AAK AB (PUBL) 1
Total volumes continued to grow nicely and were up 6 percent (9). Organic volume growth was 1 percent (1).
Operating profit, excluding acquisition costs of SEK 15 million, reached SEK 388 million (343 excluding net positive, non-recurring items of SEK 16 million), an improvement of 13 percent compared to the corresponding quarter in 2014. Operating profit at fixed foreign exchange rates, and adjusted for acquisition costs and non-recurring items, improved by 7 percent. During the quarter we have continued to invest in the organization by adding more resources in Sales and Customer Innovation, particularly in growth markets.
The currency translation impact was positive SEK 22 million (27).
Operating profit per kilo, excluding acquisition costs, reached SEK 0.79 (0.74 excluding non- recurring items). The currency translation impact was SEK 0.04 (0.06).
Business Area operating profit:
Food Ingredients improved by 17 percent, reaching SEK 257 million (220).
Chocolate & Confectionery Fats reported a result of SEK 135 million (128), an improvement of 5 percent.
Technical Products & Feed improved by 28 percent, reaching SEK 32 million (25).
Operating profit per kilo for Food Ingredients increased from SEK 0.71 to SEK 0.77. At fixed foreign exchange rates, operating profit per kilo improved by 4 percent despite continued volume growth in commodity products.
Operating profit per kilo for Chocolate & Confectionery Fats reached SEK 1.57 (1.52), an improvement of 3 percent. At fixed foreign exchange rates operating profit per kilo declined by 5 percent due to a continued very strong competitive
pressure on low-end products and previously mentioned investments in the organization.
Technical Products & Feed reported an increased operating profit per kilo, reaching SEK 0.45 (0.37).
Earnings per share decreased by 21 percent, to SEK 5.65 (7.12). This was due to an exceptional low tax cost related to non- recurring items in the fourth quarter, 2014.
Sales amounted to SEK 5,266 million (4,856). The increase was mainly due to acquisitions, organic volume growth and a positive currency translation impact of SEK 158 million. This was, however, partly offset by lower raw material prices.
Food Ingredients continued to grow organically and reported a 2 percent volume increase. The picture between the segments was, however, very variable.
The Bakery segment had a challenging quarter, particularly in Europe. Other regions, such as the US, continued to show good organic volume growth.
The Dairy segment continued the strong trend from the third quarter and reported double-digit organic volume growth despite the low prices on milk fat. Europe and the US showed particularly strong growth in this segment.
Infant Nutrition speciality volumes, comprising InFat® business in Advanced Lipids AB, a joint venture of AAK and Enzymotec, continued the organic growth trend from the last two quarters. For the full year though, we only see a modest organic volume growth after the extraordinary first quarter in 2014. Infant Nutrition product range Akonino® continued to show good organic volume growth.
Food Service reported low organic volume growth, however with continued good growth in the UK. Market conditions in the US were more challenging.
Commodity products showed organic volume growth for the fifth consecutive quarter, but still from a very low level and bringing in some incremental profit.
Total volumes for Chocolate & Confectionery Fats increased by 2 percent. The organic volume growth in the quarter was negative by 2 percent. The business area was, however, again negatively influenced by the deteriorating market conditions in Russia. After 24 months of deteriorating market conditions, Ukraine has during the fourth quarter stabilized at a low level. Total volumes excluding Russia were stable in the quarter. Low-end products continued to be under very strong competitive pressure, a trend since several quarters.
As earlier communicated, the start-up of the new factory in Brazil is planned for the first quarter, 2016. Construction of the new factory in China is developing according to plan.
During November, AAK entered a management agreement with the trustee in the bankruptcy of TLC and Belovo - both part of the BNLfood Group - to restart the operations of TLC, an ingredient supplier to the global nutrition market, located in Bastogne, Belgium.
TLC is specialized in extracting phospholipids from egg yolk. Such phospholipids offer additional benefits when included in nutrition formulas and reinforce functions of the brain,
the eyes and the immune system at all life stages.
By blending these phospholipids with Akonino®, AAK's solution for infant formulas, AAK will be able to extend its product range within the infant nutrition market and the nutrition markets in general, with new advanced customer co-developed products.
In December, AAK's revolutionary chocolate solution TROPICAO™ was recognized with an award at Food ingredients Europe (FiE) Innovation Awards in Paris.
TROPICAO™ has been developed to overcome heat-related bloom, the most frequent reason for chocolate quality complaints in hot climates. With AAK's innovative solution, chocolate manufacturers in hot climate markets such as Latin America, Asia and the Middle East are able to produce bloom-stable chocolate and still maintain the chocolate's sensorial properties. Early feedback from customers has been very strong. However, sales cycles are lengthy.
Our company program for 2014-2016, "AAKtion", is developing according to plan. The program is intended to further strengthen our focus on "Sales-Innovation-Execution".
Based on AAK's customer value propositions for health and reduced costs, and our customer product co-development and solutions approach, we continue to remain prudently optimistic about the future.
The main drivers are the continued positive underlying development in Food Ingredients and the continued improvement in Chocolate & Confectionery Fats.
Arne Frank
Chief Executive Officer and President
Financial highlights and key ratios
SEK million | Q4 2015 | Q4 2014 | % | Full year 2015 | Full year 2014 | % |
Income statement | ||||||
Volumes ('000 MT) | 491 | 462 | +6 | 1,833 | 1,703 | +8 |
Operating profit excluding non-recurring items | 3881) | 3432) | +13 | 1,4111) | 1,2422) | +14 |
Operating profit including non-recurring items | 373 | 359 | +4 | 1,409 | 1,262 | +12 |
Net profit | 245 | 299 | -18 | 945 | 887 | +7 |
Financial position | ||||||
Total assets | 13,896 | 12,512 | - | 13,896 | 12,512 | - |
Equity | 6,650 | 5,800 | - | 6,650 | 5,800 | - |
Net working capital | 3,087 | 3,301 | - | 3,087 | 3,301 | - |
Net interest-bearing debt | 2,083 | 2,508 | - | 2,083 | 2,508 | - |
Cash flow | ||||||
EBITDA | 490 | 459 | +7 | 1,840 | 1,643 | +12 |
Cash flow from operating activities | 661 | 495 | - | 1,736 | 692 | - |
Cash flow from investing activities | -549 | -47 | - | -1,016 | -708 | - |
Free cash flow | 112 | 448 | - | 720 | -16 | - |
Earnings per share | ||||||
Earnings per share before dilution | 5.65 | 7.12 | -21 | 22.17 | 21.15 | +5 |
Earnings per share after dilution | 5.64 | 7.06 | -20 | 22.12 | 20.97 | +5 |
Key figures | ||||||
Volume growth, % | +6 | +9 | - | +8 | +5 | - |
Operating profit per kilo (excl. non-recurring items1,2) | 0.79 | 0.74 | +7 | 0.77 | 0.73 | +5 |
Return on Capital Employed (R12 months) | 15.7 | 16.0 | -2 | 15.7 | 16.0 | -2 |
Net debt / EBITDA | 1.13 | 1.52 | -26 | 1.13 | 1.52 | -26 |
1) Non-recurring items for the fourth quarter 2015 consist of acquisition costs of SEK 15 million related to the acquisition of 51 percent of Kamani Oil Industries Pvt. and the acquisition of TLC of BNLfood Group. Non-recurring items for the full year 2015 amounted to negative SEK 2 million and consist of above mentioned acquisition costs of SEK 15 million, SEK 45 million in net profit as a result of the sale of the company's office building in M.P. Bruuns Gade, Aarhus, Denmark. An assessment of previously made non-recurring provisions has resulted in increased provisions of SEK 32 million.
2) Non-recurring items for the fourth quarter 2014 consist of the net profit from the divestment of Binol (SEK 81 million) and, mainly, a non-recurring cost for further production optimization in Europe of SEK 65 million. Net total positive impact of SEK 16 million in the fourth quarter 2014. Non-recurring items for the full year 2014 amounted to SEK 20 million and consist of above mentioned items, acquisition costs of SEK 16 million and a net positive impact of SEK 20 million related to the acquisition of CSM Benelux NV in Merksem, Belgium.
525
500
475
Quarter, '000 MT
450
425
400
375
350
325
300
275
250
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15
Quarter Rolling 12 months
1 900
1 800
1 700
1 600
1 500
1 400
1 300
1 200
400
375
Rolling 12 months, '000 MT
350
Quarter, SEK million
325
300
275
250
225
200
175
150
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15
Quarter Rolling 12 months
1 500
Rolling 12 months, SEK million
1 400
1 300
1 200
1 100
1 000
900
800
0,90
0,80
Quarter, SEK/Kg
0,70
0,60
0,50
0,40
0,30
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15
Quarter Rolling 12 months
0,80
0,75
0,70
0,65
0,60
0,55
0,50
0,45
0,40
0,35
0,30
18,0%
Rolling 12 months, SEK/Kg
16,0%
14,0%
12,0%
10,0%
Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 11 12 12 12 12 13 13 13 13 14 14 14 14 15 15 15 15
Operating profit and operating profit per kilo in the diagrams above have been adjusted to exclude acquisition costs and non- recurring items.
AAK AB issued this content on 03 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 03 February 2016 07:54:35 UTC
Original Document: http://feed.ne.cision.com/client/aarhuskarlshamn//Commands/File.aspx?id=3330645
