STOCKHOLM, Sweden, Feb. 13, 2002 (PRIMEZONE) -- Karlshamns:
-- The Group's profit after net financial items amounted to
SEK 182 million (52).
-- Growing volumes in all business areas.
-- Profit improvement in business area Oils & Fats, but stronger
competition on the Nordic markets.
-- A dividend per share of SEK 3.50 is proposed, in line with
last year.
-- Strategic growth areas have been identified.
-- New organisation with explicit profit responsibilities.
Development Process 2001
The year 2001 was characterised by a far-reaching development process with focus on strategy, profitability and tempo. In connection with the strategic review of the Group a number of profitable growth areas were identified, and a reorganisation implemented on 1 September with a view to clarifying responsibilities for sales and profitability. The Group is now organised in three business areas: Oils & Fats (formerly Edible Oils), Technical products and Feed materials. Business area Oils & Fats has three business sectors: Chocolate & Confectionery Fats, Edible Oils and Lipids for Care. Chocolate & Confectionery Fats has its focus on high-quality chocolate fats, fractioned so called Cocoa Butter Alternatives (CBA) and premium filling fats, or filling fats generating a technical added value.
Edible Oils has three product segments aiming at the entire food industry: Edge products, which are speciality products in the food segment; Dairy Fats Alternatives (DFA), vegetable fats for the food industry; and Volume products sold in larger volumes for applications like cooking oils, margarine and snacks.
Lipids for Care has its focus on advanced products for the cosmetic industry as well as for clinical nutrient solutions.
Market
Raw material prices increased in 2001, while the Swedish krona decreased in value against both US dollar and Euro. The weaker Swedish currency improved the competitive strength of the Swedish units and contributed to a consolidation of the company's market position.
Increased competition in the vegetable oil industry depressed margins on the Nordic markets, while recession in the metalworking industry had a negative effect on technical oils. A stronger demand for ingredients based on vegetable raw materials is boosting volumes, in particular in business areas Feed material and Oils & Fats.
The growing demand in Central and Eastern Europe contributed to increasing sales volumes in business area Oils & Fats.
Oils & Fats
Chocolate & Confectionery Fats The global market for the chocolate and confec-tionery industry totals some 5.6 million tonnes and is growing by some 3-4 per cent each year. The industry is characterised by far-reaching concentration, with the six largest chocolate producers accounting for approximately 60 per cent of total world production.
Along with rising cocoa butter prices, the growing interest to replace cocoa butter by vegetable fats in the wake of the 5 per cent rule* contributed to higher contribution margins as well as increasing volumes in the CBA segment. Volumes for the full year 2001 as well as for the fourth quarter surpassed last year's levels.
Edible Oils
The world market for vegetable oils amounts to some 85 million tonnes, with an annual growth rate of 3 - 4 per cent.
The volumes sold by Edible Oils increased somewhat during the year, but were in line with last year in the fourth quarter. The Nordic markets grew more competitive during the year.
Lipids for Care
The market for cosmetic products, and in particular the one for skin care products, grows by 4-5 per cent each year.
To an increasing extent consumers give priority to vegetable raw materials over synthetic, animal and mineral oil based alternatives. As a result, this market segment displays a higher growth rate than the market as a whole. The full year as well as the fourth quarter displays a positive volume development with unaffected margins.
*In the spring of 2000 the European Union voted a directive allowing other vegetable fats to replace up to 5 per cent of cocoa butter in products marketed as "chocolate" within the EU. The new regulation will come into full force in the autumn of 2003.
Technical Products
Tefac At the end of the third quarter of 2001 the European fatty acids market was on a level with the same period last year.
As a consequence of the general recession, European demand decreased in the fourth quarter. Tefac still managed to boost its volumes, thereby consolidating its position on the Northern European market. The pressure on glycerol prices intensified in the fourth quarter, as demand continued to decrease.
Binol
After a promising start early in the year, this autumn's general recession in the metalworking industry had a restrictive effect on the global technical oils market.
Binol maintained the market shares gained in 2000, and product segment forestry and construction even displayed a notable increase in the last six months of 2001. All in all, Binol increased its sales volumes of environmentally responsible technical oils in 2001.
Feed Materials The feed industry's outspoken focus on feed safety and the growing consumption of vegetable feed fats had positive effects on Karlshamns sales volumes, which surpassed last year's level all through 2001. The somewhat fluctuating margins stabilised on a higher level in the later part of the year.
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