Slide 1: AAK interimrapport Oktober – December 2005
AAK interimrapport Oktober – December 2005 Year end Proforma 2005 Jerker Hartwall President and CEO 1 IR 060228 CEO
Slide 2: This is AarhusKarlshamn AB
This is AarhusKarlshamn AB • A merger between Aarhus United and Karlshamns AB • Total sales: SEK 10,6 billion • 2,500 employees • Production plants in seven countries • To be traded at Stockholm Exchange O-list quarter three 2006. 2 IR 060228 CEO
Slide 3: Prime supplier to
Prime supplier to • The chocolate and confectionery industry • The food industry • The foodservice industry • The cosmetic industry • The feed industry • The technical industry 3 IR 060228 CEO
Slide 4: The merger rationale
The merger rationale • To accelerate growth • To improve competitiveness • To optimize investments and improve cash flow 4 IR 060228 CEO
Slide 5: AAK in the World
AAK in 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 AAK
Slide 6: Applications
Applications Chocolate & Technical Food Other Confectionery Products & Ingredients Business Fats Feed - Chocolate - Dairy, Bakery - Lubricants - Skin care - Fillings - Food Service - Feed Materials - Hair care 6 IR 060228 CEO
Slide 7: World leader of vegetable speciality fats
World leader of vegetable speciality fats Chocolate & Technical Food Confectionery Products & Ingredients Fats Feed 3.1 billion SEK 6.2 billion SEK 0,9 billion SEK 310 000 ton 940 000 ton 300 000 ton Gross margin: Gross margin: Gross margin: 1000 MSEK 1600 MSEK 200 MSEK EBIT 220 MSEK EBIT 300 MSEK E
Slide 8: Vision
Vision The fastest growing most innovative and profitable speciality oils & fats company in the world 8 IR 060228 CEO
Slide 9: Strategic direction – how to compete
Strategic direction – how to compete Low margin High margin ADM Speciality Fats Bunge Cargill AAK Accelerate development of speciality products 9 IR 060228 CEO
Slide 10: How to grow when markets don’t?
How to grow when markets don’t? Designing innovative, speciality products for substitution: * cocoa-butter CBE * cow milk-butter DFA * trans fatty acids trans-free solutions Market size Slow-growing total food market in mature markets (Europe and North America) High growth niches: Cocoa-Butter
Slide 11: Synergies fully implemented 2008
Synergies fully implemented 2008 150 MSEK in the whole value chain 11 IR 060228 CEO
Slide 12: AAK Reconstruction in Europe
AAK Reconstruction in Europe AAK UK HUll AAK Sweden Production plants AAK UK AAK Denmark AAK Netherlands 12 IR 060228 CEO
Slide 13: News
News • The integration process has proceeded on schedule, and synergies in the neighbourhood of SEK 150 million are expected to yield full effects from 2008 onwards. • A decision was made on a substantial increase in the production capacity for CBE (Cocoa Butter Equivalents). 13 IR 060228 CEO
Slide 14: Pro forma result 2005
Pro forma result 2005 • Net sales grew by 9%, from SEK 9,720 million in 2004 to SEK 10,573 million in 2005. • The Group’s operating profit excluding items affecting comparability totalled SEK 530 million (414), an increase of 28%. • Earnings are impacted by items affecting comparability to the amoun
Slide 15: Financial Statements October – December 2005
Financial Statements for the period October – December 2005; the first financial year of the new AarhusKarlshamn Group • Net sales reached SEK 2,990 million. • The operating profit exclusive of non-recurring items, and IAS39, amounted to SEK 153 million. • Non-recurring items had a SEK 201 million i
Slide 16: Financial Statements October – December 2005
Financial Statements for the period October – December 2005; the first financial year of the new AarhusKarlshamn Group • Operating result including these items amounted to -56 MSEK. • Earnings before tax and inclusive of items affecting comparability, totalled SEK -64 million. • Income after tax amo
Slide 17: Financial review Q4 2005
Financial review Q 4 2005 operational excl one offs • Net sales at 2.990 MSEK up 333 MSEK or 13 % • Oper profits 153 MSEK up 86 MSEK • Good business in general • CBE + Crushing • Strong UK • ”100 MSEK project” (old Karlshamn project) 17 IR 060228 CEO
Slide 18: Seasonality in AAK
Seasonality in AAK Q4 is our strongest quarter Seasonality Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 18 IR 060228 CEO
Slide 19: Income Statement, pro forma
Income Statement, pro forma Income Statement, pro forma Full year Full year ( SEK million) 2005 2004 Net sales 10,573 9,720 Other income 13 43 Total operating income 10,586 9,763 Raw materials, consumables and goods for resale -7,640 -7,076 Fair value movements in raw material and currency derivativ
Slide 20: One off costs
One off costs MSEK • Acquisitions costs (consultants) 20 • Sales bonus DK 40 • Early retirm./severance pay 25 • Write off (UK & Holland) 52 • Other 15 • Subtotal 151 • Inventory PPA 50 TOTAL ONE OFFS 201 • In addition we have activated in the balance sheet 59 MSEK in accordance with IFRS. 20 IR 0602
Slide 21: The bridge to full year 2005 proforma
”The bridge to full year 2005 proforma” Income Statement, pro forma Full year Jan-Sep Oct-Dec Adjustm. Adj Jan-Dec (SEK million) 2005 2005 non-rec. Oct-Dec 2005 2005 Net sales 7,583 2,990 2,990 10,573 Other operating income 2 11 11 13 Total operating income 7,585 3,001 3,001 10,586 Raw materials, co
Slide 22: Income Statement, pro forma
Income Statement, pro forma Income Statement, pro forma Full year Full year (SEK million) 2005 2004 Net sales 10,573 9,720 Other income 13 43 Total operating income 10,586 9,763 Raw materials, consumables and goods for resale -7,640 -7,076 Fair value movements in raw material and currency derivative
Slide 23: Operating income comparison 2005
Operating income comparison 2005 MSEK Oper. Income 2004 414 Increased sales 853 Less increase COGS - 596 257 Increased external costs -96 Decreased personnel costs 22 Increased depreciation -26 Decrease in other income - 30 Other costs - 11 Oper Income 2005 530 23 IR 060228 CEO
Slide 24: Application segments
Application segments Chocolate & Technical Food Other Confectionery Products & Ingredients Business Fats Feed - Chocolate - Dairy, Bakery - Lubricants - Skin care - Fillings - Food Service - Feed Materials - Hair care 24 IR 060228 CEO
Slide 25: Chocolate & Confectionery Fats
Chocolate & Confectionery Fats • Volumes 311 000 ton+ 11 % • Net sales 3081 MSEK + 6 % • Gross contr. 1039 MSEK + 14 % • Op profit 222 MSEK + 33 % 25 IR 060228 CEO
Slide 26: Food Ingredients
Food Ingredients • Volumes 943 000 ton+ 10 % • Net sales 6191 MSEK + 14 % • Gross contr. 1559 MSEK + 13 % • Op profit 294 MSEK + 27 % 26 IR 060228 CEO
Slide 27: Technical Products & Feed
Technical Products & Feed • Volumes 293 000 ton - 8 % • Net sales 902 MSEK - 10 % • Gross contr. 196 MSEK -4% • Op profit 54 MSEK - 14 % 27 IR 060228 CEO
Slide 28: Balance Sheet proforma
Balance Sheet proforma In MSEK 2005 2004 Assets IFRS proforma Non-current assets 3 491 3 196 Current assets 3 346 3 162 Total assets 6 837 6 331 Equity and liabilities Equity 3 504 3 265 Minority 50 46 Long-term liabilities1 421 905 Current liabilities 1 854 2 115 Total equity and liabilities 6 837
Slide 29: Cash Flow 2005 Operating (proforma)
Cash Flow 2005 Operating (proforma) 2005 2004 • Operating income 530 414 • Depreciation & write downs 307 281 • Changes in working capital -349 - 16 • Operating capital investments -485 - 261 Operating cashflow 3 418 29 IR 060228 CEO
Slide 30: Dividend 2005
Dividend 2005 The Board of Directors of AarhusKarlshamn proposes an ordinary dividend of 4 SEK per share for the year 2005. In addition the board proposes an extra dividend of 25 SEK per share aiming to bring the company's capital structure in line with its needs. Technically the ordinary and the
Slide 31: The future 06/07/08
The future 06/07/08 2006 2007 2008 -Synergies under -Implementation - Full effect of synergies development of synergies - More speciality -Strategic - Business direction clear development - More global projects Organic growth and acquisitions Productivity program Organisation development 31 IR 06022
Slide 32: Remember short term
Remember short term • Purchasing shea • Internal reconstruction costs • Energy • Limited synergy impact 32 IR 060228 CEO
Slide 33: IR 060228 CEO
AarhusKarlshamn