Slide 1: Interim report Q2 2007 & Half-year report Q1-2 2007
Interim report, Q 2 2007 & Half-year report, Q 1-2 2007 Jerker Hartwall Anders Byström President and CEO Vice President and CFO 1 IR 070815 CEO
Slide 2: 2nd quarter 2007
2nd quarter 2007 Synergies and CBE growth have been the main contributory factors in the improvement in results, while strategic acquisitions and alliances are strengthening the speciality fat strategy. The Company is expecting a clear improvement in operating profit, primarily due to cost synergies
Slide 3: 2nd quarter 2007
2nd quarter 2007 • Net sales +14 %, SEK 2,965 million. Operating profit excluding non-recurring costs +50 %, SEK 152 million. Non-recurring items SEK -150 million. (mentioned in Q1) 3 IR 070815 CEO
Slide 4: Half year 2007
Half year 2007 • Net sales +10 %, SEK 5,936 million. • Operating profit excluding non-recurring costs +43 %, SEK 314 million. Non-recurring items SEK -150 million. (mentioned in Q1) 4 IR 070815 CEO
Slide 5: Operating profit: SEK 152 million, +50%
Operating profit*: SEK 152 million, +50 % 180 160 140 162 152 120 127 119 SEK million 100 101 108 80 60 40 20 0 Q1 Q2 Q3 Q4 Q1 Q2 2006 2007 * Excluding non-recurring items and IAS 39 effects 5 IR 070815 CEO
Slide 6: Operating profit 2007 by Business Area
Operating profit 2007 by Business Area •Q2 • Q 1-2 70(27) 72(66) 18(14) 167(99) 127(111) 35(26) 80 180 70 160 60 140 50 120 100 2007 40 2007 80 2006 2006 30 60 20 40 10 20 0 0 CCF/LfC FI TPF CCF/LfC FI TPF 6 IR 070815 CEO
Slide 7: Business Areas – Gross Contribution
Business Areas – Gross Contribution Chocolate & Food Ingredients Technical Products & Confectionery Fats Feed Q 2, +29 %, Q2, +3 % Q2, -13 % 3.36 to SEK 4.32/kg 1.62 to SEK 1.67/kg 0.93 to SEK 0.81/kg Q 1-2, +18 % Q 1-2, +4 % Q 1-2, -5 % 3.56 to SEK 4.20/kg 1.56 to SEK 1.63/kg 0.83 to SEK 0.79/kg -
Slide 8: Chocolate & Confectionery Fats (including Lipids for Care)
Chocolate & Confectionery Fats (including Lipids for Care) Q2 Q2 Q 1-2 Q 1-2 Rolling SEK million 2007 2006 2007 2006 12 months Net sales 781 726 1,749 1,643 3,457 Gross contribution 290 222 597 510 1,107 Gross contribution per kilo 4.32 3.36 4.20 3.56 3.83 Operating profit excl. non-recurring items
Slide 9: Shea situation 2007
Shea situation 2007 • Good crop. • We haven't got the quantities we want. • The demand for CBE is high. • Tough competition (shea). • Logistics to be even further developed. • We continuously increase our presence in the logistic chain. • For the next coming years a limited supply of shea nuts might
Slide 10: Food Ingredients
Food Ingredients Q2 Q2 Q 1- 2 Q 1-2 Rolling SEK million 2007 2006 2007 2006 12 months Net sales 1,823 1,558 3,439 3,096 6,520 Gross contribution 365 348 723 679 1,505 Gross contribution per kilo 1.67 1.62 1.63 1.56 1.68 Operating profit excl. non-recurring items 72 66 127 111 283 Operating profit in
Slide 11: External circumstances and driving forces
External circumstances and driving forces • The greatest external change for AAK is the accelerating consumption of vegetable oils in the energy sector. • This has driven up the raw material prices of the Group, and the trend will probably continue. • Particularly for the Business Area Food Ingredie
Slide 12: Technical Products & Feed
Technical Products & Feed Q2 Q2 Q 1-2 Q 1-2 Rolling SEK million 2007 2006 2007 2006 12 months Net sales 297 240 598 505 1,150 Gross contribution 58 50 115 99 218 Gross contribution per kilo 0.81 0.93 0.79 0.83 0.76 Operating profit excl. non-recurring items 18 14 35 26 62 Operating profit incl. non-
Slide 13: Condensed balance sheet
Condensed balance sheet Equity/Total assets 29 % 50 % 33 % 13 IR 070815 CEO
Slide 14: Summary cash flow statement for the Group
Summary cash flow statement for the Group Q2 Q2 Q 1-2 Q 1-2 Full year SEK million 2007 2006 2007 2006 2006 Operating activities Cash flow from operating activities before change in working capital 70 25 249 198 502 Change in working capital -144 43 -246 -229 -325 Cash flow from operating activities
Slide 15: Rationalisation programme - Swedish and Danish sites
Rationalisation programme - Swedish and Danish sites 15 IR 070815 CEO
Slide 16: Specialisation of the Swedish and Danish sites
Specialisation of the Swedish and Danish sites • Estimated savings of SEK 100 million. • Full impact late 2009. • Non-recurring cost SEK 150 million. • SEK 50 million will have no cash flow effect. 1st phase synergies 175 Mkr Second phase rationalisation 100 Mkr ……………………………………………………………… Total ration
Slide 17: Strategic acquisitions and alliances strengthen the speciality fat strategy
Strategic acquisitions and alliances strengthen the speciality fat strategy 17 IR 070815 CEO
Slide 18: Growth
Growth Standard Speciality Volumes Lantmännen Croda Food Service Advanced Lipids AAK The market commoditization Gross margin 1 10 30 >100 index 18 IR 070815 CEO
Slide 19: AAK and Lantmännen intend to establish a jointly-owned company
AAK and Lantmännen intend to establish a jointly- owned company, an investment of around SEK 400 million • Biggest crushing plant for rapeseed in the Nordic countries. • The plant will be one of the most efficient in the world. The new plant will have a capacity sufficient to crush and refine all Sw
Slide 20: Advanced Lipids – JV with Enzymotec
AAK establishes JV with Enzymotec, an Israeli development company with focus on advanced lipids Advanced Lipids Joint Venture of AAK and Enzymotec • A new company to combine the strength of both Enzymotec Ltd and AAK. • In the field of advanced nutritional lipids. • Mother milk replacer. • Investmen
Slide 21: Advanced Lipids – Company Structure
Advanced Lipids Joint Venture of AAK and Enzymotec Company Structure. • Joint Venture under Swedish law, a Swedish corporation. • Shares divided in a 50/50 ownership between AAK and Enzymotec Ltd. • Consolidated by AAK. • Located in Karlshamn, Sweden. 21 IR 070815 CEO
Slide 22: AAK acquires Croda Food Services
AAK acquires Croda Food Services • AAK has acquired Croda Food Services from Croda International Plc. • The business is based in Oldham, UK. • Supplies a range of products and services to the bakery industry including release agents and divider oils together with bespoke delivery systems. • With sal
Slide 23: Example of our specialisation strategy
Example of our specialisation strategy AAK The Bakery Fat specialist Year No 1 Bakery process aid 2007 + in Bakery fats Croda Food Service Acquired Bakery fat production 2000 Simple oils Bakery fat 23 IR 070815 CEO
Slide 24: Bakery ingredients and process aid
Bakery ingredients and process aid 24 IR 070815 CEO
Slide 25: Roadmap to growth
Roadmap to growth t s, Croda Food Service Ebit f a Advanced Lipids t e Lantmännen la , o es o c iv h C BE at n C er ce lt A i rv od ic t s ry Fa Se t et fo ec pr e w ke sm FA ry od y oj Ba N ab ai Fo Co D B D Applications 25 IR 070815 CEO
Slide 26: Outlook 2007
Outlook 2007 We expect a clear EBIT-improvement, primarily due to the cost synergies resulting from the merger. 26 IR 070815 CEO
Slide 27: Remember 2007
Remember 2007 • Chocolate & Confectionery Fats is growing but we want more shea nuts. • For the next coming years a limited supply of shea nuts might form a restriction on AAKs expansion in this segment. • The first wave of synergies is generating SEK 175 million, per annum, with full effect from 20
Slide 28: Appendix
RAK AarhusKarlshamn Appendix
Slide 29: Cocoa butter price development in SEK/tonne
Cocoa butter price development in SEK/tonne 3500 Cocoa butter 3000 2500 2000 1500 1000 500 0 1998 1998 1999 1999 2000 2000 2001 2001 2002 2002 2003 2003 2004 2004 2005 2005 2006 2006 2007 2007 29 IR 070815 CEO
Slide 30: Price development, Palm, Rapeseed and Soya, SEK/tonne
Price development, Palm, Rapeseed and Soya, SEK/tonne 7000 Palmoil Rapeseed Soyabean 6000 5000 4000 3000 2000 1000 0 2001 2002 2003 2004 2005 2006 2007 30 IR 070815 CEO
Slide 31: AAK vision
AAK vision: The first choice for value added vegetable oil solutions 31 IR 070815 CEO