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AAK
Quarterly Report • Jul 18, 2024
2874_ir_2024-07-18_e4276d7d-e707-4b0b-847b-f41d95bb738f.pdf
Quarterly Report
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Second quarter 2024
Interim report
Financial highlights
Q2 2024
- Volumes increased by 4 percent to 525,000 MT (505,000).
- Operating profit increased by 27 percent, reaching SEK 1,118 million (880), including a positive currency translation effect of SEK 9 million. At fixed foreign exchange rates, operating profit increased by 26 percent.
Q1–Q2 2024
- Volumes increased by 3 percent to 1,081,000 MT (1,046,000).
- Operating profit increased by 29 percent, reaching SEK 2,372 million (1,832), including a negative currency translation effect of SEK 54 million. At fixed foreign exchange rates, operating profit increased by 32 percent.
- Profit for the period totaled SEK 809 million (615).
- Earnings per share equaled SEK 3.11 (2.36).
- Cash flow from operating activities amounted to SEK 1,002 million (1,645).
- Return on Capital Employed (ROCE), R12M, was 21.5 percent (19.1 percent on December 31, 2023).
- Profit for the period totaled SEK 1,743 million (1,277).
- Earnings per share equaled SEK 6.71 (4.91).
- Cash flow from operating activities amounted to SEK 1,719 million (2,747).
- Return on Capital Employed (ROCE), R12M, was 21.5 percent (19.1 percent on December 31, 2023).
| Q2 2024 |
Q2 2023 |
Δ % | Q1-Q2 2024 |
Q1-Q2 2023 |
Δ % | R12M 2024 |
Full year 2023 |
|
|---|---|---|---|---|---|---|---|---|
| Volumes, '000 MT | 525 | 505 | +4 | 1,081 | 1,046 | +3 | 2,158 | 2,123 |
| Operating profit, SEK million | 1,118 | 880 | +27 | 2,372 | 1,832 | +29 | 4,656 | 4,116 |
| Operating profit per kilo, SEK | 2.13 | 1.74 | +22 | 2.19 | 1.75 | +25 | 2.16 | 1.94 |
| Profit for the period, SEK million | 809 | 615 | +32 | 1,743 | 1,277 | +36 | 3,420 | 2,954 |
| Earnings per share, SEK | 3.11 | 2.36 | +32 | 6.71 | 4.91 | +37 | 13.15 | 11.35 |
| Cash flow from operating activities, SEK million | 1,002 | 1,645 | -39 | 1,719 | 2,747 | -37 | 4,286 | 5,314 |
| Return on Capital Employed (R12M), percent | 21.5 | 15.9 | +35 | 21.5 | 15.9 | +35 | 21.5 | 19.1 |
Solid performance driven by volume growth and improved profitability
Following a strong first quarter, I am pleased to see that we continue progressing towards our 2030 aspiration in the second quarter. We delivered year-over-year volume growth and maintained an operating profit per kilo above SEK 2. This resulted in a 27 percent increase in operating profit, following 41 percent growth in the same period last year.
Business performance
Volumes increased by 4 percent, driven by Chocolate & Confectionery Fats and Food Ingredients. This growth was achieved despite an 11 percent decline in Technical Products & Feed.
Profitability, measured as operating profit per kilo, was strong and grew year-over-year, driven by Chocolate & Confectionery Fats and Food Ingredients. The strong profitability was mainly driven by our global optimization programs, including production process optimization and portfolio & price management, as well as operating leverage from increased volumes. The second-quarter profitability was also somewhat supported by continued favorable market conditions.
Driven by the improved profitability and increased volumes, operating profit grew 27 percent compared to the second quarter last year. At fixed foreign exchange rates, operating profit increased by 26 percent. This growth was driven by Chocolate & Confectionery Fats and Food Ingredients, while Technical Products & Feed declined.
Operating cash flow was solid despite the impact from increased working capital, mainly driven by increased volumes.
Shea a viable alternative to cocoa butter
Over the years, AAK has specialized in providing cost-effective alternatives to animal and fossil-based ingredients. As a leading Multi-oil Ingredient House, we strive to consistently deliver value and functionality regardless of market conditions. Among our offerings, our cocoa butter equivalents and alternatives stand out for enhancing shelf life, flavor, and texture, all while remaining a cost-effective alternative.
Despite the potential negative volume impact high cocoa prices could have on consumer demand for chocolate, we remain prudently optimistic about long-term opportunities and the stickiness of our solutions. We are confident in the value of our solutions as we focus on increasing shea utilization in chocolates and meeting the growing demand for spreads and fillings.
In addition, we continue to advocate for increasing the regulatory limits on alternative ingredients in cocoa and chocolate products, supporting innovation, consumer choice, and affordability.
Complying with the EU deforestation regulation
The EU deforestation regulation mandates traceability for commodities such as palm oil, timber, and rubber. Starting December 30, 2024, all imported raw materials must comply with EUDR requirements, including traceability and proof of legal production.
For AAK, this regulation impacts palm and soy imported into the EU. For some time, we have been taking proactive steps to ensure compliance, such as collaborating with suppliers for EUDR readiness, revising our make-or-buy strategy, and preparing our production setup for increased processing in Europe. Additionally, we are maintaining an open dialogue with stakeholders, aligning IT systems and documentation requirements with customers, and exchanging information with authorities.
Our capital expenditure for 2024 includes SEK 100 million for upgrading our European facilities to enable compliance with the EUDR standards. Additionally, we have invested a similar amount to expand our strategic presence in the port of Rotterdam and are currently in the process of integrating a new IT system to support our raw material traceability. These investments represent a first step as we adopt a prudent approach, carefully monitoring the regional implementation and enforcement of the EUDR. In parallel, we continuously evaluate potential future capital expenditure requirements. Additionally, we expect the market to incur extra costs for traceability and legality verification protocols.
Concluding remarks
AAK has had a strong first half of the year, including a solid second quarter, marked by organic volume growth and improved profitability. Despite facing more challenging comparisons after our recent strong performance, we remain committed to achieving an average operating profit growth of 10 percent over time. We are focused on striking the right balance between value and volume, reflecting our prudent optimism for the future.
Johan Westman, President and CEO
AAK Group, Q2 2024
Volumes
Volumes totaled 525,000 MT (505,000), an increase of 4 percent compared to last year.
Net sales
Sales reached SEK 11,033 million (11,229), a decrease of 2 percent. The decrease was driven by changes in price, mainly due to lower raw material costs, as well as a negative currency translation effect of SEK 144 million. The decrease was somewhat mitigated by the increase in volumes.
Operating profit
Operating profit totaled SEK 1,118 million (880), corresponding to an increase of 27 percent compared to the same quarter in 2023.
The growth was driven by strong operating profit per kilo in Chocolate & Confectionary Fats and Food Ingredients.
Currency translation had a positive effect of SEK 9 million, of which negative SEK 3 million was related to Food Ingredients and positive SEK 12 million to Chocolate & Confectionery Fats. Operating profit at fixed foreign exchange rates increased by 26 percent.
Operating profit per kilo totaled SEK 2.13 (1.74), an increase of 22 percent. Currency translation had a positive effect of SEK 0.02 per kilo. At fixed foreign exchange rates, operating profit per kilo increased by 21 percent. AAK achieved this growth mainly due to our global optimization programs, including production process optimization and portfolio & price management, as well as operational leverage from increased volumes. Second-quarter profitability was also somewhat supported by continued favorable market conditions.
Net financial costs and tax costs
Net financial costs totaled SEK 48 million (68). The financial costs decreased due to reduced debt level, partly offset by higher interest rates. Reported tax costs correspond to an average tax rate of 24 percent (24).
Earnings per share
Earnings per share equaled SEK 3.11 (2.36).
Cash flow and investments
Operating cash flow, including changes in working capital, amounted to SEK 1,002 million (1,645). Cash flow from working capital amounted to negative SEK 271 million (positive 1,064), mainly due to negative cash flows from accounts receivable and inventory, partially offset by a positive cash flow from accounts payable. The negative cash flow effect from accounts receivable was mainly driven by the increase in volumes.
Cash outflow from investment activities amounted to SEK 306 million (246). Capital expenditure was primarily for maintenance investments, productivity improvements, and capacity increases.
Return on Capital Employed (ROCE)
Calculated on a rolling 12-month basis, Return on Capital Employed (ROCE) was 21.5 percent (19.1 on December 31, 2023).
Financial position
The equity-to-asset ratio was 58 percent (56 percent on December 31, 2023). Net debt on June 30, 2024, totaled SEK 2,275 million (SEK 2,425 million on December 31, 2023). Net debt/EBITDA totaled 0.41 (0.49 as of December 31, 2023).
On June 30, 2024, the Group had total credit facilities of SEK 8,825 million (8,605 as of December 31, 2023), of which there were SEK 7,239 million (7,085 as of December 31, 2023) in committed credit facilities. Unused committed credit facilities on June 30, 2024, totaled SEK 5,677 million (5,559 as of December 31, 2023). Non-committed credit facilities totaled SEK 1,586 million (1,520 as of December 31, 2023), SEK 1,418 million (1,352 as of December 31, 2023) of which were unused.
Selected events
Annual General Meeting 2024
Our Annual General Meeting was successfully held on May 8 in Malmö, Sweden, near our headquarters. The event had a strong turnout, with shareholders representing 77 percent of the votes represented.
During his presentation, President and CEO Johan Westman highlighted the company's achievements during 2023 as well as our sustainability commitments. For access to both the presentation and other documentation related to the AGM, please visit AAK.com.
Bio-boilers approaching full capacity
During the second quarter, our bio-boilers at the Aarhus site in Denmark ramped up and approached full capacity. These boilers will reduce CO2 emissions at the site by more than 90 percent.
By utilizing shea meal, a residual product from our oil extraction process, the boilers will cut emissions by more than 45,000 tons of CO2 annually while also generating green electricity.
The production of plant-based oils and fats, essential for food, chocolate, and personal care products, is energyintensive and has historically relied on fossil fuels at our Aarhus site. With the bio-boilers, AAK can replace fossil-based energy with shea meal, thereby significantly reducing the site's carbon footprint and generating annual savings of approximately SEK 100 million.
Building an increasingly aligned organization
In May, AAK's global leadership team gathered for its annual conference, a key event in our ongoing cultural journey.
Making Better Happen™ begins with our people, ensuring our commitment shines through in everything we do. That is why AAK places such a strong emphasis on strengthening team collaboration.
This year's conference focused on enhancing alignment across teams and functions to further optimize the performance of the organization. The conference activities were specifically designed to build stronger connections and drive increased alignment in our decentralized structure.
Food Ingredients, Q2 2024
Operating profit +19% Operating profit per kilo +15% Q2 2024 Q2 2023 Δ % Q1-Q2 2024 Q1-Q2 2023 Δ % R12M 2024 Full year 2023 Volumes, '000 MT 346 334 +4 690 671 +3 1,383 1,364 Net sales, SEK million 7,270 7,504 -3 14,222 15,363 -7 28,750 29,891 Operating profit, SEK million 755 636 +19 1,534 1,218 +26 2,958 2,642 Operating profit per kilo, SEK 2.18 1.90 +15 2.22 1.82 +22 2.14 1.94
Volumes
Volumes increased by 4 percent compared to the same period in the previous year. The volume growth was primarily driven by Bakery and Dairy, while Special Nutrition declined.
The growth in Bakery was broad-based with all three regions contributing.
In Dairy, the volume growth was mainly driven by strong performance in the Americas.
Volume performance in Special Nutrition was mixed with declines in Asia, the Middle East & Africa and Europe, being somewhat mitigated by growth in the Americas.
Volumes in Foodservice were roughly flat, with solid performance in Europe offset by a decline in the Americas.
Net sales
Net sales reached SEK 7,270 million (7,504), a decrease of 3 percent, including a negative currency translation effect of SEK 59 million.
Operating profit
Operating profit increased by 19 percent to SEK 755 million (636), including a negative currency translation effect of SEK 3 million. At fixed foreign exchange rates, operating profit increased by 19 percent.
Operating profit per kilo increased to SEK 2.18 (1.90), corresponding to 15 percent growth with currencies having a negative effect of SEK 0.01 per kilo. The increase was broadbased and primarily driven by Dairy, Special Nutrition and Foodservice while Bakery was roughly flat.
Food Ingredients - Operating profit per kilo
Chocolate & Confectionery Fats, Q2 2024
| Operating profit |
Q2 2024 |
Q2 2023 |
Δ % | Q1-Q2 2024 |
Q1-Q2 2023 |
Δ % | R12M 2024 |
Full year 2023 |
|
|---|---|---|---|---|---|---|---|---|---|
| +57% | Volumes, '000 MT | 122 | 107 | +14 | 255 | 231 | +10 | 497 | 473 |
| Net sales, SEK million | 3,275 | 3,170 | +3 | 6,829 | 6,905 | -1 | 13,618 | 13,694 | |
| Operating profit per kilo |
Operating profit, SEK million | 433 | 275 | +57 | 938 | 602 | +56 | 1,857 | 1,521 |
| +38% | Operating profit per kilo, SEK | 3.55 | 2.57 | +38 | 3.68 | 2.61 | +41 | 3.74 | 3.22 |
Volumes
Volumes increased by 14 percent compared to the same period last year. The strong volume growth came on top of soft development in the second quarter of last year and was further supported by favorable market conditions.
The growth was broad-based, with contributions from all three regions, driven by increased penetration of cocoa butter alternatives.
Net sales
Net sales for the business area reached SEK 3,275 million (3,170), a 3 percent increase, including a negative currency translation effect of SEK 85 million.
Operating profit
Operating profit reached SEK 433 million (275), an increase of 57 percent compared to the same quarter last year. Currency translation had a positive impact of SEK 12 million. At fixed foreign exchange rates, operating profit increased by 53 percent.
The operating profit per kilo was strong, increasing to SEK 3.55 (2.57). Currency translation had a positive impact of SEK 0.10 per kilo. At fixed foreign exchange rates, operating profit per kilo increased by 34 percent.
The increase in operating profit per kilo was broad-based across regions and was further supported by favorable market conditions.
Chocolate & Confectionery Fats - Operating profit
Chocolate & Confectionery Fats - Operating profit per kilo
Technical Products & Feed, Q2 2024
Operating profit -80%
Operating profit per kilo -77%
| Q2 2024 |
Q2 2023 |
Δ % | Q1-Q2 2024 |
Q1-Q2 2023 |
Δ % | R12M 2024 |
Full year 2023 |
|
|---|---|---|---|---|---|---|---|---|
| Volumes, '000 MT | 57 | 64 | -11 | 136 | 144 | -6 | 278 | 286 |
| Net sales, SEK million | 488 | 555 | -12 | 1,100 | 1,306 | -16 | 2,237 | 2,443 |
| Operating profit, SEK million | 9 | 44 | -80 | 62 | 152 | -59 | 168 | 258 |
| Operating profit per kilo, SEK | 0.16 | 0.69 | -77 | 0.46 | 1.06 | -57 | 0.60 | 0.90 |
Volumes
Volumes declined by 11 percent compared to the same period in 2023. The decline was driven by Feed while Technical Products performed well and grew in the quarter.
The decline in Feed was due to a production challenge encountered during the restart process following our annual maintenance stop. As a result, production remained offline longer than anticipated. Production has been restarted and has returned to normal levels, with no lasting impact expected beyond the second quarter.
The growth in Technical Products was driven by solid performance across applications used to replace fossilbased solutions.
Adjusted for the longer-than-expected maintenance stop, volumes in Technical Products & Feed grew by approximately 3 percent.
Net sales
Net sales for the business area reached SEK 488 million, decreasing by 12 percent compared to SEK 555 million during the second quarter of last year.
Operating profit
Operating profit totaled SEK 9 million (44), an 80 percent decrease compared to last year. The decline was due to the negative volume impact from the longer-thanexpected maintenance stop in Feed, as well as the associated additional costs when restarting production. As a result, the operating profit per kilo declined to SEK 0.16.
Technical Products & Feed - Operating profit
Technical Products & Feed - Operating profit per kilo
AAK Group, first six months 2024
Volumes
Volumes totaled 1,081,000 MT (1,046,000), an increase of 3 percent compared to last year.
Net sales
Sales reached SEK 22,151 million (23,574), a decrease of 6 percent. The decrease was driven by price adjustments due to lower raw material prices, partly offset by higher volumes, a favorable product mix via a continued focus on speciality solutions, and a negative currency translation impact of SEK 229 million.
Operating profit
Operating profit totaled SEK 2,372 million (1,832), an increase of 29 percent compared to the corresponding period in 2023.
The growth in operating profit was driven by strong operating profit per kilo in Food Ingredients and Chocolate & Confectionery Fats. AAK achieved this growth via a continued focus on speciality solutions, productivity improvements, and price management. The strong profitability was mainly driven by our global optimization programs, including production process optimization and portfolio & price management, as well as operating leverage from increased volumes. The second-quarter profitability was also somewhat supported by continued favorable market conditions.
The currency translation had a negative impact of SEK 54 million, of which SEK 20 million was related to Food Ingredients and SEK 34 million to Chocolate & Confectionery Fats. Operating profit at fixed foreign exchange rates, increased by 32 percent.
Operating profit per kilo totaled SEK 2.19 (1.75), an increase of 25 percent. The currency translation impact was negative SEK 0.05. At fixed foreign exchange rates, operating profit per kilo increased by 28 percent.
Net financial cost and tax costs
Net financial cost totaled SEK 71 million (145). The financial cost decreased due to reduced debt level and reporting in hyperinflationary economies (IAS 29), partly offset by higher interest rates. Reported tax costs correspond to an average tax rate of 24 percent (24).
Earnings per share
Earnings per share equaled SEK 6.71 (4.91).
Cash flow and investments
Operating cash flow including changes in working capital amounted to SEK 1,719 million (2,747). Cash flow from working capital amounted to negative SEK 1,000 million (positive 1,441). Due to the increase in volumes, there was a negative cash flow from inventory and accounts receivables. Accounts payables had a positive cash flow effect in the first six months of the year.
Cash outflow from investment activities amounted to SEK 570 million (608), of which SEK 0 million (89) stemmed from acquisitions of operations. Capital expenditure was mostly spent on maintenance investments, productivity improvements, and capacity increases.
Employees
The average number of employees on June 30, 2024, was 4,183 (4,128 as of December 31, 2023).
General information
Related parties
No significant related party transactions have occurred during the quarter.
Risks and uncertainty factors
AAK's operations are constantly exposed to risks, threats, and external factors. Through a proactive approach to business intelligence, the company aims to anticipate changes in factors affecting operations. Plans and policies are adjusted continuously to counteract potential negative effects. Active risk management, such as hedging raw material prices and currencies, reduces the risks that the company faces.
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 assumes that long-term risk exposure will not deviate from the inherent exposure associated with AAK's ongoing business operations.
AAK's Board of Directors and Executive Committee have, since the publication of the Annual Report 2023, reviewed the development of significant risks and uncertainties and can confirm that there have been no changes other than what has been commented on regarding market developments during 2023 and 2024.
For a more in-depth analysis of risks, please refer to AAK's Annual Report.
Accounting policies in 2024
This interim report is prepared in accordance with IAS 34, Interim Financial Reporting, and applicable rules in the Swedish Annual Accounts Act. The accounting principles correspond to the principles applied in the preparation of the Annual Report 2023.
Alternative Performance Measures (APMs)
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 a reconciliation of Alternative Performance Measures, see pages 18–19.
Definitions
For definitions, please see our Annual Report.
Events after the reporting period
No events to be reported.
The Parent Company and Group Functions
AAK AB (publ.) is the Parent Company of 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 negative SEK 174 million (negative 185). Interest-bearing liabilities minus cash and cash equivalents and interest-bearing assets totaled SEK 5,452 million (4,443 as of December 31, 2023). Investments in intangible and tangible assets amounted to SEK 34 million (7).
The Parent Company's balance sheet and income statement are shown on pages 21–22. There are no major changes in the Parent Company's balance sheet since year's end.
The Parent Company has prepared its financial reports in accordance with Chapter 9 of the Swedish Annual Accounts Act, Interim Report and RFR 2 Accounting for legal entities. The accounting principles correspond to the principles applied in the preparation of the Annual Report 2023.
Audit review
This report has not been reviewed by the company's auditors.
Malmö, July 18, 2024
Patrik Andersson Chairman of the Board
Board member Board member
Nils-Johan Andersson Märta Schörling Andreen
Board member Board member
Ian Roberts Fabienne Saadane-Oaks
David Alfredsson Lena Nilsson Trade union representative Trade union representative
For further information, please contact: Carl Ahlgren
Head of IR, Communication & Brand Mobile: +46 70 681 07 34 E-mail: [email protected]
AAK AB (publ.) is obliged to make this information public pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The information was submitted for publication, under the direction of the contact person set out above, at 8:30 CET on July 18, 2024.
Condensed income statement
| SEK million | Q2 2024 |
Q2 2023 |
Q1-Q2 2024 |
Q1-Q2 2023 |
Full year 2023 |
|---|---|---|---|---|---|
| Net sales | 11,033 | 11,229 | 22,151 | 23,574 | 46,028 |
| Other operating income | 30 | 36 | 73 | 98 | 225 |
| Total operating income | 11,063 | 11,265 | 22,224 | 23,672 | 46,253 |
| Change in inventories of finished goods and work in progress | -225 | 68 | -248 | 27 | -64 |
| Raw materials and consumables | -7,495 | -8,403 | -15,220 | -17,696 | -33,421 |
| Goods for resale | -177 | -200 | -358 | -362 | -811 |
| Other external expenses | -906 | -830 | -1,779 | -1,744 | -3,577 |
| Cost for remuneration to employees | -929 | -811 | -1,795 | -1,627 | -3,399 |
| Depreciation, amortization and impairment losses | -218 | -206 | -430 | -434 | -877 |
| Other operating expenses | 5 | -3 | -22 | -4 | 12 |
| Total operating expenses | -9,945 | -10,385 | -19,852 | -21,840 | -42,137 |
| Operating profit (EBIT) | 1,118 | 880 | 2,372 | 1,832 | 4,116 |
| Financial income | 16 | 14 | 76 | 37 | 83 |
| Financial expense | -64 | -82 | -147 | -182 | -375 |
| Total financial net | -48 | -68 | -71 | -145 | -292 |
| Profit before tax | 1,070 | 812 | 2,301 | 1,687 | 3,824 |
| Income tax | -261 | -197 | -558 | -410 | -870 |
| Profit for the period | 809 | 615 | 1,743 | 1,277 | 2,954 |
| Attributable to non-controlling interests | 1 | 1 | 2 | 2 | 8 |
| Attributable to the Parent Company's shareholders | 808 | 614 | 1,741 | 1,275 | 2,946 |
| Earnings per share before dilution, SEK1) | 3.11 | 2.36 | 6.71 | 4.91 | 11.35 |
| Earnings per share after dilution, SEK2) | 3.10 | 2.36 | 6.69 | 4.91 | 11.35 |
1) Earnings per share are calculated based on a weighted average number of outstanding shares.
2) Earnings per share are calculated based on a weighted average number of outstanding shares after dilution from outstanding subscription warrants.
Comprehensive income
| SEK million | Q2 2024 |
Q2 2023 |
Q1-Q2 2024 |
Q1-Q2 2023 |
Full year 2023 |
|---|---|---|---|---|---|
| Profit for the period | 809 | 615 | 1,743 | 1,277 | 2,954 |
| Other comprehensive income: | |||||
| Items that will not be reclassified to profit or loss Remeasurements of post-employment benefit obligations |
-1 | 0 | -3 | 0 | -11 |
| -1 | 0 | -3 | 0 | -11 | |
| Items that may subsequently be reclassified to profit or loss | |||||
| Translation differences | -622 | 832 | 377 | 1,007 | -146 |
| Fair-value changes in cash flow hedges | -4 | 0 | -7 | -3 | -12 |
| Tax related to fair-value changes in cash flow hedges | 1 | 0 | 1 | 1 | 3 |
| -625 | 832 | 371 | 1,005 | -155 | |
| Total other comprehensive income for the period | -626 | 832 | 368 | 1,005 | -166 |
| Total comprehensive income for the period | 183 | 1,447 | 2,111 | 2,282 | 2,788 |
| Attributable to non-controlling interests | 3 | 1 | 4 | 2 | 9 |
| Attributable to the Parent Company's shareholders | 180 | 1,446 | 2,107 | 2,280 | 2,779 |
Condensed balance sheet
| SEK million | 30.06.2024 | 30.06.2023 | 31.12.2023 |
|---|---|---|---|
| Assets | |||
| Goodwill | 2,819 | 2,785 | 2,712 |
| Other intangible assets | 321 | 302 | 290 |
| Property, plant and equipment | 7,858 | 7,566 | 7,493 |
| Right-of-use assets | 658 | 691 | 760 |
| Shares in associated companies | 10 | 11 | 13 |
| Financial assets | 89 | 78 | 79 |
| Deferred tax assets | 426 | 357 | 390 |
| Total non-current assets | 12,181 | 11,790 | 11,737 |
| Inventory | 9,349 | 9,498 | 8,656 |
| Accounts receivables | 5,937 | 6,107 | 5,312 |
| Current receivables | 2,544 | 3,621 | 3,343 |
| Cash and cash equivalents | 1,583 | 1,485 | 1,503 |
| Total current assets | 19,413 | 20,711 | 18,814 |
| Total assets | 31,594 | 32,501 | 30,551 |
| Equity and liabilities Shareholders' equity |
18,222 | 16,602 | 17,117 |
| Non-controlling interests | 60 | 49 | 56 |
| Total equity including non-controlling interests | 18,282 | 16,651 | 17,173 |
| Liabilities to banks and credit institutions | 949 | 3,028 | 1,969 |
| Pension liabilities Lease liabilities |
32 549 |
44 571 |
31 630 |
| Deferred tax liabilities | 662 | 609 | 656 |
| Other non-current liabilities | 471 | 302 | 455 |
| Total non-current liabilities | 2,663 | 4,554 | 3,741 |
| Liabilities to banks and credit institutions | 2,270 | 2,216 | 1,715 |
| Lease liabilities | 155 | 161 | 171 |
| Accounts payables | 4,169 | 4,498 | 3,804 |
| Other current liabilities | 4,055 | 4,421 | 3,947 |
| Total current liabilities | 10,649 | 11,296 | 9,637 |
| Total equity and liabilities | 31,594 | 32,501 | 30,551 |
Condensed change in equity
2024
| SEK million | Shareholders' equity |
Non-controlling interests |
Total equity incl. non-controlling interests |
|---|---|---|---|
| Opening balance January 1, 2024 | 17,117 | 56 | 17,173 |
| Profit for the period | 1,741 | 2 | 1,743 |
| Other comprehensive income | 366 | 2 | 368 |
| Total comprehensive income | 2,107 | 4 | 2,111 |
| Long-term incentive | -42 | - | -42 |
| Dividend | -960 | - | -960 |
| Closing balance June 30, 2024 | 18,222 | 60 | 18,282 |
| SEK million | Shareholders' equity |
Non-controlling interests |
Total equity incl. non-controlling interests |
|---|---|---|---|
| Opening balance January 1, 2023 | 15,036 | 47 | 15,083 |
| Profit for the period | 1,275 | 2 | 1,277 |
| Other comprehensive income | 1,005 | 0 | 1,005 |
| Total comprehensive income | 2,280 | 2 | 2,282 |
| Dividend | -714 | - | -714 |
| Closing balance June 30, 2023 | 16,602 | 49 | 16,651 |
Condensed cash flow statement
| SEK million | Q2 2024 |
Q2 2023 |
Q1-Q2 2024 |
Q1-Q2 2023 |
Full year 2023 |
|---|---|---|---|---|---|
| Operating activities | |||||
| Operating profit Depreciation, amortization and impairment losses |
1,118 218 |
880 206 |
2,372 430 |
1,832 434 |
4,116 877 |
| Adjustment for other non-cash items | 222 | -143 | 361 | -392 | -65 |
| Interest paid and received | -38 | -63 | -86 | -112 | -208 |
| Tax paid | -247 | -299 | -358 | -456 | -979 |
| Cash flow before changes in working capital | 1,273 | 581 | 2,719 | 1,306 | 3,741 |
| Changes in inventory | -484 | 625 | -239 | 2,139 | 2,463 |
| Changes in accounts receivables | -29 | 629 | -557 | 795 | 1,241 |
| Changes in accounts payables | 468 | 196 | 279 | -1,079 | -1,545 |
| Changes in other working capital items | -226 | -386 | -483 | -414 | -586 |
| Changes in working capital | -271 | 1,064 | -1,000 | 1,441 | 1,573 |
| Cash flow from operating activities | 1,002 | 1,645 | 1,719 | 2,747 | 5,314 |
| Investing activities | |||||
| Acquisition of intangible assets and property, plant and equipment |
-306 | -265 | -570 | -553 | -1,245 |
| Acquisition of operations and shares, net of cash acquired | - | 0 | - | -89 | -89 |
| Proceeds from sale of property, plant and equipment | 0 | 19 | 0 | 34 | 131 |
| Cash flow from investing activities | -306 | -246 | -570 | -608 | -1,203 |
| Financing activities | |||||
| Changes in loans | 573 | -592 | -22 | -1,403 | -3,166 |
| Amortization of lease liabilities | -46 | -45 | -93 | -88 | -181 |
| Dividend paid | -960 | -714 | -960 | -714 | -714 |
| Cash flow from financing activities | -433 | -1,351 | -1,075 | -2,205 | -4,061 |
| Cash flow for the period | 263 | 48 | 74 | -66 | 50 |
| Cash and cash equivalents at start of period | 1,357 | 1,405 | 1,503 | 1,515 | 1,515 |
| Exchange rate difference for cash equivalents | -37 | 32 | 6 | 36 | -62 |
| Cash and cash equivalents at end of period | 1,583 | 1,485 | 1,583 | 1,485 | 1,503 |
Key ratios
| SEK million (unless otherwise stated) | Q2 2024 |
Q2 2023 |
Δ % | Q1-Q2 2024 |
Q1-Q2 2023 |
Δ % | Full year 2023 |
|---|---|---|---|---|---|---|---|
| Income statement | |||||||
| Volumes, '000 MT | 525 | 505 | +4 | 1,081 | 1,046 | +3 | 2,123 |
| Operating profit | 1,118 | 880 | +27 | 2,372 | 1,832 | +29 | 4,116 |
| Profit for the period | 809 | 615 | +32 | 1,743 | 1,277 | +36 | 2,954 |
| Financial position Total assets |
31,594 | 32,501 | -3 | 31,594 | 32,501 | -3 | 30,551 |
| Equity | 18,282 | 16,651 | +10 | 18,282 | 16,651 | +10 | 17,173 |
| Net working capital | 9,509 | 10,126 | -6 | 9,509 | 10,126 | -6 | 8,971 |
| Net debt | 2,275 | 4,336 | -48 | 2,275 | 4,336 | -48 | 2,425 |
| Cash flow | |||||||
| Cash flow from operating activities | 1,002 | 1,645 | - | 1,719 | 2,747 | - | 5,314 |
| Cash flow from investing activities | -306 | -246 | - | -570 | -608 | - | -1,203 |
| Share data | |||||||
| Number of shares, thousand | 259,559 | 259,559 | +0 | 259,559 | 259,559 | +0 | 259,559 |
| Earnings per share, SEK1) | 3.11 | 2.36 | +32 | 6.71 | 4.91 | +37 | 11.35 |
| Equity per share, SEK | 70.20 | 63.96 | +10 | 70.20 | 63.96 | +10 | 65.95 |
| Market value on closing date, SEK | 310.60 | 202.80 | +53 | 310.60 | 202.80 | +53 | 224.80 |
| Other key ratios | |||||||
| Volume growth, percent | 4 | -9 | - | 3 | -7 | - | -6 |
| Operating profit per kilo, SEK | 2.13 | 1.74 | +22 | 2.19 | 1.75 | +25 | 1.94 |
| Return on Capital Employed (R12 months), percent | 21.5 | 15.9 | +35 | 21.5 | 15.9 | +35 | 19.1 |
| Net debt / EBITDA, multiple | 0.41 | 1.01 | -59 | 0.41 | 1.01 | -59 | 0.49 |
1) Earnings per share are calculated based on a weighted average number of outstanding shares.
Quarterly data by business area
Operating profit
| SEK million | 2023 Q1 |
Q2 | Q3 | Q4 | Full year |
2024 Q1 |
Q2 |
|---|---|---|---|---|---|---|---|
| Food Ingredients | 582 | 636 | 739 | 685 | 2,642 | 779 | 755 |
| Chocolate & Confectionery Fats | 327 | 275 | 438 | 481 | 1,521 | 505 | 433 |
| Technical Products & Feed | 108 | 44 | 47 | 59 | 258 | 53 | 9 |
| Group Functions | -65 | -75 | -81 | -84 | -305 | -83 | -79 |
| Operating profit AAK Group | 952 | 880 | 1,143 | 1,141 | 4,116 | 1,254 | 1,118 |
| Financial net | -77 | -68 | -85 | -62 | -292 | -23 | -48 |
| Profit before tax | 875 | 812 | 1,058 | 1,079 | 3,824 | 1,231 | 1,070 |
Net sales by market
2024
| SEK million | FI Q2 2024 |
CCF Q2 2024 |
TPF Q2 2024 |
Total Q2 2024 |
FI Q1-Q2 2024 |
CCF Q1-Q2 2024 |
TPF Q1-Q2 2024 |
Total Q1-Q2 2024 |
|---|---|---|---|---|---|---|---|---|
| Europe | 2,565 | 1,112 | 485 | 4,162 | 4,931 | 2,402 | 1,094 | 8,427 |
| North and South America | 3,678 | 1,490 | 0 | 5,168 | 7,268 | 3,039 | 1 | 10,308 |
| Asia | 928 | 627 | 3 | 1,558 | 1,842 | 1,281 | 5 | 3,128 |
| Other countries | 99 | 46 | 0 | 145 | 181 | 107 | 0 | 288 |
| Net sales | 7,270 | 3,275 | 488 | 11,033 | 14,222 | 6,829 | 1,100 | 22,151 |
| SEK million | FI Q2 2023 |
CCF Q2 2023 |
TPF Q2 2023 |
Total Q2 2023 |
FI Q1-Q2 2023 |
CCF Q1-Q2 2023 |
TPF Q1-Q2 2023 |
Total Q1-Q2 2023 |
|---|---|---|---|---|---|---|---|---|
| Europe | 2,801 | 1,024 | 555 | 4,380 | 5,712 | 2,323 | 1,306 | 9,341 |
| North and South America | 3,739 | 1,539 | 0 | 5,278 | 7,614 | 3,223 | 0 | 10,837 |
| Asia | 855 | 576 | 0 | 1,431 | 1,779 | 1,273 | 0 | 3,052 |
| Other countries | 109 | 31 | 0 | 140 | 258 | 86 | 0 | 344 |
| Net sales | 7,504 | 3,170 | 555 | 11,229 | 15,363 | 6,905 | 1,306 | 23,574 |
Financial instruments
| SEK million | 30.06.2024 | 31.12.2023 | Hierarchy level |
|---|---|---|---|
| Assets at fair value through profit and loss | |||
| Currency derivatives | 170 | 358 | 2 |
| Sales and purchase contracts | 591 | 927 | 2 |
| Investment in unlisted shares | 7 | 7 | 3 |
| Investment in unlisted funds | 67 | 55 | 3 |
| Derivatives used in cash flow hedges | |||
| Interest rate swaps | 6 | 13 | 2 |
| Assets at amortized cost | |||
| Financial non-current assets | 17 | 11 | - |
| Accounts receivables | 5,937 | 5,312 | - |
| Financial current assets | 96 | 97 | - |
| Cash and cash equivalents | 1,583 | 1,503 | - |
| Total financial assets | 8,474 | 8,283 | |
| Liabilities at fair value through profit and loss | |||
| Currency derivatives | 152 | 389 | 2 |
| Sales and purchase contracts | 622 | 430 | 2 |
| Liabilities at amortized cost | |||
| Liabilities to banks and credit institutions | 3,219 | 3,684 | - |
| Lease liabilities | 704 | 801 | - |
| Accounts payables | 4,169 | 3,804 | - |
| Other interest-bearing liabilities | 11 | 11 | - |
| Total financial liabilities | 8,877 | 9,119 |
For information on the valuation techniques used by the Group in measuring the fair value of financial instruments, see note 3 in the Annual report 2023.
Alternative Performance Measures (APMs)
Organic volume growth
| Percent | Q2 2024 |
Q2 2023 |
Q1-Q2 2024 |
Q1-Q2 2023 |
Full year 2023 |
|---|---|---|---|---|---|
| Food Ingredients | |||||
| Organic volume growth | 4 | -6 | 3 | -7 | -5 |
| Acquisitions / divestments | - | - | - | - | - |
| Volume growth | 4 | -6 | 3 | -7 | -5 |
| Chocolate & Confectionery Fats | |||||
| Organic volume growth | 14 | -15 | 10 | -12 | -9 |
| Acquisitions / divestments | - | - | - | - | - |
| Volume growth | 14 | -15 | 10 | -12 | -9 |
| Technical Products & Feed | |||||
| Organic volume growth | -11 | -10 | -6 | -2 | -6 |
| Acquisitions / divestments | - | - | - | - | - |
| Volume growth | -11 | -10 | -6 | -2 | -6 |
| AAK Group | |||||
| Organic volume growth | 4 | -9 | 3 | -7 | -6 |
| Acquisitions / divestments | - | - | - | - | - |
| Volume growth | 4 | -9 | 3 | -7 | -6 |
EBITDA
| SEK million | Q2 2024 |
Q2 2023 |
Q1-Q2 2024 |
Q1-Q2 2023 |
Full year 2023 |
|---|---|---|---|---|---|
| Operating profit (EBIT) | 1,118 | 880 | 2,372 | 1,832 | 4,116 |
| Depreciation, amortization and impairment losses | 218 | 206 | 430 | 434 | 877 |
| EBITDA | 1,336 | 1,086 | 2,802 | 2,266 | 4,993 |
Return on Capital Employed (ROCE)
| SEK million | R12M 30.06.2024 |
R12M 31.12.2023 |
|---|---|---|
| Total assets | 31,793 | 32,147 |
| Cash and cash equivalents | -1,505 | -1,500 |
| Financial assets | -328 | -213 |
| Accounts payables | -4,038 | -4,333 |
| Other non-interest-bearing liabilities | -4,277 | -4,566 |
| Capital employed | 21,645 | 21,535 |
| Operating profit, excluding items affecting comparability | 4,656 | 4,116 |
| Return on Capital Employed (ROCE), percent | 21.5 | 19.1 |
Net working capital
| SEK million | 30.06.2024 | 31.12.2023 |
|---|---|---|
| Inventory | 9,349 | 8,656 |
| Accounts receivables | 5,937 | 5,312 |
| Other current receivables, non-interest-bearing | 2,453 | 2,743 |
| Accounts payables | -4,169 | -3,804 |
| Other current liabilities, non-interest-bearing | -4,061 | -3,936 |
| Net working capital | 9,509 | 8,971 |
Net debt
| 31.12.2023 | |
|---|---|
| 1 | 0 |
| 106 | 599 |
| 1,583 | 1,503 |
| -31 | -31 |
| -704 | -801 |
| -949 | -1,969 |
| -2,270 | -1,715 |
| -11 | -11 |
| -2,275 | -2,425 |
| 30.06.2024 |
Net debt / EBITDA
| SEK million | 30.06.2024 | 31.12.2023 |
|---|---|---|
| Net debt | 2,275 | 2,425 |
| EBITDA (rolling 12 months) | 5,529 | 4,993 |
| Net debt / EBITDA, multiple | 0.41 | 0.49 |
Equity to assets ratio
| SEK million | 30.06.2024 | 31.12.2023 |
|---|---|---|
| Shareholders' equity | 18,222 | 17,117 |
| Non-controlling interests | 60 | 56 |
| Total equity including non-controlling interests | 18,282 | 17,173 |
| Total assets | 31,594 | 30,551 |
| Equity to assets ratio, percent | 57.9 | 56.2 |
Income statement – Parent Company
| SEK million | Q2 2024 |
Q2 2023 |
Q1-Q2 2024 |
Q1-Q2 2023 |
Full year 2023 |
|---|---|---|---|---|---|
| Net sales | 121 | 44 | 242 | 88 | 413 |
| Total operating income | 121 | 44 | 242 | 88 | 413 |
| Other external expenses | -101 | -76 | -183 | -122 | -341 |
| Cost for remuneration to employees | -53 | -32 | -102 | -64 | -153 |
| Depreciation, amortization and impairment losses | -4 | -3 | -7 | -4 | -10 |
| Total operating expenses | -158 | -111 | -292 | -190 | -504 |
| Operating profit (EBIT) | -37 | -67 | -50 | -102 | -91 |
| Profit from interest in Group companies | - | - | - | - | 213 |
| Dividend | 1 | - | 1 | - | - |
| Interest income and similar items | 0 | 1 | 0 | 1 | 0 |
| Interest expense and similar items | -66 | -47 | -125 | -84 | -205 |
| Total financial net | -65 | -46 | -124 | -83 | 8 |
| Profit before tax | -102 | -113 | -174 | -185 | -83 |
| Income tax | 19 | 23 | 34 | 38 | -18 |
| Profit for the period | -83 | -90 | -140 | -147 | -101 |
Condensed balance sheet – Parent Company
| SEK million | 30.06.2024 | 31.12.2023 |
|---|---|---|
| Assets | ||
| Other intangible assets | 54 | 24 |
| Property, plant and equipment | 3 | 3 |
| Right-of-use assets | 20 | 23 |
| Financial assets | 9,908 | 9,910 |
| Deferred tax assets | 2 | 2 |
| Total non-current assets | 9,987 | 9,962 |
| Current receivables | 500 | 682 |
| Cash and cash equivalents | 0 | 0 |
| Total current assets | 500 | 682 |
| Total assets | 10,487 | 10,644 |
| Equity and liabilities | ||
| Shareholders' equity | 4,850 | 6,000 |
| Non-controlling interests | - | - |
| Total equity including non-controlling interests | 4,850 | 6,000 |
| Liabilities to banks and credit institutions | 500 | 1,500 |
| Lease liabilities | 15 | 17 |
| Other non-current liabilities | 18 | 27 |
| Total non-current liabilities | 533 | 1,544 |
| Liabilities to banks and credit institutions | 2,053 | 1,500 |
| Lease liabilities | 5 | 5 |
| Accounts payables | 27 | 19 |
| Other current liabilities | 3,019 | 1,576 |
| Total current liabilities | 5,104 | 3,100 |
| Total equity and liabilities | 10,487 | 10,644 |
Price trends in raw materials
For information regarding cocoa and cocoa butter please refer to information at www.icco.org
Additional information
Conference call
AAK will host a conference call for investors and analysts on July 18, 2024, at 10 a.m. CET. The presentation can be followed via teleconference or webcast. Please visit www.aak.com for details.
The annual and quarterly reports are published on www.aak.com.
Financial calendar
October 24, 2024: Q3 and nine-month report for 2024
February 5, 2025: Q4 and year-end report for 2024
Forward-looking statements
This report contains forward-looking statements. Such statements are subject to risks and uncertainties since 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.
Governing text
The Swedish text shall govern for all purposes and prevail in the event of any discrepancy between the versions.
Investor Relations contact
Carl Ahlgren Head of IR, Communication & Brand Mobile: +46 706 81 07 34 E-mail: [email protected]
we do is about Making Better Happen Everything
Everything AAK does is about Making Better Happen™. We specialize in plant-based oils and fats, the valueadding ingredients in many products people love to consume.
Interim report | Q2 2024
We make these products better tasting, healthier, and more sustainable. At the heart of AAK's offer is customer co-development, combining our desire to understand what Making Better Happen™ means for each customer with the unique flexibility of our production assets and deep knowledge of products and industries, including Chocolate & Confectionery, Bakery, Dairy, Plant-based Foods, Special Nutrition, Foodservice, and Personal Care.
Our ~4,100 employees support our close collaboration with customers through 25 regional sales offices, 16 dedicated Customer Innovation Centers, and with the support of around 20 production facilities.
Listed on Nasdaq Stockholm and headquartered in Malmö, Sweden, AAK has been Making Better Happen™ for 150 years.
