AAK Annual Report 2020

“The organization’s commitment and agility in response to recent challenges have been nothing less than remarkable.” AAK Annual Report 2020 6 2020 will forever be remembered by the Covid-19 pandemic and its impact on our world. As a key supplier of ingredients to the crucial food supply chain, we early on acknowledged that AAK had a vital role to play during these difficult times. Throughout the past 12–14 months, our top priority has been to secure not only the health and safety of our employees but also our operations and logistics so that food manufacturers can maintain their production. Strong performance considering the circumstances Despite all the challenges linked to Covid-19, we managed to grow our operating profit as well as our operating profit per kilo in 2020. We also increased our net result and earnings per share. While the second quarter was severely impacted by restrictions and lockdowns, the two quarters that followed saw significant improvements, resulting in a strong finish to the year. Our largest business area Food Ingredients was negatively impacted by the pandemic, particularly in Foodservice but also in Bakery and Dairy. This was offset by continued growth for Plant-based Foods and for high-end solutions in Special Nutrition. Chocolate & Confectionery Fats reported strong profit growth, mainly driven by supply chain improvements and better-yielding shea kernels. Our smallest business area, Technical Products & Feed, had a strong year and increased both its volumes and operating profit. A few months into 2021, uncertainty and volatility remain very high. However, AAK has a robust founda- tion, a strong financial track record and solid balance sheet, and we have during 2020 demonstrated the resilience of our business. Key achievements During the year, we completed two strategic acqui- sitions to increase our geographic footprint and strengthen our opportunities in markets that hold significant potential. In March, we signed an agreement to acquire 75 percent of NPO Margaron LLC, a Russian company that has been a trusted toll manufacturer to AAK for more than a decade. Russia together with the CIS countries is one of the world’s largest chocolate and confec- tionery markets with great potential for our Special Nutrition, Bakery, and Dairy segments as well. We have also strengthened our position in the Indian market by acquiring the remaining 31 percent of the shares of AAK Kamani. We have also made some important investments in the dynamic and fast-paced category of plant-based foods. We are currently building a Plant-based Foods Global Center of Excellence in the Netherlands. At the state-of-the-art facilities, we will be able, together with our customers, to bring to market better, healthier, and more sustainable plant-based foods and beverages. Towards the end of 2020, we launched our new com- pany purpose, Making Better Happen™, which really embodies AAK’s core values and operating culture. Making Better Happen drives our love of continuous improvement; it retains and attracts talented people who want to be part of a company that makes a real President and CEO: A successful year despite unprecedented challenges