AAK’s Interim report for the second quarter 2016 – all-time high operating profit for a second quarter

· A record-high operating profit of SEK 368 million (326 excluding non
-recurring items) was achieved, an improvement of 13 percent. The currency
translation impact was negative SEK 8 million (positive 39), mainly related to
Food Ingredients.
  · Total volumes continued to grow nicely and were up 6 percent (12). Organic
volume growth was 1 percent (last year 4 percent) despite continued declining
commodity volumes in Food Ingredients, where the growth in 2015 was exceptional.
However, the demand for speciality and semi-speciality products was strong,
generating organic volume growth of 5 percent (3).
  · Food Ingredients improved by 8 percent, reaching SEK 238 million (221). The
picture between the different segments was mixed though.
- The Dairy segment continued the strong trend from the last three quarters and
reported double-digit organic volume growth.
- The Bakery segment had another challenging quarter globally. Volumes continued
to decline, although at a slower pace than during the first quarter 2016.
- Infant Nutrition reported a strong volume development. This was driven by
product range Akonino®, which showed an impressive double-digit volume growth.
- Foodservice reported organic volume growth with good development particularly
in the U.K. and the U.S.

  · Chocolate & Confectionery Fats reported a result of SEK 146 million (116),
an improvement of 26 percent.
- Total volumes in the quarter increased by 15 percent and organic volume growth
was 11 percent.
- Organic volume growth within high-end products continued during the second
quarter. After some challenging quarters, low-end products were also back to
organic volume growth.
- After two years of severely deteriorating market conditions in Russia and
Ukraine, the strong growth in the first quarter continued also during the second
quarter, but still from a low level.

  · Technical Products & Feed improved its operating profit by 5 percent,
reaching SEK 23 million (22), due to a positive development of the fatty acids
business.
  · Earnings per share increased by 2 percent, to SEK 5.47 (5.38). Increased
financial costs due to extended borrowings in high-interest rate countries
(Brazil, China and India) had a very unfavorable impact on earnings per share.
  · Operating cash flow including changes in working capital amounted to SEK 520
million (389). Cash flow from working capital was positive, amounting to SEK 158
million (83). The strong improvement in working capital was mainly related to
good inventory management and increased accounts payables. This was despite the
negative impact from substantially increased raw material prices during the last
quarters, combined with working capital tied up for the two greenfield
investments.
  · Calculated on a rolling 12 months basis, Return on Capital Employed (ROCE)
was 16.0 percent (15.7 percent at December 31, 2015).
  · As communicated earlier today, AAK has acquired the leading West Coast based
vegetable oils company California Oils Corporation from Mitsubishi Corporation
of Japan. California Oils Corporation, also known as CalOils, had last year
revenues of approximately SEK 1,350 million and a volume of approximately
110,000 MT, with 65 employees.
  · During the second quarter we have inaugurated our new factory in Brazil.
Some limited volumes have been delivered. To be able to deliver the whole
product range a gradual ramp-up will continue during the coming quarters. Our
China greenfield project continues to develop according to plan.

Concluding remarks:
“Based on AAK’s customer value propositions for health and reduced costs, and
our customer product co-development and solutions approach, we continue to
remain prudently optimistic about the future”, says Arne Frank, CEO and
President, AAK Group. “The main drivers are the continued positive underlying
development in Food Ingredients and the continued improvement in Chocolate &
Confectionery Fats.”
The Interim report for the second quarter 2016 will be presented today, July 15,
2016 at 1 p.m. CET at a Press & Analyst telephone conference. For participation,
please see instructions under the Investor tab at the AAK website, www.aak.com.
For further information, please contact:
Fredrik Nilsson
CFO
Mobile: +46 708 95 22 21
E-mail: fredrik.nilsson@aak.com
This information is information that AAK AB (publ.) is obliged to make public
pursuant to the EU Market Abuse Regulation and the Securities Markets Act. The
information was submitted for publication, through the agency of the contact
person set out above, at 11:00 a.m. CET on July 15, 2016.
AAK is a leading provider of value-adding vegetable oils & fats. Our expertise
in oils & fats within food applications, our wide range of raw materials and our
broad process capabilities enable us to develop innovative and value-adding
solutions across many industries – Chocolate & Confectionery, Bakery, Dairy,
Infant Nutrition, Foodservice, Personal Care, and more. AAK’s proven expertise
is based on more than 140 years of experience within oils & fats. Our unique co
-development approach brings our customers’ skills and know-how together with
our own capabilities and mindset for lasting results. Listed on the NASDAQ OMX
Stockholm and with our headquarters in Malmö, Sweden, AAK has 20 different
production facilities, sales offices in more than 25 countries and more than
2,700 employees. We are AAK – The Co-Development Company.