AAK Annual Report 2016

38 Acquisition of non-controlling interests in AAK Mexico During the third quarter, AAK acquired 4.5 percent of a non- controlling interest in AAK Mexico from United Plantation Berhad. After the acquisition, AAK holds more than 99 percent of the shares in AAK Mexico. Strategic investments in China and Brazil 7KH QHZ IDFWRU\ LQ %UD]LO EHJDQ RSHUDWLRQV LQ WKH ¿UVW KDOI RI The work to build a new factory in China is proceeding according to SODQ DQG WKH ¿UVW YROXPHV DUH H[SHFWHG WR EH GHOLYHUHG GXULQJ WKH ¿UVW TXDUWHU RI Board changes In October 2016, Melker Schörling announced that he would resign IURP KLV RI¿FH DV &KDLUPDQ RI WKH %RDUG RI 'LUHFWRUV RI $$. $% (publ.) at the Annual General Meeting on May 17, 2017. Melker Schörling will continue to support and advise AAK’s management and Board of Directors. Ulrik Svensson left his position as CEO of Melker Schörling AB on December 31, 2016 and resigned from his RI¿FH DV D PHPEHU RI WKH %RDUG RI 'LUHFWRUV RI $$. $% SXEO DW the same time. Financial goals $$.¶V ¿QDQFLDO JRDOV DUH WR JURZ IDVWHU WKDQ WKH XQGHUO\LQJ PDUNHW DQG WR JHQHUDWH VWURQJ FDVK ÀRZV :H DOVR LQWHQG WR FRQWLQXDOO\ improve the return on operating capital. Planned dividend policy 7KH REMHFWLYH RI WKH %RDUG RI 'LUHFWRUV WDNLQJ LQWR DFFRXQW WKH GHYHORSPHQW RI *URXS HDUQLQJV LWV ¿QDQFLDO SRVLWLRQ DQG IXWXUH development opportunities, is to propose annual dividends HTXLYDOHQW WR DW OHDVW ± SHUFHQW RI WKH SUR¿W IRU WKH \HDU after tax, for the Group. Concluding comments by the President “Based on AAK’s customer value propositions for health and reduced costs, and our customer product co-development and solutions approach, we continue to remain prudently optimistic about the future. The main drivers are the continued positive underlying development in Food Ingredients and the continued LPSURYHPHQW LQ &KRFRODWH &RQIHFWLRQHU\ )DWV ´ Nomination Committee Ahead of the 2017 Annual General Meeting, the Nomination Committee has proposed that Mikael Ekdahl be elected as the new Chairman of the Board of Directors and that Gun Nilsson and Bengt Baron be elected as new Board members. The Nomination Committee has also proposed the re-election of Arne Frank, Lillie Li Valeur, Märta Schörling Andreen and Marianne Kirkegaard as Board members. In total, the Nomination Committee represents approximately 48.0 percent of the shares and votes in AAK as at December 31, 2016. AAK’s Nomination Committee for the 2017 Annual General Meeting consists of: Mikael Ekdahl (chairman), Melker Schörling AB (publ.) Lars-Åke Bokenberger, AMF Fonder Henrik Didner, Didner & Gerge Fonder Johan Strandberg, SEB Investment Management in close collaboration with customers, innovative new solutions and greater geographical presence continue to produce positive UHVXOWV 2SHUDWLQJ SUR¿W SHU NLOR URVH IURP 6(. WR 6(. as a consequence of this. 2SHUDWLQJ SUR¿W IRU WKH &RPSDQ\¶V VPDOOHVW EXVLQHVV DUHD Technical Products & Feed, was SEK 100 million (88), an increase of 14 percent. This is primarily due to the positive growth in fatty DFLGV WKDW LV EHKLQG WKH LPSURYHPHQW LQ SUR¿W 2SHUDWLRQV DQG VLJQL¿FDQW HYHQWV Business areas The Company’s business areas are Food Ingredients, Chocolate & Confectionery Fats and Technical Products & Feed. Group-wide functions are included in the Group Functions segment. Food Ingredients maintains its strong regional positions, primarily in Europe, the USA and North Latin America, but is gradually strengthening its positions in other regions. Acquisitions were made in the USA during the year. Chocolate & Confectionery Fats and Personal Care have world- leading positions, and these will gradually be expanded in an increasingly global arena. Technical Products & Feed has a strong local position in Northern Europe and will continue to focus its growth efforts in these geographical segments through its close links to the .DUOVKDPQ IDFWRU\ LQ 6ZHGHQ EULQJLQJ VLJQL¿FDQW V\QHUJ\ JDLQV New company program and new management ambition 7KH FRPSDQ\ SURJUDP ³$$.WLRQ´ IRU ± ZDV HQGHG GXULQJ the year and developed well during its three years. The new com- SDQ\ SURJUDP ³7KH $$. :D\´ ZLOO JXLGH RSHUDWLRQV XS WR WKH HQG of 2019. Our primary focus for the program is that AAK must be able to further increase its organic growth. This will be achieved E\ PHDQV RI ¿YH SULRULW\ DUHDV ³*R WR 0DUNHW´ ³2SHUDWLRQDO ([FHOOHQFH´ ³6SHFLDO )RFXV $UHDV´ ³,QQRYDWLRQ´ DQG ³3HRSOH´ Parallel to the new company program, a new management ambi- tion has been presented for the years to come. The ambition is WR LQFUHDVH RSHUDWLQJ SUR¿W E\ SHUFHQW SHU DQQXP RQ DYHUDJH via organic growth, innovation, an improved product mix and HQKDQFHG HI¿FLHQF\ Acquisitions in the USA In July, AAK acquired California Oils Corporation, the leading com- pany in speciality and semi-speciality oils on the US West Coast, from Mitsubishi Corporation of Japan. The company has an annual volume of approximately 110,000 MT and had sales of approxi- PDWHO\ 6(. PLOOLRQ LQ WKH ODVW ¿QDQFLDO \HDU 7KH FRPSDQ\ has 65 employees. The acquisition had very limited impact on AAK’s operating SUR¿W IRU DQG WKLV DFTXLVLWLRQ FRQVHTXHQWO\ KDG D GLOXWLYH HIIHFW RQ WKH RSHUDWLQJ SUR¿W SHU NLOR IRU 7KH DFTXLVLWLRQ ZDV completed on August 31, 2016, and the entity was consolidated from September 1. The acquisition will start to contribute to AAK’s RSHUDWLQJ SUR¿W GXULQJ WKH WKLUG TXDUWHU RI 7KH FDOFXODWLRQ of the fair value of the assets and liabilities of California Oils Corporation resulted in negative goodwill of SEK 135 million. At the same time, planned integration expenses of SEK 120 million were recognized as expenses, resulting in positive non-recurrent income of SEK 15 million being recognized in the fourth quarter.