Fredrik Nilsson Chief Financial Officer and acting Chief Executive Officer. CFO update. The Co-Development Company

Transcription

1 Fredrik Nilsson Chief Financial Officer and acting Chief Executive Officer CFO update

2 How we measure success Important financial KPIs Organic volume growth Higher than market growth Operating profit Double-digit growth ROCE A balancing act Strong balance sheet Net debt / EBITDA < 3.0 Free cash flow Cash is king 2

3 AAK s performance a history of success (CAGR) Volume* +7.9% Operating profit improvement* +11.5% EPS improvement* +8.3% Dividend increase* +10.5% * CAGR

4 Good progress in most of the focus areas 2017 Organic growth 5% higher than underlying market growth Operating profit > 10% year-on-year improvement Return on capital employed (ROCE) Has started to increase again after greenfield investments and acquisition of California Oil Corporation Strong balance sheet Net debt / EBITDA < 1.5 Free cash flow Challenge due to higher raw material prices Working capital days remain flat 4

5 Income statement Volume*, ( 000 MT) 1,579 1, % Operating profit, SEK million 1,315 1, % Operating profit per kilo*, SEK % Financial net, SEK million % Tax, SEK million % Earnings per share, SEK % * Excluding non-recurring items and acqusition costs 5

6 Revenue split by country 49% 6

7 Split of costs 7

8 FX exposure Movement vs SEK EBIT impact USD MXN GBP EUR TRY 8

9 Balance sheet, SEK million Total noncurrent assets 7,153 7, % Working capital 4,447 3, % Net debt 3,233 3, % Net debt / EBITDA, multiple % Equity to asset ratio, % 45% 44% 1 2% 9

10 Working capital More than SEK 1,500 million in reduced working capital since

11 Raw material prices Rapeseed oil Palm oil USD/ton

12 Cash flow SEK million Q YTD 2017 Q YTD 2016 EBITDA 595 1, ,505 Paid interest Paid tax Non-cash items Change in working capital (WC) Cash flow from operating activities incl. changes in WC Cash flow from investments ,094 Free cash flow

13 Return on Capital Employed (ROCE) We target a gradual and continuous improvement ROCE end Q3 2017* 15.4% EBITA LTM SEK million 1,765 Capital employed SEK million 11,448 Growth and operating leverage to drive increase in ROCE Profit (Operating profit) Ensure strong operating leverage as growth returns Growth (Volume and mix) Capital employed (Focus WC) Run business to optimize free cash flow generation * ROCE: Returns on capital employed calculated on rolling 12 months 13

14 Solid debt portfolio Structure of loans and borrowings Interest-bearing debt SEK 3,810 million as at September 2017 SEK 3,006 million of unused committed credit facilities as at September 2017 SEK million Average maturity of long-term loans is 4 years Main financing sources EUR 400 million club loan Maturing in H1/2021 SEK 1,400 million multi-currency facility Maturing in H1/2019 Back-up facilities SEK 500 million, mortgage loan SEK 970 million, other facilities 14

15 A strong balance sheet ensures maximum flexibility Improvement since 2010 Net debt and Net debt/ebitda Equity and Equity ratio 15

16 Investments and capital allocation How we allocate capital We maximize room to invest in growth and shareholder return Priorities To be well-capitalized (Net debt/ebitda < 3x) To pay stable dividends (30-50% pay-out ratio) Invest in organic growth Mergers and acquisitions 16

17 Balanced cash flow and CAPEX Investments done enhancing growth areas New plant in Brazil New plant in China Capacity additions related to acquisition of California Oils Corporation Debottleneck CAPEX Balanced cash flow and CAPEX Good maintenance CAPEX control Prudent strategic prioritization of investments 17

18 Potential volume growth MT Existing business CalOils Greenfield Brazil Greenfield China 18

19 Our long-term management ambition result after nine months +11% +13% +13% Average 10% year-over-year EBIT improvement* -30% -3% *Excluding acquisitions and at fixed FX 19

20 AAK investment case highlights Above the market growth Average 10% year-over-year operating profit improvement* Strong balance sheet supporting further growth Very strong underlying growth drivers Indulgence Health Trust Personalization Convenience * Excl. acquisitions and fixed FX 20

21 Thank you!