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AAK
Quarterly Report • Feb 7, 2024
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Quarterly Report
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Fourth quarter and year-end report 2023
Interim report
Financial highlights
Q4 2023
- Total volumes decreased by 4 percent to 548,000 MT (571,000), mainly due to declines in Food Ingredients and Technical Products & Feed.
- Operating profit increased by 47 percent, reaching SEK 1,141 million (778), including a negative currency translation effect of SEK 26 million. At fixed foreign exchange rates, operating profit, increased by 50 percent.
Q1–Q4 2023
- Total volumes decreased by 6 percent to 2,123,000 MT (2,259,000), with all three business areas declining. After adjusting for the negative year-on-year impact of the controlled exit from Russia, volumes declined by 5 percent.
- Operating profit increased by 43 percent, excluding items affecting comparability and including a positive currency translation effect of SEK 104 million, reaching SEK 4,116 million (2,888). At fixed foreign exchange rates, operating profit, excluding items affecting comparability, increased by 39 percent.
- Profit for the period totaled SEK 870 million (517).
- Earnings per share equaled SEK 3.34 (1.98).
- Cash flow from operating activities amounted to SEK 1,353 million (1,062).
- Return on Capital Employed (ROCE), R12M, was 19.1 percent (14.5 percent on December 31, 2022).
- Profit for the period totaled SEK 2,954 million (1,780).
- Earnings per share equaled SEK 11.35 (6.84).
- Cash flow from operating activities amounted to SEK 5,314 million (negative 73).
- Return on Capital Employed (ROCE), R12M, was 19.1 percent (14.5 percent on December 31, 2022).
- The Board of Directors proposes that a dividend of SEK 3.70 (2.75) per share to be paid for the financial year 2023.
| Q4 2023 |
Q4 2022 |
Δ % | Q1–Q4 2023 |
Q1–Q4 2022 |
Δ % | |
|---|---|---|---|---|---|---|
| Volumes, '000 MT | 548 | 571 | -4 | 2,123 | 2,259 | -6 |
| Operating profit, SEK million | 1,141 | 778 | +47 | 4,116 | 2,538 | +62 |
| Operating profit, excluding IAC, SEK million | 1,141 | 778 | +47 | 4,116 | 2,888 | +43 |
| Operating profit per kilo, SEK | 2.08 | 1.36 | +53 | 1.94 | 1.12 | +73 |
| Operating profit per kilo, excluding IAC, SEK | 2.08 | 1.36 | +53 | 1.94 | 1.28 | +52 |
| Profit for the period, SEK million | 870 | 517 | +68 | 2,954 | 1,780 | +66 |
| Profit for the period, excluding IAC, SEK million | 870 | 517 | +68 | 2,954 | 2,099 | +41 |
| Earnings per share, SEK | 3.34 | 1.98 | +69 | 11.35 | 6.84 | +66 |
| Earnings per share, excluding IAC, SEK | 3.34 | 1.98 | +69 | 11.35 | 8.07 | +41 |
| Cash flow from operating activities, SEK million | 1,353 | 1,062 | - | 5,314 | -73 | - |
| Return on Capital Employed (R12M), percent | 19.1 | 14.5 | +32 | 19.1 | 14.5 | +32 |
Items affecting comparability (IAC) are related to the controlled exit from the Russian market (Q2 2022: negative SEK 350 million).
Closing out the year with strength
I begin by extending my heartfelt appreciation to our employees for their tireless efforts and their dedication to AAK and to Making Better Happen™. Your hard work building an aligned organization on top of a decentralized structure forms the foundation of our achievements in 2023, and our success reflects your strong commitment.
As we turn to a new year, I pause and reflect on our recent achievements as well as the opportunities and challenges that lie ahead. The year 2023 brought substantial progress. Achieving a remarkable 43 percent growth in operating profit, on top of a 21 percent growth in 2022, we surpassed our target of an average EBIT growth of around 10 percent.
This accomplishment underscores our position as a diverse Multi-oil Ingredient House. The results also speak to the power of alignment and internal optimization, and while we have progressed, there is still work to be done on further aligning the organization and our culture in 2024.
Business performance
In the fourth quarter, operating profit grew 47 percent compared to the corresponding quarter last year. The growth was driven by strong performance in Food Ingredients and Chocolate & Confectionery Fats, while Technical Products & Feed declined. At fixed foreign exchange rates, operating profit increased by 50 percent.
Volumes continued to improve sequentially for the second quarter in a row but declined by 4 percent compared to the same period last year. The year-on-year decline was mainly driven by the Bakery optimization program and weak demand in Feed.
Profitability showed significant strength, with operating profit per kilo reaching SEK 2.08 in the quarter. This marked an increase of 53 percent, or 57 percent at fixed currencies, compared to the fourth quarter of 2022. This was partly driven by internal optimization projects, namely, productivity improvements in our processing plants and partly by better portfolio & price management, including continued higher sales of speciality solutions.
The operational cash flow was strong in the quarter, primarily attributable to the higher profit.
SBTi targets approved
In December, we received notification that our emission reduction targets had been approved by the Science Based Targets Initiative (SBTi). This approval signifies our dedication to meaningful contributions to global climate action initiatives. AAK proudly stands as an early adopter, being one of the first
companies having secured approval for the Forest, Land, and Agriculture (FLAG) targets.
Science-based targets provide companies with a path to reduce emissions in line with the Paris Agreement goals. This collaborative initiative is orchestrated through a partnership involving organizations such as CDP, the UN Global Compact, the World Resources Institute and WWF.
Concluding remarks
As we bring 2023 to a close, I am pleased to note that we have reached several important milestones and have progressed toward realizing our long-term aspiration.
Our financial performance in 2023 exhibited strength, marked by an impressive 43 percent growth in operating profit, despite declining volumes. This performance was further underscored by a strong cash flow and return on capital employed.
We are gaining recognition for our positive contribution to the green transformation of the global food supply chain. Investors, media, and key opinion leaders are increasingly recognizing the potential of plant-based oils and fats.
We remain committed to delivering on our 2030 aspiration. As we look ahead, I am excited about the internal and external opportunities for AAK, and I believe we are wellpositioned to continue growing and expanding our business. Thus, we remain prudently optimistic and fully committed to Making Better Happen™.
Johan Westman, President and CEO
AAK Group, Q4 2023
Volumes
Volumes totaled 548,000 MT (571,000), a decrease of 4 percent compared to last year.
Net sales
Sales reached SEK 10,835 million (13,317), a decrease of 19 percent. The decrease was driven by lower volumes and price adjustments due to lower raw material costs, as well as a negative currency translation effect of SEK 235 million.
Operating profit
Operating profit totaled SEK 1,141 million (778), corresponding to an increase of 47 percent compared to the same quarter in 2022.
The growth was largely driven by strong operating profit per kilo in Food Ingredients and Chocolate & Confectionery Fats.
Currency translation had a negative effect of SEK 26 million, of which SEK 1 million was related to Food Ingredients and SEK 25 million to Chocolate & Confectionery Fats. Operating profit at fixed foreign exchange rates increased by 50 percent.
Operating profit per kilo totaled SEK 2.08 (1.36), an increase of 53 percent. Currency translation had a negative effect of SEK 0.05 per kilo. At fixed foreign exchange rates, operating profit per kilo increased by 57 percent. AAK achieved this growth partly driven by internal optimization projects and partly by better portfolio & price management. In addition, the performance was supported by continued higher sales of speciality solutions.
Net financial costs and tax costs
Net financial costs totaled SEK 62 million (145). The financial costs decreased due to reporting in hyperinflationary economies (IAS 29) and reduced debt level, partly offset by higher interest rates. Reported tax costs correspond to an average tax rate of 19 percent (24). The tax expense in the quarter was positively affected by utilization of tax losses carried forward and adjustments of previous year tax expense.
Earnings per share
Earnings per share equaled SEK 3.34 (1.98).
Cash flow and investments
Operating cash flow, including changes in working capital, amounted to SEK 1,353 million (1,062). Cash flow from working capital amounted to SEK 157 million (661). There was a positive cash flow from accounts receivables and accounts payables, while cash flow from inventory was negative.
Cash outflow from investment activities amounted to SEK 325 million (488), of which SEK 0 million (14) stemmed from acquisitions of operations. 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 19.1 percent (14.5 on December 31, 2022).
Financial position
The equity-to-asset ratio was 56 percent (44 percent on December 31, 2022). Net debt on December 31, 2023, totaled SEK 2,425 million (SEK 5,707 million on December 31, 2022). Net debt / EBITDA totaled 0.49 (1.71 as of December 31, 2022).
On December 31, 2023, the group had total credit facilities of SEK 8,605 million (9,806 as of December 31, 2022), of which there were SEK 7,085 million (8,366 as of December 31, 2022) in committed credit facilities. Unused committed credit facilities on December 31, 2023, totaled SEK 5,559 million (4,295 as of December 31, 2022). Non-committed credit facilities totaled SEK 1,520 million (1,440 as of December 31, 2022), SEK 1,352 million (976 as of December 31, 2022) of which were unused.
Selected events
SBTi targets officially approved
In December 2023, the Science Based Targets Initiative (SBTi) approved our emission reduction targets. This endorsement reaffirms our dedication to align with the most current climate science and actively contributing to global efforts in addressing climate change.
By complying with the criteria set by SBTi, we are committed to adopting a uniform framework for emission reduction. We extend an invitation to fellow stakeholders to join us in this journey, aligning their operations with scientifically grounded climate targets for collective environmental impact.
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Sensory Innovation award finalist at FiE with CEBES™ Choco 15
One of AAK's recent innovations, CEBES™ Choco 15, was recognized as a finalist for the Sensory Innovation Award at Food Ingredients Europe (FiE) in November 2023. The nomination criteria focused on the development of an ingredient or process enhancing the sensory attributes of food products, including taste, texture, aroma, and visual appeal, while ensuring cost-effectiveness in its application. Positioned as a cost-effective solution, CEBES™ Choco 15 empowers brands to provide an authentic chocolate experience across a diverse range of products.
Funding to support the development of Microbial Cell Factories for lipids production
AAK, together with Chalmers University of Technology, has received funding to expand the research and development within the field of industrial and environmental biotechnology.
The grant by Novo Nordisk Foundation, will facilitate the expansion of research into microbial production of functional fatty acids. This funding aims to develop these fatty acids for application in plant-based food, health nutrition, and personal care products.
Food Ingredients, Q4 2023*
| Operating profit |
Q4 2023 |
Q4 2022 |
Δ % | Q1–Q4 2023 |
Q1–Q4 2022 |
Δ % | |
|---|---|---|---|---|---|---|---|
| +47% | Volumes, '000 MT | 350 | 361 | -3 | 1,364 | 1,433 | -5 |
| Operating profit per kilo +52% |
Net sales, SEK million | 6,815 | 8,863 | -23 | 29,891 | 32,661 | -8 |
| Operating profit, SEK million | 685 | 465 | +47 | 2,642 | 1,716 | +54 | |
| Operating profit per kilo, SEK | 1.96 | 1.29 | +52 | 1.94 | 1.20 | +62 |
Volumes
In the fourth quarter, volumes in Food Ingredients declined by 3 percent compared to the same period in the previous year. The volume decline was mainly attributed to Bakery and Special Nutrition, somewhat mitigated by growth in Dairy.
Bakery volumes declined due to the year-on-year effects from the optimization program initiated in June 2022. This program, which began influencing volumes at the start of 2023 with the closure of the Merksem plant, has now been annualized and is not expected to impact the volume performance in 2024.
Similar to the first nine months of the year, volumes for Special Nutrition declined year-over-year, mainly due to the negative effect of lower birth rates in China, as well as soft volume development in the US following unusually high sales in the same quarter last year.
Dairy volumes grew in the quarter compared to the corresponding period of last year. The growth was mainly driven by Europe.
In Foodservice, volumes grew slightly.
Food Ingredients - Operating profit
Net sales
Net sales reached SEK 6,815 million (8,863), a decrease of 23 percent or SEK 2,048 million, including a negative currency translation effect of SEK 197 million and reductions from lower year-over-year volumes and raw material prices.
Operating profit
Operating profit increased by 47 percent to SEK 685 million (465). Currency translation had a negative effect of SEK 1 million. At fixed foreign exchange rates, operating profit increased by 48 percent.
Operating profit per kilo increased to SEK 1.96 (1.29), corresponding to a 52 percent growth with currencies having a net neutral effect. The increase was broad-based, with all subsegments improving except Special Nutrition which decreased.
Food Ingredients - Operating profit per kilo
*Operating profit and operating profit per kilo exclude items affecting comparability.
Chocolate & Confectionery Fats, Q4 2023*
| Operating profit |
Q4 2023 |
Q4 2022 |
Δ % | Q1–Q4 2023 |
Q1–Q4 2022 |
Δ % | |
|---|---|---|---|---|---|---|---|
| +56% | Volumes, '000 MT | 123 | 125 | -2 | 473 | 521 | -9 |
| Net sales, SEK million | 3,432 | 3,672 | -7 | 13,694 | 14,813 | -8 | |
| Operating profit per kilo |
Operating profit, SEK million | 481 | 308 | +56 | 1,521 | 1,092 | +39 |
| +59% | Operating profit per kilo, SEK | 3.91 | 2.46 | +59 | 3.22 | 2.10 | +53 |
Volumes
In the fourth quarter, volumes declined 2 percent compared to the same period last year. The decline was driven by solutions for chocolate bars, somewhat compensated by growth in solutions for spreads. The performance was mixed across the regions with Europe doing well and growing while Americas and Asia declined.
Net sales
Net sales for the business area reached SEK 3,432 million (3,672), a 7 percent decrease, including negative currency translation effect of SEK 38 million and reductions from lower year-over-year volumes and raw material prices.
Operating profit
Operating profit reached SEK 481 million (308), an increase of 56 percent compared to the corresponding quarter last year. Currency translation had a negative impact of SEK 25 million. At fixed foreign exchange rates, operating profit increased by 64 percent.
Chocolate & Confectionery Fats - Operating profit
Chocolate & Confectionery Fats - Operating profit per kilo
Operating profit per kilo increased and totaled SEK 3.91 (2.46). Currency translation had a negative impact of SEK 0.20 per kilo. At fixed foreign exchange rates, operating
The increase in operating profit per kilo was partly driven by internal process optimization and partly by better portfolio & price management across subsegments, including continued higher sales of speciality solutions.
profit per kilo increased by 67 percent.
*Operating profit and operating profit per kilo exclude items affecting comparability.
Technical Products & Feed, Q4 2023*
| Operating profit |
Q4 2023 |
Q4 2022 |
Δ % | Q1–Q4 2023 |
Q1–Q4 2022 |
Δ % | |
|---|---|---|---|---|---|---|---|
| -41% | Volumes, '000 MT | 75 | 85 | -12 | 286 | 305 | -6 |
| Operating profit per kilo -33% |
Net sales, SEK million | 588 | 782 | -25 | 2,443 | 2,951 | -17 |
| Operating profit, SEK million | 59 | 100 | -41 | 258 | 303 | -15 | |
| Operating profit per kilo, SEK | 0.79 | 1.18 | -33 | 0.90 | 0.99 | -9 |
Volumes
In the fourth quarter, volumes declined 12 percent compared to the same period in 2022, mainly driven by Feed.
The absolute volume performance remained roughly consistent sequentially over the last couple of quarters but experienced a year-over-year decline. This decline can be attributed to a challenging comparison with the previous year, following a strong demand in Feed.
Technical Products, including solutions to replace paraffin in candles, declined slightly compared to the same period of last year.
Net sales
Net sales for the business area reached SEK 588 million, decreasing by SEK 194 million compared to SEK 782 million during the fourth quarter of last year due to a negative impact from lower year-over-year volumes and raw material prices.
Operating profit
Operating profit totaled SEK 59 million (100), a 41 percent decrease compared to last year.
As a result of the lower volumes, lower margins in Biofuels, as well as lower year-over-year crush margin, the business area reported an operating profit per kilo of SEK 0.79 (1.18), a decrease of 33 percent.
Technical Products & Feed - Operating profit
Technical Products & Feed - Operating profit per kilo
Quarter Rolling 12 months
*Operating profit and operating profit per kilo exclude items affecting comparability.
AAK Group, 12M 2023
Volumes
Volumes totaled 2,123,000 MT (2,259,000), a decrease of 6 percent compared to last year. Excluding Russia, volumes declined by 5 percent.
Net sales
Net sales reached SEK 46,028 million (50,425), a decrease of 9 percent. The decrease was driven by lower volumes and lower raw material prices, partly offset by a positive currency translation effect of SEK 1,174 million.
Operating profit
Operating profit, excluding items affecting comparability (IAC), totaled SEK 4,116 million (2,888), an increase of 43 percent compared to the corresponding period in 2022.
The growth in operating profit was largely driven by strong operating profit per kilo in Food Ingredients and Chocolate & Confectionery Fats.
Currency translation had a SEK 104 million positive effect, of which SEK 54 million related to Food Ingredients and SEK 50 million to Chocolate & Confectionery Fats. Operating profit, excluding items affecting comparability and at fixed foreign exchange rates, increased by 39 percent.
Operating profit per kilo, excluding items affecting comparability, totaled SEK 1.94 (1.28), an increase of 52 percent. Currency translation had a positive effect of SEK 0.05 per kilo. At fixed foreign exchange rates, operating profit per kilo, excluding items affecting comparability, increased by 48 percent. AAK achieved this growth partly driven by internal optimization projects and partly by better portfolio & price management. In addition, the performance was supported by continued higher sales of speciality solutions.
Net financial costs and tax costs
Net financial costs totaled SEK 292 million (188). The financial costs increased due to higher interest rates and reporting in hyperinflationary economies (IAS 29), partly offset by reduced debt level. Reported tax costs correspond to an average tax rate of 23 percent (24).
Earnings per share
Earnings per share equaled SEK 11.35 (6.84).
Cash flow and investments
Operating cash flow, including changes in working capital, amounted to SEK 5,314 million (negative 73). Cash flow from working capital amounted to SEK 1,573 million (negative 2,710). Following the decrease in raw material prices during the second half of 2022, there was a positive cash flow from inventory and accounts receivables, in particular during the first half of the year. Accounts payables had a negative cash flow effect in 2023.
Cash outflow from investment activities amounted to SEK 1,203 million (1,233), of which SEK 89 million (14) stemmed from acquisitions of operations. The acquisition of Arani Agro Oil, announced during the 2022 fiscal year, was completed in January 2023 and is included in AAK's financials from January 1, 2023. Capital expenditure was mostly for maintenance investments, productivity improvements, and capacity increases.
Employees
The average number of employees on December 31, 2023, was 4,128 (3,962 at December 31, 2022).
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 2022, 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 2022 and 2023.
For a more in-depth analysis of risks, please refer to AAK's Annual Report.
Accounting policies in 2023
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 2022.
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 21–22.
Definitions
For definitions, please see our Annual Report.
Annual General Meeting and Annual Report
The Annual General Meeting will be held on May 8, 2024, in Malmö, Sweden. The Annual Report for 2023 will be available at www.aak.com from April 12, 2024.
Nomination Committee
At the Annual General Meeting 2023, Märta Schörling Andreen (Melker Schörling AB), Henrik Didner (Didner & Gerge Fonder), William McKechnie (Alecta) and Elisabet Jamal Bergström (SEB Investment Management) were elected as members of the Nomination Committee for the period up to the Annual General Meeting 2024.
Märta Schörling Andreen was re-elected Chairman of the Nomination Committee.
William McKechnie has thereafter left Alecta and thereby also his assignment in the Nomination Committee for the Annual General Meeting 2024. In accordance with the Instructions for the Nomination Committee, Alecta has been given the opportunity to appoint a new representative, whereby Daniel Kristiansson has been appointed new member of the Nomination Committee. The Nomination Committee for the Annual General Meeting 2024 thus consists of Chairman Märta Schörling Andreen (Melker Schörling AB) and the members Henrik Didner (Didner & Gerge Fonder), Daniel Kristiansson (Alecta) and Elisabet Jamal Bergström (SEB Investment Management)
Proposed dividend
The Board of Directors proposes that a dividend of SEK 3.70 (2.75) per share be paid for the financial year 2023. The proposed record date for the dividend is May 13, 2024. It is expected that the dividend will reach the shareholders after May 16, 2024.
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 83 million (negative 63). Interest-bearing liabilities minus cash and cash equivalents and interest-bearing assets totaled SEK 4,443 million (3,443 as of December 31, 2022). Investments in intangible and tangible assets amounted to SEK 23 million (1).
The Parent Company's balance sheet and income statement are shown on pages 23–24. 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 2022.
Malmö, February 7, 2024
Johan Westman President and CEO
For further information, please contact: Carl Ahlgren Head of IR, Communication & Brand
Mobile: +46 70 681 07 34 E-mail: [email protected]
Auditor's review report
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, under the direction of the contact person set out above, at 8:30 CET on February 7, 2024.
Auditor's review report
AAK AB (publ.) Corp. Id. 556669-2850
Introduction
We have reviewed the condensed interim financial information (interim report) of AAK AB (publ.) as of December 31, 2023, and the twelve-month period then ended. The Board of Directors and the Managing Director are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
Scope of review
We conducted our review in accordance with International Standard on Review Engagements ISRE 2410 Review of Interim Financial Information Performed by the Independent Auditor of the Entity. A review of interim financial information 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 and other generally accepted auditing practices and consequently does 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.
Conclusion
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, for the Group in accordance with IAS 34 and the Annual Accounts Act, and for the Parent Company in accordance with the Annual Accounts Act.
Malmö, February 7, 2024
KPMG AB
Jonas Nihlberg Authorized Public Accountant
Condensed income statement
| Q4 | Q4 | Q1–Q4 | Q1–Q4 | |
|---|---|---|---|---|
| SEK million Net sales |
2023 10,835 |
2022 13,317 |
2023 46,028 |
2022 50,425 |
| Other operating income | 62 | 34 | 225 | 149 |
| Total operating income | 10,897 | 13,351 | 46,253 | 50,574 |
| Change in inventories of finished goods and work in progress | 17 | 143 | -64 | 201 |
| Raw materials and consumables | -7,462 | -10,547 | -33,421 | -39,777 |
| Goods for resale | -250 | -234 | -811 | -1,085 |
| Other external expenses | -970 | -894 | -3,577 | -3,401 |
| Cost for remuneration to employees | -891 | -838 | -3,399 | -2,958 |
| Depreciation, amortization and impairment losses | -194 | -209 | -877 | -799 |
| Other operating expenses | -6 | 6 | 12 | -217 |
| Total operating expenses | -9,756 | -12,573 | -42,137 | -48,036 |
| Operating profit (EBIT) | 1,141 | 778 | 4,116 | 2,538 |
| Financial income | 24 | -51 | 83 | 69 |
| Financial expense | -86 | -94 | -375 | -257 |
| Total financial net | -62 | -145 | -292 | -188 |
| Profit before tax | 1,079 | 633 | 3,824 | 2,350 |
| Income tax | -209 | -116 | -870 | -570 |
| Profit for the period | 870 | 517 | 2,954 | 1,780 |
| Attributable to non-controlling interests | 4 | 2 | 8 | 10 |
| Attributable to the Parent Company's shareholders | 866 | 515 | 2,946 | 1,770 |
| Earnings per share before dilution, SEK1) | 3.34 | 1.98 | 11.35 | 6.84 |
| Earnings per share after dilution, SEK2) | 3.33 | 1.98 | 11.35 | 6.84 |
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 | Q4 2023 |
Q4 2022 |
Q1–Q4 2023 |
Q1–Q4 2022 |
|---|---|---|---|---|
| Profit for the period | 870 | 517 | 2,954 | 1,780 |
| Other comprehensive income: Items that will not be reclassified to profit or loss |
||||
| Remeasurements of post-employment benefit obligations | -28 | 11 | -11 | 149 |
| -28 | 11 | -11 | 149 | |
| Items that may subsequently be reclassified to profit or loss | ||||
| Translation differences | -1,106 | -659 | -146 | 1,460 |
| Fair-value changes in cash flow hedges | -6 | -1 | -12 | 20 |
| Tax related to fair-value changes in cash flow hedges | 2 | 0 | 3 | -4 |
| -1,110 | -660 | -155 | 1,476 | |
| Total other comprehensive income for the period | -1,138 | -649 | -166 | 1,625 |
| Total comprehensive income for the period | -268 | -132 | 2,788 | 3,405 |
| Attributable to non-controlling interests | 4 | 2 | 9 | 16 |
| Attributable to the Parent Company's shareholders | -272 | -134 | 2,779 | 3,389 |
Condensed balance sheet
| SEK million | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Assets | ||
| Goodwill | 2,712 | 2,538 |
| Other intangible assets | 290 | 293 |
| Property, plant and equipment | 7,493 | 6,944 |
| Right-of-use assets | 760 | 685 |
| Shares in associated companies | 13 | 32 |
| Financial assets | 79 | 67 |
| Deferred tax assets | 390 | 327 |
| Total non-current assets | 11,737 | 10,886 |
| Inventory | 8,656 | 11,174 |
| Accounts receivables | 5,312 | 6,635 |
| Current receivables | 3,343 | 3,780 |
| Cash and cash equivalents | 1,503 | 1,515 |
| Total current assets | 18,814 | 23,104 |
| Total assets | 30,551 | 33,990 |
| Equity and liabilities | ||
| Shareholders' equity | 17,117 | 15,036 |
| Non-controlling interests | 56 | 47 |
| Total equity including non-controlling interests | 17,173 | 15,083 |
| Liabilities to banks and credit institutions | 1,969 | 3,526 |
| Pension liabilities | 31 | 58 |
| Lease liabilities | 630 | 562 |
| Deferred tax liabilities Other non-current liabilities |
656 455 |
553 273 |
| Total non-current liabilities | 3,741 | 4,972 |
| Liabilities to banks and credit institutions | 1,715 | 2,997 |
| Lease liabilities | 171 | 162 |
| Accounts payables | 3,804 | 5,337 |
| Other current liabilities | 3,947 | 5,439 |
| Total current liabilities | 9,637 | 13,935 |
| Total equity and liabilities | 30,551 | 33,990 |
Condensed change in equity
2023
| 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 | 2,946 | 8 | 2,954 |
| Other comprehensive income | -167 | 1 | -166 |
| Total comprehensive income | 2,779 | 9 | 2,788 |
| Long-term incentive | 16 | - | 16 |
| Dividend | -714 | - | -714 |
| Closing balance December 31, 2023 | 17,117 | 56 | 17,173 |
2022
| SEK million | Shareholders' equity |
Non-controlling interests |
Total equity incl. non-controlling interests |
|---|---|---|---|
| Opening balance January 1, 2022 | 11,783 | 48 | 11,831 |
| Adjustment Opening balance IAS29 | 41 | - | 41 |
| Adjusted Opening balance January 1, 2022 | 11,824 | 48 | 11,872 |
| Profit for the period | 1,770 | 10 | 1,780 |
| Other comprehensive income | 1,619 | 6 | 1,625 |
| Total comprehensive income | 3,389 | 16 | 3,405 |
| New issue of shares | 147 | - | 147 |
| Subscription warrants | 80 | - | 80 |
| Exit Russia | 237 | -17 | 220 |
| Liquidation | 5 | - | 5 |
| Dividend | -646 | - | -646 |
| Closing balance December 31, 2022 | 15,036 | 47 | 15,083 |
Condensed cash flow statement
| Operating activities Operating profit 1,141 778 4,116 2,538 Depreciation, amortization and impairment losses 194 209 877 799 Adjustment for other items not included in cash flow 241 -276 -65 63 Interest paid and received -59 -135 -208 -146 Tax paid -321 -175 -979 -617 Cash flow before changes in working capital 1,196 401 3,741 2,637 Changes in inventory -271 536 2,463 -1,427 Changes in accounts receivables 514 357 1,241 -1,149 Changes in accounts payables 119 -640 -1,545 -812 Changes in other working capital items -205 408 -586 678 Changes in working capital 157 661 1,573 -2,710 Cash flow from operating activities 1,353 1,062 5,314 -73 Investing activities Acquisition of intangible assets and property, plant and -410 -480 -1,245 -1,226 equipment Acquisition of operations and shares, net of cash acquired - -14 -89 -14 Proceeds from sale of property, plant and equipment 85 6 131 7 Cash flow from investing activities -325 -488 -1,203 -1,233 Financing activities Changes in loans -988 -333 -3,166 2,364 Amortization of lease liabilities -46 -43 -181 -152 New issue of shares - - - 147 Subscription warrants - - - 80 Dividend paid - - -714 -646 Cash flow from financing activities -1,034 -376 -4,061 1,793 Cash flow for the period -6 198 50 487 Cash and cash equivalents at start of period 1,595 1,410 1,515 1,001 Exchange rate difference for cash equivalents -86 -93 -62 27 |
SEK million | Q4 2023 |
Q4 2022 |
Q1–Q4 2023 |
Q1–Q4 2022 |
|---|---|---|---|---|---|
| Cash and cash equivalents at end of period | 1,503 | 1,515 | 1,503 | 1,515 |
Key ratios
| SEK million (unless otherwise stated) | Q4 2023 |
Q4 2022 |
Δ % | Q1–Q4 2023 |
Q1–Q4 2022 |
Δ % |
|---|---|---|---|---|---|---|
| Income statement | ||||||
| Volumes, '000 MT | 548 | 571 | -4 | 2,123 | 2,259 | -6 |
| Operating profit | 1,141 | 778 | +47 | 4,116 | 2,538 | +62 |
| Operating profit excluding IAC | 1,141 | 778 | +47 | 4,116 | 2,888 | +43 |
| Profit for the period | 870 | 517 | +68 | 2,954 | 1,780 | +66 |
| Profit for the period excluding IAC | 870 | 517 | +68 | 2,954 | 2,099 | +41 |
| Financial position | ||||||
| Total assets | 30,551 | 33,990 | -10 | 30,551 | 33,990 | -10 |
| Equity | 17,173 | 15,083 | +14 | 17,173 | 15,083 | +14 |
| Net working capital | 8,971 | 10,747 | -17 | 8,971 | 10,747 | -17 |
| Net debt | 2,425 | 5,707 | -58 | 2,425 | 5,707 | -58 |
| Cash flow | ||||||
| Cash flow from operating activities | 1,353 | 1,062 | - | 5,314 | -73 | - |
| Cash flow from investing activities | -325 | -488 | - | -1,203 | -1,233 | - |
| Share data | ||||||
| Number of shares, thousand | 259,559 | 259,559 | 0 | 259,559 | 259,559 | 0 |
| Earnings per share, SEK1) | 3.34 | 1.98 | +69 | 11.35 | 6.84 | +66 |
| Earnings per share, excluding IAC, SEK1) | 3.34 | 1.98 | +69 | 11.35 | 8.07 | +41 |
| Equity per share, SEK | 65.95 | 57.93 | +14 | 65.95 | 57.93 | +14 |
| Market value on closing date, SEK | 224.80 | 177.85 | +26 | 224.80 | 177.85 | +26 |
| Other key ratios | ||||||
| Volume growth, percent | -4 | -6 | - | -6 | -2 | - |
| Operating profit per kilo, SEK | 2.08 | 1.36 | +53 | 1.94 | 1.12 | +73 |
| Operating profit per kilo, excluding IAC, SEK | 2.08 | 1.36 | +53 | 1.94 | 1.28 | +52 |
| Return on Capital Employed (R12 months), percent | 19.1 | 14.5 | +32 | 19.1 | 14.5 | +32 |
| Net debt / EBITDA, multiple | 0.49 | 1.71 | -72 | 0.49 | 1.71 | -72 |
1) Earnings per share are calculated based on a weighted average number of outstanding shares.
Quarterly data by business area
Operating profit
| SEK million | 2022 Q1 |
Q2 | Q3 | Q4 | Full year |
2023 Q1 |
Q2 | Q3 | Q4 | Full year |
|---|---|---|---|---|---|---|---|---|---|---|
| Food Ingredients | 369 | 342 | 476 | 465 | 1,652 | 582 | 636 | 739 | 685 | 2,642 |
| Chocolate & Confectionery Fats | 258 | -70 | 310 | 308 | 806 | 327 | 275 | 438 | 481 | 1,521 |
| Technical Products & Feed | 81 | 46 | 76 | 100 | 303 | 108 | 44 | 47 | 59 | 258 |
| Group Functions | -44 | -44 | -40 | -95 | -223 | -65 | -75 | -81 | -84 | -305 |
| Operating profit AAK Group | 664 | 274 | 822 | 778 | 2,538 | 952 | 880 | 1,143 | 1,141 | 4,116 |
| Financial net | -18 | -6 | -19 | -145 | -188 | -77 | -68 | -85 | -62 | -292 |
| Profit before tax | 646 | 268 | 803 | 633 | 2,350 | 875 | 812 | 1,058 | 1,079 | 3,824 |
Operating profit excluding items affecting comparability
| SEK million | 2022 Q1 |
Q2 | Q3 | Q4 | Full year |
2023 Q1 |
Q2 | Q3 | Q4 | Full year |
|---|---|---|---|---|---|---|---|---|---|---|
| Food Ingredients | 369 | 406 | 476 | 465 | 1,716 | 582 | 636 | 739 | 685 | 2,642 |
| Chocolate & Confectionery Fats | 258 | 216 | 310 | 308 | 1,092 | 327 | 275 | 438 | 481 | 1,521 |
| Technical Products & Feed | 81 | 46 | 76 | 100 | 303 | 108 | 44 | 47 | 59 | 258 |
| Group Functions | -44 | -44 | -40 | -95 | -223 | -65 | -75 | -81 | -84 | -305 |
| Operating profit AAK Group | 664 | 624 | 822 | 778 | 2,888 | 952 | 880 | 1,143 | 1,141 | 4,116 |
| Financial net | -18 | -6 | -19 | -145 | -188 | -77 | -68 | -85 | -62 | -292 |
| Profit before tax | 646 | 618 | 803 | 633 | 2,700 | 875 | 812 | 1,058 | 1,079 | 3,824 |
Net sales by market
2023
| SEK million | FI Q4 2023 |
CCF Q4 2023 |
TPF Q4 2023 |
Total Q4 2023 |
FI Q1–Q4 2023 |
CCF Q1–Q4 2023 |
TPF Q1–Q4 2023 |
Total Q1–Q4 2023 |
|---|---|---|---|---|---|---|---|---|
| Europe | 2,094 | 1,302 | 588 | 3,984 | 10,662 | 4,858 | 2,443 | 17,963 |
| North and South America | 3,621 | 1,431 | 0 | 5,052 | 15,029 | 6,128 | 0 | 21,157 |
| Asia | 979 | 648 | 0 | 1,627 | 3,712 | 2,532 | 0 | 6,244 |
| Other countries | 121 | 51 | 0 | 172 | 488 | 176 | 0 | 664 |
| Net sales | 6,815 | 3,432 | 588 | 10,835 | 29,891 | 13,694 | 2,443 | 46,028 |
2022
| SEK million | FI Q4 2022 |
CCF Q4 2022 |
TPF Q4 2022 |
Total Q4 2022 |
FI Q1-Q4 2022 |
CCF Q1-Q4 2022 |
TPF Q1-Q4 2022 |
Total Q1-Q4 2022 |
|---|---|---|---|---|---|---|---|---|
| Europe | 3,331 | 1,133 | 782 | 5,246 | 12,113 | 5,530 | 2,951 | 20,594 |
| North and South America | 4,268 | 1,648 | 0 | 5,916 | 16,114 | 6,345 | 0 | 22,459 |
| Asia | 1,114 | 847 | 0 | 1,961 | 3,980 | 2,661 | 0 | 6,641 |
| Other countries | 150 | 44 | 0 | 194 | 454 | 277 | 0 | 731 |
| Net sales | 8,863 | 3,672 | 782 | 13,317 | 32,661 | 14,813 | 2,951 | 50,425 |
| SEK million | 31.12.2023 | 31.12.2022 | Hierarchy level |
|---|---|---|---|
| Assets at fair value through profit and loss | |||
| Currency derivatives | 358 | 164 | 2 |
| Sales and purchase contracts | 927 | 2,199 | 2 |
| Investment in unlisted shares | 7 | 7 | 3 |
| Investment in unlisted funds | 55 | 43 | 3 |
| Derivatives used in cash flow hedges | |||
| Interest rate swaps | 13 | 25 | 2 |
| Assets at amortized cost | |||
| Financial non-current assets | 11 | 7 | - |
| Accounts receivables | 5,312 | 6,635 | - |
| Financial current assets | 97 | 85 | - |
| Cash and cash equivalents | 1,503 | 1,515 | - |
| Total financial assets | 8,283 | 10,680 | |
| Liabilities at fair value through profit and loss | |||
| Currency derivatives | 389 | 294 | 2 |
| Sales and purchase contracts | 430 | 1,140 | 2 |
| Liabilities at amortized cost | |||
| Liabilities to banks and credit institutions | 3,684 | 6,523 | - |
| Lease liabilities | 801 | 724 | - |
| Accounts payables | 3,804 | 5,337 | - |
| Other interest-bearing liabilities | 11 | 12 | - |
| Total financial liabilities | 9,119 | 14,030 |
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 2022.
AAK
Alternative Performance Measures (APMs)
Organic volume growth
| Percent | Q4 2023 |
Q4 2022 |
Q1–Q4 2023 |
Q1–Q4 2022 |
|---|---|---|---|---|
| Food Ingredients | ||||
| Organic volume growth | -3 | -7 | -5 | -3 |
| Acquisitions / divestments | - | - | - | - |
| Volume growth | -3 | -7 | -5 | -3 |
| Chocolate & Confectionery Fats | ||||
| Organic volume growth | -2 | -10 | -9 | 0 |
| Acquisitions / divestments | - | - | - | - |
| Volume growth | -2 | -10 | -9 | 0 |
| Technical Products & Feed | ||||
| Organic volume growth | -12 | 4 | -6 | -4 |
| Acquisitions / divestments | - | - | - | - |
| Volume growth | -12 | 4 | -6 | -4 |
| AAK Group | ||||
| Organic volume growth | -4 | -6 | -6 | -2 |
| Acquisitions / divestments | - | - | - | - |
| Volume growth | -4 | -6 | -6 | -2 |
EBITDA
| SEK million | Q4 2023 |
Q4 2022 |
Q1–Q4 2023 |
Q1–Q4 2022 |
|---|---|---|---|---|
| Operating profit (EBIT) | 1,141 | 778 | 4,116 | 2,538 |
| Depreciation, amortization and impairment losses | 194 | 209 | 877 | 799 |
| EBITDA | 1,335 | 987 | 4,993 | 3,337 |
Operating profit excluding items affecting comparability (IAC)
| SEK million | Q4 2023 |
Q4 2022 |
Q1–Q4 2023 |
Q1–Q4 2022 |
|---|---|---|---|---|
| Food Ingredients | ||||
| Operating profit, excluding IAC | 685 | 465 | 2,642 | 1,716 |
| Exit Russia | - | - | - | -64 |
| Operating profit | 685 | 465 | 2,642 | 1,652 |
| Chocolate & Confectionery Fats | ||||
| Operating profit, excluding IAC | 481 | 308 | 1,521 | 1,092 |
| Exit Russia | - | - | - | -286 |
| Operating profit | 481 | 308 | 1,521 | 806 |
| Technical Products & Feed | ||||
| Operating profit, excluding IAC | 59 | 100 | 258 | 303 |
| Operating profit | 59 | 100 | 258 | 303 |
| AAK Group | ||||
| Operating profit, excluding IAC | 1,141 | 778 | 4,116 | 2,888 |
| Exit Russia | - | - | - | -350 |
| Operating profit | 1,141 | 778 | 4,116 | 2,538 |
Return on Capital Employed (ROCE)
| SEK million | R12M 31.12.2023 |
R12M 31.12.2022 |
|---|---|---|
| Total assets | 32,147 | 32,083 |
| Cash and cash equivalents | -1,500 | -1,354 |
| Financial assets | -213 | -51 |
| Accounts payables | -4,333 | -5,791 |
| Other non-interest-bearing liabilities | -4,566 | -4,998 |
| Capital employed | 21,535 | 19,889 |
| Operating profit, excluding items affecting comparability | 4,116 | 2,888 |
| Return on Capital Employed (ROCE), percent | 19.1 | 14.5 |
Net working capital
| SEK million | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Inventory | 8,656 | 11,174 |
| Accounts receivables | 5,312 | 6,635 |
| Other current receivables, non-interest-bearing | 2,743 | 3,686 |
| Accounts payables | -3,804 | -5,337 |
| Other current liabilities, non-interest-bearing | -3,936 | -5,411 |
| Net working capital | 8,971 | 10,747 |
Net debt
| SEK million | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Current interest-bearing receivables | 599 | 95 |
| Cash and cash equivalents | 1,503 | 1,515 |
| Pension liabilities | -31 | -58 |
| Lease liabilities | -801 | -724 |
| Non-current liabilities to banks and credit institutions | -1,969 | -3,526 |
| Current liabilities to banks and credit institutions | -1,715 | -2,997 |
| Other interest-bearing liabilities | -11 | -12 |
| Net debt | -2,425 | -5,707 |
Net debt / EBITDA
| SEK million | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Net debt | 2,425 | 5,707 |
| EBITDA (rolling 12 months) | 4,993 | 3,337 |
| Net debt / EBITDA, multiple | 0.49 | 1.71 |
Equity to assets ratio
| SEK million | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Shareholders' equity | 17,117 | 15,036 |
| Non-controlling interests | 56 | 47 |
| Total equity including non-controlling interests | 17,173 | 15,083 |
| Total assets | 30,551 | 33,990 |
| Equity to assets ratio, percent | 56.2 | 44.4 |
Income statement – Parent Company
| SEK million | Q4 2023 |
Q4 2022 |
Q1–Q4 2023 |
Q1–Q4 2022 |
|---|---|---|---|---|
| Net sales | 168 | 64 | 413 | 160 |
| Total operating income | 168 | 64 | 413 | 160 |
| Other external expenses | -89 | -58 | -341 | -151 |
| Cost for remuneration to employees | -39 | -54 | -153 | -130 |
| Depreciation, amortization and impairment losses | -3 | -2 | -10 | -7 |
| Total operating expenses | -131 | -114 | -504 | -288 |
| Operating profit (EBIT) | 37 | -50 | -91 | -128 |
| Profit from interest in Group companies | 213 | 108 | 213 | 108 |
| Interest income and similar items | -1 | -1 | 0 | 20 |
| Interest expense and similar items | -64 | -26 | -205 | -63 |
| Total financial net | 148 | 81 | 8 | 65 |
| Profit before tax | 185 | 31 | -83 | -63 |
| Income tax | -71 | -19 | -18 | 0 |
| Profit for the period | 114 | 12 | -101 | -63 |
Condensed balance sheet – Parent Company
| SEK million | 31.12.2023 | 31.12.2022 |
|---|---|---|
| Assets | ||
| Other intangible assets | 24 | 8 |
| Property, plant and equipment | 3 | 1 |
| Right-of-use assets | 23 | 2 |
| Financial assets | 9,910 | 9,974 |
| Deferred tax assets | 2 | 3 |
| Total non-current assets | 9,962 | 9,988 |
| Current receivables | 682 | 493 |
| Cash and cash equivalents | 0 | 0 |
| Total current assets | 682 | 493 |
| Total assets | 10,644 | 10,481 |
| Equity and liabilities | ||
| Shareholders' equity | 6,000 | 6,811 |
| Non-controlling interests | - | - |
| Total equity including non-controlling interests | 6,000 | 6,811 |
| Liabilities to banks and credit institutions | 1,500 | 3,000 |
| Lease liabilities | 17 | 1 |
| Other non-current liabilities | 27 | 36 |
| Total non-current liabilities | 1,544 | 3,037 |
| Liabilities to banks and credit institutions | 1,500 | 500 |
| Lease liabilities | 5 | 2 |
| Accounts payables Other current liabilities |
19 1,576 |
18 113 |
| Total current liabilities | 3,100 | 633 |
| Total equity and liabilities | 10,644 | 10,481 |
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 February 7, 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
April 11, 2024: Sustainability Report for 2023
April 12, 2024: Annual Report for 2023
April 25, 2024: Q1 and three month report for 2024
May 8, 2024: Annual General Meeting, Malmö, Sweden
July 18, 2024: Q2 and six month report for 2024
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]
Everything we do is about Making Better Happen™
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.
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 ~4,000 employees support our close collaboration with customers through 25 regional sales offices, 16 dedicated Customer Innovation Centers, and with the support of more than 20 production facilities.
Listed on Nasdaq Stockholm and headquartered in Malmö, Sweden, AAK has been Making Better Happen™ for 150 years.
AAK