Strong financial performance and gained market share
2018 saw another record-high full-year result. How
would you describe AAK’s financial performance?
I would describe it as very strong. Particularly considering
the challenges we have had within Chocolate &
Confectionery Fats where volatility in raw material yields
has resulted in lower output and higher production
The continued double-digit improvement in operating
profit is in line with our management ambition, and we
have now had 32 straight quarters with record-high
operating profit quarter-over-quarter as well as a recordhigh
full-year result every year since 2010.
The organic growth for our speciality and semi-
speciality solutions continued during the year and with
5 percent organic growth we have no doubt gained
What is your comment on the cash flow?
Despite growing at a fast pace and investing in more
capacity to meet customer demand, we have had a
positive cash flow after investment activities during both
2017 and 2018. We expect capital expenditure to be at
a slightly higher level in 2019 compared to 2018.
Cash flow from working capital was negative in 2018.
Good working capital management has impacted cash
flow favorably. This was offset by a modest increase
in raw material prices during the second half of 2017,
impacting 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 has also
resulted in an outflow of cash flow from working capital.
We continue our focus on working capital days and
further improvements should be possible, particularly
relating to payment terms with our suppliers and late
payments from some customers.
Linked to the company’s long-term performance, we
strive to pay a stable dividend. For the seventh year in
a row we increased the dividend paid, totaling SEK 412
million or 35 percent of the consolidated profit after tax.
How is capital allocated?
We always try to maximize our ability to invest in growth
and create a higher shareholder return. To ensure
continued growth, we want to have a strong balance
sheet and be well capitalized with a net debt/EBITDA
ratio lower than 3. Our current ratio is 1.06.
At the end of 2018 we established an MTN program
(Medium Term Note) with a framework amount of SEK
4,000 million. The program will diversify our existing
sources of funding and give us a flexible alternative to
current bank facilities.
Our dividend policy is to have a payout ratio of net
profit of 30–50 percent. Historically, the payout ratio has
been around 35 percent.
Over the last years we have invested significant
amounts in organic growth, built new factories and
expanded others to secure that we have enough
capacity to meet the strong demand for our solutions.
The company will continue to invest in organic growth,
both in equipment and in our employees, to secure that
we can continue to be the co-development partner to
Fredrik Nilsson, CFO