Aak Ab · OMXSTO:AAK
Aak Ab — Investor Day (November 2024)
50 slides from Aak Ab's investor day presentation, Nov 26, 2024
Slide 1: Capital Markets Day 2024
Capital Markets Day 2024 Deliver, Develop, Discover Karlshamn, Sweden
Slide 2: Agenda
1 Strategic update Agenda 2 Financials 3 Innovation 4 Lunch 5 Q&A breakout sessions 6 Concluding remarks Capital Markets Day 2024 | November 26
Slide 3: Today's speakers
Today’s speakers An experienced leadership team Presentations Johan Westman Tomas Bergendahl Niall Sands • Chief Executive Officer • Chief Financial Officer • President Commercial • With AAK since 2018 • With AAK since 2021 Development & Innovation • With AAK since 2018 Q&A Breakout sessions Susanne
Slide 4: Strategic update
Strategic update Deliver, Develop, Discover Johan Westman, Chief Executive Officer Karlshamn, Sweden
Slide 5: Track record of delivering on our strategy, 12% EBIT CAGR since 2005
Deliver | Develop | Discover AAK has a strong track record of delivering on our strategy, growing with an 12% EBIT CAGR since 2005 Value, growth and impact Portfolio optimization Customer Co-development Global 4.8 bn expansion Specialisation strategy +150 years of expertise 2.2 bn 1.4 bn 0.9 bn 0.5
Slide 6: Proven track record of generating value for shareholders and stakeholders
Deliver | Develop | Discover Proven track record of generating value for our shareholders and stakeholders alike driving margin, capital efficiency and sustainability EBIT/Kg ROCE SEK/Kg % 3.00 25.0 22.1 2.19 19.1 1.94 20.0 2.00 15.7 15.8 15.6 15.8 14.9 15.6 14.5 14.2 15.0 1.28 0.94 0.99 1.04 10.0 1
Slide 7: Driving value in our core business
Deliver | Develop | Discover Driving value in our core business Specialty Customer co- Value-adding Distribution ingredients development flexible service footprint Unique multi-oil, multi- End-product application Tailored service, e.g., logistics, Global footprint, close to processing and functional
Slide 8: 2030 Aspiration
Deliver | Develop | Discover Since launching the 2030 Aspiration two years ago We have… More to be done…. Doubled our value creation and continued our specialty journey Continue to improve value creation per kilo Built an increasingly aligned organization Further align and optimize operations and or
Slide 9: Strong development in Invest and Optimize
Deliver | Develop | Discover Strong development in “Invest” and “Optimize”, driven by higher specialty mix, optimization and co-development in our core High EBIT growth Broad-based driven by CCF Invest in continued growth Optimize for value creation high EBIT growth Chocolate & Special Nutrition Bak
Slide 10: Updated 2030 Aspiration
Deliver | Develop | Discover Updated 2030 Aspiration Continue to Deliver and Develop, aspiring to reach profitability of SEK 3+ per kilo by 2030 and grow volumes faster than the market, achieving our target of double-digit earnings growth. Beyond 2030, Discover new opportunities to drive sustainable
Slide 11: Raising the 2030 aspiration
Deliver | Develop | Discover Raising the 2030 aspiration Aspiration Financial target Key sustainability objectives* The first choice for plant-based oil A double-digit compounder Sustainability from plant to brand ingredients Value Grow operating profit by an average of 10 percent per Deforestation-
Slide 12: Deliver
Deliver | Develop | Discover Aligned Beyond 2030 Deliver strategic 2030 The first choice for specialty plant-based oils alignment Continue optimizing our decentralized Centralized Decentralized structure, increasing alignment to unlock operational efficiencies and drive value 2024 creation. Unaligne
Slide 13: 7 major forces shaping the specialty oils & fats industry
Deliver | Develop | Discover 7 major forces shaping the specialty oils & fats industry Stable Some acceleration Major acceleration over the last 3-5 years over the last 3-5 years over the last 3-5 years 1. Demand for palm oil 2. New disruptive technologies 6. Requirements on sustainability and healt
Slide 14: Growing market and demand in AAK's specialty solutions
Deliver | Develop | Discover Growing market and demand in AAK’s specialty solutions Food Chocolate & Technical solutions to the bakery, dairy, foodservice, and special Confectionery products & Feed nutrition industries, as well as functional cocoa butter equivalents making use of side streams for th
Slide 15: Consumer demands shaping the future ingredients industry
Deliver | Develop | Discover AAK’s innovation portfolio is well positioned to deliver on the consumer demands are shaping the future ingredients industry Unlock time and Treasure money Planet Pro-active Health Escape and and Wellness Indulgence Capital Markets Day 2024 | November 26
Slide 16: Solid underlying market growth, opportunity to expand specialty market
Deliver | Develop | Discover Solid underlying … opportunity to expand market growth … specialty market Cu Current addressable market, oils & fats sto ts m (CAGR, volume) ien er ed 20mn MT gr Co in -d addressable market for ∼3% ty ev fossil- and animal-based ial elo oils and fats ec pm Sp ent Plant-b
Slide 17: Deliver, Develop, Discover
Deliver | Develop | Discover Raising the 2030 Aspiration Deliver, Continue to Deliver and Develop, aspiring to reach profitability of SEK 3+ per kilo by 2030 and grow volumes faster than the Develop, market, achieving our target of double-digit earnings growth. Beyond 2030, Discover new opportunitie
Slide 18: Agenda
1 Strategic update Agenda 2 Financials 3 Innovation 4 Lunch 5 Q&A breakout sessions 6 Concluding remarks Capital Markets Day 2024 | November 26
Slide 19: Financials
Financials Deliver, Develop, Discover Tomas Bergendahl, Chief Financial Officer Karlshamn, Sweden
Slide 20: Strong track record with underlying profitability improvement
Deliver | Develop | Discover Strong track record with underlying profitability improvement in times of volatility and uncertainty 572 551 19Q3 21Q3 19Q2 20Q3 21Q2 20Q2 21Q4 22Q1 22Q3 23Q1 23Q3 24Q1 24Q3 19Q4 20Q1 22Q2 23Q2 24Q2 19Q1 21Q1 22Q4 23Q4 20Q4 AAK Volume Source: Conceptual illustration of e
Slide 21: Strong track record with underlying profitability improvement
Deliver | Develop | Discover Strong track record with underlying profitability improvement in times of volatility and uncertainty 572 551 19Q3 21Q3 19Q2 20Q3 21Q2 20Q2 21Q4 22Q1 22Q3 23Q1 23Q3 24Q1 24Q3 19Q4 20Q1 22Q2 23Q2 24Q2 19Q1 21Q1 22Q4 23Q4 20Q4 AAK Volume Palm Oil price Source: Conceptual il
Slide 22: Strong track record with underlying profitability improvement
Deliver | Develop | Discover Strong track record with underlying profitability improvement in times of volatility and uncertainty 572 551 19Q3 21Q3 19Q2 20Q3 21Q2 20Q2 21Q4 22Q1 22Q3 23Q1 23Q3 24Q1 24Q3 19Q4 20Q1 22Q2 23Q2 24Q2 19Q1 21Q1 22Q4 23Q4 20Q4 AAK Volume Palm Oil price Global Inflation Sour
Slide 23: Strong track record with underlying profitability improvement
Deliver | Develop | Discover Strong track record with underlying profitability improvement in times of volatility and uncertainty Operating profit growth, excl. IAC +9% (avg. 2015-2021) +21% (2022) 2.28 +43% (2023) +22% (Q1-Q3 2024) 0.87 572 551 19Q3 21Q3 19Q2 20Q3 21Q2 20Q2 21Q4 22Q1 22Q3 23Q1 23Q3
Slide 24: A decentralized organization with a track record of delivery
Deliver | Develop | Discover A decentralized organization with a track record of delivery Focus on value-adding solutions and optimizations… …generating strong return on capital employed Adjusted EBIT Volume SEK million (´000MT) ROCE (%) 6.000 Launch of 2030 Aspiration 4.000 30 22.1 19.1 4.000 20 15
Slide 25: Alignment and optimization expected to continue delivering results
Deliver | Develop | Discover Alignment and optimization expected to continue delivering results From Decentralized & Unaligned… …to Decentralized & increasingly Aligned Aligned 2.19 2030 ∼0.2 The first choice for specialty plant-based oils ∼0.5 Centralized Decentralized 2024 ∼0.5 2022 strategy updat
Slide 26: Updated 2030 Aspiration
Deliver | Develop | Discover Updated 2030 Aspiration Continue to Deliver and Develop, aspiring to reach profitability of SEK 3+ per kilo by 2030 and grow volumes faster than the market, achieving our target of double-digit earnings growth. Beyond 2030, Discover new opportunities to drive sustainable
Slide 27: Raising the 2030 aspiration
Deliver | Develop | Discover Raising the 2030 aspiration Aspiration Financial target Model assumptions** The first choice for plant-based oil A double-digit compounder Ensuring long-term value creation ingredients Value Grow operating profit by an average of 10 percent per Operating cash flow after
Slide 28: Alignment and optimization expected to continue delivering results
Deliver | Develop | Discover Alignment and optimization expected to continue delivering results From Decentralized and Unaligned… …to Decentralized and increasingly Aligned Aligned Beyond 2022 strategy update 2030 Cost savings and Production process optimization improved capacity 2030 utilization Th
Slide 29: Broad-based EBIT/kg improvement across global production footprint
Deliver | Develop | Discover Broad-based EBIT/kg improvement across our global production footprint however, variances still exist among our 20 production sites EBIT/KG 8 7 6 5 4 3 Updated 2030 Aspiration R12M Q3’24 2 2021 1 0 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 -1 AAK’s 20 producti
Slide 30: Capital allocation to drive shareholder value creation
Deliver | Develop | Discover Capital allocation to drive shareholder value creation - via sustainable and profitable long-term growth 1. Investing for growth 2. Acquisitions 3. Return to shareholders Geographic Capacity expansion expansion M&A Dividend policy, 30-50 percent of net profit Adjacent Hi
Slide 31: Investing for growth
Deliver | Develop | Discover 1. Investing for growth Historical CAPEX overview Future CAPEX priorities SEK million NIDB/EBITDA 1,500 2.0 • Innovation, capacity expansions, 1,421 efficiency gains and capability 1,335 1,233 1,203 • CAPEX/EBITDA ~20-30% 1,200 1,150 1.5 • Potential for Net debt/EBITDA 1
Slide 32: Criteria for selecting/deselecting M&A opportunities
Deliver | Develop | Discover 2. Criteria for selecting/deselecting M&A opportunities Geographical expansion Capacity expansion Other • Stable regions • Potential for capacity and • Vertical integration back to the crude • Logistically strategic location capability upgrades oil stage, excluding plant
Slide 33: We continue to be disciplined, resulting in attractive returns
Deliver | Develop | Discover 3. We continue to be disciplined, resulting in attractive returns Aspire for operating cash flow after tax to average 60-70% of EBITDA Gradual ROCE improvement over time % ROCE (%) SEK million 6 5,3 150 106 25 22,1% 25,000 94 3,6 4 100 19,1% 69 20 15,8% 20,000 58 55 15,7
Slide 34: Raising the 2030 aspiration
Deliver | Develop | Discover Raising the 2030 aspiration Aspiration Financial target Model assumptions** The first choice for plant-based oil A double-digit compounder Ensuring long-term value creation ingredients Value Grow operating profit by an average of 10 percent per Operating cash flow after
Slide 35: Deliver, Develop, Discover
Raising the 2030 Aspiration Deliver, Continue to Deliver and Develop, aspiring to reach profitability of SEK 3+ per kilo by 2030 and grow volumes faster than the Develop, market, achieving our target of double-digit earnings growth. Beyond 2030, Discover new opportunities to drive sustainable growth
Slide 36: Q&A
Q&A Capital Markets Day 2024 | November 26
Slide 37: Agenda
1 Strategic update Agenda 2 Financials 3 Innovation 4 Lunch 5 Q&A breakout sessions 6 Concluding remarks Capital Markets Day 2024 | November 26
Slide 38: Develop & Discover: Innovation at AAK
Develop & Discover Innovation at AAK Niall Sands, President Commercial Development & Innovation Karlshamn, Sweden
Slide 39: Updated 2030 Aspiration
Deliver | Develop | Discover Updated 2030 Aspiration Continue to Deliver and Develop, aspiring to reach profitability of SEK 3+ per kilo by 2030 and grow volumes faster than the market, achieving our target of double-digit earnings growth. Beyond 2030, Discover new opportunities to drive sustainable
Slide 40: Insights-driven strategic innovation approach
Deliver | Develop | Discover Ambition to move towards an insights-driven strategic innovation approach, delivering innovation both short and long-term Deliver on Insights driven Three time horizons 2030 Aspiration Moving towards an outward-looking, Alignment towards a shared AAK 2030 Holistic strate
Slide 41: The world is changing, providing unique opportunities for innovation
Deliver | Develop | Discover The world is changing , providing unique opportunities for innovation 1. 2. 3. 4. 5. Ever changing Technology enabling new Consumers focusing on Finding new value in New policy & regulations, consumer expectations applications and solutions affordability sustainability s
Slide 42: Food and Beverage industry is an experience economy
Deliver | Develop | Discover The Food and Beverage industry is an ”experience economy” – our customers are innovating & communicating this way to consumers Product economy Experience economy Optimizing food Optimizing myself, my food, my planet The story of today The story of tomorrow What we do The
Slide 43: 5 common innovation themes anchor our projects
Deliver | Develop | Discover 5 common innovation themes anchor our projects; to deliver on the consumer demands shaping the future ingredients industry 68 Innovation projects in total across Horizons 1-3. New Product Development, New Technology Development, exploratory science & technology, PhD proj
Slide 44: Our innovation pipeline targets
Deliver | Develop | Discover Our pipeline targets: (1) improved consumer experiences (2) efficient customer manufacturing processes (3) new AAK product categories (4) emerging technologies Input Active Projects in AAK Innovation Pipeline Innovation Ideas, Concepts, Theories, Assumptions (project exa
Slide 45: Enabled by a holistic approach to innovation
Deliver | Develop | Discover Enabled by a holistic approach to innovation Our initial focus to accelerate speed-to- ... leverage key enablers for market and value creation … better innovation impact People Process and Governance Center of External Internal and external projects Excellence assets eng
Slide 46: Monitoring and investing in emerging oils and fats technologies
Deliver | Develop | Discover AAK closely monitors and selectively invests in emerging oils and fats technologies with the potential to drive large impact Plant- Fermented Cultivated Power-to-X based oils microbial oils cellular oils • Extracting edible oils from new • Microalgae, yeast- and bacteria
Slide 47: Innovation at AAK
Deliver | Develop | Discover Innovation at AAK Diverse team with Developing a specialty-led Designed to meet the emerging extensive technical & innovation portfolio anchored customer & consumer needs of commercial food in science & technology Better Planet, Performance, Health, industry experience e
Slide 48: Q&A
Deliver | Develop | Discover Q&A Capital Markets Day 2024 | November 26
Slide 49: Agenda
1 Strategic update Agenda 2 Financials 3 Innovation 4 Lunch 5 Q&A breakout sessions 6 Concluding remarks Capital Markets Day 2024 | November 26
Slide 50: Making Better Happen
Everything we do is about Making Better HappenTM Capital Markets Day 2024 | November 26