AAK Annual Report 2017

Bakery Our bakery business continued to face some challenges LQ DOWKRXJK SUR¿WDELOLW\ KDV VHHQ SRVLWLYH GHYHORS - ments, especially in the US and Western Europe, due to an improved product mix. The new factories in China and Brazil are gaining ground. New bakery application centers in the US and the UK will further support the shift towards value-adding solutions, IRFXVLQJ RQ VSHFL¿F DSSOLFDWLRQ DUHDV VXFK DV FDNHV ELVFXLWV and cookies, and pastries. In 2017, butter prices reached record levels around the globe. Therefore, we developed butter substitutes to support biscuit, pastry and cake producers and provide cost-in-use EHQH¿WV DOO WKH ZD\ IURP SURGXFWLRQ WR HQG SURGXFW Our opportunity and innovation pipeline looks solid and ZH HQWHU ZLWK FRQ¿GHQFH WKDW WKH ODXQFKHV ZH KDYH planned will deliver desired business growth, both in regards WR YROXPH DQG SUR¿WDELOLW\ Dairy 2017 was another strong year for our dairy business with double-digit volume growth. North Latin America and the US experienced particularly strong growth and our new opera- tions within the Brazilian and Chinese markets showed great development. Europe also showed good growth with the H[FHSWLRQ RI 6FDQGLQDYLD ZKLFK ZDV ÀDW The plant-based dairy segment, forecast to show double- digit volume growth over the coming years, continued to demonstrate its great potential. AAK has seen a number of NH\ ZLQV WKURXJKRXW WKH \HDU 7KLV FRQ¿UPV WKH VHJPHQW DV an important contributor to accelerate growth. Through our co-development approach we are well positioned to continue such strong business development. Special Nutrition Special Nutrition continued to show strong global growth during 2017. The main driver was our Infant Nutrition sub-segment which showed double-digit growth. During 2017, we started to deliver our Akonino ® product range from our new factories in Brazil and China as well as from our US factory in Richmond, California, which was acquired in 2016. Akonino ® Organic was in high demand especially in the Chinese market. Our INFAT ® product range, sold through Advanced Lipids AB, a joint venture of AAK and Enzymotec, also showed double-digit growth. ,Q 0D\ ZH GHOLYHUHG RXU ¿UVW YROXPHV RI RXU SURGXFW range Akovita ® to a customer within Senior Nutrition, and we have since then continued to deliver this new product to multiple customers. Akomed ® , our product range for Medical Nutrition, is showing steady growth globally. Foodservice Within Foodservice, AAK has a very strong market focus DQG ZH GHOLYHU LQQRYDWLYH VROXWLRQV WKDW UHÀHFW WKH QHZHVW market trends. AAK recognizes the regional variations in the taste and functionalities that our customers seek. We strive to adapt our solutions and concepts to create the greatest SRVVLEOH EHQH¿W IRU RXU FXVWRPHUV¶ EXVLQHVVHV DQG IRU WKH end-users’ food experiences. 2017 was a mixed year for our Foodservice business. We had another strong year in the UK, growing faster than the market, while in Scandinavia we faced some challenges due to changing market and competitor dynamics. Our Foodservice business in the US had a record year, delivering market share gains through strong customer support and connectivity. During the past year, we have upgraded and expanded our Customer Innovation Center for Foodservice in Scan- dinavia, where we work with customers and suppliers to GHYHORS QHZ UHFLSHV ZLWK JUHDW ÀDYRUV DQG WH[WXUHV ,Q HDUO\ 2018, we have done the same for our corresponding center in the UK, and we aim to be back in steady growth mode in a market that is rapidly evolving as consumers’ behaviors are changing and as their propensity to eat out is on the increase.