AAK (AAK) Q3 2024 earnings summary

Executive summary

• Achieved 4% volume growth across all business areas in Q3 2024, with operating profit per kilo margin up 13% at fixed currencies, driven by optimization programs and favorable market conditions in Chocolate & Confectionery Fats.

• Operating profit increased by 18% year-over-year at fixed currencies, reaching SEK 1,256 million, while operating cash flow was SEK 514–515 million, impacted by higher working capital.

• Net debt/EBITDA remained stable at 0.39, and ROCE reached 22.1% on strong operating profit.

• Verified deforestation-free palm oil increased to 89% in H1 2024, with a 2025 ambition of 100%.

• Announced divestment of the North American Foodservice facility, expected to close by year-end 2024, generating SEK 600 million in cash flow and enabling a strategic refocus on Europe.

Financial highlights

• Q3 2024 volumes rose 4% to 551,000 MT; operating profit per kilo: SEK 2.28 (+6% YoY, +13% at fixed FX); operating profit: SEK 1,256 million (+10% YoY, +18% at fixed FX).

• Net sales decreased 4% to SEK 11,171 million, mainly due to currency translation.

• Operating cash flow was SEK 514–515 million, affected by higher working capital and inventory build for EUDR compliance.

• CapEx for Q3 just over SEK 300 million; YTD SEK 881 million; full-year 2024 expected just above SEK 1.2 billion.

• ROCE (R12M) reached 22.1%, up from 19.1% at year-end 2023.

Outlook and guidance

• Committed to long-term average operating profit growth of 10%.

• Management remains prudently optimistic amid dynamic market conditions and tougher year-on-year comparisons.

• Strategic update to be presented at Capital Markets Day in November 2024.

• No specific guidance on EBIT per kilo, but focus remains on value over volume and continued delivery on 2030 aspirations.