Aak Ab · OMXSTO:AAK
Aak Ab — Q4 2024 Earnings Presentation
36 slides from Aak Ab's earnings presentation, Feb 5, 2025
Slide 1: Corporate Presentation
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Slide 2: Table of content
Table of content 1. Latest financials 2. Company presentation 3. Strategy & Aspiration
Slide 3: Solid finish to a strong year
Solid finish to a strong year Highlights Q4 2024 * Volumes decreased by 1%, driven by Food Ingredients. Operating profit per kilo increased by 16% at fixed currencies, primarily driven by our global optimization programs and supported by continued favorable market conditions in Chocolate & Confectio
Slide 4: Selected events
Selected events Opening of Sustainability Raised our 2030 Completed the biotechnology Innovation Award at aspiration - Capital divestment of our innovation center FIE Markets Day in North American Karlshamn Foodservice site
Slide 5: Food Ingredients
Food Ingredients SEK million ‘SEK million 300 4,000 Volume Net sales Operating profit Operating profit “000 MT SEK million per kilo SEK SEK million 3.000 350 337 7 455 2.28 767 6 815 196 685 200 1000 ° Q4 QW Q2 Q3 QF QI Q2 QS O4 QI Q2 QB Q4 QI Q2 QB _Q4 SLSESFRRRERRRRARRR A = Rolling 12 months (righ
Slide 6: Chocolate & Confectionary Fats
Chocolate & Confectionary Fats Volume Net sales Operating profit ‘000 MT SEK million per kilo SEK 123 124 3 492 3.606 agi 4.19 423 Q4'24 Q4'23 424 Q4'23 Q4'24 Business area development Volumes grew 1% y/y, driven by Europe, Asia, and the Middle East & Africa, somewhat offset by weaker performance in
Slide 7: Technical Products & Feed
Technical Products @ Feed SEK million SEK million 150 400 Volume Net sales Operating profit Operating profit _ ‘000 MT SEK million per kilo SEK SEK million 300 0 669, 0.86 69 200 8 9 3 g il : 423 Q4'24 Q423 Q4'24 Q423 Q4'24 Q4'23 Qv24 Operating profit per kilo Business area development SeIKG 0.79 5
Slide 8: Cash flow impacted by seasonal sourcing, rising costs of raw materials and EUDR-buildup
Cash flow impacted by seasonal sourcing, rising costs of raw materials and EUDR-buildup 195 AR * Cash flow in the fourth quarter was Other impacted by seasonal sourcing and rising costs of raw materials, as well as the 966 previously communicated EUDR-related Inventory : + inventory buildup. -46 YAP
Slide 9: Return on Capital Employed (ROCE) increase following the strong operating profit development
Return on Capital Employed (ROCE) increase following the strong operating profit development ROCE end Q4 2024* za ze eet ‘e | an EBIT LTM 2 SEK 4,896 7 million ‘| Q4 QI Q2 Q3 Q4 QI Q2 Q3 Q4 Qi Q2 Q3 4 21 22 22 22 22 23 23 23 23 24 24 24 24 * ROCE: Return on Capital Employed calculated on rolling 12
Slide 10: Continued strong balance sheet
Continued strong balance sheet Net debt/EBITDA Net debt/EBITDA 2,50 5 2,00 4 1,50 4 1,00 4 0,50 4 0,29 0,00 Q4 QI Q2 Q3 Q4 QI Q2 Q3 Q4 QI Q2 Q3 O4 21 22 22 22 22 23 23 23 23 24 24 24 24 ARK
Slide 11: Solid finish to a strong year
Solid finish to a strong year + An 11% operating profit growth on top of last year’s 47% increase reflects our ability to manage the business effectively, despite somewhat soft fourth- quarter volumes. * ROCE at 22.4% on strong operating profit. + Raising our aspiration: Following our strong perform
Slide 12: An introduction to AAK
Cs An introduction to AAK Our business ba —** 4 - 2, ie if _— pga E _ Sem
Slide 13: An integral part in many of the products we love to consume, every day
An integral part in many of the products we love to consume, every day 06:45 For breakfast, you have a delicious bowl of granola with oat-based yoghurt 07:00 A worm shower to wake up in the morning and you apply a moisturiser ARK to your skin, The afternoon tiredness kicks in, and you re-energize by
Slide 14: AAK in brief
AAXK in brief: Everything we do is about Making Better Happen™ About AAK AAK specializes in plant-based oils and fats, the value-adding ingredients in many products people love to consume. We make these products better tasting, more nutritious, cost-efficient, and sustainable. We are listed on Nasda
Slide 15: Our vision is to be the first choice for plant-based oil solutions
Our vision is to be the first choice for plant-based oil solutions +150 years of experience in the plant-based oils and fats industry -4,000 employees across the world Malmo is our global head office 89% 9% of our sourced palm oil is verified deforestation-free (VDF), H1 2024 45 bn «: 2024 net sales
Slide 16: Fats are an essential part of our diets
Fats are an essential part of our diets Dietary fats are essential to give your body energy and to support cell function*: * Dietary fats are necessary for the absorption of fat-soluble vitamins A, D, E, and K. * Fats are integral components of cell membranes, contributing to their structure and fun
Slide 17: A diversified mix of plant-based oils and fats
A diversified mix of plant-based oils and fats - based on customer requirements Palm kernel oil fy Asia and South gy America Rapeseed/ Canola oil Northern and central Europe, Canada, United ‘States, Australia and China Shea kernels Western Africa | y Coconut oil — Soybe ‘Sunflower oil Other oils Ind
Slide 18: The market growth is expected to accelerate driven by specialty segments and solutions
The market growth is expected to accelerate driven by specialty segments and solutions Indicative oils and fats market consumption (‘000 MT) Total market, oils and fats Growth driven by GDP per capita and 250 000 population growth ~1% Speciality markets, oils and fats 200 000 __ Ss Slightly higher g
Slide 19: A differentiated, midstream company in a global value chain
A differentiated, midstream company in a global value chain ak «ae ale : Multi-oil Raw materials from Mills, crushers* DD . farmers and plantations > Ingredient House FMCG Producers DAK 05/02/2025 19
Slide 20: Growing market and demand in our specialty solutions
Growing market and demand in our specialty solutions Food solutions to the bakery, dairy, foodservice, and special Chocolate & Technical Confectionery products & Feed iuiniien Rushes asuralles functional cocoa butter equivalents making use of side streams for the fast-growing market for for chocolat
Slide 21: Growth and development
Growth and development Investing in our 4,000 people We offer the chance to make a real difference by being part of a team that is passionate about Making Better Happen™. + We take responsibility for health and safety, and for creating a workplace where equality, diversity and inclusivity are priori
Slide 22: Spotlight — replacing palm oil with coconut oil
Spotlight — replacing palm oil with coconut oil 300 million additional hectares needed, equivalent to the size of Argentina and Belarus combined. Oil yield by crop type Global cil yields are rneasured as the average amount of vegetable oil produced per hectare of land. This is different from the tot
Slide 23: Raising the 2030 aspiration
Raising the 2030 aspiration Aspiration The first choice for plant-based oil ingredients Value Aspiring to achieve profitability of SEK 3+ per kilo, through strategic investments in our specialty journey Growth Aspiring to achieve volume growth that outpaces the growth rate of the underlying market”
Slide 24: Strong track record with underlying profitability improvement in times of volatility and uncertainty
Strong track record with underlying profitability improvement in times of volatility and uncertainty - t+9% (avg. 2015-2021) 1X +21% (2022) / +43% (2023) y / \ NX / +19% (2024) 7 / \ / ~ Pe og7 5 S 8 & & $$ & & & & &F & & FS & &F& &F F&F F&F F&F F&F F F e 8 8 2S &§ & 8 &§ N A K&R & N RF 8 SF N RK BR
Slide 25: Strong development in "Invest" and "Optimize"
Strong development in “Invest” and “Optimize”, driven by higher specialty mix, optimization and co-development in our core High EBIT growth driven by CCF Slight EBIT growth despite market slowdown > ee 21°22 23 24 Invest in continued growth @® © Optimize for value creation @@™ Chocolate & Special Nu
Slide 26: Alignment and optimization expected to continue delivering results
Alignment and optimization expected to continue delivering results Centralized Aligned From Decentralized & Unaligned... Strategy update + Procurement excellence unaligned OFr + Production & process optimization + Portfolio & price management + Cash-2-Grow AAK Decentralized ..to Decentralized & incr
Slide 27: Alignment and optimization expected to continue delivering results
Alignment and optimization expected to conlinue delivering results From Decentralized and Unaligned... ..to Decentralized and increasingly Aligned Aligned 2022 strategy update Production process optimization 1¢ first choice * t Portfolio & price management 2024 strategy update + Continue as per 2022
Slide 28: Broad-based EBIT/kg improvement across our global production footprint
Broad-based EBIT/kg improvement across our global production footprint however, variances still exist among our 19 production sites EBIT/KG 8 7 3 |---L--S@__]}-_J]--_-}--4--4@__- eee eee eee ee eee ele eee Updated 2030 Aspiration al pleted estates etait itetete ties - a} ~--|---+---|---+}---|---/---
Slide 29: Capital allocation to drive shareholder value creation
Capital allocation to drive Shareholder value creation - via sustainable and profitable long-term growth @) Investing for growth (2) Acquisitions G.) Return to shareholders o0°0 Geographic Capacity OM excansion expansion y NN 4 a 2) Dividend policy, 30-50 percent of net profit @) @) Adjacent Q) Hist
Slide 30: Investing for growth
Investing for growth Historical CAPEX overview Future CAPEX priorities SEK million NIDB/EBITDA 4,500, r 2.0 + Innovation, capacity expansions, efficiency gains and capability + CAPEX/EBITDA ~20-30% 1,200 18 + Potential for Net debt/ESITDA <3x to support continued growth 900 and investments 1.0 600 O
Slide 31: Criteria for selecting/deselecting M&A opportunities
(2) Criteria for selecting/deselecting M&A opportunities Geographical expansion Capacity expansion Other + Stable regions + Potential for capacity and + Vertical integration back to the crude Logistically strategic location capability upgrades oil stage, excluding plantation and + Focused on the val
Slide 32: We continue to be disciplined
(3) We continue to be disciplined, for operating cash flo v after tax to average 60-70% of EBITDA % 6 53 4 oa 106 | 24 | a9 58 55 go - > 48 43 2.01 9 W , 2 : “11 16: N 7 41 $ 50 i) oO -0,1 2 0 2015 «2016. «2017S 2018S «2019S 2020 2021.» 2022 20238-2024 — CF% of EBITDA (right axis) J Cash flow from o
Slide 33: Common innovation themes anchor our projects
5 common innovation ie a themes anchor our projects; a a to deliver on the consumer demands shaping the a “ future ingredients industry 68 Innovation projects Better Better Better Better Better in total across Horizons 1-3. New Planet Performance Health Experience Futures Product Development, New Te
Slide 34: Our pipeline targets: improved consumer experiences, efficient manufacturing, new categories, emerging technologies
Our pipeline targets: (1) improved consumer experiences (2) efficient customer manufacturing processes (3) new AAK product categories (4) emerging technologies Stages Theme Application Discover @ Panet Medical Nutrition _ © &werience PB Dairy Design © suwrestech Personal Care @ ruturertech New Tech
Slide 35: AAK closely monitors and selectively invests in emerging oils and fats technologies
AAK closely monitors and selectively savests in emerging oils and fats technologies with the potential to drive large impact Fermented microbial oils - Plant- based oils + Extracting edible oils from new + Microalgae, yeast- and bacteria- * Using carbon dioxide, water and plant sources based ferment
Slide 36: Everything we do is about Making Better Happen
Everything we do is about Making Better Happen™ 05/02/2025 36