February 28, 2024

AAK’s Interim report for the fourth quarter and year-end report 2022 – A solid year with double-digit earnings growth driven by margin expansion

  • Total volumes decreased by 6 percent year-on-year to 571,000 MT (610,000), largely due to exiting the Russian market and the optimization program in Bakery. Excluding Russia, volumes decreased by 3 percent.
  • Operating profit, including a positive currency translation of SEK 24 million, increased by 18 percent, reaching SEK 778 million (659). At fixed foreign exchange rates, operating profit increased by 14 percent.
  • Profit for the quarter totaled SEK 517 million (480).
  • Earnings per share equaled SEK 1.98 (1.84).
  • Cash flow from operating activities amounted to SEK 1,062 million (239), including a positive net working capital impact from lower raw material prices. 
  • Return on Capital Employed (ROCE), R12M, was 14.5 percent (15.6 on December 31, 2021).

Business areas, fourth quarter

  • Food ingredients operating profit increased by 38 percent to SEK 465 million (337).
  • Chocolate & Confectionery Fats operating profit reached SEK 308 million (299), an increase of 3 percent.
  • Technical Products & Feed operating profit reached SEK 100 million (83), up 20 percent compared to last year.

AAK Group, full year

  • Volumes decreased by 2 percent year-on-year to 2,259,000 MT (2,312,000). The decrease was mainly due to exiting the Russian market and the optimization of our Bakery segment. Excluding Russia, volumes were flat.
  • Operating profit, excluding items affecting comparability (IAC) and including a positive currency translation impact of SEK 287 million, increased by 21 percent, reaching SEK 2,888 million (2,393). At fixed foreign exchange rates, operating profit increased by 9 percent.
  • AAK reported a second-quarter IAC cost of SEK 350 million related to exiting the Russian market.
  • Profit for the period totaled SEK 1,780 million (1,447). Excluding IAC, the profit for the period totaled SEK 2,099 million (1,733).
  • Earnings per share equaled SEK 6.84 (5.59). Excluding IAC, earnings per share for the period equaled SEK 8.07 (6.71).
  • Cash flow from operating activities amounted to negative SEK 73 million (positive 508), impacted by high raw material prices.
  • Return on Capital Employed (ROCE), R12M, was 14.5 percent (15.6 on December 31, 2021).
  • The Board of Directors proposes that a dividend of SEK 2.75 (2.50) per share to be paid for the financial year 2022.

CEO’s comments

2022 was a solid year. With 21 percent operating profit growth and an improved operating profit per kilo, we delivered on our target of having an average EBIT growth of ∼10 percent. Adjusting for the positive effect from currencies and items affecting comparability, operating profit grew 9 percent compared to 2021, despite a negative impact due to our exit out of Russia. This achievement demonstrates our solid foundation as a multi-oil ingredient house, especially when considering the dynamic and volatile environment we have had during 2022.

In the fourth quarter, operating profit grew 18 percent compared to the corresponding quarter last year, driven by a strong margin expansion, compensating for the somewhat soft year-on-year volume development in Food Ingredients and Chocolate & Confectionery Fats. Adjusting for the positive currency effect, operating profit grew 14 percent compared to the fourth quarter of 2021.

Business performance

Fourth-quarter volumes in Food Ingredients declined by 7 percent year-on-year, largely due to the optimization program in Bakery as well as the expected effects of the controlled exit out of the Russian market. As a result of the optimization efforts, operating profit increased by 33 percent at fixed foreign exchange rates, driven by strong margin expansion.

Chocolate & Confectionery Fats reported a solid quarter despite volumes declining 10 percent due to the exit out of Russia. Excluding Russia, volumes grew 1 percent in the fourth quarter compared to the same period last year. Despite declining volumes, operating profit at fixed foreign exchange rates grew 1 percent year-on-year, driven by a strong margin improvement.

Technical Products & Feed reported another strong quarter, with operating profit at fixed foreign exchange rates up 20 percent, driven by higher volumes in our Feed business.

  • Total volumes decreased by 6 percent year-on-year to 571,000 MT (610,000), largely due to exiting the Russian market and the optimization program in Bakery. Excluding Russia, volumes decreased by 3 percent.
  • Operating profit, including a positive currency translation of SEK 24 million, increased by 18 percent, reaching SEK 778 million (659). At fixed foreign exchange rates, operating profit increased by 14 percent.
  • Profit for the quarter totaled SEK 517 million (480).
  • Earnings per share equaled SEK 1.98 (1.84).
  • Cash flow from operating activities amounted to SEK 1,062 million (239), including a positive net working capital impact from lower raw material prices. 
  • Return on Capital Employed (ROCE), R12M, was 14.5 percent (15.6 on December 31, 2021).

Business areas, fourth quarter

  • Food ingredients operating profit increased by 38 percent to SEK 465 million (337).
  • Chocolate & Confectionery Fats operating profit reached SEK 308 million (299), an increase of 3 percent.
  • Technical Products & Feed operating profit reached SEK 100 million (83), up 20 percent compared to last year.

AAK Group, full year

  • Volumes decreased by 2 percent year-on-year to 2,259,000 MT (2,312,000). The decrease was mainly due to exiting the Russian market and the optimization of our Bakery segment. Excluding Russia, volumes were flat.
  • Operating profit, excluding items affecting comparability (IAC) and including a positive currency translation impact of SEK 287 million, increased by 21 percent, reaching SEK 2,888 million (2,393). At fixed foreign exchange rates, operating profit increased by 9 percent.
  • AAK reported a second-quarter IAC cost of SEK 350 million related to exiting the Russian market.
  • Profit for the period totaled SEK 1,780 million (1,447). Excluding IAC, the profit for the period totaled SEK 2,099 million (1,733).
  • Earnings per share equaled SEK 6.84 (5.59). Excluding IAC, earnings per share for the period equaled SEK 8.07 (6.71).
  • Cash flow from operating activities amounted to negative SEK 73 million (positive 508), impacted by high raw material prices.
  • Return on Capital Employed (ROCE), R12M, was 14.5 percent (15.6 on December 31, 2021).
  • The Board of Directors proposes that a dividend of SEK 2.75 (2.50) per share to be paid for the financial year 2022.

CEO’s comments

2022 was a solid year. With 21 percent operating profit growth and an improved operating profit per kilo, we delivered on our target of having an average EBIT growth of ∼10 percent. Adjusting for the positive effect from currencies and items affecting comparability, operating profit grew 9 percent compared to 2021, despite a negative impact due to our exit out of Russia. This achievement demonstrates our solid foundation as a multi-oil ingredient house, especially when considering the dynamic and volatile environment we have had during 2022.

In the fourth quarter, operating profit grew 18 percent compared to the corresponding quarter last year, driven by a strong margin expansion, compensating for the somewhat soft year-on-year volume development in Food Ingredients and Chocolate & Confectionery Fats. Adjusting for the positive currency effect, operating profit grew 14 percent compared to the fourth quarter of 2021.

Business performance

Fourth-quarter volumes in Food Ingredients declined by 7 percent year-on-year, largely due to the optimization program in Bakery as well as the expected effects of the controlled exit out of the Russian market. As a result of the optimization efforts, operating profit increased by 33 percent at fixed foreign exchange rates, driven by strong margin expansion.

Chocolate & Confectionery Fats reported a solid quarter despite volumes declining 10 percent due to the exit out of Russia. Excluding Russia, volumes grew 1 percent in the fourth quarter compared to the same period last year. Despite declining volumes, operating profit at fixed foreign exchange rates grew 1 percent year-on-year, driven by a strong margin improvement.

Technical Products & Feed reported another strong quarter, with operating profit at fixed foreign exchange rates up 20 percent, driven by higher volumes in our Feed business.

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