Slide 1: CEO update
Arne Frank CEO update
Slide 2: Forward-looking statement
Forward-looking statement This presentation includes forward-looking statements that are subject to risks and uncertainties, including those pertaining to the anticipated benefits to be realized from the proposals described herein. This presentation contains a number of forward-looking statements in
Slide 3: Agenda
Agenda CEO CFO US – special focus CalOils Dairy Infant Nutrition Asia – special focus India/China 3 The Co-Development Company
Slide 4: AAK speakers
AAK speakers Arne Frank Fredrik Nilsson Terry Thomas Henning Villadsen Karel Stoschek Torben Friis Lange CEO CFO President AAK Marketing Director, President President AAK Asia USA and Canada Dairy Infant Nutrition 4 The Co-Development Company
Slide 5: Global footprint and leading positions
The Co-Development Company Talented More than 2,700 Employees Production and 20 Customization plants 25 Sales offices Sales in 100 countries Global footprint Leading positions 5 The Co-Development Company
Slide 6: September YTD
September YTD Volume Operating profit* 1,442,000 MT SEK 1,180 million (up 1% organically y/y) (up 15% y/y, up 13% y/y**) Operating profit per kilo* ROCE R12M SEK 0.82 kg 15.7% (up 8% y/y, up 12% y/y**) (unchanged since December 2015) Cash flow from op. activities EPS SEK 369 million SEK 17.03 (last
Slide 7: FI – January to September
FI – January to September Volume ('000 MT) Operating profit (SEK million) 990 750 970 725 950 +5% 700 930 675 +11% 910 650 890 625 870 600 2015 2016 2015 2016 Operating profit per kilo (SEK) 0,90 0,80 +6% 0,70 0,60 0,50 2015 2016 7 The Co-Development Company
Slide 8: FI volume – January to September
FI volume – January to September 425 400 375 350 325 300 275 250 2012 225 MT 2013 200 175 2014 150 2015 125 2016 100 75 50 25 0 Bakery Food Service Infant Dairy Other niche Frying & Nutrition Solutions specialities Other commodity 8 The Co-Development Company
Slide 9: FI EBIT – January to September
FI EBIT– January to September 275 250 225 200 175 SEK million 150 2012 2013 125 2014 100 2015 2016 75 50 25 0 Bakery Food Service Infant Dairy Other niche Frying & Nutrition Solutions specialities Other commodity 9 The Co-Development Company
Slide 10: FI EBIT/kg – January to September
FI EBIT/kg– January to September 3,20 3,00 2,80 2,60 2,40 2,20 2,00 2012 SEK/kg 1,80 1,60 2013 1,40 2014 1,20 2015 1,00 2016 0,80 0,60 0,40 0,20 0,00 Bakery Food Service Infant Dairy Other niche Frying & Nutrition Solutions specialities Other commodity 10 The Co-Development Company
Slide 11: FI organic growth – January to September
FI organic growth – January to September 25% 20% 15% 10% 5% 0% Bakery Food Service Infant Nutrition Dairy -5% 11 The Co-Development Company
Slide 12: CCF – January to September
CCF – January to September Volume ('000 MT) Operating profit (SEK million) 300 550 525 280 500 260 475 +19% 450 +18% 240 425 220 400 200 375 2015 2016 2015 2016 Operating profit per kilo (SEK) 2,00 1,90 -1% 1,80 1,70 1,60 2015 2016 12 The Co-Development Company
Slide 13: Cocoa butter price
Cocoa butter price For information regarding cocoa and cocoa butter please refer to information at www.icco.org 13 The Co-Development Company
Slide 14: Since last Capital Market Day
Since last Capital Market Day AAKtion CSR Product development New factories in Brazil and China Acquisition 14 The Co-Development Company
Slide 15: The first choice for value-adding vegetable oil solutions
The first choice for value-adding vegetable oil solutions SALES INNOVATION EXECUTION Sales Innovation Service Customer co-development Quality Productivity PEOPLE Ahead of plan On plan Behind plan 15 The Co-Development Company
Slide 16: AAK Palm Oil Policy
AAK Palm Oil Policy Source palm oil produced without destruction of High Conservation Value (HCV) areas High Carbon Stocks (HCS) forest Peatland of any depth Ensure Free, Prior and Informed Consent (FPIC) takes place prior to new plantation development Strongly act on any violations Increase volume
Slide 17: Progress on sustainable palm oil
Progress on sustainable palm oil Strong engagement with suppliers Signed the AAK Palm Oil Policy Traceable to mill Independent risk assessment by Proforest Workshops at supplier locations On-site third party verification Tight and continuous follow-up Smallholder projects Strong engagement with cust
Slide 18: CSR within shea in West Africa
CSR within shea in West Africa Women group program in Burkina Faso and Ghana now reached approx 117,000 women with 99,000 in Burkina Faso Pre-financing and micro credits done in May-July in front of the coming season Very good results on quality Very small credit losses Great interest from several l
Slide 19: Biodiesel
Biodiesel Very high use of rapeseed oil and palm oil for biodiesel particularly within the EU Encouraging information on potential “second generation” of biodiesel New rules and then potentially followed by a “second generation” would over time significantly reduce the pressure on the availability o
Slide 20: TROPICAO – A tropical revolution in chocolate production
TROPICAOTM A tropical revolution in chocolate production
Slide 21: Medium and fast growing markets
Medium and fast growing markets 100% 13% 90% 20% 22% 27% 80% 18% 40% 70% 18% 60% 31% 35% 50% 40% 35% 69% 30% 62% 47% 20% 38% 10% 25% 0% 2006 2009 2012 2016 2020 Slow growing markets Medium growing markets Fast growing markets Nordics USA Asia West Europe CEE Latin America CIS 21 The Co
Slide 22: Agenda
Agenda Inauguration of new factory in Brazil New speciality and semi-speciality edible oils factory Major step forward for our global growth strategy Closer to our customers in a key market 22 The Co-Development Company
Slide 23: China – according to plan
Agenda China – according to plan 23 The Co-Development Company
Slide 24: California Oils Corporation
California Oils Corporation Annual volume of 110,000 MT Strengthen AAK’s presence in a very important market Revenues of approximately SEK 1,350 million in Transform AAK into a true national speciality and semi- 2015 speciality edible oils company in the US Factory in Richmond, California Bring AAK'
Slide 25: Management ambition, 2010–2016
Management ambition, 2010–2016* Ambition probably reached in 2016 but with Acquisitions some support of M&A and partly translation Organic growth Productivity differences Operating profit 2010 400 Much larger investments in organization for; Organic growth, particularly in China and 400 Brazil R&D,
Slide 26: Our strategy for future profitable growth
Our strategy for future profitable growth Innovation Organic Efficiency Selective & growth Efficiency acquisitions Mix 26 The Co-Development Company
Slide 27: Strong business drivers
Strong business drivers World population is increasing 7.3 billion in 2015 8.5 billion in 2030 16% By 2030, 5 billion will be living in urban areas – up from 3.5 billion 43% 45% of all population growth is in Asia Global middle class population will grow by 150% *United Population Fund; UN projectio
Slide 28: Population growth - market opportunity
Population growth* - market opportunity +12% (60m) +12% (420m) Production plants +13% Customization plants (53m) Sales offices Sourcing operations Customer innovation centres * United Nation population growth 2015-2030 28 The Co-Development Company
Slide 29: Current market growth estimates
Current market growth estimates Production plants Customization plants Sales offices Sourcing operations Customer innovation centres 29 The Co-Development Company
Slide 30: AAK year to date vs market growth
AAK year to date vs market growth Production plants Customization plants Sales offices Sourcing operations Customer innovation centres 30 The Co-Development Company
Slide 31: AAK's position in growing markets
AAK’s position in growing markets North America Asia Pacific Strong position with Invested in future growth through national wide presence greenfield in China and a perfect through recent acquisition match between surging population in India and our stake in AAK Kamani South Latin America Invested f
Slide 32: What's next?
What’s next? 32 The Co-Development Company
Slide 33: Our drivers
Our drivers Health No trans Low sat Dairy fat alternatives and Plant based dairy Nutrition Costs optimization for Customers Retailers Consumers 33 The Co-Development Company
Slide 34: M&A? Track record of selective add-on acquisitions
M&A? - AAK has a very good track record of selective add on acquisitions and their integrations California Oils Corporation (US) Q3/2016 TLC/Belovo (Belgium) Q4/2015 Miyoshi Oils & Fats Co. (JV, Japan) Q4/2015 Kamani Oil Industries Pvt Ltd. (JV, India) Q3/2015 Frita brand from Unilever (Turkey) Q3/2
Slide 35: A history of double-digit EBIT growth
A history of double-digit EBIT growth AAK quarterly EBIT growth y-o-y 25% 25% 20% 20% 15% 15% 10% 10% 5% 5% 0% 0% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 12 12 13 13 13 13 14 14 14 14 15 15 15 15 16 16 16 Quarterly growth Average growth Average organic growth 35 The Co-Development Company
Slide 36: Next management ambition?
Next management ambition? We have built and continue building a very solid foundation We are supported by very strong business drivers Strong organization with strong executive and local management Clear and very well aligned strategy and strategy execution High activity levels in the AAK Accelerati
Slide 37: Management ambition for the coming years
Management ambition for the coming years Innovation Organic & Average 10% growth Mix year-over-year EBIT improvement* & Supporting a good and consistent Selective Efficiency EPS improvement acquisitions * Excluding acquisitions and at fixed FX 37 The Co-Development Company
Slide 38: Concluding remarks
Concluding remarks Based on AAK’s customer value propositions for Health and reduced costs Customer product co-development and solutions approach We continue to remain prudently optimistic about the future The main drivers; We are expecting a continued positive underlying development for Food Ingred
Slide 39: www.aak.com
www.aak.com