AAK (AAK) Q4 2024 earnings summary

Executive summary

• Operating profit grew 11% year-over-year in Q4 2024, with all business areas contributing; full-year operating profit up 19% to SEK 4,896 million, exceeding long-term targets.

• Volumes declined 1% in Q4 but rose 2% for the year; profitability per kilo improved, driven by optimization and favorable market conditions.

• Board proposes a dividend of SEK 5.00 per share for 2024, a 35% increase from last year.

• ROCE reached 22.4% on the back of robust operating profit.

• Sustainability progress included major CO2 reductions at the Aarhus site and winning the Sustainability Innovation Award at FIE 2024.

Financial highlights

• Q4 operating profit: SEK 1,268 million (+11% YoY); full-year: SEK 4,896 million (+19% YoY).

• Q4 volumes decreased by 1% to 541,000 MT, mainly due to Food Ingredients.

• Operating profit per kilo up 16% year-over-year at fixed currencies; Q4 SEK 2.34 (+13% YoY); full-year SEK 2.25 (+16% YoY).

• Operating cash flow for Q4 was SEK 118 million, impacted by seasonal sourcing, higher raw material costs, and EUDR-related inventory buildup.

• Net debt/EBITDA at 0.29, indicating a strong balance sheet.

Outlook and guidance

• 2030 profitability aspiration raised to above SEK 3 per kilo, aiming to grow volumes faster than the market.

• Management remains prudently optimistic for 2025, focusing on sustainable growth, margin expansion, and innovation.

• Restructured sourcing agreements expected to deliver long-term benefits, with a one-time negative cash flow impact of SEK 500-600 million in Q1 2025.