Aak Ab · OMXSTO:AAK
Aak Ab — AarhusKarlshamn — Shareholder Meeting (2006)
49 slides from Aak Ab's shareholder meeting presentation, 2006
Slide 1: Annual General Meeting 2006 – AAK – a global company
Annual General Meeting 2006 Jerker Hartwall President and C.E.O. “AAK – a global company” 1 A.G.M. 2006/CEO
Slide 2: AarhusKarlshamn is the world-leading producer of vegetable speciality fats
AarhusKarlshamn is the world-leading producer of vegetable speciality fats 2 A.G.M. 2006/CEO
Slide 3: This is AarhusKarlshamn
This is AarhusKarlshamn • A merger between Aarhus United A/S and Karlshamns AB. • Total sales: SEK 10.5 billion. • 2,500 employees. • Production plants in seven countries. • The AAK share will be listed on the Stockholm Stock Exchange in the third quarter of 2006. 3 A.G.M. 2006/CEO
Slide 4: AAK around the world
AAK around the world Production plants Sales offices AAK Sweden AAK Norway AAK Poland AAK Czech Republic AAK Denmark AAK UK AAK Netherlands AAK Croatia AAK Russia AAK Canada AAK US AAK Hong Kong AAK Mexico AAK Latin America Sao Paolo, Brazil AAK Ivory Coast AAK Benin AAK Australia AAK Latin America
Slide 5: AarhusKarlshamn – you meet us daily
AarhusKarlshamn – you meet us daily 5 A.G.M. 2006/CEO
Slide 6: The Group's business areas
The Group’s business areas AAK AAK Chocolate Chocolate&& Technical Technical Other Other Food Food Confectionery Confectionery Products Products&& Business Business Ingredients Ingredients Fats Fats Feed Feed (Cosmetics) (Cosmetics) Total sales Total sales Total sales 6,200 MSEK 3,100 MSEK 900 MSEK
Slide 7: Our vegetable raw-material base
Our vegetable raw-material base • Rapeseed • Palm Rapeseed • Soya Sunflower Olive • Shea Soya Shea • Maize Palm • Sunflower • Olive 7 A.G.M. 2006/CEO
Slide 8: AarhusKarlshamn – Compared to Aarhus United and Karlshamns
AarhusKarlshamn – Compared to Aarhus United and Karlshamns • LARGER • More global • Wider product range 8 A.G.M. 2006/CEO
Slide 9: Why AAK?
Why AAK? 9 A.G.M. 2006/CEO
Slide 10: Complementing each other
Complementing each other Aarhus United Karlshamns Chocolate fats Cosmetics DFA Geographically West/South North/East 10 A.G.M. 2006/CEO
Slide 11: Critical mass
Critical mass • Stronger market position. • Innovations reach global recognition in much shorter time. • Better international development potential for our staff. • A wider base of knowhow and expertise. • Stronger purchasing power. • Financial strength for organic growth and acquisitions. • Strong
Slide 12: Strategic merger reasons
Strategic merger reasons • Accelerated growth • Stronger cost position • Lower investment costs • A stronger cash flow 12 A.G.M. 2006/CEO
Slide 13: Synergies 2006-2008
Synergies 2006 -2008 150 MSEK 10 % 60 % 5% Sourcing Operation Sales Trading - UK restructuring - Sales offices - NL restructuring - Agents, etc. - Freight costs - SE/DK - Marketing - Raw materials 25 % Administration 13 A.G.M. 2006/CEO
Slide 14: AAK development 2001-2008
AAK development 2001 - 2008 2001 - 2004 2005 - 2008 The foundation • Growth in speciality products for increased • Productivity programme specialisation and • Continued globalisation globalisation • Consolidation 14 A.G.M. 2006/CEO
Slide 15: Our strategy
Our strategy 15 A.G.M. 2006/CEO
Slide 16: BNP global growth
BNP global growth 45000 40000 Mega trends: 35000 • Technologies 30000 • Globalisation World GDP 25000 • Wealth 20000 => Rapid and dramatic 15000 changes all over the 10000 world 5000 0 -1 0 0 0 00 40 00 50 75 25 50 65 80 95 00 00 0 0 0 1 0 00 60 35 60 90 00 00 -5 12 13 16 17 18 19 19 19 19 19 -4 -1
Slide 17: How do these changes affect AAK?
How do these changes affect AAK? Globalisation, technology, wealth trends: • Surplus capacity ¾ The industry is restructuring • Standardisation of most products ¾ Retailing is putting pressure on profitability • Shorter product life cycles ¾ Shorter payback periods for investments 17 A.G.M. 2006/CEO
Slide 18: Strategic direction – how to compete
Strategic direction – how to compete “More speciality”, “More global” Standard sales Speciality solutions Speciality ADM Loders AAK Fuji Bunge AAK Others Cargill Accelerate development of speciality solutions 18 A.G.M. 2006/CEO
Slide 19: Growth
Growth Standard Speciality Volumes AAK The market 1 10 30 >100 19 A.G.M. 2006/CEO
Slide 20: How do we achieve growth in a stagnant market?
How do we achieve growth is a stagnant market? New solutions replacing the old ones! Market sizes High-growth niches Cocoa Butter Alternatives Trans-free alternatives Dairy Fat Alternatives Time 20 A.G.M. 2006/CEO
Slide 21: Higher specialisation
Higher specialisation Cosmetic fats Sauces Chocolate Marinades fats Standard oils Raw materials Bakery Butter fat fats alternatives 21 A.G.M. 2006/CEO
Slide 22: Increased globalisation
Increased globalisation 22 A.G.M. 2006/CEO
Slide 23: AAK's Vision
AAK´s Vision - Rapid growth - High profitability - Innova- tiveness - Global - Special 23 A.G.M. 2006/CEO
Slide 24: AAK's Business Areas
AAK´s Business Areas 24 A.G.M. 2006/CEO
Slide 25: Business Areas
Business Areas Regional Global Food Regional Ingredients Chocolate & Technical Global Confectionery Products & - Speciality Fats Feed (Other fats Business) - Standard oils - Speciality - Speciality Cosmetic products - Standard products - Speciality -DFA -CBE - Fatty acids - Skin care - Bakery - Fill
Slide 26: Business Area Chocolate & Confectionery Fats
Business Area Chocolate & Confectionery Fats • World leader within speciality fats for the chocolate and confectionery industry. • Total sales 3,500 MSEK • Volume 310,000 tonnes • Profit 220 MSEK • Driving forces; • Costs • Success factors: • Global market coverage • Product development • Productivi
Slide 27: Business Area Food Ingredients
Business Area Food Ingredients • Wide range of everything from standard oils to advanced products with tailored properties. • Total sales 5,200 MSEK • Volumes 940,000 tonnes • Profit 300 MSEK • Driving forces • Costs • Health aspects • Success factors • Regional market coverage • Product development
Slide 28: Business Area Lipids for Care (Other Business)
Business Area Lipids for Care (Other Business) • Global leader within speciality fats for the cosmetics industry • Driving forces • Vegetable raw materials • Health aspects • Success factors • Global market coverage • Product development 28 A.G.M. 2006/CEO
Slide 29: Business Area Technical Products & Feed
Business Area Technical Products & Feed • Leading supplier of technical products and feed raw materials to northern Europe • Total sales 1,200 MSEK • Volumes 300,000 tonnes • Profit 50 MSEK • Driving forces • Costs • Success factors • Specialisation • Process and product development 29 A.G.M. 2006/C
Slide 30: Financial performance 2005
Financial performance 2005 30 A.G.M. 2006/CEO
Slide 31: Summary financial statements October-December 2005
Summary financial statements for the period October - December 2005: the Group’s first financial year • Net sales totalled SEK 2,990 million. • The operating profit exclusive of non-recurring items and IAS39 effects amounted to SEK 153 million. • Non-recurring items, mainly merger-related restructur
Slide 32: Summary Financial Statements Pro forma Full year 2005
Summary Financial Statements Pro forma Full year 2005 • Net sales increased by 9% in 2005, to SEK 10,573 million. • The operating profit exclusive non-recurring items amounted to SEK 530 million (414), an improvement of 28%. • Non-recurring items, mainly merger-related restructuring costs, had a neg
Slide 33: Financial performance Q1 2006 January - March
Financial performance Q1 2006 January - March 33 A.G.M. 2006/CEO
Slide 34: Interim Report January – March 2006
Interim Report January – March 2006 • Net sales totalled SEK 2,797 (2,482) million with an increase by 13 percent. • Operating profit, excluding impact of IAS 39 amounted to SEK 114 (119) million. The result is reduced by SEK 15 million related to restructuring and integration costs. • Operating pro
Slide 35: Acquisition of Division Wet Foods from Lion Foods
Acquisition of Division ”Wet Foods” from Lion Foods • This division produces sauces, dressings and marinades • Products for hotels, restaurants and catering businesses • Total sales: around SEK 200 million • Synergies with AAK’s UK unit, in production as well as in sales and marketing Strategy: Forw
Slide 36: CCF Investment
CCF Investment • AAK is a global leader in CBE. • CBE is a rapidly growing market segment. • This investment will considerably expand production capacity. • Investment cost: appr. SEK 150 million. • The new fractionation plant will be built in Aarhus, Denmark. • The investment is part of the Group’s
Slide 37: The merger process
The merger process 37 A.G.M. 2006/CEO
Slide 38: The merger pre-phase
The merger pre-phase 26 June 30 Sept. Ambition: Get to know each other Strategy/ Organisation / Synergies / planning A warm-up before the start-up phase 38 A.G.M. 2006/CEO
Slide 39: Current situation – the day before Day 1
Current situation – the day before Day 1 Denmark Sweden Holland USA Mexico Chocolate Chocolate Chocolate Chocolate Chocolate Food Food Food Food Food Ingredients Ingredients Ingredients Ingredients Ingredients Food Food Ingredients Ingredients Cosmetics Cosmetics Cosmetics • Duplicate sales organisa
Slide 40: Business Organisation
Business Organisation Chocolate Food Technical Lipids Confectionery Ingredients Products for Fats (FI) & Care Feed 40 A.G.M. 2006/CEO
Slide 41: Business Organisation
Business Organisation Chocolate FICE FIUK FI Nafta Technical Lipids Products Confectionery for & Fats Care Feed 41 A.G.M. 2006/CEO
Slide 42: The merger - start-up phase
The merger - start-up phase October December Ambition: Group Management established Operational organisation up and running Sufficient strategic direction laid down The first batch of synergies identified 42 A.G.M. 2006/CEO
Slide 43: The merger process 2006
The merger process 2006 Ambition Development of The real merger phase • organisation • strategy • synergies + • New company Development of 43 A.G.M. 2006/CEO
Slide 44: Summary
Summary What a merger is really about: • Business as usual • + New colleagues • + New ways of doing things • + New priorities • => Major changes !!! 44 A.G.M. 2006/CEO
Slide 45: Major activities in the first six months of the merger process
Major activities in the first six months of the merger process UK reconstruction New logo adopted Year-end accounts Group structure and management ready Acquisition of Lion Food Operating organisation up and running CBE Investment Strategy, budget Synergies worth SEK 150 million New headquarters ide
Slide 46: The future Three-year plan
The future Three-year plan 46 A.G.M. 2006/CEO
Slide 47: The future 06/07/08
The future 06/07/08 2006 2007 2008 - Develop synergies -Implementation - Full synergy effects of synergies - Growth plans - More speciality products pursued -Business develop- ment projects - Higher globalisation - Continued productivity -Productivity development projects Organisational development
Slide 48: To sum up
To sum up • We are merged • We are generating sound and strong earnings • We are acquiring and investing • We are making headway. 48 A.G.M. 2006/CEO
Slide 49: A powerful future
A powerful future 49 A.G.M. 2006/CEO