly strong in North Latin America, and Europe saw an improved product mix with a greater proportion of customer co-developed solutions. The US market continued to be weak.
The long-term trend within Dairy continued and the segment once again reported strong organic volume growth. All regions showed good growth except the Nordics which experienced decreased volumes of lowend semi-speciality products.
Special Nutrition reported double-digit volume growth with an improved product mix. Sub-segment Infant Nutrition was the main driver but we also progressed within Medical and Senior Nutrition, although from a much smaller base.
In the US, volumes in Foodservice declined slightly while the Nordics continued to improve after a challenging 2017.
Commodity products reported organic volume growth of 18 percent (4). This was primarily due to some good spot opportunities.
Sales amounted to SEK 4,650 million (4,345). The increase was mainly due to organic volume growth and a positive currency translation impact of SEK 193 million.
Operating profit improved by 11 percent to SEK 321 million (288). This was driven by volume growth and a continued improved product mix, including a greater proportion of customer co-developed solutions. The currency translation impact was positive SEK 9 million. At fixed foreign exchange rates operating profit increased by 8 percent.
Operating profit per kilo for Food Ingredients improved by 8 percent and reached SEK 0.85 (0.79). The currency translation impact was SEK 0.02. At fixed foreign exchange rates operating profit per kilo increased by 5 percent.
| Operating profit + 4% |
Q3 2018 |
Q3 2017 |
Δ % | Q1-Q3 2018 |
Q1-Q3 2017 |
Δ % | R12 months |
Full year 2017 |
|
|---|---|---|---|---|---|---|---|---|---|
| Volumes, '000 MT | 115 | 110 | +5 | 314 | 303 | +4 | 415 | 404 | |
| Operating profit | Net sales, SEK million | 2,007 | 1,866 | +8 | 5,649 | 5,565 | +2 | 7,438 | 7,354 |
| per kilo | Operating profit, SEK million | 206 | 198 | +4 | 565 | 559 | +1 | 741 | 735 |
| - 1% |
Operating profit per kilo, SEK | 1.79 | 1.80 | -1 | 1.80 | 1.84 | -2 | 1.79 | 1.82 |
Organic volume growth for the business area continued. The increase was 5 percent (9).
Production capacity, compared to demand, remains stretched for certain high-end products. We continue to make investments to remove bottlenecks in order to support current and future volume growth of high-end products.
Net sales for the business area increased by SEK 141 million mainly as a consequence of volume growth, an improved product mix, and a positive currency translation impact of SEK 48 million.
Operating profit reached SEK 206 million (198), an increase by 4 percent. The currency translation impact was positive SEK 7 million. At fixed foreign exchange rates operating profit increased by 1 percent.
As previously projected and communicated, the price development on high-end products has been slightly positive in the quarter. However, volatility in raw material yields has resulted in lower output and higher production costs.
Operating profit per kilo for the business area was stable and reached SEK 1.79 (1.80). The currency translation impact was SEK 0.06. At fixed foreign exchange rates operating profit per kilo declined by 4 percent.
| Operating profit + 48% |
Q3 2018 |
Q3 2017 |
Δ % | Q1-Q3 2018 |
Q1-Q3 2017 |
Δ % | R12 months |
Full year 2017 |
|
|---|---|---|---|---|---|---|---|---|---|
| Volumes, '000 MT | 73 | 69 | +6 | 223 | 207 | +8 | 294 | 278 | |
| Operating profit | Net sales, SEK million | 377 | 342 | +10 | 1,126 | 1,080 | +4 | 1,463 | 1,417 |
| per kilo | Operating profit, SEK million | 37 | 25 | +48 | 105 | 53 | +98 | 136 | 84 |
| + 42% | Operating profit per kilo, SEK | 0.51 | 0.36 | +42 | 0.47 | 0.26 | +80 | 0.46 | 0.30 |
Volumes increased by 6 percent (1) compared to the corresponding quarter in 2017. Both our feed and fatty acids business reported volume growth.
Net sales for the business area increased by SEK 35 million mainly due to the volume growth.
Operating profit improved by 48 percent reaching SEK 37 million (25). This was due to an improved product mix in our fatty acids business, volume growth in both our feed and fatty acids business, and a good performance in our crushing operation.
The business area reported an operating profit per kilo of SEK 0.51 (0.36), an improvement of 42 percent.
Total volumes were up by 5 percent (10). Organic volume growth was 5 percent (5).
Sales amounted to SEK 20,600 million (19,842). There was an underlying growth in sales due to a positive product mix, organic volume growth, and a positive currency translation impact of SEK 16 million.
Operating profit reached SEK 1,440 million (1,315), an improvement of 10 percent.
The currency translation impact was SEK 9 million of which SEK 7 million was related to Food Ingredients, SEK 3 million to Chocolate & Confectionery Fats and negative SEK 1 million to Group Functions. Operating profit at fixed foreign exchange rates improved by 9 percent.
Operating profit per kilo reached SEK 0.86 (0.83). The currency translation impact was SEK 0.01. At fixed foreign exchange rates operating profit per kilo increased by 3 percent.
Net financial cost decreased and amounted to SEK 92 million (94). The lower financial costs are mainly related to optimization in financing impacting the first quarter. However, from the second quarter we are experiencing higher financial costs due to increased borrowings in high interest rate countries and increased interest rates in a few markets, mainly Turkey.
Reported tax costs correspond to an average tax rate of 27 percent (29). This is mainly due to the reduction of the US corporate income tax (CIT) rate from January 1, 2018.
Operating cash flow including changes in working capital amounted to SEK 524 million (255). Cash flow from working capital was negative, amounting to SEK 615 million (negative 650).
A modest increase in raw material prices during the third quarter last year impacted cash flow from working capital negatively during the first quarter. We have also seen continued organic volume growth during the first nine months.
Cash outflow from investing activities amounted to SEK 463 million (519).
No significant changes have taken place in relations or transactions with related parties since 2017.
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, please refer to AAK's Annual Report.
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, please see our Annual Report. A number of new and amended standards are effective for periods beginning after January 1, 2018. None of these have a significant effect on the consolidated financial statements of the Group or the Parent company.
IFRS 16 Leasing is a new accounting policy that will come into effect as of January 1, 2019. The new standard means that AAK will report all significant leases in the balance sheet. The Group has not yet completed the evaluation of the effects of IFRS 16, but believes that it will not have a significant effect on the balance sheet total, assets, liabilities, EBITDA, or interest expenses.
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 Alternative Performance Measures can be found at www.aak.com under the Investor tab. For reconciliation of Alternative Performance Measures, see pages 19–20.
For definitions, please see our Annual Report.
In June, the number of shares and votes in AAK AB (publ.) increased as a result of the share split (6:1) resolved upon by AAK AB's Annual General Meeting on May 30, 2018. As of June 29, 2018, the number of shares and votes in the company amounts to 253,730,934.
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 result for the Parent Company after financial items amounted to positive SEK 2,060 million (negative 45).
Interest-bearing liabilities minus cash and cash equivalents and interest-bearing assets totalled a positive of SEK 231 million (negative 1,440 as of December 31, 2017). Investments in intangible and tangible assets amounted to SEK 5 million (0).
The Parent Company's balance sheet and income statement are shown on pages 21–22.
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 change in the parent company since yearend.
Malmö, October 25, 2018
Johan Westman CEO and President
For further information, please contact: Fredrik Nilsson CFO Mobile: +46 708 95 22 21 E-mail: [email protected]
The 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 08:20 a.m. CET on October 25, 2018.
We have reviewed the condensed interim financial information (interim report) of AAK AB (publ.) as of September 30, 2018 and the nine-month period then ended. The board of directors and the CEO are responsible for the preparation and presentation of the interim financial information in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the International Standard on Review Engagements ISRE 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified
in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Malmö, October 25, 2018
PricewaterhouseCoopers AB
Sofia Götmar-Blomstedt Authorized Public Accountant Auditor in charge
Linda Corneliusson Authorized Public Accountant
| SEK million | Q3 2018 |
Q3 2017 |
Q1-Q3 2018 |
Q1-Q3 2017 |
Full year 2017 |
|---|---|---|---|---|---|
| Net sales | 7,034 | 6,553 | 20,600 | 19,842 | 26,436 |
| Other operating income | 31 | 25 | 112 | 79 | 129 |
| Total operating income | 7,065 | 6,578 | 20,712 | 19,921 | 26,565 |
| Raw materials and supplies | -5,259 | -4,969 | -15,518 | -15,207 | -20,216 |
| Other external expenses | -632 | -560 | -1,831 | -1,634 | -2,208 |
| Cost for remuneration to employees | -506 | -454 | -1,505 | -1,398 | -1,862 |
| Amortization and impairment losses | -138 | -120 | -414 | -365 | -491 |
| Other operating expenses | -4 | -0 | -4 | -2 | -2 |
| Total operating costs | -6,539 | -6,103 | -19,272 | -18,606 | -24,779 |
| Operating profit (EBIT) | 526 | 475 | 1,440 | 1,315 | 1,786 |
| Interest income | 2 | 2 | 5 | 8 | 11 |
| Interest expense | -32 | -25 | -85 | -88 | -112 |
| Other financial items | -7 | -8 | -12 | -14 | -19 |
| Total financial net | -37 | -31 | -92 | -94 | -120 |
| Result before tax | 489 | 444 | 1,348 | 1,221 | 1,666 |
| Income tax | -130 | -129 | -362 | -358 | -454 |
| Net result | 359 | 315 | 986 | 863 | 1,212 |
| Attributable to non-controlling interests | 5 | 10 | 15 | 20 | 18 |
| Attributable to the Parent company's shareholders | 354 | 305 | 971 | 843 | 1,194 |
| Q3 | Q3 | Q1-Q3 | Q1-Q3 | Full year | |
|---|---|---|---|---|---|
| SEK million | 2018 | 2017 | 2018 | 2017 | 2017 |
| Profit for the period | 359 | 315 | 986 | 863 | 1,212 |
| Items that will not be reclassified to profit or loss: | |||||
| Remeasurements of post-employment benefit obligations | -19 | -19 | -19 | -8 | -15 |
| -19 | -19 | -19 | -8 | -15 | |
| Items that may subsequently be reclassified to profit or loss: | |||||
| Translation differences | -152 | -223 | 532 | -655 | -706 |
| -152 | -223 | 532 | -655 | -706 | |
| Total comprehensive income for the period | 188 | 73 | 1,499 | 200 | 491 |
| Attributible to non-controlling interests | 3 | 8 | 13 | 17 | 16 |
| Attributible to the Parent company's shareholders | 185 | 65 | 1,486 | 183 | 475 |
| SEK million | 30.09.2018 | 30.09.2017 | 31.12.2017 |
|---|---|---|---|
| Assets | |||
| Goodwill | 1,671 | 1,588 | 1,601 |
| Other intangible assets | 314 | 314 | 349 |
| Tangible assets | 5,392 | 5,114 | 5,178 |
| Financial assets | 50 | 26 | 40 |
| Deferred tax assets | 88 | 111 | 73 |
| Total non-current assets | 7,515 | 7,153 | 7,241 |
| Inventory | 4,468 | 4,276 | 4,656 |
| Accounts receivables | 3,701 | 3,372 | 3,210 |
| Current receivables | 1,598 | 1,189 | 1,305 |
| Cash and cash equivalents | 723 | 545 | 480 |
| Total current assets | 10,490 | 9,382 | 9,651 |
| Total assets | 18,005 | 16,535 | 16,892 |
| Equity and liabilities | |||
| Shareholders' equity | 8,738 | 7,335 | 7,664 |
| Non-controlling interests | 83 | 71 | 70 |
| Total equity including non-controlling interests | 8,821 | 7,406 | 7,734 |
| Liabilities to banks and credit institutions | 2,824 | 3,354 | 2,354 |
| Pension liabilities | 384 | 150 | 164 |
| Deferred tax liabilities | 479 | 500 | 437 |
| Non-interest-bearing liabilities | 214 | 356 | 363 |
| Total non-current liabilities | 3,901 | 4,360 | 3,318 |
| Liabilities to banks and credit institutions | 631 | 307 | 628 |
| Accounts payables | 2,755 | 2,830 | 3,137 |
| Other current liabilities | 1,897 | 1,632 | 2,075 |
| Total current liabilities | 5,283 | 4,769 | 5,840 |
| Total equity and liabilities | 18,005 | 16,535 | 16,892 |
No changes have arisen in contingent liabilities.
| SEK million | Shareholders' equity |
Non-controlling interests |
Total equity incl. non-controlling interests |
|---|---|---|---|
| Opening balance January 1, 2018 | 7,664 | 70 | 7,734 |
| Profit for the period | 971 | 15 | 986 |
| Other comprehensive income | 515 | -2 | 513 |
| Total comprehensive income | 1,486 | 13 | 1,499 |
| Dividend | -412 | - | -412 |
| Closing balance September 30, 2018 | 8,738 | 83 | 8,821 |
| SEK million | Shareholders' equity |
Non-controlling interests |
Total equity incl. non-controlling interests |
|---|---|---|---|
| Opening balance January 1, 2017 | 7,522 | 54 | 7,576 |
| Profit for the period | 843 | 20 | 863 |
| Other comprehensive income | -660 | -3 | -663 |
| Total comprehensive income | 183 | 17 | 200 |
| Dividend | -370 | - | -370 |
| Closing balance September 30, 2017 | 7,335 | 71 | 7,406 |
| SEK million Financial instruments reported in balance sheet September 30, 2018 |
Asset | Liability |
|---|---|---|
| Sales and purchase contracts | 484 | 64 |
| Currency hedge contracts | 115 | 108 |
| Total derivatives financial instruments | 599 | 172 |
| Fair value adjustment inventory | 12 | 12 |
| Total financial instruments | 611 | 184 |
| SEK million | Q3 2018 |
Q3 2017 |
Q1-Q3 2018 |
Q1-Q3 2017 |
Full year 2017 |
|---|---|---|---|---|---|
| Operating activities | |||||
| Operating profit | 526 | 475 | 1,440 | 1,315 | 1,786 |
| Depreciation and amortization | 138 | 120 | 414 | 365 | 491 |
| Other non-cash items | 15 | -126 | -304 | -291 | -263 |
| Cash flow before interest and tax | 679 | 469 | 1,550 | 1,389 | 2,014 |
| Interest paid and received | -38 | -35 | -87 | -99 | -114 |
| Tax paid | -80 | -98 | -324 | -385 | -413 |
| Cash flow before changes in working capital | 561 | 336 | 1,139 | 905 | 1,487 |
| Changes in inventory | 264 | 387 | 304 | 408 | 21 |
| Changes in accounts receivables | -189 | -69 | -473 | -493 | -341 |
| Changes in accounts payables | -120 | -6 | -479 | -329 | -18 |
| Changes in other working capital items | 8 | -156 | 33 | -236 | -50 |
| Changes in working capital | -37 | 156 | -615 | -650 | -388 |
| Cash flow from operating activities | 524 | 492 | 524 | 255 | 1,099 |
| Investing activities | |||||
| Acquisition of intangible and tangible assets | -160 | -176 | -465 | -526 | -817 |
| Proceeds from sale of property, plant and equipment | 1 | 1 | 2 | 7 | 7 |
| Cash flow from investing activities | -159 | -175 | -463 | -519 | -810 |
| Cash flow after investing activities | 365 | 317 | 61 | -264 | 289 |
| Financing activities | |||||
| Subscription warrants | - | - | - | - | 37 |
| Changes in loans | -494 | -400 | 586 | 628 | -33 |
| Dividend paid | - | - | -412 | -370 | -370 |
| Cash flow from financing activities | -494 | -400 | 174 | 258 | -366 |
| Cash flow for the period | -129 | -83 | 235 | -6 | -77 |
| Cash and cash equivalents at start of period | 872 | 639 | 480 | 586 | 586 |
| Exchange rate difference for cash equivalents | -20 | -11 | 8 | -35 | -29 |
| Cash and cash equivalents at end of period | 723 | 545 | 723 | 545 | 480 |
| SEK million (unless otherwise stated) | Q3 2018 |
Q3 2017 |
Δ % | Q1-Q3 2018 |
Q1-Q3 2017 |
Δ % | Full year 2017 |
|---|---|---|---|---|---|---|---|
| Income statement | |||||||
| Volumes, '000 MT | 564 | 543 | +4 | 1,665 | 1,579 | +5 | 2,129 |
| Operating profit | 526 | 475 | +11 | 1,440 | 1,315 | +10 | 1,786 |
| Net result | 359 | 315 | +14 | 986 | 863 | +14 | 1,212 |
| Financial position | |||||||
| Total assets | 18,005 | 16,535 | +9 | 18,005 | 16,535 | +9 | 16,892 |
| Equity | 8,821 | 7,406 | +19 | 8,821 | 7,406 | +19 | 7,734 |
| Net working capital | 5,124 | 4,346 | +18 | 5,124 | 4,346 | +18 | 3,970 |
| Net interest-bearing debt | 2,918 | 3,233 | -10 | 2,918 | 3,233 | -10 | 2,666 |
| Cash flow | |||||||
| EBITDA | 664 | 595 | +12 | 1,854 | 1,680 | +10 | 2,277 |
| Cash flow from operating activities | 524 | 492 | - | 524 | 255 | - | 1,099 |
| Cash flow from investing activities | -159 | -175 | - | -463 | -519 | - | -810 |
| Free cash flow | 365 | 317 | - | 61 | -264 | - | 289 |
| Share data* | |||||||
| Number of shares, thousand | 253,731 | 253,731 | +0 | 253,731 | 253,731 | +0 | 253,731 |
| Earnings per share, SEK** | 1.39 | 1.20 | +16 | 3.83 | 3.32 | +15 | 4.71 |
| Earnings per share incl. dilution, SEK*** | 1.39 | 1.20 | +16 | 3.83 | 3.32 | +15 | 4.71 |
| Earnings per share incl. full dilution, SEK**** | 1.37 | 1.20 | +14 | 3.83 | 3.32 | +15 | 4.71 |
| Equity per share, SEK | 34.44 | 28.91 | +19 | 34.44 | 28.91 | +19 | 30.21 |
| Market value on closing date, SEK | 154.06 | 102.75 | +50 | 154.06 | 102.75 | +50 | 117.08 |
| Other key ratios | |||||||
| Volume growth, percent | +4 | +8 | - | +5 | +10 | - | +8 |
| Operating profit per kilo, SEK | 0.93 | 0.87 | +7 | 0.86 | 0.83 | +4 | 0.84 |
| Return on Capital Employed (R12 months), percent | 15.7 | 15.4 | +2 | 15.7 | 15.4 | +2 | 15.6 |
| Net debt / EBITDA, multiple | 1.19 | 1.43 | -17 | 1.19 | 1.43 | -17 | 1.17 |
* Share data recalculated in accordance with the decided share split (6:1) by the Annual General Meeting on May 30, 2018.
** 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.
| SEK million | 2017 Q1 |
Q2 | Q3 | Q4 | Full year | 2018 Q1 |
Q2 | Q3 |
|---|---|---|---|---|---|---|---|---|
| Food Ingredients | 249 | 271 | 288 | 299 | 1,107 | 271 | 292 | 321 |
| Chocolate & Confectionery Fats | 196 | 165 | 198 | 176 | 735 | 190 | 169 | 206 |
| Technical Products & Feed | 19 | 9 | 25 | 31 | 84 | 36 | 32 | 37 |
| Group Functions | -33 | -36 | -36 | -35 | -140 | -37 | -39 | -38 |
| Operating profit AAK Group | 431 | 409 | 475 | 471 | 1,786 | 460 | 454 | 526 |
| Financial net | -41 | -22 | -31 | -26 | -120 | -24 | -31 | -37 |
| Result before tax | 390 | 387 | 444 | 445 | 1,666 | 436 | 423 | 489 |
| SEK million | FI Q3 2018 |
CCF Q3 2018 |
TPF Q3 2018 |
Total Q3 2018 |
FI Q1-Q3 2018 |
CCF Q1-Q3 2018 |
TPF Q1-Q3 2018 |
Total Q1-Q3 2018 |
|---|---|---|---|---|---|---|---|---|
| Europe | 2,105 | 903 | 375 | 3,383 | 6,268 | 2,501 | 1,119 | 9,888 |
| North and South America | 1,965 | 823 | 2 | 2,790 | 5,705 | 2,339 | 7 | 8,051 |
| Asia | 536 | 241 | 0 | 777 | 1,703 | 662 | 0 | 2,365 |
| Other countries | 44 | 40 | 0 | 84 | 149 | 147 | 0 | 296 |
| Net sales | 4,650 | 2,007 | 377 | 7,034 | 13,825 | 5,649 | 1,126 | 20,600 |
| Percent | Q3 2018 |
Q3 2017 |
Q1-Q3 2018 |
Q1-Q3 2017 |
Full year 2017 |
|---|---|---|---|---|---|
| Food Ingredients | |||||
| Organic volume growth | 3 | 3 | 6 | 3 | 4 |
| Acquisitions/divestments | - | 5 | - | 7 | 5 |
| Volume growth | 3 | 8 | 6 | 10 | 9 |
| Chocolate & Confectionery Fats | |||||
| Organic volume growth | 5 | 9 | 4 | 13 | 10 |
| Acquisitions/divestments | - | - | - | - | - |
| Volume growth | 5 | 9 | 4 | 13 | 10 |
| Technical Products & Feed | |||||
| Organic volume growth | 6 | 1 | 8 | 1 | 1 |
| Acquisitions/divestments | - | - | - | - | - |
| Volume growth | 6 | 1 | 8 | 1 | 1 |
| AAK Group | |||||
| Organic volume growth | 4 | 4 | 5 | 5 | 5 |
| Acquisitions/divestments | - | 4 | - | 5 | 3 |
| Volume growth | 4 | 8 | 5 | 10 | 8 |
| SEK million | Q3 2018 |
Q3 2017 |
Q1-Q3 2018 |
Q1-Q3 2017 |
Full year 2017 |
|---|---|---|---|---|---|
| Operating profit (EBIT) | 526 | 475 | 1,440 | 1,315 | 1,786 |
| Add back depreciation and amortization | 138 | 120 | 414 | 365 | 491 |
| EBITDA | 664 | 595 | 1,854 | 1,680 | 2,277 |
| SEK million | 30.09.2018 | 30.09.2017 | R12M 30.09.2018 |
R12M 31.12.2017 |
|---|---|---|---|---|
| Total assets | 18,005 | 16,535 | 17,705 | 17,099 |
| Cash and cash equivalents | -723 | -545 | -658 | -566 |
| Financial assets | -7 | -34 | -54 | -13 |
| Accounts payables | -2,755 | -2,830 | -2,960 | -3,073 |
| Other non-interest-bearing liabilities | -1,880 | -1,627 | -1,866 | -1,963 |
| Capital employed | 12,640 | 11,499 | 12,167 | 11,484 |
| Operating profit (Rolling 12 months) | 1,911 | 1,765 | 1,911 | 1,786 |
| Return on Capital Employed (ROCE), percent | 15.1 | 15.3 | 15.7 | 15.6 |
| SEK million | 30.09.2018 | Full year 2017 |
|---|---|---|
| Inventory | 4,468 | 4,656 |
| Accounts receivables | 3,701 | 3,210 |
| Other current receivables, non-interest-bearing | 1,590 | 1,299 |
| Accounts payables | -2,755 | -3,137 |
| Other current liabilities, non-interest-bearing | -1,880 | -2,058 |
| Net working capital | 5,124 | 3,970 |
| SEK million | 30.09.2018 | Full year 2017 |
|---|---|---|
| Current interest-bearing receivables | 7 | 5 |
| Cash and cash equivalents | 723 | 480 |
| Pension liabilities | -189 | -164 |
| Non-current liabilities to banks and credit institutions | -2,824 | -2,354 |
| Current liabilities to banks and credit institutions | -631 | -628 |
| Other interest-bearing liabilities | -4 | -5 |
| Net debt | -2,918 | -2,666 |
| SEK million | 30.09.2018 | Full year 2017 |
|---|---|---|
| Shareholders' equity | 8,738 | 7,664 |
| Non-controlling interests | 83 | 70 |
| Total equity including non-controlling interests | 8,821 | 7,734 |
| Total assets | 18,005 | 16,892 |
| Equity to assets ratio, percent | 49.0 | 45.8 |
| SEK million | Q3 2018 |
Q3 2017 |
Q1-Q3 2018 |
Q1-Q3 2017 |
Full year 2017 |
|---|---|---|---|---|---|
| Net sales | 32 | 24 | 97 | 71 | 97 |
| Other operating income | 0 | 0 | 0 | 0 | 0 |
| Total operating income | 32 | 24 | 97 | 71 | 97 |
| Other external expenses | -15 | -16 | -54 | -34 | -67 |
| Cost for remuneration to employees | -25 | -26 | -80 | -78 | -97 |
| Amortization and impairment losses | -1 | 0 | -2 | -1 | -2 |
| Other operating expenses | - | - | - | - | - |
| Total operating costs | -41 | -42 | -136 | -113 | -166 |
| Operating profit (EBIT) | -9 | -18 | -39 | -42 | -69 |
| Dividend from group companies | 1,298 | - | 2,110 | - | - |
| Income from shares in group companies | - | - | - | - | 67 |
| Interest income | 0 | - | 0 | 0 | 0 |
| Interest expense | 0 | -1 | -8 | -3 | -5 |
| Other financial items | -2 | 0 | -3 | 0 | -4 |
| Total financial net | 1,296 | -1 | 2,099 | -3 | 58 |
| Result before tax | 1,287 | -19 | 2,060 | -45 | -11 |
| Income tax | 1 | 2 | 6 | 7 | 2 |
| Net result | 1,288 | -17 | 2,066 | -38 | -9 |
| Attributable to non-controlling interests | - | - | - | - | - |
| Attributable to the Parent company's shareholders | 1,288 | -17 | 2,066 | -38 | -9 |
| SEK million | Q3 2018 |
Q3 2017 |
Q1-Q3 2018 |
Q1-Q3 2017 |
Full year 2017 |
|---|---|---|---|---|---|
| Profit for the period | 1,288 | -17 | 2,066 | -38 | -9 |
| Items that will not be reclassified to profit or loss: | |||||
| - | - | - | - | - | |
| Items that may subsequently be reclassified to profit or loss: | |||||
| - | - | - | - | - | |
| Total comprehensive income for the period | 1,288 | -17 | 2,066 | -38 | -9 |
| Attributible to non-controlling interests | - | - | - | - | - |
| Attributible to the Parent company's shareholders | 1,288 | -17 | 2,066 | -38 | -9 |
| SEK million | 30.09.2018 | 30.09.2017 | 31.12.2017 |
|---|---|---|---|
| Assets | |||
| Other intangible assets | 10 | 4 | 7 |
| Tangible assets | 2 | 3 | 3 |
| Financial assets | 5,565 | 5,492 | 5,333 |
| Deferred tax assets | 3 | 8 | 3 |
| Total non-current assets | 5,580 | 5,507 | 5,346 |
| Accounts receivables | - | - | - |
| Current receivables | 76 | 81 | 125 |
| Cash and cash equivalents | 0 | 0 | - |
| Total current assets | 76 | 81 | 125 |
| Total assets | 5,656 | 5,588 | 5,471 |
| Equity and liabilities | |||
| Shareholders' equity | 5,569 | 3,835 | 3,915 |
| Non-controlling interests | - | - | - |
| Total equity including non controlling interests |
5,569 | 3,835 | 3,915 |
| Pension liabilities | 14 | 14 | 14 |
| Total non-current liabilities | 14 | 14 | 14 |
| Accounts payables | 13 | 10 | 15 |
| Other current liabilities | 60 | 1,729 | 1,527 |
| Total current liabilities | 73 | 1,739 | 1,542 |
| Total equity and liabilities | 5,656 | 5,588 | 5,471 |
No changes have arisen in contingent liabilities.
0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 USD/ton Cocoa butter
For information regarding cocoa and cocoa butter please refer to information at www.icco.org
AAK will host a conference call on October 25, 2018 at 1 p.m. CET. The conference call can be accessed via our website, www.aak.com.
The annual and quarterly reports are also published on www.aak.com.
A capital market day will be held in Karlshamn, Sweden, on November 21, 2018.
The fourth quarter and year-end report for 2018 will be published on February 8, 2019.
The interim report for the first quarter 2019 will be published on April 23, 2019.
The Annual General Meeting will be held in Malmö, Sweden on May 15, 2019.
The interim report for the second quarter 2019 will be published on July 16, 2019.
The interim report for the third quarter 2019 will be published on October 24, 2019.
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, Special 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 3,400 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.
Explore more at www.aak.com
AAK AB (publ.)
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