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AAK accelerates optimisation in line with strategic direction to cope with COVID-19 pandemic effects.

NORDIC BUSINESS REPORT-June 26, 2020-AAK accelerates optimisation in line with strategic direction to cope with COVID-19 pandemic effects

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AAK AB (STO:AAK), a leading provider of value-adding vegetable oils and fats, announced on Thursday that in response to the COVID-19 pandemic, it is optimising its cost base in affected segments without jeopardising its long-term capabilities and strategic initiatives.

Reportedly, the COVID-19 pandemic has resulted in a negative impact on demand and earnings within most industries that AAK serves.

According to AAK, in spite of the short-term to mid-term impact from the COVID-19 pandemic, it sees no reason to adjust its view on the strong favourable underlying long-term trends in its markets and continues to remain prudently optimistic about the future.

However, in order to support its long -term ambition, it has decided to accelerate the optimisation of its structure and has initiated structural measures, including cost items affecting comparability, of about SEK200m, which will be reported in the operating profit in the second quarter of 2020.

Approximately 35% to 40% is expected to impact cash flow. These measures will generate annual savings of about SEK150m and are expected to reach full run-rate by the second half of 2021.

In addition, AAK will report an income in the range of SEK200m to SEK225m as an item affecting comparability, linked to an optimization of the company's capital structure. This will not have an impact on the cash flow.

(EUR1.00=SEK10.46)

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Publication:Nordic Business Report
Date:Jun 26, 2020
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