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CFO – Financial update Capital Market Day November 10, 2010 Anders Byström CFO
17

Chief%20Financial%20Officer

Mar 30, 2016

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Page 1: /Chief%20Financial%20Officer

CFO – Financial updateCapital Market Day November 10, 2010

Anders ByströmCFO

Page 2: /Chief%20Financial%20Officer

Agenda

Financial performance

Refinancing

Stock option program

CFO - Capital Market Day, 10 November 2010 2

Page 3: /Chief%20Financial%20Officer

Third quarter - Operating profit in line with last year

CFO - Capital Market Day, 10 November 2010 3

Net sales amounted to SEK 3,774 million (3,828). • Negative currency translation impact of SEK 104

million.• 1% decrease in volumes (higher speciality volumes

but lower commodity volumes).

Group operating profit declined by 2 percent to SEK 231 million (235).

For comparable units (adjusted for divestments) and fixed exchange rates the operating profit amounted to SEK 236 million (231), an improvement of 2 percent.

Page 4: /Chief%20Financial%20Officer

Highlights first nine months 2010

CFO - Capital Market Day, 10 November 2010 4

Continued improved Group operating profit by 7 percent to SEK 573 million (538).

For comparable units (adjusted for divestments) and fixed exchange rates the operating profit amounted to SEK 598 million (523), an improvement by 14 percent.

Positive cash flow from operating activities before investments amounted to SEK 225 million (1,515).

• The bulk of the strong cash flow in 2009 was due to a significant decline in raw material prices which led to a reduction in working capital, ~SEK 800 million.

• The negative working capital in 2010 was mainly due to increased raw material prices, ~SEK 200 million.

Page 5: /Chief%20Financial%20Officer

538

3 4314 25

573

YTD 2009 Volume Price/Mix Operating expenses

Currency YTD 2010

P/L Bridge 2010

5CFO - Capital Market Day, 10 November 2010

Page 6: /Chief%20Financial%20Officer

Translation impact of a stronger SEK

Year to date we have had a negative translation impact of SEK 25 million.

CFO - Capital Market Day, 10 November 2010 6

8,00

8,50

9,00

9,50

10,00

10,50

11,00

11,50

12,00

EUR/SEK

6,00

6,50

7,00

7,50

8,00

8,50

9,00

9,50

10,00

USD/SEK

10,00

10,50

11,00

11,50

12,00

12,50

13,00

13,50

GBP/SEK

Page 7: /Chief%20Financial%20Officer

Group cost structure

79 % of the cost base is raw material costs

7CFO - Capital Market Day, 10 November 2010

Page 8: /Chief%20Financial%20Officer

Raw material prices

CFO - Capital Market Day, 10 November 2010 8

Page 9: /Chief%20Financial%20Officer

Cash flow

CFO - Capital Market Day, 10 November 2010 9

SEK million Q 3 2010

Q 3 2009

Q 1-3 2010

Q 1-3 2009

Cash flow from operating activities 306 290 808 746

Paid tax -51 -21 -223 -29

Change in working capital -340 589 -360 798

Cash flow from operating activities inclchange in working capital

-85 858 225 1 515

Cash flow from investments -65 -59 -244 -203

Free cash flow -150 799 -19 1 312

Cash flow from operating activities reaching SEK 225 million (1,515). – Working capital in the third quarter 2010 increased by SEK 340 million

mainly due to higher inventory value following the recent increased raw material prices.

– The majority of the strong cash flow 2009 was due to a significant decline in raw material prices which led to reduced working capital.

Page 10: /Chief%20Financial%20Officer

Cash flow bridge year to date

CFO - Capital Market Day, 10 November 2010 10

1515

800

130

585

62 200

15031

225

Page 11: /Chief%20Financial%20Officer

Financial summary

CFO - Capital Market Day, 10 November 2010 11

Focus the analysis on:

• Volume

• Gross Margin per kilo or tonne

• Operating profit per kilo or tonne

• Improvement in Operating profit

• Return on Net Operating Assets

• Net Debt / EBITDA

0,00

0,50

1,00

1,50

2,00

2,50

3,00

0,00

0,50

1,00

1,50

2,00

2,50

3,00

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Rolling 12 m

onths, SE

K/K

g

Qua

rter,

SE

K/K

g

AAK Group - Gross Margin per kilo

Quarter Rolling 12 months

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

0,90

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

0,90

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Rolling 12 m

onths, SE

K/K

g

Qua

rter,

SE

K/K

g

AAK Group - Operating profit per kilo

Quarter Rolling 12 months

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

0

50

100

150

200

250

300

350

400

450

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Rolling 12 m

onths, '000 MT

Qua

rter,

'000

MT

AAK Group - Volume

Quarter Rolling 12 months

Page 12: /Chief%20Financial%20Officer

Financial summary

CFO - Capital Market Day, 10 November 2010 12

EBITDA is exclusive non recurrent items but includes SEK 70 million in insurance compensation received in Q2 2009.

Focus the analysis on:

• Volume

• Gross Margin per kilo or tonne

• Operating profit per kilo or tonne

• Improvement in Operating profit

• Return on Net Operating Assets

• Net Debt / EBITDA

6,0%

7,0%

8,0%

9,0%

10,0%

11,0%

12,0%

13,0%

14,0%

15,0%

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10

Return on Net Operating Assets - Rolling 12 months

3,87 3,89 3,964,12 4,25

4,564,42

4,174,40

3,85

3,10

2,452,16

2,46 2,48

0,00

0,50

1,00

1,50

2,00

2,50

3,00

3,50

4,00

4,50

5,00

Q1 07 Q2 07 Q3 07 Q4 07 Q1 08 Q2 08 Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10

Net Debt/Ebitda

0

100

200

300

400

500

600

700

800

900

1000

0

50

100

150

200

250

300

350

Q1 07

Q2 07

Q3 07

Q4 07

Q1 08

Q2 08

Q3 08

Q4 08

Q1 09

Q2 09

Q3 09

Q4 09

Q1 10

Q2 10

Q3 10

Rolling 12 m

onths, SE

K m

illion

Qua

rter,

SE

K m

illio

n

AAK Group - Operating profit (excl IAS 39)

Quarter Rolling 12 months

Page 13: /Chief%20Financial%20Officer

Capital expenditures

CFO - Capital Market Day, 10 November 2010 13

SEK

Mill

ion

Capital expenditures (excluding acquisitions and strategicinvestments) will be in line with annual deprectiations.

* Rolling 12 months

0

100

200

300

400

500

600

700

2006 2007 2008 2009 2010*

Investments Depreciations

Page 14: /Chief%20Financial%20Officer

Refinancing – SEK 4,200 million

The Group’s net borrowings as at 30 September 2010 amounted to SEK 3,080 million

Total committed credit facilities were end of September 2010 SEK ~ 6,750 million.

Large interest from banks to participate in the refinancing.

CFO - Capital Market Day, 10 November 2010 14

SEK 4,200 million expected to be refinanced before end of 2010

Page 15: /Chief%20Financial%20Officer

Investment Grade Pricing - Interestmargin

~100 bps

15CFO - Capital Market Day, 10 November 2010

Page 16: /Chief%20Financial%20Officer

Stock option program for senior executives and key managers

The Extraordinary General Meeting has decided to issue a maximum of 1,500,000 subscription warrants.

Dilution of maximum approximately 3.54 percent

Allotment of warrants to approximately 70 senior executives and key managers.

Management will buy the warrants at market value.

CFO - Capital Market Day, 10 November 2010 16

Page 17: /Chief%20Financial%20Officer

Market conditions

Volumes for speciality products are expected to continue to increase in Food Ingredients as well as in Chocolate & Confectionery Fats.

CFO - Capital Market Day, 10 November 2010 17