President and CEO:
A strong year with organic volume and profit growth
My first year as President and CEO for AAK has been
a very exciting and stimulating time. I have traveled
quite extensively, and I have had many informative and
interesting encounters with colleagues, customers,
shareholders and other stakeholders.
Aside from visiting our many production facilities,
I have also spent some memorable and inspiring
time with our sourcing operations in West Africa and
Southeast Asia. Wherever I have come, I have been
warmly welcomed by professional, highly motivated,
and passionate colleagues with great dedication for our
customers and our co-development approach.
AAK is a very well-managed company with strong
regional leadership and I am extremely proud and privileged
to be part of this team. There is no doubt that we
have all the prerequisites to continue to be successful.
Solid financial performance despite challenges
2018 has been another year of strong financial performance.
We continue to grow faster than the market and
there has been organic volume growth as well as profit
growth for all three business areas. Operating profit for
the year reached SEK 1,956 million, which, compared
to 2017, was an improvement of 10 percent, in line with
Raw material yields have been lower than normal
within business area Chocolate & Confectionery Fats
and we have seen a greater demand for some of our
high-end products compared to our capacity.
To mitigate the situation, we have made significant
investments to remove bottlenecks and to support
current and future volume growth of high-end products.
We have also strengthened our sourcing operations
in West Africa. The capacity is expected to increase
during the later part of 2019 as our investments are
Key strategic achievements
Our strategic company program The AAK Way, now
in its final year, has seen some good progress and
important results during 2018. To further expand our
geographic footprint, we have invested in a customization
plant in the Philippines. We have also signed an
exclusive agent and distributor agreement in the GCC
(Gulf Cooperation Council) region. In addition, we have
opened new Customer Innovation Centers in Tokyo,
Singapore and the UK which will further strengthen our
co-development approach in these important regions.
We have furthermore expanded our capacities and
production capabilities. For example, through our joint
venture AAK Kamani in India we have made important
investments, and we have also completed significant
upgrades of our production facilities in Louisville, USA.
Other important milestones include our customer
survey, reaching out to more than 2,000 customers
globally. While confirming our unique customer co-development
approach, the survey results also gave us
valuable input to further improve our customer value
proposition. To become a “truly customer-centric”
company and to further develop the customer experience,
we have also continued to train and educate our
dedicated sales and customer innovation organization.
During 2019, we will not only conclude The AAK Way
in the best possible way, we will also start to plan for our
next strategic company program.
Recognized sustainability work
Sustainability is a fundamental and strategically
important driver for our business and during the past
year we have seen strong results within all of our CSR
Our efforts to continuously improve our sustainability
work were recognized in early 2019 when Corporate
Knights Inc., after analyzing some 7,500 companies,
ranked AAK among the 100 Most Sustainable Corporations
in the world. For more information on our efforts
within sustainability, please refer to our sustainability
Expansion and continued growth
The growth journey that AAK has experienced over the
last years is no doubt impressive and going forward we
will continue to build upon the solid foundation that we
have created. We remain focused on profitable sustainable
growth, organically as well as through strategic
mergers and acquisitions.