Transcript AAK interimrapport oktober – december 2005 Proforma 2005
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AAK interimrapport Oktober – December 2005 Year end Proforma 2005
Jerker Hartwall President and CEO IR 060228 CEO
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This is AarhusKarlshamn AB
• A merger between Aarhus United and Karlshamns AB • Total sales: SEK 10,6 billion • 2,500 employees • Production plants in seven countries • To be traded at Stockholm Exchange O-list quarter three 2006.
IR 060228 CEO
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Prime supplier to
• The chocolate and confectionery industry • The food industry • The foodservice industry • The cosmetic industry • The feed industry • The technical industry IR 060228 CEO
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The merger rationale
• To accelerate growth • To improve competitiveness • To optimize investments and improve cash flow IR 060228 CEO
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AAK in the World
Production plants Sales offices AAK Norway AAK Sweden AAK Poland AAK Denmark AAK Czech Republic AAK UK AAK Netherlands AAK Croatia AAK Russia AAK Canada AAK US AAK Mexico AAK Latin America Sao Paolo, Brazil AAK Latin America Montevideo, Uruguay AAK Ivory Coast AAK Benin AAK Ghana Ceylon Trading Company AAK Hong Kong AAK Australia AAK Asia-Pacific Malaysia IR 060228 CEO
Applications
Chocolate & Confectionery Fats Food Ingredients Technical Products & Feed Other Business 6 - Chocolate - Fillings - Dairy, Bakery - Food Service - Lubricants - Feed Materials - Skin care - Hair care IR 060228 CEO
World leader of vegetable speciality fats
Chocolate & Confectionery Fats 3.1 billion SEK 310 000 ton Gross margin: 1000 MSEK EBIT 220 MSEK Food Ingredients 6.2 billion SEK 940 000 ton Gross margin: 1600 MSEK EBIT 300 MSEK 7
Note: Numbers are proforma 2005
IR 060228 CEO Technical Products & Feed 0,9 billion SEK 300 000 ton Gross margin: 200 MSEK EBIT 50 MSEK
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Vision
The fastest growing most innovative and profitable speciality oils & fats company in the world
IR 060228 CEO
Strategic direction – how to compete
Low margin High margin
ADM Bunge Cargill AAK Speciality Fats
9 Accelerate development of speciality products IR 060228 CEO
How to grow when markets don’t?
Designing innovative, speciality products for substitution: * cocoa-butter CBE * cow milk-butter * trans fatty acids DFA trans-free solutions Market size Slow-growing total food market in mature markets (Europe and North America) High growth niches:
Cocoa-Butter Equivalents Trans-free alternatives Dairy-Fat Alternative
Time 10 IR 060228 CEO
Synergies fully implemented 2008 150 MSEK in the whole value chain
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AAK Reconstruction in Europe
AAK UK AAK Netherlands AAK UK HUll AAK Sweden AAK Denmark Production plants 12 IR 060228 CEO
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News
• The integration process has proceeded on schedule, and synergies in the neighbourhood of SEK 150 million are expected to yield full effects from 2008 onwards.
• A decision was made on a substantial increase in the production capacity for CBE (Cocoa Butter Equivalents).
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Pro forma result 2005
• Net sales grew by 9%, from SEK 9,720 million in 2004 to SEK 10,573 million in 2005.
• The Group’s operating profit excluding items affecting comparability totalled SEK 530 million (414), an increase of 28%.
• Earnings are impacted by items affecting comparability to the amount of SEK 201 million; principally restructuring expenses related to the merger.
• Profit before tax and exclusive of non-recurring items amounted to SEK 461 million (360).
• Earnings after tax amounted to SEK 340 million (274) exclusive of non-recurring items.
IR 060228 CEO
15 Financial Statements for the period October – December 2005; the first financial year of the new AarhusKarlshamn Group • Net sales reached SEK 2,990 million.
• The operating profit exclusive of non-recurring items, and IAS39, amounted to SEK 153 million.
• Non-recurring items had a SEK 201 million impact on earnings; the majority of which were restructuring costs related to the merger, and the implementation of IAS39 had a negative effect of SEK 8 million, attributable to raw material and currency derivatives, totalling 209 MSEK.
IR 060228 CEO
16 Financial Statements for the period October – December 2005; the first financial year of the new AarhusKarlshamn Group • Operating result including these items amounted to -56 MSEK.
• Earnings before tax and inclusive of items affecting comparability, totalled SEK -64 million.
• Income after tax amounted to -46 MSEK.
• Earnings per share was -1,23 SEK. IR 060228 CEO
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Financial review Q 4 2005
operational excl one offs • Net sales at 2.990 MSEK up 333 MSEK or 13 % • Oper profits 153 MSEK up 86 MSEK •
Good business in general
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CBE + Crushing
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Strong UK
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”100 MSEK project” (old Karlshamn project)
IR 060228 CEO
Seasonality in AAK
Q4 is our strongest quarter
Seasonality
18 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 IR 060228 CEO
Income Statement, pro forma
Income Statement, pro forma (SEK million )
Net sales Other income
Total operating income
Raw materials, consumables and goods for resale Other external costs Personnel Depreciation and write-downs Other costs
Total operating costs Operating profit
Net financial items
Pre-tax profit
Tax
Net profit
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Full year 2005
10,573 13
10,586
-7,640 -32 -1,074 -992 -307 -11
-10,056 530
-69
461
-121
340 Full year 2004
9,720 43
9,763
-7,076 -978 -1,014 -281
-9,349 414
-54
360
-86
274
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One off costs
• Acquisitions costs (consultants) • Sales bonus DK • Early retirm./severance pay • Write off (UK & Holland) • Other •
Subtotal
• Inventory PPA TOTAL ONE OFFS •
In addition we have activated in the balance sheet 59 MSEK in accordance with IFRS.
MSEK 20 40 25 52 15
151
50 201 IR 060228 CEO
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”The bridge to full year 2005 proforma” Income Statement, pro forma (SEK million)
Net sales Other operating income
Total operating income
Raw materials, consumables and goods for resale Fair value movements in raw material and currency derivatives (IAS 39) Other external costs Personnel Depreciation and write-downs Other costs
Total operating costs Operating profit/loss
Net financial items
Pre-tax profit/loss
Tax
Net profit/loss Jan-Sep 2005
7,583 2
7,585
-5,347 -40 -805 -798 -218 -
-7,208 377
-61
316
-81
235 Oct-Dec 2005
2,990 11
3,001 Adjustm. Adj non-rec. Oct-Dec 2005
2,990 11
3,001
-2,343 8 -298 -264 -141 -11
-3,049 -48
-8
-56
16
-40
50 29 70 52
201 201 201
-56
145
-2,293 8 -269 -194 -89 -11
-2,848 153
-8
145
-40
105 Full year Jan-Dec 2005
10,573 13
10,586
-7,640 -32 -1,074 -992 -307 -11
-10,056 530
-69
461
-121
340
IR 060228 CEO
Income Statement, pro forma
Income Statement, pro forma (SEK million)
Net sales Other income
Total operating income
Raw materials, consumables and goods for resale Fair value movements in raw material and currency derivatives (IAS 39) Other external costs Personnel Depreciation and write-downs Other costs
Total operating costs Operating profit
Net financial items
Pre-tax profit
Tax
Net profit Full year 2005
10,573 13
10,586 Full year 2004
9,720 43
9,763
-7,640 -32 -1,074 -992 -307 -11
-10,056 530
-69
461
-121
340
-7,076 -978 -1,014 -281 1
-9,349 414
-54
360
-86
274
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Operating income comparison 2005
Oper. Income 2004
MSEK
414
Increased sales Less increase COGS Increased external costs Decreased personnel costs Increased depreciation Decrease in other income Other costs
Oper Income 2005
- 596 853 257 -96 22 -26 - 30 - 11
530
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Application segments
Chocolate & Confectionery Fats Food Ingredients Technical Products & Feed Other Business 24 - Chocolate - Fillings - Dairy, Bakery - Food Service - Lubricants - Feed Materials - Skin care - Hair care IR 060228 CEO
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Chocolate & Confectionery Fats
• Volumes 311 000 ton + 11 % • Net sales 3081 MSEK + 6 % • Gross contr. 1039 MSEK + 14 % • Op profit 222 MSEK + 33 % IR 060228 CEO
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Food Ingredients
• Volumes 943 000 ton • Op profit 294 MSEK + 10 % • Net sales 6191 MSEK + 14 % • Gross contr. 1559 MSEK + 13 % + 27 % IR 060228 CEO
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Technical Products & Feed
• Volumes 293 000 ton - 8 % • Net sales 902 MSEK • Gross contr. 196 MSEK - 10 % - 4 % • Op profit 54 MSEK - 14 % IR 060228 CEO
Balance Sheet proforma
In MSEK
Assets
Non-current assets Current assets
Total assets
2005 IFRS
3 491 3 346
6 837
Equity and liabilities
Equity
Minority Long-term liabilities Current liabilities
Total equity and liabilities
3 504
50 1 421 1 854
6 837
28 Equity / Total assets Net debt Net debt/ EBITDA excl one offs IR 060228 CEO 52 % 1 629 1,9
2004 proforma
3 196 3 162
6 331
3 265
46 905 2 115
6 331
52 % 1 208 1,8
29 Cash Flow 2005 Operating (proforma) • Operating income • Depreciation & write downs • Changes in working capital • Operating capital investments Operating cashflow 2005 530 307 -349 -485 3 2004 414 281 - 16 -261 418 IR 060228 CEO
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Dividend 2005
The Board of Directors of AarhusKarlshamn proposes an ordinary dividend of 4 SEK per share for the year 2005. In addition the board proposes an extra dividend of 25 SEK per share aiming to bring the company's capital structure in line with its needs. Technically the ordinary and the extra dividend cannot be decided until the extra ordinary shareholders meeting.
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The future 06/07/08
2006
-Synergies under
development
-Strategic
direction clear 2007
-Implementation
of synergies - Business development projects Organic growth and acquisitions Productivity program Organisation development 2008
- Full effect of synergies - More speciality
- More global
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Remember short term
• Purchasing shea • Internal reconstruction costs • Energy • Limited synergy impact IR 060228 CEO
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