The combination of Aarhus United and Karlshamns in August 2005 came about after Aarhus’s 46 per cent stakeholder UIE said it was selling its 46 percent majority share. Under Danish law, the buyer would need to bid for the remaining shares too.
But the game-changing deal for the oils providers put a set of specific objectives and expectations on the table. The enlarged company said it would see accelerated growth, be more competitive, optimise investments, and improve cash flow.
AAK’s presentation at Stockholm’s Capital Market Day yesterday reads like a check list of these objectives. Four years on, and EBIT has grown 90 per cent; production resources have been reshuffled and optimised between the two units; so far, annual savings have amounted to SEK200m – with another SEK100m by late 2010 and another SEK200m by mid 2011.
“Through an aggressive strategy to cut costs we have turned cash flow and achieved a much stronger balance sheet, and thus we open up for acquisitions in the future,” said the company.
No details have been released about the profile of companies that could be attractive for AAK, or whether it has already identified potential targets.
Last week AAK reported net sales of SEK1,2096m in the first nine months of 2009, and operating profit of SEK538m. Although both of these figures were down slightly on last year, AAK says change in turnover is not the best measures of progress, since it is affected by world market price fluctuations.
Chocolate and confectionery fat sales have been especially affects by reduced demand for chocolate in the recession.
It drew attention to gross margin improvements, of 15 per cent on chocolate and confectionery fats, 14 per cent in food ingredients, and 5 per cent in technical products and feed.
AAK’s filling fat for confectionery, Deliair NH, has been shortlisted for the FiE Excellence Award, said to be remarkable for its taste, whipping capabilities and stability.
The award ceremony will take place at the FiE trade show in Frankfurt next week.