Quarterly Report • Feb 8, 2019
Quarterly Report
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· ··························· Fourth quarter and year-end report 2018
··························································
Net result amounted to SEK 1,340 million (1,212), an improvement of 11 percent.
Earnings per share amounted to SEK 1.39 (1.39). The net result for 2017 was favorably impacted by a positive one-off tax income of SEK 35 million or SEK 0.14 per share. Consequently, our underlying earnings per share increased by SEK 0.14 or 11 percent year-over-year.
| Q4 2018 |
Q4 2017 |
Δ % | Full year 2018 |
Full year 2017 |
Δ % | |
|---|---|---|---|---|---|---|
| Volumes, '000 MT | 574 | 550 | +4 | 2,239 | 2,129 | +5 |
| Operating profit, SEK million | 516 | 471 | +10 | 1,956 | 1,786 | +10 |
| Operating profit per kilo, SEK | 0.90 | 0.86 | +5 | 0.87 | 0.84 | +4 |
| Net result, SEK million | 354 | 349 | +1 | 1,340 | 1,212 | +11 |
| Earnings per share, SEK* | 1.39 | 1.39 | +0 | 5.21 | 4.71 | +11 |
| Return on Capital Employed (R12M), percent | 15.8 | 15.6 | +1 | 15.8 | 15.6 | +1 |
* Share data recalculated in accordance with the decided share split (6:1) by the Annual General Meeting on May 30, 2018.
The consistent positive trend in operating profit continued during the fourth quarter. The main drivers for our profit growth were Dairy and Special Nutrition as well as business area Technical Products & Feed.
Our organic volume growth reached 4 percent (5). Business areas Chocolate & Confectionery Fats and Technical Products & Feed accounted for the strongest volume growth, both reporting a double-digit increase compared to last year.
Operating profit increased by 10 percent to SEK 516 million (471), a record-high profit for a fourth quarter. Earnings per share and operating cash flow were also good in the quarter.
Food Ingredients had a strong profit growth in the quarter with Dairy and Special Nutrition leading the way. Our Bakery segment continued the positive trend we have seen over the last quarters. The profit growth in our Foodservice segment was slightly negative.
Chocolate & Confectionery Fats had a stable quarter with continued profit growth. As expected, the volatility in raw material yields continued during the fourth quarter and had a negative impact on operating profit. We still 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 and strengthen our supply chain in order to support future volume growth.
Business area Technical Products & Feed had a very strong profit growth in the quarter on the back of an extraordinarily favorable product mix within the fatty acids business.
Our company program The AAK Way is progressing well and yielding good results.
After reaching out to more than 2,000 customers, we have, through our global customer survey, "We listen. We care. We act.", received very valuable input. While confirming our unique customer co-development approach, the survey results also gave us valuable input to further improve our customer value proposition.
To become a "truly customer-centric" company and to further improve the customer experience, we have also
continued to train and educate our dedicated sales and customer innovation organization.
2018 has been another year of strong financial performance and we continue to grow faster than the market. Operating profit increased by 10 percent, in line with our ambition. This despite raw material yields continuing to be lower than normal within Chocolate & Confectionery Fats.
When looking back on my first year with AAK, I see a decentralized organization with strong regional leadership, and I see great dedication to our customers and our co-development approach. I am extremely proud and happy to be part of this AAK team and there is no doubt that we have great opportunities for continued profitable growth, organically and through acquisitions.
We offer plant-based, healthy, high value-adding oils and fats solutions by using our customer codevelopment approach. In addition, we see favorable underlying trends in the food industry. Thus, we continue to remain prudently optimistic about the future.
Johan Westman President and CEO
Volumes continued to grow nicely, by 4 percent (5). Organic volume growth was 4 percent (5). Speciality and semi-speciality products grew organically by 2 percent (7).
Sales amounted to SEK 6,992 million (6,594). There was an underlying growth in sales due to a positive product mix, organic volume growth and a positive currency translation impact of SEK 133 million.
Operating profit reached SEK 516 million (471), an improvement of 10 percent compared to the corresponding quarter in 2017.
The currency translation impact was positive SEK 13 million of which SEK 10 million was related to Food Ingredients, SEK 4 million to Chocolate & Confectionery Fats and negative SEK 1 million to Group Functions. Operating profit at fixed foreign exchange rates improved by 7 percent.
Operating profit per kilo reached SEK 0.90 (0.86), an increase of 5 percent. The currency translation impact was SEK 0.02. At fixed foreign exchange rates operating profit per kilo increased by 2 percent.
Net financial cost increased and amounted to SEK 35 million (26). This was due to increased borrowings in high interest rate countries and increased interest rates in a few markets, mainly Turkey.
Earnings per share amounted to SEK 1.39 (1.39). Compared to previous year, operating profit before tax continued to improve. Earnings per share in 2017 included a one-off tax income (SEK 0.14 per share) related to the US tax reform (TCJA).
Operating cash flow including changes in working capital amounted to SEK 566 million (844). Cash flow from working capital was positive, amounting to SEK 60 million (262).
Lower raw material prices had a favorable effect on cash flow from working capital, impacting inventory and accounts receivables positively and accounts payables negatively. Underlying accounts receivables increased due to the continued volume growth. Purchase of some strategic raw materials, due to normal seasonality, also had a negative impact on cash flow.
Cash outflow from investing activities amounted to SEK 260 million (291). Capital expenditures were mainly related to regular maintenance investments and capacity increases.
Calculated on a rolling 12 months basis, Return on Capital Employed (ROCE) was 15.8 percent (15.6 at December 31, 2017). The increased operating profit has been partly offset by higher working capital during the first part of 2018. At the balance sheet date, ROCE was 15.5 percent (15.9).
The equity/assets ratio amounted to 50 percent (46 percent at December 31, 2017). Net debt at December 31, 2018 amounted to SEK 2,667 million (2,666 at December 31, 2017). At December 31, 2018 the Group had total committed credit facilities of SEK 6,339 million (6,213 as of December 31, 2017), with SEK 4,698 million of unused committed credit facilities.
The average number of employees at December 31, 2018 was 3,609 (3,508 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.
On November 21, AAK hosted its annual Capital Market Day for analysts, investors and media representatives. This year's event, held in Blekinge, Sweden, included a presentation by President and CEO Johan Westman, focusing on AAK's strategy and business. This was followed by an update on the company's financial performance by Fredrik Nilsson, CFO, and a presentation from CMO Anne Mette Olesen on AAK's progress within the sustainability area. A more in-depth look at AAK's work within innovation and Customer Co-Development and the company's solutions for plant-based products were also provided. All presentations can be accessed at www.aak.com.
In early December, AAK issued a senior unsecured bond for a total of SEK 1.1 billion with a tenor of three years. The bond carries a floating interest rate of three months STIBOR plus 105 basis points. The transaction generated strong investor demand and was oversubscribed. The proceeds from the bond issue will be used to broaden AAK's funding base and for general corporate purposes.
On January 22, Corporate Knights Inc. ranked AAK among the 100 Most Sustainable Corporations in the world. Corporate Knights' annual ranking was launched in 2005 and this year some 7,500 companies (with at least USD 1 billion in revenues) were analyzed. The ranking was released on the sidelines of the World Economic Forum in Davos, Switzerland.
| Operating profit +7% |
Q4 2018 |
Q4 2017 |
Δ % | Full year 2018 |
Full year 2017 |
Δ % | |
|---|---|---|---|---|---|---|---|
| Volumes, '000 MT | 380 | 378 | +1 | 1,508 | 1,447 | +4 | |
| Operating profit | Net sales, SEK million | 4,643 | 4,468 | +4 | 18,468 | 17,665 | +5 |
| per kilo | Operating profit, SEK million | 321 | 299 | +7 | 1,205 | 1,107 | +9 |
| +6% | Operating profit per kilo, SEK | 0.84 | 0.79 | +6 | 0.80 | 0.77 | +4 |
Food Ingredients reported an organic volume growth of 1 percent (7). The volume growth for speciality and semi-speciality products was slightly negative but there was a favorable development of the product mix within the categories.
The Bakery segment continued its positive trend. Volume growth was particularly strong in North Latin America while most other markets showed limited volume growth. The product mix continued to improve with a greater proportion of customer co-developed solutions.
The long-term growth trend within Dairy continued and the segment once again reported organic volume growth. All regions showed good growth except the Nordics which experienced decreased volumes of lowend semi-speciality products.
Special Nutrition had a negative volume growth in the quarter but that was compensated by a very favorable product mix in Infant Nutrition. Although from a small base, the positive trend within Medical and Senior Nutrition continued.
The volume growth in our Foodservice segment was slightly negative.
Due to some good spot opportunities, commodity products reported strong organic volume growth.
Sales amounted to SEK 4,643 million (4,468). The increase was mainly due to an improved product mix and a positive currency translation impact of SEK 109 million.
Operating profit improved by 7 percent to SEK 321 million (299). This was driven by a continued improved product mix, including a greater proportion of customer co-developed solutions. The currency translation impact was positive SEK 10 million. At fixed foreign exchange rates operating profit increased by 4 percent.
Operating profit per kilo for Food Ingredients improved by 6 percent and reached SEK 0.84 (0.79). The currency translation impact was SEK 0.03. At fixed foreign exchange rates operating profit per kilo increased by 4 percent.
| Operating profit +3% |
Q4 2018 |
Q4 2017 |
Δ % | Full year 2018 |
Full year 2017 |
Δ % | |
|---|---|---|---|---|---|---|---|
| Volumes, '000 MT | 116 | 101 | +15 | 430 | 404 | +6 | |
| Operating profit | Net sales, SEK million | 1,962 | 1,789 | +10 | 7,611 | 7,354 | +3 |
| per kilo | Operating profit, SEK million | 182 | 176 | +3 | 747 | 735 | +2 |
| -10% | Operating profit per kilo, SEK | 1.57 | 1.74 | -10 | 1.74 | 1.82 | -4 |
There was significant organic volume growth for the business area in the quarter. The increase was 15 percent (1). There was particularly strong volume growth for some low-end semi-speciality products.
Production capacity, compared to demand, remains stretched for certain high-end products. We continue to make investments to remove bottlenecks and strengthen our supply chain in order to support current and expected future volume growth of high-end products.
Net sales for the business area increased by SEK 173 million mainly as a consequence of volume growth and a positive currency translation impact of SEK 24 million.
Operating profit reached SEK 182 million (176), an increase by 3 percent. The currency translation impact was positive SEK 4 million. At fixed foreign exchange rates operating profit increased by 1 percent.
As previously projected and communicated, volatility in raw material yields continue to give lower output and higher production costs. This has, however, to some extent been offset by the price development on highend products being slightly positive in the quarter.
Operating profit per kilo declined and reached SEK 1.57 (1.74). This was due to the strong volume growth for some low-end semi-speciality products and the higher production costs mentioned above. The currency translation impact was SEK 0.03. At fixed foreign exchange rates operating profit per kilo declined by 12 percent.
| Operating profit +61% |
Q4 2018 |
Q4 2017 |
Δ % | Full year 2018 |
Full year 2017 |
Δ % | |
|---|---|---|---|---|---|---|---|
| Volumes, '000 MT | 78 | 71 | +10 | 301 | 278 | +8 | |
| Operating profit | Net sales, SEK million | 387 | 337 | +15 | 1,513 | 1,417 | +7 |
| per kilo | Operating profit, SEK million | 50 | 31 | +61 | 155 | 84 | +85 |
| +45% | Operating profit per kilo, SEK | 0.64 | 0.44 | +45 | 0.51 | 0.30 | +70 |
Volumes increased by 10 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 50 million mainly due to the volume growth.
Operating profit improved by 61 percent reaching SEK 50 million (31). This was due to an improved and extraordinarily favorable 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 0.64 (0.44), an improvement of 45 percent.
Total volumes were up by 5 percent (8). Organic volume growth was 5 percent (5).
Sales amounted to SEK 27,592 million (26,436). There was an underlying growth in sales due to a positive product mix, organic volume growth, and a positive currency translation impact of SEK 149 million.
Operating profit reached SEK 1,956 million (1,786), an improvement of 10 percent.
The currency translation impact was SEK 22 million of which SEK 17 million was related to Food Ingredients, SEK 7 million to Chocolate & Confectionery Fats and negative SEK 2 million to Group Functions. Operating profit at fixed foreign exchange rates improved by 8 percent.
Operating profit per kilo reached SEK 0.87 (0.84). The currency translation impact was SEK 0.01. At fixed foreign exchange rates operating profit per kilo increased by 3 percent.
Net financial cost increased and amounted to SEK 127 million (120). This was due to increased borrowings in high interest rate countries and increased interest rates in a few markets, mainly Turkey.
Reported tax costs corresponded to an average tax rate of 27 percent (27).
Operating cash flow including changes in working capital amounted to SEK 1,090 million (1,099). Cash flow from working capital was negative, amounting to SEK 555 million (negative 388).
A modest increase in raw material prices during the third quarter 2017 impacted cash flow from working capital negatively during the first part of 2018 while lower raw material prices had a favorable impact during the latter part of the year. Continued organic volume growth during the year has resulted in an outflow of cash flow from working capital.
Cash outflow from investing activities amounted to SEK 723 million (810). Capital expenditures were mainly related to regular maintenance investments and capacity increases in several regions.
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 indepth 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 replaces IAS 17 as of January 1, 2019. According to the new standard, almost all leases will be recognized on the balance sheet as a right-of-use asset and a lease liability. In the income statement a depreciation will be recognized in the operating income and an interest expenses in net financial result. The Group will be affected primarily for lease agreements of rental for premises and lease of vehicles.
The Group will adopt IFRS 16 using the modified retrospective approach with the cumulative effect initially recognized on January 1, 2019, which means the comparatives for 2017, in accordance with the standard, will not be restated. The Group will apply the majority of the practical expedients allowed for the first time that IFRS 16 is applied, the most significant being to account for leases with a remaining lease term of less than 12 months as at January 1, 2019 as shortterm leases. The Group will also, after initial application, apply the practical expedients of accounting for leases with a lease term of 12 months or less and leases of
low value as an expense on a straight-line basis in the income statement.
The Group estimates that the lease liability as at January 1, 2019 will be approximately SEK 900 million and the right-of-use asset about SEK 900 million. Equity will not be affected in the transition to IFRS 16. For further information about current lease agreements, see note 28 in the Annual Report 2017.
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.
At the Annual General Meeting 2018, Märta Schörling Andreen (Melker Schörling AB), Henrik Didner (Didner & Gerge Fonder), Lars-Åke Bokenberger (AMF Fonder) and Yvonne Sörberg (Handelsbanken fonder) were elected members of the Nomination Committee in respect of the Annual General Meeting 2019. Märta Schörling Andreen was elected chairman of the Nomination Committee.
In accordance with the Annual General Meeting's resolution, and the share register as of August 30, 2018, Leif Törnvall (Alecta) has replaced Yvonne Sörberg (Handelsbanken fonder) as member of the Nomination Committee.
The Annual General Meeting will be held on May 15, 2019 at 2 p.m. CET in Malmö, Sweden (Malmö Arena). The Annual Report for 2018 will be available at www.aak.com from April 11, 2019 and is expected to be distributed to shareholders during the end of the week starting with April 15, 2019. The report will at that time also be available at AAK's headquarters.
Shareholders who wish to participate at the Annual General Meeting must be registered in the share register maintained by Euroclear Sweden AB on May 9, 2019. To be eligible to participate in the Annual General Meeting, shareholders with nominee-registered holdings should temporarily re-register their shares in their own names through the agency of their nominees so that they are recorded in the share register in good time before May 9, 2019. Notification of attendance should be made to AAK's head office no later than 4 p.m. CET on May 9, 2019.
The Board of Directors proposes that a dividend of SEK 1.85 (1.63) per share be paid for the financial year 2018. The proposed recording day for the dividend is May 17, 2019. It is expected that the dividend will reach the shareholders on May 22, 2019.
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 SEK 2,122 million (negative 11).
Interest-bearing liabilities minus cash and cash equivalents and interest-bearing assets totalled a positive of SEK 1,710 million (negative 1,440 as of December 31, 2017). Investments in intangible and tangible assets amounted to SEK 6 million (3). 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, February 8, 2019
| Georg Brunstam Chairman of the Board |
Gun Nilsson Board member |
Bengt Baron Board member |
|---|---|---|
| Märta Schörling Andreen Board member |
Lillie Li Valeur Board member |
Marianne Kirkegaard Board member |
| Leif Håkansson Trade union representative |
Lena Nilsson Trade union representative |
|
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 08:50 a.m. CET on February 8, 2019.
We have reviewed the condensed interim financial information (interim report) of AAK AB (publ.) as of December 31, 2018 and the twelve-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, February 8, 2019
PricewaterhouseCoopers AB
Sofia Götmar-Blomstedt Authorized Public Accountant Auditor in charge
Linda Corneliusson Authorized Public Accountant
| SEK million | Q4 2018 |
Q4 2017 |
Full year 2018 |
Full year 2017 |
|---|---|---|---|---|
| Net sales | 6,992 | 6,594 | 27,592 | 26,436 |
| Other operating income | 68 | 50 | 180 | 129 |
| Total operating income | 7,060 | 6,644 | 27,772 | 26,565 |
| Raw materials and supplies | -5,205 | -5,009 | -20,723 | -20,216 |
| Other external expenses | -631 | -574 | -2,462 | -2,208 |
| Cost for remuneration to employees | -568 | -464 | -2,073 | -1,862 |
| Amortization and impairment losses | -138 | -126 | -552 | -491 |
| Other operating expenses | -2 | -0 | -6 | -2 |
| Total operating costs | -6,544 | -6,173 | -25,816 | -24,779 |
| Operating profit (EBIT) | 516 | 471 | 1,956 | 1,786 |
| Interest income | 1 | 3 | 6 | 11 |
| Interest expense | -39 | -24 | -124 | -112 |
| Other financial items | 3 | -5 | -9 | -19 |
| Total financial net | -35 | -26 | -127 | -120 |
| Result before tax | 481 | 445 | 1,829 | 1,666 |
| Income tax | -127 | -96 | -489 | -454 |
| Net result | 354 | 349 | 1,340 | 1,212 |
| Attributable to non-controlling interests | 3 | -2 | 18 | 18 |
| Attributable to the Parent company's shareholders | 351 | 351 | 1,322 | 1,194 |
| SEK million | Q4 2018 |
Q4 2017 |
Full year 2018 |
Full year 2017 |
|---|---|---|---|---|
| Profit for the period | 354 | 349 | 1,340 | 1,212 |
| Items that will not be reclassified to profit or loss: | ||||
| Remeasurements of post-employment benefit obligations | -9 | -7 | -28 | -15 |
| -9 | -7 | -28 | -15 | |
| Items that may subsequently be reclassified to profit or loss: | ||||
| Translation differences | -170 | -51 | 362 | -706 |
| -170 | -51 | 362 | -706 | |
| Total comprehensive income for the period | 175 | 291 | 1,674 | 491 |
| Attributible to non-controlling interests | 5 | -1 | 18 | 16 |
| Attributible to the Parent company's shareholders | 170 | 292 | 1,656 | 475 |
| SEK million | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Assets | ||
| Goodwill | 1,666 | 1,601 |
| Other intangible assets | 333 | 349 |
| Tangible assets | 5,468 | 5,178 |
| Financial assets | 30 | 40 |
| Deferred tax assets | 61 | 73 |
| Total non-current assets | 7,558 | 7,241 |
| Inventory | 4,705 | 4,656 |
| Accounts receivables | 3,441 | 3,210 |
| Current receivables | 1,594 | 1,305 |
| Cash and cash equivalents | 737 | 480 |
| Total current assets | 10,477 | 9,651 |
| Total assets | 18,035 | 16,892 |
| Equity and liabilities | ||
| Shareholders' equity | 8,908 | 7,664 |
| Non-controlling interests | 88 | 70 |
| Total equity including non-controlling interests | 8,996 | 7,734 |
| Liabilities to banks and credit institutions | 2,551 | 2,354 |
| Pension liabilities | 206 | 164 |
| Deferred tax liabilities | 490 | 437 |
| Non-interest-bearing liabilities | 434 | 363 |
| Total non-current liabilities | 3,681 | 3,318 |
| Liabilities to banks and credit institutions | 661 | 628 |
| Accounts payables | 2,685 | 3,137 |
| Other current liabilities | 2,012 | 2,075 |
| Total current liabilities | 5,358 | 5,840 |
| Total equity and liabilities | 18,035 | 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 | 1,322 | 18 | 1,340 |
| Other comprehensive income | 334 | 0 | 334 |
| Total comprehensive income | 1,656 | 18 | 1,674 |
| Dividend | -412 | - | -412 |
| Closing balance December 31, 2018 | 8,908 | 88 | 8,996 |
| 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 | 1,194 | 18 | 1,212 |
| Other comprehensive income | -719 | -2 | -721 |
| Total comprehensive income | 475 | 16 | 491 |
| Subscription warrants | 37 | - | 37 |
| Dividend | -370 | - | -370 |
| Closing balance December 31, 2017 | 7,664 | 70 | 7,734 |
| SEK million | Asset | Liability |
|---|---|---|
| Financial instruments reported in balance sheet December 31, 2018 | ||
| Sales and purchase contracts | 544 | 180 |
| Currency hedge contracts | 123 | 78 |
| Total derivatives financial instruments | 667 | 258 |
| Fair value adjustment inventory | 31 | 32 |
| Total financial instruments | 698 | 290 |
| SEK million | Q4 2018 |
Q4 2017 |
Full year 2018 |
Full year 2017 |
|---|---|---|---|---|
| Operating activities | ||||
| Operating profit | 516 | 471 | 1,956 | 1,786 |
| Depreciation and amortization | 138 | 126 | 552 | 491 |
| Other non-cash items | 26 | 28 | -278 | -263 |
| Cash flow before interest and tax | 680 | 625 | 2,230 | 2,014 |
| Interest paid and received | -15 | -15 | -102 | -114 |
| Tax paid | -159 | -28 | -483 | -413 |
| Cash flow before changes in working capital | 506 | 582 | 1,645 | 1,487 |
| Changes in inventory | -241 | -387 | 63 | 21 |
| Changes in accounts receivables | 265 | 152 | -208 | -341 |
| Changes in accounts payables | -59 | 311 | -538 | -18 |
| Changes in other working capital items | 95 | 186 | 128 | -50 |
| Changes in working capital | 60 | 262 | -555 | -388 |
| Cash flow from operating activities | 566 | 844 | 1,090 | 1,099 |
| Investing activities | ||||
| Acquisition of intangible and tangible assets | -260 | -291 | -725 | -817 |
| Proceeds from sale of property, plant and equipment | 0 | - | 2 | 7 |
| Cash flow from investing activities | -260 | -291 | -723 | -810 |
| Cash flow after investing activities | 306 | 553 | 367 | 289 |
| Financing activities | ||||
| Subscription warrants | - | 37 | - | 37 |
| Changes in loans | -297 | -661 | 289 | -33 |
| Dividend paid | - | - | -412 | -370 |
| Cash flow from financing activities | -297 | -624 | -123 | -366 |
| Cash flow for the period | 9 | -71 | 244 | -77 |
| Cash and cash equivalents at start of period | 723 | 545 | 480 | 586 |
| Exchange rate difference for cash equivalents | 5 | 6 | 13 | -29 |
| Cash and cash equivalents at end of period | 737 | 480 | 737 | 480 |
| SEK million (unless otherwise stated) | Q4 2018 |
Q4 2017 |
Δ % | Full year 2018 |
Full year 2017 |
Δ % |
|---|---|---|---|---|---|---|
| Income statement | ||||||
| Volumes, '000 MT | 574 | 550 | +4 | 2,239 | 2,129 | +5 |
| Operating profit | 516 | 471 | +10 | 1,956 | 1,786 | +10 |
| Net result | 354 | 349 | +1 | 1,340 | 1,212 | +11 |
| Financial position | ||||||
| Total assets | 18,035 | 16,892 | +7 | 18,035 | 16,892 | +7 |
| Equity | 8,996 | 7,734 | +16 | 8,996 | 7,734 | +16 |
| Net working capital | 5,062 | 3,970 | +28 | 5,062 | 3,970 | +28 |
| Net interest-bearing debt | 2,667 | 2,666 | +0 | 2,667 | 2,666 | +0 |
| Cash flow | ||||||
| EBITDA | 654 | 597 | +10 | 2,508 | 2,277 | +10 |
| Cash flow from operating activities | 566 | 844 | - | 1,090 | 1,099 | - |
| Cash flow from investing activities | -260 | -291 | - | -723 | -810 | - |
| Free cash flow | 306 | 553 | - | 367 | 289 | - |
| Share data* | ||||||
| Number of shares, thousand | 253,731 | 253,731 | +0 | 253,731 | 253,731 | +0 |
| Earnings per share, SEK** | 1.39 | 1.39 | +0 | 5.21 | 4.71 | +11 |
| Earnings per share incl. dilution, SEK*** | 1.39 | 1.39 | +0 | 5.21 | 4.71 | +11 |
| Earnings per share incl. full dilution, SEK**** | 1.39 | 1.39 | +0 | 5.21 | 4.71 | +11 |
| Equity per share, SEK | 35.11 | 30.21 | +16 | 35.11 | 30.21 | +16 |
| Market value on closing date, SEK | 122.70 | 117.08 | +5 | 122.70 | 117.08 | +5 |
| Other key ratios | ||||||
| Volume growth, percent | +4 | +5 | - | +5 | +8 | - |
| Operating profit per kilo, SEK | 0.90 | 0.86 | +5 | 0.87 | 0.84 | +4 |
| Return on Capital Employed (R12 months), percent | 15.8 | 15.6 | +1 | 15.8 | 15.6 | +1 |
| Net debt / EBITDA, multiple | 1.06 | 1.17 | -9 | 1.06 | 1.17 | -9 |
* 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 | Q4 | Full year |
|---|---|---|---|---|---|---|---|---|---|---|
| Food Ingredients | 249 | 271 | 288 | 299 | 1,107 | 271 | 292 | 321 | 321 | 1,205 |
| Chocolate & Confectionery Fats | 196 | 165 | 198 | 176 | 735 | 190 | 169 | 206 | 182 | 747 |
| Technical Products & Feed | 19 | 9 | 25 | 31 | 84 | 36 | 32 | 37 | 50 | 155 |
| Group Functions | -33 | -36 | -36 | -35 | -140 | -37 | -39 | -38 | -37 | -151 |
| Operating profit AAK Group | 431 | 409 | 475 | 471 | 1,786 | 460 | 454 | 526 | 516 | 1,956 |
| Financial net | -41 | -22 | -31 | -26 | -120 | -24 | -31 | -37 | -35 | -127 |
| Result before tax | 390 | 387 | 444 | 445 | 1,666 | 436 | 423 | 489 | 481 | 1,829 |
| SEK million | FI Q4 2018 |
CCF Q4 2018 |
TPF Q4 2018 |
Total Q4 2018 |
FI Full year 2018 |
CCF Full year 2018 |
TPF Full year 2018 |
Total Full year 2018 |
|---|---|---|---|---|---|---|---|---|
| Europe | 2,103 | 905 | 386 | 3,394 | 8,372 | 3,407 | 1,505 | 13,284 |
| North and South America | 1,947 | 752 | 1 | 2,700 | 7,652 | 3,090 | 8 | 10,750 |
| Asia | 554 | 264 | 0 | 818 | 2,256 | 926 | 0 | 3,182 |
| Other countries | 39 | 41 | 0 | 80 | 188 | 188 | 0 | 376 |
| Net sales | 4,643 | 1,962 | 387 | 6,992 | 18,468 | 7,611 | 1,513 | 27,592 |
| Percent | Q4 2018 |
Q4 2017 |
Full year 2018 |
Full year 2017 |
|---|---|---|---|---|
| Food Ingredients | ||||
| Organic volume growth | 1 | 7 | 4 | 4 |
| Acquisitions/divestments | - | - | - | 5 |
| Volume growth | 1 | 7 | 4 | 9 |
| Chocolate & Confectionery Fats | ||||
| Organic volume growth | 15 | 1 | 6 | 10 |
| Acquisitions/divestments | - | - | - | - |
| Volume growth | 15 | 1 | 6 | 10 |
| Technical Products & Feed | ||||
| Organic volume growth | 10 | 1 | 8 | 1 |
| Acquisitions/divestments | - | - | - | - |
| Volume growth | 10 | 1 | 8 | 1 |
| AAK Group | ||||
| Organic volume growth | 4 | 5 | 5 | 5 |
| Acquisitions/divestments | - | - | - | 3 |
| Volume growth | 4 | 5 | 5 | 8 |
| SEK million | Q4 2018 |
Q4 2017 |
Full year 2018 |
Full year 2017 |
|---|---|---|---|---|
| Operating profit (EBIT) | 516 | 471 | 1,956 | 1,786 |
| Add back depreciation and amortization | 138 | 126 | 552 | 491 |
| EBITDA | 654 | 597 | 2,508 | 2,277 |
| SEK million | 31.12.2018 | 31.12.2017 | R12M 31.12.2018 |
R12M 31.12.2017 |
|---|---|---|---|---|
| Total assets | 18,035 | 16,892 | 18,004 | 17,099 |
| Cash and cash equivalents | -737 | -480 | -696 | -566 |
| Financial assets | -20 | -6 | -51 | -13 |
| Accounts payables | -2,685 | -3,137 | -2,931 | -3,073 |
| Other non-interest-bearing liabilities | -1,973 | -2,058 | -1,935 | -1,963 |
| Capital employed | 12,620 | 11,211 | 12,391 | 11,484 |
| Operating profit (Rolling 12 months) | 1,956 | 1,786 | 1,956 | 1,786 |
| Return on Capital Employed (ROCE), percent | 15.5 | 15.9 | 15.8 | 15.6 |
| SEK million | Full year 2018 |
Full year 2017 |
|---|---|---|
| Inventory | 4,705 | 4,656 |
| Accounts receivables | 3,441 | 3,210 |
| Other current receivables, non-interest-bearing | 1,574 | 1,299 |
| Accounts payables | -2,685 | -3,137 |
| Other current liabilities, non-interest-bearing | -1,973 | -2,058 |
| Net working capital | 5,062 | 3,970 |
| SEK million | Full year 2018 |
Full year 2017 |
|---|---|---|
| Current interest-bearing receivables | 20 | 5 |
| Cash and cash equivalents | 737 | 480 |
| Pension liabilities | -205 | -164 |
| Non-current liabilities to banks and credit institutions | -2,551 | -2,354 |
| Current liabilities to banks and credit institutions | -661 | -628 |
| Other interest-bearing liabilities | -7 | -5 |
| Net debt | -2,667 | -2,666 |
| SEK million | Full year 2018 |
Full year 2017 |
|---|---|---|
| Shareholders' equity | 8,908 | 7,664 |
| Non-controlling interests | 88 | 70 |
| Total equity including non-controlling interests | 8,996 | 7,734 |
| Total assets | 18,035 | 16,892 |
| Equity to assets ratio, percent | 49.9 | 45.8 |
| SEK million | Q4 2018 |
Q4 2017 |
Full year 2018 |
Full year 2017 |
|---|---|---|---|---|
| Net sales | 22 | 26 | 119 | 97 |
| Other operating income | 0 | 0 | 0 | 0 |
| Total operating income | 22 | 26 | 119 | 97 |
| Other external expenses | -51 | -33 | -105 | -67 |
| Cost for remuneration to employees | -20 | -19 | -100 | -97 |
| Amortization and impairment losses | -1 | -1 | -3 | -2 |
| Total operating costs | -72 | -53 | -208 | -166 |
| Operating profit (EBIT) | -50 | -27 | -89 | -69 |
| Dividend from group companies | - | - | 2,110 | - |
| Income from shares in group companies | 119 | 67 | 119 | 67 |
| Interest income | 4 | 0 | 4 | 0 |
| Interest expense | -9 | -2 | -17 | -5 |
| Other financial items | -2 | -4 | -5 | -4 |
| Total financial net | 112 | 61 | 2,211 | 58 |
| Result before tax | 62 | 34 | 2,122 | -11 |
| Income tax | -17 | -5 | -11 | 2 |
| Net result | 45 | 29 | 2,111 | -9 |
| Attributable to non-controlling interests | - | - | - | - |
| Attributable to the Parent company's shareholders | 45 | 29 | 2,111 | -9 |
| SEK million | Q4 2018 |
Q4 2017 |
Full year 2018 |
Full year 2017 |
|---|---|---|---|---|
| Profit for the period | 45 | 29 | 2,111 | -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 | 45 | 29 | 2,111 | -9 |
| Attributible to non-controlling interests | - | - | - | - |
| Attributible to the Parent company's shareholders | 45 | 29 | 2,111 | -9 |
| SEK million | 31.12.2018 | 31.12.2017 |
|---|---|---|
| Assets | ||
| Other intangible assets | 11 | 7 |
| Tangible assets | 2 | 3 |
| Financial assets | 7,044 | 5,333 |
| Deferred tax assets | 3 | 3 |
| Total non-current assets | 7,060 | 5,346 |
| Accounts receivables | - | - |
| Current receivables | 170 | 125 |
| Cash and cash equivalents | 0 | 0 |
| Total current assets | 170 | 125 |
| Total assets | 7,230 | 5,471 |
| Equity and liabilities | ||
| Shareholders' equity | 5,613 | 3,916 |
| Non-controlling interests | - | - |
| Total equity including non controlling interests |
5,613 | 3,916 |
| Liabilities to banks and credit institutions | 1,499 | - |
| Other non-current liabilities | 26 | 25 |
| Total non-current liabilities | 1,525 | 25 |
| Accounts payables | 18 | 15 |
| Other current liabilities | 74 | 1,515 |
| Total current liabilities | 92 | 1,530 |
| Total equity and liabilities | 7,230 | 5,471 |
No changes have arisen in contingent liabilities.
For information regarding cocoa and cocoa butter please refer to information at www.icco.org
AAK will host a conference call on February 8, 2019 at 10 a.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.
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 3,600 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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