Aak Ab · OMXSTO:AAK
Aak Ab — Investor Day (October 2006)
20 slides from Aak Ab's investor day presentation, Oct 3, 2006
Slide 1: Business Area Technical Products & Feed
Business Area Technical Products & Feed Magnus Jörsmo, President
Slide 2: Technical Products & Feed
Technical Products & Feed • Leading supplier of technical products and feed materials based on vegetable oils to the Nordic countries • Total sales 900 MSEK • Volume 300,000 tonnes • Profit 50 MSEK • RONA 19% 2 Capital Market Day, October 3, 2006
Slide 3: The Karlshamn Site
Technical Products & Feed The Karlshamn Site Significant overlaps • Energy/Utilities • Fixed costs Tefac Oils & Fats Feed • Raw Material Materials Binol Important contributor to site’s overall cost position 3 Capital Market Day, October 3, 2006
Slide 4: Binol hit by recession, Glycerine margins plunge
Technical Products & Feed Volume 300000 80 EBIT Linear (EBIT) 250000 60 200000 Std Fatty Acids margins fall Glycerine margins plunges Feed Fats starts to grow MSEK MT Binol hit by recession 150000 40 Binol takes off 100000 20 50000 0 0 1999 2000 2001 2002 2003 2004 2005 4 Capital Market Day, October
Slide 5: Unit margin
Technical Products & Feed Unit margin* Binol Fractio- nates 0.7 SEK/kg Special Glyce- Feed fatty Std rine fats acids fatty Std TPF ExPro acids Feed Feed Value added Bulk Speciality * Unit margin = Gross contribution / volume. Source: 5 Annual report 2005. Capital Market Day, October 3, 2006
Slide 6: Tefac - Business Logic
Technical Products & Feed - Tefac Business Logic Fatty Acids Vegetable Oil Glycerine 6 Capital Market Day, October 3, 2006
Slide 7: Tefac - Glycerine margins plunge
Technical Products & Feed - Tefac 70000 50 45 60000 Volume EBIT Market position 40 Std fatty acids margins fall Glycerine margins plunge 50000 35 • Market leader in the 40000 30 Nordic area 30000 25 20 • Strong in Northern 20000 15 Germany 10 10000 5 Market 0 -99 2000 2001 2002 2003 2004 2005 0 • To
Slide 8: Tefac - Regions and Customers
Technical Products & Feed - Tefac Regions • 55% of sales to the Nordic area • Germany makes up ~ 35% of sales Customers • Detergent/softener manufacturers • Paper chemicals • Rubber industries • Candle light manufacturers 8 Capital Market Day, October 3, 2006
Slide 9: Tefac - Industry driving forces
Technical Products & Feed - Tefac Industry driving forces • Strong cost focus, originating from retailers • Low margins and high transportation costs make standard fatty acids a regional business • Specialties have wider geographic area Success factors • Regional cost leader • Development further in
Slide 10: Tefac - Margins
Technical Products & Feed - Tefac Margins Distilled THT Stearics Stearics Fractionated (bulk) (flaked) No of competitors We are moving in this direction • Flaked • Fractionates • Raw material flexibility • Logistic advantage in Nordic 10 Capital Market Day, October 3, 2006
Slide 11: Feed - Business Logic
Technical Products & Feed - Feed Feed Fats Business Logic Oil Fatty Acids Rapeseed Meal Feed 11 Capital Market Day, October 3, 2006
Slide 12: Feed - Feed Fats take off
Technical Products & Feed - Feed 250 000 Volume EBIT 40 35 Market position 200 000 •Feed Fats take off 30 25 • Market leader for cattle 150 000 MSEK MT 20 feed in the Nordic area 100 000 15 10 50 000 5 0 0 1999 2000 2001 2002 2003 2004 2005 Market • Nordic protein market is 600,000 MT • Nordic feed
Slide 13: Feed - Regions and Customers
Technical Products & Feed - Feed Regions • 98% of sales to the Nordic area • The rest is UK and Baltic states Customers • Feed compounding industries • Big farms • Cattle • Pigs • Poultry 13 Capital Market Day, October 3, 2006
Slide 14: Feed - Industry driving forces
Technical Products & Feed - Feed Industry driving forces • Strong cost focus, pushed by big farms • Feed cost vs milk output/animal growth • Hygiene and feed safety Success factors • Guaranteed free from salmonella ExPro Process • Nutritional value • Regional cost position 14 Capital Market Day, Oct
Slide 15: Binol - Business Logic
Technical Products & Feed - Binol Business Logic Metalworking fluids Vegetable Oil Hydraulic oils 15 Capital Market Day, October 3, 2006
Slide 16: Binol - Market position
Technical Products & Feed - Binol 8000 15 Market position Volume EBIT 6000 • European leader in 10 biolubricants MSEK m3 4000 • Dominant in the Nordic area 5 2000 • Double digit growth 0 0 Market 1999 2000 2001 2002 2003 2004 2005 • Biolubricant market in Europe is ~ 1 bn SEK • Total lubricant marke
Slide 17: Binol - Regions and Customers
Technical Products & Feed - Binol Regions • 85% of sales to the Nordic area • The rest is Germany and US/Canada Customers • Metalworking industry (automotive) • Forestry industry • Construction industry • Sawmill industry 17 Capital Market Day, October 3, 2006
Slide 18: Binol - Industry driving forces
Technical Products & Feed - Binol Industry driving forces • Strong total cost focus from automotive industry • Substitution of mineral oil based products • Health, Safety and environmental issues Success factors • Regional market coverage • International alliances • Product development and technical
Slide 19: Binol - Business development
Technical Products & Feed - Binol Business development; • Acquisitions Denmark (2003), Finland (2004) • Alliances with Shell (2002), Quaker Chemical (2004) New products launched; Binol X/BioSafe XE range • First long life hydraulic oil based on renewable raw material. • First to be awarded the EU Fl
Slide 20: The future
The future: • Binol –“Super niche” with potential to internationalize • Feed – Specialties in a commodity business • Tefac – Moving towards specialization. 20 Capital Market Day, October 3, 2006