AAK Annual Report 2016

2016 in brief Total volumes were up 7 percent (8) and organic volume growth was up 2 percent (3). Net sales amounted to SEK 22,057 million (20,114). The increase was mainly due to the positive product mix, increased raw material prices, and acquisitions, partly offset by a negative currency translation impact of SEK 648 million. 2SHUDWLQJ SUR¿ W H[FOXGLQJ QRQ UHFXUULQJ LWHPV UHDFKHG SEK 1,615 million (1,411), an improvement of 14 percent. 2SHUDWLQJ SUR¿ W DW ¿ [HG IRUHLJQ H[FKDQJH UDWHV DQG excluding non-recurring items, improved by 17 percent. 2SHUDWLQJ SUR¿ W LQFOXGLQJ QRQ UHFXUULQJ LWHPV RSHUDWLQJ SUR¿ W UHDFKHG 6(. PLOOLRQ DQ LPSURYHPHQW of 15 percent. The largest business area, Food Ingredients, reported DQ RSHUDWLQJ SUR¿ W RI 6(. PLOOLRQ DQ LPSURYH PHQW RI SHUFHQW 2SHUDWLQJ SUR¿ W SHU NLOR LQFUHDVHG E\ 4 percent to SEK 0.75 (0.72). The business area Chocolate & Confectionery Fats UHSRUWHG DQ RSHUDWLQJ SUR¿ W RI 6(. PLOOLRQ DQ LPSURYHPHQW RI SHUFHQW 2SHUDWLQJ SUR¿ W SHU NLOR increased by 2 percent, to SEK 1.81 (1.77). The smallest business area, Technical Products & Feed, UHSRUWHG DQ LQFUHDVHG RSHUDWLQJ SUR¿ W DW 6(. PLOOLRQ 2SHUDWLQJ SUR¿ W SHU NLOR LQFUHDVHG E\ SHUFHQW WR SEK 0.36 (0.33). 2SHUDWLQJ FDVK À RZ LQFOXGLQJ FKDQJHV LQ ZRUNLQJ FDSLWDO DPRXQWHG WR 6(. PLOOLRQ &DVK À RZ IURP working capital was negative, amounting to SEK 263 million (positive 380). This was due to the impact from substantially increased raw material prices during the last quarters, combined with working capital tied up for the WZR JUHHQ¿ HOG LQYHVWPHQWV Earnings per share increased by 7 percent, to SEK 23.71 (22.17). Return on Capital Employed (ROCE), calculated on a rolling 12 months basis, was 15.8 percent (15.7) despite negative effect of higher working capital due to LQFUHDVHG UDZ PDWHULDO SULFHV JUHHQ¿ HOG LQYHVWPHQWV and acquisitions. Our new speciality and semi-speciality edible oils factory LQ -XQGLDt %UD]LO ZDV RI¿ FLDOO\ LQDXJXUDWHG LQ -XQH :LWK the new plant in operation, we have taken a major step forward in our global growth strategy and it brings us closer to our customers in yet another key market. The fully automated, multi-oil and multi-process plant has an initial production capacity of 100,000 MT per year, and opens up many new possibilities for our customers in Brazil in a wide range of applications. In July, we acquired the leading US West Coast based vegetable oils company California Oils Corporation, also known as CalOils, from Mitsubishi Corporation of Japan. In 2015, CalOils had revenues of approximately SEK 1,350 million and a volume of approximately 110,000 MT. The acquisition establishes AAK as the leading supplier of speciality and semi-speciality oils to the bakery, dairy and chocolate and confectionery industries in California and across the west coast of the US and Canada. Our very similar speciality and semi-speciality edible oils factory in Zhangjiagang, China was completed at the HQG RI DQG WKH ¿ UVW YROXPHV ZHUH GHOLYHUHG LQ HDUO\ 2017. Fully utilized, the plant will increase AAK’s total capacity by approximately 100,000 MT, with room for further expansion at a later stage. Having successfully completed our three years with AAKtion, we launched our new company program, The AAK Way, in January 2017. The AAK Way, which will JXLGH XV XS WKURXJK ZLOO IRFXV RQ WKH IROORZLQJ ¿ YH priority areas: Go to Market, Operational Excellence, Special Focus Areas, Innovation, and People. Our strong and continued commitment to responsible growth was outlined in our annual Sustainability Report, documenting our activities, achievements and future objectives. René Schou was in June 2016 appointed President Foodservice Europe and is a member of the AAK Executive Committee. IV AAK Group (SEK million unless otherwise stated) 2012 2013 2014 2015 2016 Volumes, thousand tonnes 1,511 1,620 1,703 1,833 1,966 Adjusted operating profit (EBIT)* 1,003 1,127 1,242 1,411 1,615 Earnings per share, SEK 15.66 17.87 21.15 22.17 23.71 Net sales 16.911 16.537 17.814 20.114 22.057 *Adjusted for non-recurring items and acquisition costs