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For the financial year January 1 – December 31, 2019
The Board of Directors and the President and Chief
Executive Officer (CEO) 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, 2019.
Performance and financial position
2019 has been a strong year for AAK. There has been
year-over-year growth in terms of volumes, operating
profit, operating profit per kilo, and earnings per share.
In addition, the company has made three strategic
acquisitions, increased its ownership in the joint venture
AAK Kamani in India, and brought some key products to
market, including AkoPlanet™ and COBAO™ Pure. The
closing of 2019 also marks the end of The AAK Way, a
company program that has resulted in many important
achievements.
Net sales increased by SEK 918 million to SEK
28,510 million (27,592). There was an underlying
growth in sales due to organic volume growth, a
greater portion of speciality solutions, and a positive
currency translation impact of SEK 968 million. This
was partly offset by lower raw material prices.
Operating profit was record-high and reached SEK
2,142 million (1,956), an improvement of 10 percent
including acquisition costs of SEK 15 million. The
currency translation impact was SEK 75 million.
Operating profit at fixed foreign exchange rates and
excluding acquisition costs improved by 6 percent.
Food Ingredients reported a strong improvement
by 13 percent and Chocolate & Confectionery Fats
improved by 6 percent. Technical Products & Feed
reported a decline of 2 percent but is compared to
historical performances operating on a significantly
higher operating profit level.
Operating profit per kilo reached SEK 0.94 (0.87), an
improvement by 8 percent. At fixed foreign exchange
rates and excluding acquisition costs operating profit
per kilo increased by 5 percent.
The Group’s profit after financial items amounted
to SEK 2,011 million (1,829). Net financial items
amounted to negative SEK 131 million (negative
127), an increase of SEK 4 million. Interest expenses
for bank financing decreased but the new accounting
standard for leases, IFRS 16, has resulted in additional
interest expenses of SEK 35 million compared
to the corresponding period last year.
The equity/assets ratio was 46 percent as at
December 31, 2019 (50 percent as at December 31,
2018). Consolidated net debt as at December 31,
2019 was SEK 3,117 million (2,667 as at December
31, 2018). On December 31, 2019, the Group had
total credit facilities of approximately SEK 7,081
million.
Operating cash flow including changes in working
capital amounted to SEK 1,558 million (1,090). Cash
flow from working capital was negative, amounting to
SEK 896 million (negative 555). Strategic purchases
of key raw materials to Chocolate & Confectionery
Fats impacted cash flow from inventory negatively.
Accounts payables have during the latter part of
2019 showed positive cash flow and have, combined
with lower raw material prices, to a small degree
offset the increased inventory. Cash outflow from
investing activities amounted to SEK 1,335 million
(723), whereof SEK 535 million (0) was related to
acquisitions.
Calculated on a rolling 12 months basis, Return on
Capital Employed (ROCE) was 14.9 percent (15.8 at
December 31, 2018). ROCE was negatively impacted
by 0.5 percent due to the new accounting standard
for leases, IFRS 16. The additional purchase of
strategic raw materials has also impacted ROCE
negatively.
Earnings per share were SEK 5.86 (5.21), an
increase of 12 percent, due to increased operating
profit combined with lower tax costs. A lower tax rate
in Sweden and India combined with further optimization
of capital structure in the Group have reduced the
average tax rate.
On March 30, 2020, the Board of Directors proposed
to postpone the decision on the dividend for 2019.
For further information, please see page 47.
Directors’ report