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AAK Annual Report 2016

Fredrik Nilsson, CFO: No reasons to lower ambition level With another good AAK year behind you, how would you GHVFULEHWKHFRPSDQ\¶V¿QDQFLDOSHUIRUPDQFH" I would describe it as solid, no doubt. We have now been able to deliver 24 straight quarters with record-high operating SUR¿WTXDUWHURYHUTXDUWHUDVZHOODVDUHFRUGKLJKIXOO\HDU result every year since 2010. This is a quite impressive track record. The organic growth for our speciality and semi-speciality VROXWLRQVFRQWLQXHGGXULQJDQGZHKDYHGH¿QLWHO\ JDLQHGPDUNHWVKDUHV:HKDYHDOVRLGHQWL¿HGWKHGULYHUV for further organic growth and continued our effective cost control with annual productivity improvements. :KDWDUH\RXUFRPPHQWVRQWKHFDVKÀRZ" $IWHUDYHU\VWURQJFDVKÀRZLQZHKDYHVHHQDQ RXWÀRZIURPZRUNLQJFDSLWDOLQPDLQO\GXHWRVLJQL¿- cantly higher raw material prices. As a consequence of the organic growth, we have also tied up more working capital in accounts receivables. Our focus on working capital days continues and some further minor improvements should be possible, particularly to improve payment terms with our suppliers. The Group’s capital expenditure continued to be at a high OHYHOGXHWRRXUWZRJUHHQ¿HOGSURMHFWVLQ%UDLODQG&KLQD We furthermore acquired California Oils Corporation on the US West Coast – a very strategic acquisition in order for us to be a national player in the US. For 2017, we expect capital expenditure to be another year above historic levels, but clearly below 2016. )RUWKH¿IWK\HDULQDURZ$$.LQFUHDVHGWKHGLYLGHQGSDLG AAK strives to pay a stable dividend linked to the company’s long-term performance. Total paid dividend was SEK 328 PLOOLRQRUSHUFHQWRIWKHFRQVROLGDWHGSUR¿WDIWHUWD With your company program AAKtion now completed, what ambition level for the coming years can we expect? Our former management ambition was launched in 2010, DLPLQJWRGRXEOHRXURSHUDWLQJSUR¿WIURP6(.PLOOLRQ WR6(.PLOOLRQHFOXGLQJDFTXLVLWLRQVDQGDW¿HG FX. With some support from acquisitions and positive FX we reached that target by the end of 2016. The average annual improvement year-over-year HFOXGLQJDFTXLVLWLRQVDQGDW¿HG);KDVEHHQ 10 percent since 2010. The activity levels in our company programs AAK Acceleration and AAKtion have been high and combined with our solid foundation and supported by very strong business drivers we see no reasons to lower the ambition level for the coming years. We expect, on average, a 10 percent year-over-year LPSURYHPHQWLQRSHUDWLQJSUR¿WZKLFK will support a good and consistent improvement in earnings per share. Our new company program, The AAK Way, will guide us up through 2019. Our key focus with the program is to enable the company to continue to deliver strong organic growth. This will be achieved by IRFXVLQJRQ¿YHSULRULW\DUHDV*RWR Market, Operational Excellence, Special Focus Areas, Innovation, and People. 28


AAK Annual Report 2016
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