Aak Ab · OMXSTO:AAK
Aak Ab — Investor Day (October 2006)
16 slides from Aak Ab's investor day presentation, Oct 3, 2006
Slide 1: Business Area Food Ingredients UK, Americas
Business Area Food Ingredients UK, Americas Ian McIntosh, President
Slide 2: Food Ingredients - Regional split of sales
Food Ingredients - Regional split of sales FI total sales - Total FI sales: 6bn. SEK - 40% of FI sales in UK UK Americas Europe - 20% of FI sales in Americas - 40% of FI sales in Continental Europe 2 Capital Market Day, October 3, 2006
Slide 3: Food Ingredients UK, Americas - Key Market Position
Food Ingredients UK, Americas • Key Market Position - One of three big players in the UK FI market, and a significant player in the Mexican FI market - Foodservice market leader in UK - Global player in speciality branded bottled oils - Leading player for palm oil-based trans-free solutions in USA.
Slide 4: Customer groupings
Customer groupings - Bakery sector - Snack foods sector Food industry - Dairy sector - Other industry sectors - Quick-service restaurants - Hotels & restaurants FIUK, Foodservice - Work-place catering Americas - Cash-and-Carry - UK major multiples Retail - Speciality Delis and upscale chains world-
Slide 5: Products and applications
Food Ingredients UK, Americas Products and applications - Food ingredients: - Bakery fat solutions ØCake and pastry margarine ØShortenings for bakery, bread, etc. ØTrans-free, low saturated bakery fat solutions - Dairy-fat alternatives (DFA) ØSolutions for whipped toppings, cream, ice cream, etc. -
Slide 6: Major new products launched
Food Ingredients UK, Americas Major new products launched; - EsSence in USA. Ø A range of specially composed products designed to meet the demands for trans-free, non- hydrogenated products with low levels of saturated fatty acids. - Prep ZT / FryChef. Ø A trans-free deep-frying oil. Ø The successfu
Slide 7: Unit margin by product group
Food Ingredients UK, Americas Unit margin 1.7 SEK/kg Branded Branded Speciality Retail sauces Foodservice hard- Pro- FI products stocks and ducts Food- avg. dressings Snack Bakery Bulk service foods fats (oils) Bulk oils Speciality * Unit 7 margin = Gross contribution / volume. Capital Market Day, O
Slide 8: Market growth
Food Ingredients UK, Americas • Market - UK and US: Low market growth* of 2.0% and 2.2%, resp. - Mexico: High market growth rate with 4.6%*. *) Source: Euromonitor 2006, % constant value growth 2005-10. 8 Capital Market Day, October 3, 2006
Slide 9: Competitors
Food Ingredients UK, Americas • Competitors - Cargill in all regions - ADM in UK and USA - Bunge in USA - Loders Croklaan and Fuji Oil. 9 Capital Market Day, October 3, 2006
Slide 10: Industry driving forces
Food Ingredients UK, Americas • Industry driving forces - Cost focus due to extreme retail pressure in UK - Health, trans fat, and low fat products in general - Food ingredients tend to be local/regional business….. - ….but the speciality solutions travel further! - Sustainability issues 10 Capital
Slide 11: Success factors
Food Ingredients UK, Americas – Success factors • Sense-and-respond approach to customers’ needs. • Productivity initiatives to stay competitive • Branding skills for foodservice products. • Raw material sourcing and hedging 11 Capital Market Day, October 3, 2006
Slide 12: UK's success in shifting the product-mix
Food Ingredients UK, Americas • UK’s success in shifting the product-mix via acquisitions, branding and product development 18 16 14 12 10 Profit Bulk oils 8 Speciality 6 4 2 0 2000 2001 2002 2003 2004 2005 12 Capital Market Day, October 3, 2006
Slide 13: UK plant rationalisation
UK plant rationalisation • Following the merger, three UK plants become one. • Status Oct. 2006: - Formby was closed as planned in June 2006 - Wincolmlee will close as planned. - Operations focussed in Hull 13 Capital Market Day, October 3, 2006
Slide 14: Expansion in the USA
Expansion in the USA • AAK located in Newark, New Jersey • Until recently, AAK primarily lauric based • New legislation requires labelling of trans fats in USA from 2006 • AAK launches innovative product range - non-trans, low saturates solution based on palm oil. • Facilities developed to produce t
Slide 15: Creation of AAK Foods Division
Food Ingredients UK, Americas Creation of AAK Foods Division • Acquisition of food company April 2006 • Sauces, dressings and marinades • Foodservice, Industrial and Retail • Total sales: around 200 MSEK • Synergy with AAK UK’s existing business Strategy: Forward integration and capitalising on dist
Slide 16: The future
The future • Finalise plant restructuring in the UK • Drive US food ingredient growth • Drive AAK Foods growth • Extend branded solutions to more countries • Ready for more acquisitions! 16 Capital Market Day, October 3, 2006