SWEDEN: AAK sees FY sales and profit rise
Swiss ingredients firm AAK has booked an increase in sales and earnings on the back of an "extraordinary" performance from its food ingredients unit.
The company said today (7 February) that full-year sales rose to SEC16.9bn, an increase of 1% on 2011. Higher sales from the firm's food ingredients division offset weakness in its chocolate and confectionery fats segment, the group revealed.
Operating profit for the 12 month period rose 9% to SEC1bn, adjusted for the impact of Hurricane Sandy, which disrupted operations at the firm's two New Jersey plants.
AarhusKarlshamn: AAK's Interim Report for the Fourth quarter and Year-end Report, 2012
KARLSHAMN, Sweden--(BUSINESS WIRE)--Regulatory News:
Chief Executive´s comments
Record high operating profit driven by an extraordinary performance in Food Ingredients Operating profit adjusted for hurricane Sandy ("Sandy")* reached a record high for the fourth quarter of SEK 292 million (265), an improvement of 10 percent compared to the corresponding quarter in 2011. Operating profit per kilo adjusted for Sandy* amounted to SEK 0.74 (0.69), a significant improvement largely attributable to a continuing trend away from low margin commodity volumes. In addition, Food Ingredients had a very favourable product mix and unusually high production yields.
Business Area operating profit adjusted for Sandy*:
· Food Ingredients reached a record high fourth quarter of SEK 220 million (151), an improvement of 46 percent
· Chocolate & Confectionery Fats reported operating profit of SEK 82 million (115)
· Technical Products & Feed reported stable profits at SEK 21 million (21)
Operating profit for the fourth quarter including Sandy* effects amounted to SEK 271 million (265), an improvement of 2 percent.
Earnings per share increased by 4 percent, from SEK 4.82 to SEK 5.01. Sales amounted to SEK 4,205 million (4,483), reflecting lost sales related to Hurricane Sandy and lower raw material prices.
Continued very strong operational cash flow Continuing strong cash flow in the fourth quarter amounted to SEK 439 million (499), including a reduction in working capital of SEK 112 million (289).
With the raw material price evolution during the second half of 2012, AAK will display a continuing reduction in working capital in the first half of 2013.
Increased dividend The proposed dividend is SEK 5.25 (4.75) per share an increase of SEK 0.50 or 11 percent.
Business development During the fourth quarter Group volume increased by 2 percent. Food Ingredients continued to demonstrate very strong development, particularly in Bakery and Infant Nutrition, while commodity volumes in the UK continued to decline. Further, Scandinavia lost some low margin volumes. Chocolate & Confectionery Fats continued as expected to be challenged and Technical Products & Feed stabilized.
Hurricane Sandy ("Sandy")* The AAK plants in New Jersey, US which were affected by Hurricane Sandy are back in operation. Sandy* negatively impacted operating profit in the fourth quarter by estimated SEK 21 million.
AAK Acceleration and recent acquisitions We continue to see positive effects of the AAK Acceleration program (Growth-Efficiency-People). Recent acquisitions are developing in line with plans.
Concluding remarks The impact on our industry from the more difficult general economy in Europe is, as we all know, really difficult to predict.
However, based on AAK's customer value propositions for health and reduced costs, our customer product co-development and solutions approach, and the AAK Acceleration program, we continue to remain prudently optimistic for the future. The main drivers are expected to be our strong Food Ingredients business and the expected recovery in our Chocolate & Confectionary Fats business.
The performance of the Chocolate & Confectionary Fats business is expected to stabilize in the first part of 2013 and, provided the cocoa butter price remains at the current more normal level - see page 19 - it is expected to start improving significantly during the second half of 2013.
Arne Frank CEO and President
The information is that which AarhusKarlshamn AB (publ) is obliged to publish under the provisions of the Stock Exchange and Clearing Operations Act and/or the Trading in Financial Instruments Act. The information was released to the media for publication on February 7, 2013 at 08.15 am CET.
Original source: AAK
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