39
For the financial year January 1 – December 31, 2018
The Board of Directors and the Chief Executive Officer
of AAK AB (publ.), corporate identity number 556669-
2850, with its registered office in Malmö, hereby present
the Financial Statements and Consolidated Financial
Statements for the financial year January 1 – December
31, 2018.
Performance and financial position
Net sales increased by SEK 1,156 million to SEK
27,592 million (26,436). There was an underlying
growth in sales due to a positive product mix, organic
volume growth, and a positive currency translation
impact of SEK 149 million. Organic volume growth
was 5 percent (5), primarily due to a strong demand
for speciality and semi-speciality products.
Operating profit was record-high and reached
SEK 1,956 million (1,786), an improvement of 10
percent. The currency translation impact was SEK
22 million. Operating profit at fixed foreign exchange
rates improved by 8 percent. Food Ingredients
reported a strong improvement by 9 percent and
Technical Products & Feed had a very strong year
with an improvement by 85 percent. Chocolate &
Confectionery Fats had a more challenging year
and reported a 2 percent improvement compared
to last year.
Operating profit per kilo reached SEK 0.87 (0.84). At
fixed foreign exchange rates operating profit per kilo
increased by 3 percent.
The Group’s profit after financial items amounted
to SEK 1,829 million (1,666). Net financial items
amounted to negative SEK 127 million (negative
120), an increase of SEK 7 million. The higher
financial expenses are due to increased borrowings
in high interest rate countries and increased interest
rates in a few markets, mainly Turkey.
The equity/assets ratio was 50 percent as at
December 31, 2018 (46 percent as at December 31,
2017). Consolidated net debt as at December 31,
2018 was SEK 2,667 million (2,666 as at December
31, 2017). On December 31, 2018, the Group had
total credit facilities of approximately SEK 6,339
million.
Operating cash flow including changes in working
capital amounted to SEK 1,090 million (1,099). Cash
flow from working capital was negative, amounting to
SEK 555 million (negative 388). A modest increase
in raw material prices during the third quarter 2017
impacted cash flow from working capital negatively
during the first part of 2018 while lower raw material
prices had a favorable impact during the latter part
of the year. Continued organic volume growth during
the year has resulted in an outflow of cash flow from
working capital.
Cash outflow from investing activities amounted to
SEK 723 million (810). Capital expenditures were
mainly related to regular maintenance investments
and capacity increases in several regions.
Calculated on a rolling 12 months basis, Return on
Capital Employed (ROCE) was 15.8 percent (15.6 at
December 31, 2017). The increased operating profit
was partly offset by higher working capital during the
first part of 2018. At the balance sheet date, ROCE
was 15.5 percent (15.9).
Earnings per share were SEK 5.21 (4.71), an
increase of 11 percent. The increase in operating
profit was partly offset by higher financial costs and
a one-off tax income in 2017 related to the US tax
reform (TCJA).
The proposed dividend amounts to SEK 1.85 (1.63),
an increase of SEK 0.22 or 13 percent.
The Company’s largest business area, Food
Ingredients,
reported a record-high operating profit of
SEK 1,205 million (1,107), an increase of 9 percent. The
operating profit per kilo increased by 4 percent to SEK
0.80 (0.77). The Bakery segment continued its positive
trend. The product mix continued to improve with a
greater proportion of customer co-developed solutions.
The long-term growth trend within Dairy continued
and the segment once again reported good organic
volume growth. All regions showed good growth except
Directors’ report