Improved operating profit and cash flow for AAK

Improved operating profit and cash flow for AAK

The positive development of operating profit as well as of cash flow which
characterised the later months of 2009 continued during the first quarter of
2010.


“We can close the first quarter of 2010 with satisfaction” commented Arne Frank,
the new CEO of AAK, in a comment to the first quarter result. “Food Ingredients
developed very well and we had a healthy volume growth in Chocolate &
Confectionery Fats. We have however a challenge with increased price pressure in
Chocolate & Confectionery Fats.”

•	Improved Group operating profit by 13 percent to SEK 178 million (157). 

•	Cash flow from operating activities continued positively reaching 
	SEK 315 million (22).


All AAK business areas have developed positively:

•	Food Ingredients successfully continued the specialisation strategy, 
with lower volumes but with higher margins increasing operating profit by 26
percent. 

•	Chocolate & Confectionery Fats reported operating profit just slightly above
the first
	quarter last year, comprising volume growth but declining margins. Short term 
	volume growth will not compensate for the reduction in margins arising from
this
	 excess capacity.

•	Continued turnaround in Technical Products & Feed increased
	operating profit by 62 percent. 

Focus on health oriented products in Food Ingredients
In the Group's largest business area, Food Ingredients, the successfully
implemented specialisation strategy, with a higher proportion of high-value
products with high margins, led to an improvement in operating profit of 26
percent, to SEK 101 million (80). 

The focus on health oriented products as well as AAK's focus and leading
position in sustainable raw materials has led to increased market shares in high
value products. 

During the first quarter of 2010 the business area Food Ingredients continued to
benefit from the ongoing rationalisation programme. These cost savings have been
offset by increased investments in organic growth outside Scandinavia.
Continued drive for cocoa butter alternatives 
The operating result of SEK 76 million (74) for the business area Chocolate &
Confectionery Fats was only marginally better than the first quarter of 2009.

As the world emerges from recession there are indications of slower recovery of
chocolate consumption in Eastern Europe than in the rest of the world. Eastern
Europe is an important market for the Chocolate & Confectionery Fats business
area.

“The global recession has provided a strong incentive to reduce costs and to
drive further the substitution of expensive cocoa butter”, says Arne Frank. This
increased demand for CBE has stimulated significant investments in additional
manufacturing capacity in the industry. Uncertainty remains regarding the impact
of the excess capacity. Short term volume growth will not compensate for the
reduction in margins arising from this excess capacity. 
Turn around for Technical Products & Feed 
Operating profit improved by 62 percent, from SEK 13 million to SEK 21 million,
for the business area Technical Products & Feed, compared to the first quarter
of 2009. 
A special turnaround plan was implemented during 2009 and has led to lower
costs. 

For the fatty acid and metal working fluids businesses within Technical Products
& Feed there are some limited signs of recovery. 
Ongoing rationalisation programmes
The rationalisation programmes are progressing in line with plan in all business
areas. SEK 100 million in savings will be realised in late 2010, and an
additional SEK 200 million will be realised in the latter part of 2011, as
communicated during the second quarter of 2009.


Personal reflections from CEO Arne Frank
“During an extremely interesting introduction period, I have had the privilege
of meeting many of the key members of AAK's management team and of the various
business area teams, as well as a large number of customers. Sharing their
knowledge, experiences, insights and views has been very valuable” said Arne
Frank, commenting on his first period with AAK.

“Our customers confirm that our strategies focusing on high value products are
correct. The positive development within specific segments such as foodservice,
bakery and bakery services, dairy fat alternatives and chocolate and
confectionery fats is evidence that we have chosen the right path.

Our health profile, products like InFat (mother's milk fat replacer) and our
strong product development are relevant examples of the future for AAK. This, as
well as a selective acquisition strategy based on a strong balance sheet, will
move AAK forward and ensure a continued long-term improvement in profitability.”


Financial summary excluding IAS 39 effects*
		
                      2010            2009
SEK million              Q1             Q1     
Net sales             3,510          4,223  
Gross                   840            877  
Contribution
Operating               178            157    
profit
Net result              114             65     
Earnings per           2.79           1.59    	

* For full financial information please refer to Interim report Q1 2010.


For contact: 
Arne Frank, President and CEO	Anders Byström, CFO 
Phone: + 46 40 627 83 10 		Phone: + 46 40 627 83 32
Mobile: + 46 704 45 53 70		Mobile: + 46 709 88 56 13



The information is that which AarhusKarlshamn AB (publ) is obliged to publish
under the provisions of the Stock Exchange and Clearing Operations Act and/or
the Trading in Financial Instruments Act. The information was released to the
media for publication on 21 May 2010 at 12.00 CET.

 Facts/AAK 
AAK is the world's leading manufacturer of high value-added speciality vegetable
fats. These fats are used as substitutes for butterfat and cocoa butter
substitutes, as transfree solutions for fillings for chocolate and confectionery
products, in the cosmetic industry, and as mother's milk replacers. AAK has
production facilities in Denmark, the Netherlands, Mexico, Great Britain,
Sweden, Uruguay and the U.S.A. Read more at www.aak.com.