AAK (AAK) Q2 2024 earnings summary

Executive summary

• Achieved 4% year-over-year volume growth in Q2 2024, mainly from Chocolate & Confectionery Fats and Food Ingredients, while Technical Products & Feed declined due to a one-off production stop.

• Operating profit increased by 27% to SEK 1,118 million, supported by improved profitability and favorable market conditions.

• Operating profit per kilo rose 22% year-over-year to SEK 2.13; return on capital employed reached 21.5%.

• Operating cash flow was SEK 1,002 million, solid despite higher working capital from increased volumes.

• Investments in bio boilers at Aarhus reduced CO2 emissions by over 90% and save SEK 100 million annually.

Financial highlights

• Q2 2024 operating profit: SEK 1,118 million (+27% YoY); profit for the period: SEK 809 million (+32% YoY).

• Net sales: SEK 11,033 million (-2% YoY); operating profit per kilo: SEK 2.13 (+22% YoY).

• Volume reached 525,000 MT, up 4% year-over-year.

• Net debt/EBITDA at 0.41, remaining low after dividend payout.

• ROCE reached 21.5% on a rolling 12-month basis.

Outlook and guidance

• Management remains prudently optimistic, targeting average operating profit growth of 10% over time.

• Temporary working capital increase due to EUDR compliance and seasonality, expected to normalize in 2025.

• Ongoing investments in compliance and production flexibility to address regulatory changes.