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AAK: announces Q2-2018 interim report

Malmo / SE. (aak) Swedish AAK Group (former AarhusKarlshamn AB) announced its interim report for the second quarter 2018 with a continued strong performance. «The positive trend we have seen over the last few years continued during the second quarter. Organic volume growth reached 6 percent (5). Based on our initiatives and by focusing on selected segments and applications in line with our company program The AAK Way, we continue to gain market shares», says CFO and acting CEO Fredrik Nilsson in his statement.

Q2/2018 Highlights AAK Group

  • Total volumes for the quarter amounted to 550,000 MT (521,000), an organic growth of 6 percent (5).
  • Operating profit, including a positive currency translation impact of SEK 2 million, reached SEK 454 million (409), an improvement by 11 percent.
  • Net result amounted to SEK 310 million (273), an improvement by 14 percent.
  • Earnings per share increased by 15 percent, to SEK 1.20 (1.04).
  • Cash flow from operating activities amounted to SEK 396 million (171). Cash flow from working capital was positive, amounting to SEK 65 million (negative 66).
  • Return on Capital Employed (ROCE), R12M, was 15.5 percent (15.6 at December 31, 2017).

Q2/2018 Highlights Business Areas

  • Food Ingredients – operating profit improved by 8 percent to SEK 292 million (271).
  • Chocolate + Confectionery Fats – operating profit reached SEK 169 million (165).
  • Technical Products + Feed – operating profit improved by 256 percent, reaching SEK 32 million (9).

CEO’s comments

The positive trend we have seen over the last few years continued during the second quarter. Organic volume growth reached 6 percent (5). Based on our initiatives and by focusing on selected segments and applications in line with our company program The AAK Way, we continue to gain market shares.

Year-over-year, operating profit increased by 11 percent to a new all-time high for a second quarter.

All three business areas showed volume growth as well as profit growth. In addition, most of our geographic markets have seen good progress. However, there has been a slightly weaker development in the US market during the quarter.

Food Ingredients had another strong quarter with Dairy and Special Nutrition leading the way. For the second consecutive quarter our Bakery segment continued to show growth.

After a challenging first quarter, Chocolate + Confectionery Fats was back to a small profit growth. This despite being hampered by a stretched utilization of some production lines as well as a planned maintenance stop which will support future volume growth of high-end products.

Business area Technical Products + Feed reported strong volume and profit growth in the quarter. The product mix continued to improve within the fatty acids business. Compared to last year we had a shorter maintenance stop and lower raw material prices.

Based on our 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 a continued improvement in Chocolate + Confectionery Fats.