AAK AB (publ.)

Good morning, everyone. Thank you for joining us today. Welcome to our third quarter results presentation. As you heard, joining me today here in Malmö is also our CFO, Thomas Bergendahl, and we will guide you through this presentation. If we move into slide number two, this is what we will cover today. The quarterly highlights, some selected events, We'll also include the recently announced divestment of our food service site in North America. We'll have a business and financial update and then some concluding remarks. I will also take this opportunity to briefly review the agenda for our upcoming Capital Markets Day. And as usual, we will end it with a Q&A session. With that, we move into slide number three. This presentation includes forward looking statements that come with risk and uncertainties. These are our views on future events and financial performance, but actual results could be different. So please keep that in mind when digesting this material. Now over to page number four. I'm proud to report strong growth across all our business areas. We have had a 4% volume increase and we have improved our group profitability for the third quarter. Our operating profit per kilo, our margin, grew by 13% at fixed currencies, driven largely by our global optimization programs and favorable market conditions in the chocolate and confectionary fats segments. As a result, our operating profit increased by 18% compared to the third quarter last year at fixed currencies. Operating cash flow amounted to 514 million SEK, impacted by an increase in working capital. Our net debt to EBITDA ratio was stable at 0.39 and our return on capital employed stands at a solid 22.1%. And with that, we move to the next slide. Sustainability remains a key pillar of our strategy, and I am proud to report that we continue to make progress. We have increased our verified deforestation-free palm oil from 83% in 2023 to 89% in just the first half of 2024. The improvement was primarily driven by enhanced verification, higher RSPO purchases, stronger supplier engagement and satellite monitoring. This is not something new, but rather the result of hard work and our continued commitment to sustainable practices and protecting biodiversity, especially as regulations continue to evolve. Speaking of regulations, as I'm sure many of you have seen, there is a proposal to delay the EU deforestation regulation by one year. No final decision has been made yet, but we see the proposal as unfortunate, as it risks adding unnecessary uncertainty. And worst of all, it also risks shifting the focus away from the goal that we all should be focusing on, which is to stop deforestation. On that note, I will now hand it over to Thomas, who will explain a bit about the rationale about the announced divestment of our food service site in North America.

Thank you, Johan. Good morning, everyone. We're now on slide six. As announced yesterday, AAK has entered into an agreement to divest our food service facility, Hillside, in the US. The transaction is expected to close at year-end 2024 and will generate a one-time cash flow of roughly 600 million Swedish kronors at the time of closing. It's anticipated that there will be no material impact on the profit and loss statement as a result from the transaction itself. The deal logic is driven by that the Hillside plant is geographically separated from the rest of our food service business that resides in Europe. And that the plant has very limited connections or synergies with the US-based oils and fats business that we have in the group. nor any synergies with the European food service business. In addition, the site has for some time been challenged from a profitability perspective due to the lack of the above-mentioned synergies, but also from the fact that it's a standalone site in a highly competitive local market. uh the hillside plant accounts for about five percent of the group volumes uh as it stands today and around one percent of operating profit as a result the divestment will positively impact our operating profit per kilo everything else equaled by four percent At the same time, to strengthen our remaining food service operations in Europe, we are making a capital investment in a total of 400 million Swedish kronors, spread over 2025 and 2026. This will be invested in a new site to replace the existing facility in Dalby, Sweden. And as part of the investment focus in food service, we will also enhance and modernize our Hastings food service site in the UK. The three remaining food service sites after the divestment of Hillside in the US that resides in Europe currently generate above average EBIT per kilo margins compared to the group. With that, I'll hand it back to Johan to go over the Q3 performance per business area. Thank you, Thomas.

And with that, let's move into slide seven, some business area highlights. We start with that by looking into food ingredients. Volumes grew by 1%, led by bakery and food service, while special nutrition saw a slight decline due to a continued challenging environment in China. Operating profit per kilo increased by 3% to 2.21 sec per kilo. primarily driven by food service and dairy, and it included a negative impact from currencies of SEC 0.18. At fixed foreign exchange rates, operating profit per kilo increased by 11% year on year. Absolute operating profits for food ingredients increased by 4%, including a negative FX of 62 million SEC, At fixed foreign exchange rates, operating profit increased by 13%. And with that, please turn to the next slide. Chocolate and confectionary fats had a strong quarter with a 12% increase in volumes, somewhat helped by soft comparisons to last year and supported by favorable market conditions. result of this operating profit per kilo increased by seven percent even after a negative currency impact of sick 0.25 per kilo at fixed foreign exchange rates operating profit per kilo increased by 14 and with that overall this resulted in a 20 growth in operating profit or 27 at fixed currencies a strong quarter for our chocolate and confectionary fats business With that, we turn to the next page and our third business area. In technical products and feed, volumes increased by 4%, primarily driven by growth in technical products, while feed was roughly flat. And with that operating profit per kilo declined 0.65 SEC. And operating profit decreased slightly to 46 million SEC, down 4% year on year. But on the other hand, a sequential improvement from quarter two. And with that, I hand it back to you, Thomas, for some more comments on the financials. Thank you.