In This Article:
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Volume Growth: 4% increase year over year.
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Operating Profit: Increased by 18% at fixed currencies compared to the previous year.
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Operating Profit per Kilo: Margin grew by 13% at fixed currencies.
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Operating Cash Flow: SEK514 million, impacted by an increase in working capital.
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Net Debt/EBITDA Ratio: Stable at 0.39.
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Return on Capital Employed: 22.1%.
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Food Ingredients Volume Growth: 1% increase.
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Food Ingredients Operating Profit per Kilo: Increased by 3% to SEK2.21 per kilo.
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Chocolate and Confectionery Fats Volume Growth: 12% increase.
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Chocolate and Confectionery Fats Operating Profit per Kilo: Increased by 7%.
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Technical Products and Feed Volume Growth: 4% increase.
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Technical Products and Feed Operating Profit: Decreased by 4% to SEK46 million.
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Capital Expenditure (CapEx): Just over SEK300 million for the quarter; year-to-date total of SEK881 million.
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Expected Full Year CapEx: Just north of SEK1.2 billion.
Release Date: October 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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AAK AB (FRA:6AA0) reported a 4% volume increase across all business areas, indicating strong growth.
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Operating profit increased by 18% compared to the third quarter of the previous year at fixed currencies.
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The company improved its operating profit per kilo margin by 13% at fixed currencies, driven by global optimization programs and favorable market conditions.
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AAK AB (FRA:6AA0) achieved a return on capital employed of 22.1%, reflecting efficient use of capital.
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Sustainability efforts showed progress with verified deforestation-free palm oil increasing from 83% in 2023 to 89% in the first half of 2024.
Negative Points
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The divestment of the food service site in North America is expected to have no material impact on profit and loss, but it highlights challenges in profitability due to lack of synergies.
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Operating cash flow was impacted by an increase in working capital, primarily driven by inventory buildup.
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The technical products and feed business area saw a decline in operating profit by 4% year on year.
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The company faces uncertainties due to potential delays in EU deforestation regulation, which could impact raw material prices and supply chain dynamics.
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Special nutrition volumes declined due to a challenging environment in China, affecting overall growth in the food ingredients segment.
Q & A Highlights
Q: In the CEO statement, you mentioned approaching tough comparables. Could you clarify what comparables you are referring to specifically? A: When we grow on top of growth, it doesn't mean the comparables become easier. Last year, we grew by 40%, and this year we grew another 10% or 18% at fixed currencies. It's strong growth, but we face dynamic market conditions and higher risks. We have delivered strong results in a short period, and we should be humble about that. - Johan Westman, CEO