Aak Ab · OMXSTO:AAK
Aak Ab — Investor Day (November 2013)
102 slides from Aak Ab's investor day presentation, Nov 12, 2013
Slide 1: Capital Market Days November 12 and 22, 2013
Arne Frank CEO Capital Market Days November 12 and 22, 2013
Slide 2: Forward-looking statements
Forward-looking statements 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 i
Slide 3: Agenda
Agenda 09.30 – 10.00 AAK Acceleration Arne Frank, CEO 10.00 – 10.15 Financial update Peter Korsholm, CFO 10.15 – 10.40 Infant Nutrition Karel Stoschek, Director Infant Nutrition 10.40 – 11.00 Break 11.00 – 11.15 CSR and palm oil update Anne Mette Olesen, CMO 11.15 – 11.40 Chocolate & Confectionery F
Slide 4: AAK participants
AAK participants Arne Frank Peter Korsholm Torben Friis Lange Octavio Díaz de León Edmond Borit President and CEO CFO President Asia Europe President AAK President AAK Africa North Latin America South America Karel Stoschek Anne Mette Olesen René Schou Fredrik Nilsson Lena Ingvarsson Malin Thors Ros
Slide 5: Year to date
Year to date Volume + 7% ´000 MT 1,196 (1,117) (org. +2 %) Sales 12,251 (12,706) - 4% SEK Million EBIT* 815 (711) + 15% SEK Million EBIT/kg* 0.68 (0.64) + 6% SEK EPS 12.39 (10.65) + 16% SEK * Excl acquistions costs and at fixed FX rates The first choice for value-added vegetable oil solutions 5
Slide 6: Since last Capital Market Day
Since last Capital Market Day AAK Acceleration Acquisition of Unipro Other external factors • Cocoa butter • Nordic Nutrition Recommendation • Biodiesel China Innovation Center CSR Product development The first choice for value-added vegetable oil solutions 6
Slide 7: AAK Acceleration
AAK Acceleration KPI KPI Q3 13 Q2 13 Bakery Dairy CCF Infant Nutrition Growth Food Service Merger & Acquisition N.A N.A Fast-growing economies Purchasing Efficiency Productivity Sales Mobilize ourselves People Internal communication Ahead of plan Slightly ahead of plan On plan Behind plan The first
Slide 8: AAK Turkey, Unipro
AAK Turkey, Unipro Strong position and deep customer relationships in the Turkish Bakery market Revenues of ~ SEK 700 million The transaction included • Unipro and 9 other established brands for Bakery and Industrial fats • Core management and sales organization • All related know-how • Transaction
Slide 9: AAK Acceleration - Efficiency
AAK Acceleration - Efficiency Increased productivity since early 2010 • Karlshamn, Sweden, ~60% • Aarhus, Denmark, ~35% • Hull, UK, ~30% with shrinking volumes • Mexico, ~30% Part of the savings are reinvested in; • New product development • Sales force • Customer innovation resources The first
Slide 10: Cocoa butter
Cocoa butter 10 000 9 000 8 000 7 000 6 000 USD/ton 5 000 4 000 3 000 2 000 1 000 0 The first choice for value-added vegetable oil solutions 10
Slide 11: Nordic Nutrition Recommendation
Nordic Nutrition Recommendation - Focus on lipid quality rather than quantity Recognise that a fat is not unhealthy Recommend • to decrease the intake of saturated fatty acids • increased intake of polyunsaturated fatty acids - 5-10%E* PUFA, of which min 1% n-3 • a high intake of monounsaturated
Slide 12: Biodiesel
Biodiesel A proposal to limit Europe's use of food- based fuel crops has been stalled by a vote on the European Parliament's environment committee, and may not now be decided before 2015 The draft legislation would have limited to 6% the share of Europe's transport fuel that such crops could mak
Slide 13: China Innovation Center
China Innovation Center Leading center for speciality oils and fats for food and nutritional products within the Chinese food industry Customers offered the possibility to work closely with our Customer Innovation team Focus on Chocolate & Confectionery, Bakery and Dairy solutions Training at the in
Slide 14: AAK and palm oil
AAK and palm oil Other PNG 10% 10% Softs Malaysia, 25% Palm pen 47% 51% LA 37% Laurics 14% Indonesia Malaysia, 7% East 0% AAK follows UN Global Compact, and the RSPO standard and/or full traceability AAK does not source from suppliers involved in deforestation nor destruction of peatland Accor
Slide 15: Product development – FI
Product development – FI Cisao 81-16 – for cake icings • Minimizes post-hardening over time • Smooth texture, good spreadability Akoblend Flow & Fluid • Liquid butter replacers offering improved productivity and lower handling and mixing costs Akomix LS 25 • Developed for ice cream products •
Slide 16: Product development - CCF
Product development - CCF ILLEXAO MT 20 TM • Improved milk fat tolerance resulting in improved processing CHOCOFILL NH 110 TM • For steep melting non-hydrogenated fillings without tempering • Nominated for Confectionery Innovation of the year at FIE The first choice for value-added vegetable oil sol
Slide 17: Product development – PC/LFC
Product development – PC/LFC Lipex® SheaLight • New eco designed emollient ester • Shea emollients known for their skin nourishing, moisturising and anti-inflammatory properties • Very first shea product that maintains the skin nourishing properties of shea, while leaving the skin with a dry and p
Slide 18: Food Ingredients – January to September
Food Ingredients – January to September Volume 300 EBIT/kg 275 250 1,80 225 200 1,60 175 2010 150 MT 2011 1,40 125 2012 100 2013 75 1,20 50 1,00 SEK/kg 25 2010 0 Bakery Food Service Inf ant Dairy Fat Frying & 0,80 2011 Nutrition Alternative Other commodity 2012 275 EBIT 0,60 2013 250 0,40 225 200 0,
Slide 19: AAK Acceleration - Management growth ambition
AAK Acceleration - Management growth ambition Acquisitions Organic growth Productivity Operating profit 2010 400 400 800 800 2010 In appr 5-6 years *As expressed at the Capital Market Day November 10, 2010 and at fixed exchange rates. The first choice for value-added vegetable oil solutions 19
Slide 20: 2014 – Execution
2014 – Execution The first choice for value-added vegetable oil solutions 20
Slide 21: Financial update
Peter Korsholm CFO Financial update
Slide 22: Quarterly trends
Quarterly trends YTD Q3 Q2 Q1 Volume ´000 MT 1,196 (1,117) + 8% + 7% + 6% EBIT SEK 815 (711)* + 16% + 15% + 13% million EPS SEK 12.39 (10.65) + 19% + 19% + 10% * Excl acquistions costs and at fixed FX rates The first choice for value-added vegetable oil solutions 22
Slide 23: Financial summary
Financial summary AAK Group - Volume AAK Group - Operating profit 450 1 800 350 1 200 400 1 600 300 1 000 Rolling 12 months, '000 MT 350 1 400 250 Quarter, SEK million 300 1 200 800 Quarter, '000 MT 250 1 000 200 600 200 800 150 150 600 400 100 100 400 50 200 50 200 0 0 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q
Slide 24: Food Ingredients
Food Ingredients Food Ingredients - Operating profit 250 900 800 Rolling 12 months, SEK million 200 700 Quarter, SEK million 600 150 500 400 Q3 100 300 + 11% 50 200 100 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 Quarter Rolling 12 months
Slide 25: Food Ingredients - organic volume growth
Food Ingredients - organic volume growth YTD Q3 Q2 Q1 Speciality & + 7% + 11% + 8% + 2% semi-speciality Commodity -2% +5% -3% -9% Total + 4% +9% +2% -2% The first choice for value-added vegetable oil solutions 25
Slide 26: Chocolate & Confectionery Fats
Chocolate & Confectionery Fats Chocolate & Confectionery Fats - Operating profit 160 600 140 500 Rolling 12 months, SEK million 120 Quarter, SEK million 400 100 80 300 Q3 60 200 + 19% 40 100 20 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13
Slide 27: Technical Products & Feed
Technical Products & Feed +9% Technical Products & Feed - Operating profit 50 140 45 Rolling 12 months, SEK million 40 120 35 Quarter, SEK million 100 30 80 25 Q3 20 60 + 9% 15 40 10 20 5 0 0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 Quarte
Slide 28: Key raw material prices
Key raw material prices Rapeseed oil Palm oil Rapeseed oil Palm oil 1 800 1 400 1 600 1 300 1 400 1 200 1 200 1 000 1 100 USD/tonne USD/tonne 800 1 000 600 900 400 800 200 0 700 10 percent change in all raw material prices will effect working capital by +/-SEK 250 million Time lag of six to nine
Slide 29: Working capital days
Working capital days Rolling 12 months Days reduction since year-end 2012 110 110 100 100 90 90 0 80 67 64 80 70 61 60 58 70 60 60 -3 50 50 40 40 30 30 -3 20 20 10 10 0 0 0 -10 -10 -20 -20 -30 -30 -6 -40 -40 Q3 12 Q4 12 Q1 13 Q2 13 Q3 13 Inventory Accounts receivables Accounts payables Others AAK Gr
Slide 30: Cash flow
Cash flow SEK million Q3 Q3 YTD YTD 2013 2012 2013 2012 EBITDA 390 361 1,050 965 Paid interest -27 -31 -80 -89 Paid tax -55 -111 -209 -259 Non-cash items 7 4 -4 6 Change in working capital -12 141 335 476 Cash flow from operating activities 303 364 1,092 1,099 incl change in working capital Cash flo
Slide 31: ROCE – 30 September 2013
ROCE – 30 September 2013 Sep Full year Sep 2012 2012 2013 18% EBIT R12M 969 1,003* 1,091* Fixed assets 4,028 4,067 4,285 16% Working capital 2,901 2,761 2,481 ROCE 14.0 14.7 16.1 14% 12% 10% 8% Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 Roll
Slide 32: Net debt
Net debt Net debt and Net debt/EBITDA 4 000 3.5 3 500 3.0 3 000 2.5 2 500 SEK million 2.0 2 000 1.5 1 500 1.0 1 000 500 0.5 0 0.0 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 09 09 10 10 10 10 11 11 11 11 12 12 12 12 13 13 13 The first choice for value-added vegetable oil solutions 32
Slide 33: FX exposure
FX exposure Currency Movement EBIT impact Sales impact USD Weakened Negative Negative MXN Weakened Negative Negative GBP Weakened Negative Negative EUR/DKK Weakened Negative Negative YTD 2013 -17 MSEK -262 MSEK Effect 11.0 9.0 EUR/SEK USD/SEK 10.0 8.0 9.0 7.0 8.0 6.0 7.0 5.0 Source oanda.com The fir
Slide 34: Value creation priorities
Value creation priorities Strengthen growth • Customer co-development • Emerging markets • Selective acquisitions Continue improving EBIT/Kg • Speciality and semi-speciality vs. commodity products • Efficiency Capital efficiency • Working capital management The first choice for value-added veg
Slide 35: Infant Nutrition
Karel Stoschek Director Infant Nutrition Infant Nutrition
Slide 36: Operating profit - FI
Operating profit - FI 2013 19% Volume growth • Existing customers 81% • New customers • New markets 2010 5% Higher utilization in dedicated plant Focus on speciality blends 95% The first choice for value-added vegetable oil solutions 36
Slide 37: Global baby food retail value
Global baby food retail value Global market 52.1 US$ B. Prepared baby Dried baby food Milk formula Other baby food food 4.8 US$ B. 36.1 US$ B. 2.6 US$ B. 8.6 US$ B. 69% Standard formula Follow-on formula Toddler formula Special formula 35% 23% 35% 7% Key segments for AAK Source: Euromonitor Internat
Slide 38: Infant milk formula market
Infant milk formula market 2.1 million MT/yr Infant milk formula ~600,000 MT /yr oils & fats as an ingredient Consolidated industry – 5 multinationals (Nestlé, Danone, Mead Johnson, Abbott, Wyeth) hold ~ 60% of the world market Chinese companies increase share of domestic market China is 26%
Slide 39: Average annual growth infant milk formula 2010-2016
Average annual growth infant milk formula 2010-2016 (retail sales by value) Global growth rate +12% +3% +8% +3% +15% +13% +8% +6% Source: Euromonitor International, Jul 2013 The first choice for value-added vegetable oil solutions 39
Slide 40: Infant formula market characteristics
Infant formula market characteristics • Population growth in emerging markets Key revenue • Urbanisation drivers • Growth in middle class • Food safety Key profit • Consolidation of market drivers • High demand for premium blends • Changing regulatory Key pains • Share of voice in the global press •
Slide 41: Infant milk formula - the product
Infant milk formula - the product Spray dried powder or ”ready to eat” emulsion with milk protein, vegetable oils and micronutrients (vitamins, minerals, amino acids etc.) Target is to mimic human breast milk as closely as possible Vegetable oils is around 25% by weight and 50% of calories A
Slide 42: AAK operates in infant milk formula market with
AAK operates in infant milk formula market with High quality infant nutrition single oils Akonino ® • Customized oil blends for infant milk formula producers • Organic oil blends Global Production • All AAK factories are audited to produce high quality infant grade products The first choice fo
Slide 43: INFAT® sn2 palmitate
INFAT® sn2 palmitate INFAT® is a clinically-proven SN2 palmitate ingredient that mimics the fat structure and properties of human milk fat This unique fat enables easy digestion and optimized uptake of calcium, fat recovery and energy INFAT® is sold and marketed by Advanced Lipids, a joint ven
Slide 44: AAK gains market share
AAK gains market share CAGR (MT) 2010 - 2013 30% 25% 20% 15% 10% 5% 0% Market AAK The first choice for value-added vegetable oil solutions 44
Slide 45: Main drivers for AAK growth
Main drivers for AAK growth Focus on infant nutrition Increased demand for high quality oils & fats and special ingredients Food safety Global growth with multinationals Premium segment grows rapidly The first choice for value-added vegetable oil solutions 45
Slide 46: AAK is well positioned for further growth
AAK is well positioned for further growth Comprehensive product range A track record to grow globally with major producers Global account management with local presence for key customers Strong focus on food safety and quality Strong position in Europe New supply chain in Asia through ou
Slide 47: CSR and palm oil update
Anne Mette Olesen CMO CSR and palm oil update
Slide 48: Responsible growth at AAK
Responsible growth at AAK The first choice for value-added vegetable oil solutions 48
Slide 49: Edible oils in 2012
Edible oils in 2012 60 28% 50 22% Million MT (2012) 40 30 20 10 0 Total market 185 million MT (including ~25 million MT for biodiesel) Source: FEDIOL data The first choice for value-added vegetable oil solutions 49
Slide 50: Palm the most efficient crop
Palm the most efficient crop Global Average yield per year (tonnes of oil per hectare) land usage Palm oil 3.68 15mHA Rapeseed: 33mHA 0.59 Sunflower: 25mHA 0.42 Soybean: 122mHA 0.36 Around 10x the land usage is required to switch from palm to soybeans Source: palmoilworld.org The first choice for
Slide 51: Palm oil
Palm oil A highly versatile vegetable oil Used in many food and non-food products Produced in tropical countries The world’s top selling vegetable oil Rapidly growing in market share The first choice for value-added vegetable oil solutions 51
Slide 52: Palm oil growing areas
Palm oil growing areas Palm oil Palm oil Palm oil 86% from Indonesia and Malaysia The first choice for value-added vegetable oil solutions 52
Slide 53: Palm oil criticism
Palm oil criticism Pesticide use Forest and peatland conversion Biodiversity loss and animal habitat Climate change Land ownership conflicts Workers’ rights and conditions Treatment of smallholders The first choice for value-added vegetable oil solutions 53
Slide 54: Roundtable on Sustainable Palm Oil
Roundtable on Sustainable Palm Oil Founded in 2004 with seven members Multi-stakeholder association Not for profit Secretariat in Malaysia AAK a founder member and on the Board Seven constituencies – growers, traders and processors, consumer goods manufacturers, retailers, banks, social
Slide 55: Reflections on RSPO today
Reflections on RSPO today Achievements Criticisms • Recognized benchmark for • Moves too slowly due to consensus based sustainable palm decisions • More than 1,000 members across all • Complaint panel ineffective stakeholders • Membership is green-washing • Well founded third party certification
Slide 56: AAK palm oil policy
AAK palm oil policy Founding member of and engaged in RSPO, and its Board. Recognizes RSPO certification as the standard for sustainable palm oil, however not perfect Focus on one well established and recognized system is important to progress towards a fully sustainable palm oil supply chain
Slide 57: AAK and palm oil
AAK and palm oil Other PNG 10% 10% Softs Malaysia, 25% Palm pen 47% 51% LA 37% Laurics 14% Indonesia Malaysia, 7% East 0% AAK follows UN Global Compact, and the RSPO standard and/or full traceability AAK does not source from suppliers involved in deforestation nor destruction of peatland Accor
Slide 58: Chocolate & Confectionery Fats
René Schou Marketing Director CCF Chocolate & Confectionery Fats
Slide 59: The market in scope
The market in scope Confectionery in scope • Market size USD Billion 116 • Market size MT Million 8.6 • Market growth 2013-2016 CAGR 2.4% Chocolate Caramel and toffee • Market size USD Billion 107 • Market size USD Billion 9 • Market size MT Million 7.5 • Market size MT Million 1.1 • Avg fat content
Slide 60: Chocolate segments
Chocolate segments Alfajores Bagged selflines/softlines Boxed assortments Chocolate with toys Countlines Seasonal chocolate Tablets Other chocolate confectionery The first choice for value-added vegetable oil solutions 60
Slide 61: Key players in the market (value)
Key players in the market (value) Mars 16% Others The big five, all 30% growing above market average Mondelez 15% Large regional Large regional players players Nestlé 9% 13% Lindt Small players 3% Ferrero Hershey 7% 7% AAK has a strong position with all major players in the chocolate industry
Slide 62: Trends in market
Trends in market • Strong population growth Rise of global • Rising income levels in emerging economies middle class • Urbanization Convenience • Consumers pressed for time and • Increasing need for on-the-go meals and prepared food accessibility • Global obesity epidemic Health • General health tre
Slide 63: Trends in market – from a fat perspective
Trends in market – from a fat perspective • Light • Aerated • Melting behaviour Premiumisation • Soft fillings • Creaminess • Higher cocoa content • Low/non-trans Health and • Low in saturated fatty acids wellness • Non-hydrogenated • Low in fat Sustainability • Responsible and sustainable sourcing
Slide 64: Market characteristics
Market characteristics • Population growth Key revenue • Urbanisation drivers • Growth in middle class in developing countries • Premiumisation • Premiumisation • Pack sizes Key profit • Sustainability drivers • Health categories • Consolidation of market • Sustainability • Global obesity trend Key
Slide 65: Projected growth by regions (Volume)
Projected growth by regions (Volume) Regional Growth Market growth 2,4% 250,0 Absolute Growth in `000 MT (2013-2016) Asia Pacific 200,0 150,0 100,0 Eastern Latin Western Europe America Europe 50,0 Mid East and Africa 0,0 -1,0 0,0 1,0 2,0 3,0 4,0 5,0 6,0 North -50,0 America 2013-2016 CAGR Source: Eur
Slide 66: Cocoa butter market
Cocoa butter market Cocoa liquor Cocoa butter Cocoa powder 1.1 Million MT 1.0 Million MT 0.75 Million MT 10 000 9 000 8 000 7 000 6 000 USD/ton 5 000 4 000 3 000 2 000 1 000 0 The first choice for value-added vegetable oil solutions 66
Slide 67: Strong growth potential
Strong growth potential Increasing consumption of chocolate • Consumption of chocolate is rising in the developing regions Mature markets growing outside chocolate • Growth to be found through alternative applications like Bakery, Dairy and Ice cream Cost savings • Manufacturers are seeking wa
Slide 68: New product development
New product development ILLEXAOTM MT 20 • Improved milk fat tolerance resulting in improved processing CHOCOFILLTM NH 110 • For steep melting non- hydrogenated fillings without tempering • Nominated for Confectionery Innovation of the year at FIE CEBESTM EG 80 • Providing extreme gloss to choc
Slide 69: AAK is well positioned for future growth
AAK is well positioned for future growth A strong passion for chocolate Unmatched on customer innovation and customer co-development Addresses key needs of the industry with strong solutions Far ahead of market on health trends Second to none in oils & fats knowledge A ”small” big compan
Slide 70: AAK’s growth markets
AAK’s growth markets
Slide 71: AAK in the world
AAK in the world The first choice for value-added vegetable oil solutions 71
Slide 72: The answer to why is quite given
The answer to why is quite given World population Million 7,540 Urbanisation is perhaps the 6,830 16 694 single biggest driver of lifestyle change. By 2020 we expect 55% of the world’s population to live in towns and cities. This creates 6,303 busier lives, bigger incomes, a Emerging 5,609 growing n
Slide 73: Strengthen our presence in growth markets
Strengthen our presence in growth markets 1 M&A Number of targets being assessed Hard to find focused speciality targets and quality companies 2 Brown- Difficult to find suitable plants AAK Focus field Attractive as an alternative 3 Green- Longer lead time field Possibility to get it rig
Slide 74: AAK’s focus regions/countries
AAK’s focus regions/countries China Turkey CIS South America Latin America The first choice for value-added vegetable oil solutions 74
Slide 75: China is the growth engine of vegetable oils and fats
China is the growth engine of vegetable oils and fats Consumption* (MT million) Population 1.35 billion UK The world’s second +35 % +12.3% largest economy 17.8 Urbanisation rate PN/LV 14.0 15.8 11.2 12.5 constantly growing +30 % Projected CAGR of key food segments: 7% from 2012 to 2016 12 13
Slide 76: Food industry market trends in China
Food industry market trends in China Economic changes to a more sustainable growth model from an export driven economy to a domestic consumption driven • Increased individual consumption Growing middle class with diversified needs • Oils & fats demand will grow due to urbanisation increase, popu
Slide 77: Market potentials in China
Market potentials in China Demand for oils & fats is estimated to be 12 million MT in 2013 • Mid and high-end speciality oils demand are estimated to be 1.0 million MT in 2013 • YoY growth estimated to be not less than 6% to +1.3 million MT in 2018 Provides room for AAK to grow core business I
Slide 78: Opportunities in China
Opportunities in China Industrial Whipping bakery fats cream Traditional bakery/ bakery Milk chains beverage Ice cream fats Infant Chocolate Nutrition The first choice for value-added vegetable oil solutions 78
Slide 79: Market shares in the Chinese speciality and semi-speciality oil market
Market shares in the Chinese speciality and semi-speciality oil market Other E D A C B Competitor A Competitor B Competitor C Competitor D Competitor E Other AAK The first choice for value-added vegetable oil solutions 79
Slide 80: Extensive exposure and activities in China
Extensive exposure and activities in China Food Ingredients Bakery AAK Academy Innovation Prize at Personal Visit by Finance Care Ingredients Exhibition Minister of Denmark The first choice for value-added vegetable oil solutions 80
Slide 81: AAK China innovation center grand opening October 8, 2013
AAK China innovation center grand opening October 8, 2013 The first choice for value-added vegetable oil solutions 81
Slide 82: Turkey – our platform in South Eastern Europe and MENA
Turkey – our platform in South Eastern Europe and MENA 76 million inhabitants 16th largest economy UK +35 % Urbanisation rate Consumption* (MT million) constantly growing PN/LV +4,0% Packaged food market +30 % valued at US$40 billion 1,5 1,6 1,7 1,7 1,8 with 5.2% expected growth 2013-2017
Slide 83: AAK Turkey
AAK Turkey The acquisition of Unipro will strengthen AAK’s presence in the important Turkish market and the surrounding region AAK Turkey is the market leader within traditional bakery Opportunity for growth within the Industrial segment where AAK is strong The first choice for value-added veg
Slide 84: AAK Turkey opportunities
AAK Turkey opportunities Retail volume and current value growth are increasing in Turkey, Middle East and Africa The baked goods category benefits from growth in the number of young consumers as products like buns, doughnuts, croissants and bakhlava are especially popular among the younger popul
Slide 85: AAK Turkey focus
AAK Turkey focus New functional products for CCF, Bakery and Dairy will be introduced to the market in order to differentiate from competitors in the industrial segment AAK customer innovation – AAK Academy and customer seminars in Turkey Strong focus on export opportunities in the neighbourin
Slide 86: CIS
CIS +275 million inhabitants GDP growth forecasted at 4-5% per year Consumption* (MT million) Dominated by Russia, +1.5% which is the 11th largest economy 4.0 4.0 4.1 4.2 4.2 Historically high growth in packaged food segment driven by 12 13 14 15 16 demand in large cities Consolidation amo
Slide 87: AAK in CIS
AAK in CIS Established sales in Russia and Ukraine with increased and more aggressive direct sales activities Customisation plant in Russia Speciality confectionery fats a focus area, but also emerging trends within Bakery and Dairy Proven customer innovation with focus on functionalities ap
Slide 88: AAK in CIS focus
AAK in CIS focus Very fast innovation cycles in the market A region with significant risk management applied Opportunities within Food Ingredients area with a strong supply chain The first choice for value-added vegetable oil solutions 88
Slide 89: South America – Brazil a natural next step
South America – Brazil a natural next step Population 400 million GDP growth 3.1% Consumption* (MT million) 2012-2016 UK +2.1% High level of urbanisation – +35 % 325 million 2010 and 6.9 7.0 7.2 7.3 7.5 PN/LV growing to 385 million 2020 +30 % The packaged food market in Brazil was valued at
Slide 90: South America - industry
South America - industry A world leading industrial country; • Chocolate; world’s 4th largest manufacturer • Biscuits; world’s 3rd largest manufacturer • Cosmetics; world’s 3rd largest market Nestlé runs 31 factories in Brazil Mondeléz (Kraft) has its world’s largest chocolate factory in Brazil High
Slide 91: AAK South America
AAK South America Unique platform for a CCF business • Production in Montevideo, Uruguay, since 2006 • Multi-oil processing set-up Only local supplier of CBE in South America • Duty free in Mercosur • Deliveries in bulk Local commercial and customer innovation teams in Brazil The first choice for
Slide 92: AAK South America
AAK South America Customer innovation focus • Sole oils & fats custom innovation partner of the main regional confectionery company • 93% of the total products are low trans products • Winner of “Customer A – a fortune 500 company” Supplier Challenge Biscuit in 2012 Source: IBRC – Insituto Brasileir
Slide 93: A truly fast-growing economy
A truly fast-growing economy Artisan bakeries grew 11.5% CAGR in the last 5 years • 63,000 small bakeries • 44 million customers/year Dairy segment grew 3% CAGR in the last decade Food Service segment grew 14% CAGR in the last 10 years Chocolate segment’s growth has been ~ 5% in the past 5 years The
Slide 94: Latin America (Mexico, Central America and Caribbean)
Latin America (Mexico, Central America and Caribbean) Consumption* (MT million) Population 188 million +2.3% GDP growth 6.8% 2012- UK 2.7 2.8 2.8 2.9 3.0 +35 % 2016 High level of urbanisation – PN/LV 122 million 2010 and +30 % growing to 130 million 2020 12 13 14 15 16 The packaged food mark
Slide 95: Facts that make Latin America attractive
Facts that make Latin America attractive The oils and fats market is continuously increasing and the size is considerable AAK has a multi-oil processing factory in Morelia, Mexico All segments in which AAK has business are expected to grow in the following years The strong players in the food indust
Slide 96: Strong presence of the big food companies
Strong presence of the big food companies Customer A Customer E Customer B Customer F Customer C Customer G Customer D *Only in Mexico, one of our customers have 42 production plants and another one have 13 The first choice for value-added vegetable oil solutions 96
Slide 97: Latin America – Market
Latin Amercia – Market Food Infant Bakery Dairy CCF service Nutrition Mexico x x x x x Guatemala x x Belize x Colombia x x Costa Rica x El Salvador x Haití x Honduras x Dominican Republica x Nicaragua x Venezuela x x The first choice for value-added vegetable oil solutions 97
Slide 98: Global food trends - new opportunities for Latin America
Global food trends - new opportunities for Latin America Consumers are more knowledgeable than ever about their food products There is a challenge to innovate in functional foods Healthy aging provides a rapidly growing platform for food producers to position new products Consumers are well aware of
Slide 99: Innovation in AAK Mexico
Innovation in AAK Mexico Our focus on innovation has given us an important position in a high competitive environment • We offer solutions rather than products • Continuous customer training • Strong product development • Customer innovation The first choice for value-added vegetable oil solutions 9
Slide 100: New special tax on packed food and soft drinks in Mexico
New special tax on packed food and soft drinks in Mexico Special tax of 8% on production and services (IEPS) has been introduced in Mexico for the non-staple foods with a caloric density of 275 kcal or more per 100 grams Soft drinks and sugar added beverages will be taxed $1 MXN per litre; approxima
Slide 101: Growth is focus in Latin America
Growth is focus in Latin America Focus 1 Innovation 2 Health trends 3 M&A Niches for more Low saturated fats Accelerated growth specialized solutions Trans free oils New markets New segments (e.g. Infant Nutrition) Labelling The first choice for value-added vegetable oil solutions 101
Slide 102: Medium and fast growing markets – New management ambition
Medium and fast growing markets – New management ambition 100% 13% 90% 20% 22% 25% 80% 18% 70% 18% 31% 70% 60% 35% 50% 40% 69% 30% 62% 47% 20% 40% 30% 10% 0% 2006 2009 2012 2013 2015-2016* Slow growing markets Medium growing markets Fast growing markets Nordics USA Asia West Europe CEE L