AAK: Interim Report for the First Quarter 2012

Malmo / SE. (aak) Swedish AarhusKarlshamn AB (AAK) announced record high first quarter results and again strong growth in Food Ingredients. CEO and President Arne Frank: «The impact on our industry from the more difficult general economy in Europe is difficult to predict. However, based on AAK´s customer value propositions for health and reduced costs, customer product co-development and solutions approach, and the AAK Acceleration program (Growth-Efficiency-People), we remain prudently optimistic for the future mainly driven by a very strong Food Ingredients business». Summary of Q1/2012:

  • Volumes increased by seven percent due to higher speciality volumes and the impact of AAK Louisville, whilst commodity volumes were down, particularly in the United Kingdom.
  • Net sales amounted to 4’222 million SEK (3’843 million SEK), an increase by 379 million SEK mainly due to increased volumes; a better product mix; and a minor positive currency translation impact of 40 million SEK.
  • Operating profit for the first quarter of 2012 reached 220 million SEK (204 million SEK), an improvement of eight percent compared with the corresponding quarter in 2011. Operating profit per kilogram continued to improve, from 0,59 SEK to 0,60 SEK due to a higher proportion of value added products.
  • A record high operating profit for the first quarter for the largest business area, Food Ingredients, reached 137 million SEK (104 million SEK), an increase of 32 percent. In the first quarter the business area reported significant volume growth of twelve percent. Continued increases in volumes of high-value products and a consequently more profitable product mix enhanced the result. The integration of the acquired Golden Foods / Golden Brands (now AAK Louisville) continue to develop according to plan.
  • The business area Chocolate + Confectionery Fats´ operating result reached 81 million SEK (81 million SEK) and remained stable as earlier predicted.
  • The smallest business area, Technical Products + Feed continued to experience challenging markets conditions. The underlying trend in the first quarter 2012 was still very challenging but slightly less challenging than during the third and fourth quarter 2011.
  • The company also recorded, as predicted, a record high first quarter cash flow of 384 million SEK.
  • Earnings per share increased from 3,38 SEK to 3,43 SEK despite higher interest costs.