AAK Annual Report 2019

AAK’s new strategic direction The closing of 2019 marked the end of our company program The AAK Way. To identify new opportunities for future growth, we have over the past year reviewed our market and our capabilities to define AAK’s strategic direction going forward. Our assessment shows favorable market and consumer trends and new opportunities for continued profitable growth. We are building on a very strong historical performance, and although we will preserve the DNA of our company we will, going forward, prior- itize and operate our business somewhat differently. Acknowledging that different industries are charac- terized by different market dynamics, it is important to differentiate our approach to each of them. Therefore, we have identified four different portfolio roles: “Invest in continued growth”, “Bet for the future”, “Optimize performance”, and “Maintain current strategy” Financially, we believe that the strategy supports our ambition of an average 10 percent year-over-year operating profit growth combined with a good and consistent earnings per share improvement. Our strong historical growth in Chocolate & Confectionery Fats has been made possible by indus- try-leading application knowledge and an ability to offer customers the best solutions. Strengthening our key supply chains and capacities within customer innova- tion will enable us to capture the growth in high-value applications. In Special Nutrition, high-quality solutions tailored to our customers’ needs have over the past decade enabled high growth rates. A strong innovation pipe- line and investments in our ability to serve important markets such as China is key to continue the growth. We will enable the continued growth of these two industries by ensuring the necessary investments in new value propositions and a reliable supply of key products. 18 Chocolate & Confectionery Fats Special Nutrition Bakery Dairy Foodservice The overall bakery and dairy markets are characterized by more standard solutions with a strong focus on cost of ingredients and less opportunities for further premiumization of AAK’s offering. However, some Invest in continued growth Optimize performance