AAK Annual Report 2017

2017 in brief Total volumes were up 8 percent (7) and organic volume growth was 5 percent (2). Net sales amounted to SEK 26,436 million (22,057). The increase was mainly due to positive product mix and increased raw material prices, partly offset by a negative currency translation impact of SEK 327 million. 2SHUDWLQJ SUR¿W UHDFKHG 6(. PLOOLRQ DQ improvement of 11 percent. The currency translation LPSDFW ZDV QHJDWLYH 6(. PLOOLRQ 2SHUDWLQJ SUR¿W DW ¿[HG IRUHLJQ H[FKDQJH UDWHV LPSURYHG E\ SHUFHQW The largest business area, Food Ingredients, reported an RSHUDWLQJ SUR¿W RI 6(. PLOOLRQ DQ LPSURYH - PHQW RI SHUFHQW 2SHUDWLQJ SUR¿W SHU NLOR LQFUHDVHG E\ 3 percent, to SEK 0.77 (0.75). Business area Chocolate & Confectionery Fats reported DQ RSHUDWLQJ SUR¿W RI 6(. PLOOLRQ DQ LPSURYH - PHQW RI SHUFHQW 2SHUDWLQJ SUR¿W SHU NLOR LQFUHDVHG E\ 1 percent, to SEK 1.82 (1.81). The smallest business area, Technical Products & Feed, UHSRUWHG DQ RSHUDWLQJ SUR¿W RI 6(. PLOOLRQ D GHFUHDVH E\ SHUFHQW 2SHUDWLQJ SUR¿W SHU NLOR decreased by 17 percent, to SEK 0.30 (0.36). 2SHUDWLQJ FDVK ÀRZ LQFOXGLQJ FKDQJHV LQ ZRUNLQJ FDSLWDO DPRXQWHG WR 6(. PLOOLRQ &DVK ÀRZ IURP working capital was negative, amounting to SEK 388 million (negative 263). Good working capital management KDV LPSDFWHG FDVK ÀRZ IDYRUDEO\ +RZHYHU WKLV ZDV offset by a continued organic volume growth, a net nega- tive impact from higher raw material prices, and working capital tied up for our new factories in Brazil and China. Earnings per share increased by 19 percent, to SEK 28.24 (23.71). Return on Capital Employed (ROCE), calculated on a rolling 12 months basis, was 15.6 percent (15.8). ROCE declined due to increased raw material prices which LPSDFWHG WKH ¿UVW VL[ PRQWKV LQ LQYHVWPHQWV LQ Brazil and China, and the acquisition of California Oils Corporation in 2016. In January, we launched our new company program The AAK Way which will guide us through 2019. The AAK :D\ ZLOO IRFXV RQ WKH IROORZLQJ ¿YH SULRULW\ DUHDV *R WR Market, Operational Excellence, Special Focus Areas, Innovation, and People. For the Annual General Meeting in May, the Nomination Committee of AAK AB proposed new election of Mikael Ekdahl as Chairman of the Board and Gun Nilsson and Bengt Baron as Board members. The Annual General Meeting resolved in accordance with the proposal. Following the strategy to broaden our nutritional focus we GHOLYHUHG RXU ¿UVW YROXPHV RI $NRYLWD ® in June. Akovita ® is our new product range for the senior nutrition market and contains ingredients such as plant sterol esters which are clinically proven to maintain and even reduce the cholesterol level in the blood which is supported by Article 14(1) health claim in the EU. In July, our CEO and President Arne Frank suddenly and very unfortunately passed away. Arne joined AAK in 2010 and developed AAK into a world-leading player in the market for value-adding vegetable oils and fats. Our new speciality and semi-speciality edible oils factory LQ =KDQJMLDJDQJ &KLQD ZDV RI¿FLDOO\ LQDXJXUDWHG LQ September. With 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 China in a wide range of applications. In November, AAK’s Board of Directors appointed Johan Westman as new President and CEO of AAK AB. Prior to joining AAK, Johan was Senior Vice President Europe and Managing Director of the BlankLight division at Shiloh Industries, a global innovative solutions provider to the mobility market with headquarters in Valley City, Ohio, USA. Johan will start no later than June 1, 2018. $W WKH HQG RI 'HFHPEHU ZH VLJQHG RXU ¿UVW FRPPHUFLDO contract for TROPICAO ™ , our chocolate solution for hot climate markets. IV Financial results Key events