AAK is a specialty vegetable-oils-and-fats franchise — high-value chocolate & confectionery fats, plant-based and special-nutrition applications — run on an 'operating profit per kilo' model that reached SEK 2.45/kg (from SEK 2.25), the key value metric. The franchise is genuinely durable: customer co-development and reformulation create switching costs, and the company has delivered 18 consecutive years of operating-profit growth (an ~18% EBIT CAGR since 2020). FY2025 operating profit excl. IAC was SEK 4,925M, +9% at constant FX even as volumes fell ~3% on soft consumer demand — margin/kilo expansion more than offset the volume decline.
We make one normalization: adding back the SEK 250M Fit-to-Win restructuring charge (the sole FY2025 IAC, targeting ~SEK 300M of annual run-rate savings by mid-2026), which sits in the FY2025 anchor. PPA amortization is small (SEK 30M) and kept in opex. The result: adjusted ROIC ~14.9% on IC SEK 25,343M clears the 8% WACC for EP +SEK 1,750M (~7pp spread). The chief balance-sheet feature is working capital — inventory SEK 11,906M + receivables SEK 6,442M (~SEK 18.3bn gross), an inherent feature of a commodity-input specialty processor that ties up capital but supports the per-kilo margin model.
On adjusted NOPAT (SEK 3,777M) the reverse-DCF base is ~−3% to the SEK 239.8 price at 5% growth and +9% at 10% (PEBV ~1.41, EV/IC ~2.6x) — the market prices ~6-7% sustained growth, a modest premium that the per-kilo expansion track record and Fit-to-Win savings can justify.
Base SEK 248 (modest upside; ~6-7% growth + savings ramp); bull SEK 280 if margin/kilo expansion and the SEK 300M savings flow through (the 10% case); bear SEK 205 if volume softness and FX headwinds persist (no-growth case).
The market pays today’s enterprise value for roughly 6.4% NOPAT growth over 5 years. The business earns 15% on capital against a 8% cost of capital (spread +6.9 pp); the no-growth value is SEK 203/share (84% of price), so the rest is priced-in growth.
| Scenario | 24m target | Impl. g | Upside | Prob. | Driver |
|---|---|---|---|---|---|
| Bull | SEK 280 | +12% | +17% | 30% | Margin/kilo expansion + Fit-to-Win savings flow through |
| Base | SEK 248 | +8% | +3% | 45% | ~6-7% growth priced; per-kilo model justifies it |
| Bear | SEK 205 | +0% | -15% | 25% | Volume softness + FX headwinds persist |
| Prob-weighted | SEK 247 | — | +3% | 100% | Scenario-weighted expected value |
| WACC \ g | 0% | 3% | 5% | 8% | 10% | 15% |
|---|---|---|---|---|---|---|
| 6.50% | 278 | 306 | 326 | 358 | 381 | 445 |
| 7.25% | 234 | 256 | 271 | 296 | 313 | 360 |
| 8.00% (base) | 203 | 219 | 231 | 250 | 263 | 299 |
| 8.75% | 179 | 192 | 201 | 216 | 226 | 253 |
| 9.50% | 160 | 170 | 177 | 189 | 197 | 217 |
Green = fair value above the current price of SEK 239.80. The reverse-DCF conclusion is dominated by WACC and growth — see the whole surface, not a single fair value.
⤓ Download the full model (.xlsx) — formula-driven sheets; flex the blue input cells and the model cascades in Excel.
Operating profit/kilo SEK 2.45 (from 2.25) — the core value engine offsetting soft volumes.
~SEK 300M annual run-rate savings by mid-2026 — a margin tailwind.
Customer co-development + reformulation switching costs; 18-year profit-growth streak.
Adjusted ROIC ~14.9% > 8% WACC, EP +SEK 1,750M.
AAK is a durable specialty-fats compounder — 18 straight years of operating-profit growth, a per-kilo value model lifting margin against soft volumes, adjusted ROIC ~14.9% and EP +SEK 1,750M — fairly-to- modestly valued at PEBV ~1.41. HOLD with a modest BUY-lean / quality bias; base SEK 248.
Accumulate on volume- or FX-driven weakness; the Fit-to-Win savings and continued per-kilo expansion are the levers that re-rate it.
Every adjustment traces to the cited note/page in the source filing — click to open it there. Annual report / 10-K: 📄 open · Latest interim: 📄 open
| Adjustment / figure | Value | Source | Why mttssn treats it this way |
|---|---|---|---|
| Net sales (LTM) | 45,666 | Financial highlights — R12M column 📄 p.2 | AAK's own disclosed rolling-12-month net sales on the Q1 2026 highlights table; equals FY2025 46,021 + Q1'26 11,388 - Q1'25 11,743. Confirms exact LTM reconciliation. |
| Net sales (FY2025 anchor) | 46,021 | Consolidated income statement 📄 p.124 | Audited FY2025 net sales line. Total operating income (incl other operating income 332) = 46,353, which matches the Borsdata revenue anchor. |
| Operating profit / EBIT (LTM reported) | 4,699 | Financial highlights — R12M column 📄 p.2 | Disclosed R12M operating profit; = FY 4,675 + Q1'26 1,285 - Q1'25 1,261. Used as reported-EBIT spine of the LTM. |
| Operating profit excl. IAC (LTM, company adj EBIT) | 4,949 | Financial highlights — R12M column (footnote: IAC = Fit-to-Win, Q2 2025) 📄 p.2 | AAK's own adjusted EBIT R12M. Our adjusted EBIT (4,699 + 250 add-back) equals this exactly so APM divergence is 0.0%. |
| Items affecting comparability (Fit-to-Win restructuring) | 250 | Directors' Report — performance & financial position 📄 p.45 | Sole FY2025 IAC: 'a non-recurring restructuring cost of SEK 250 million in the second quarter, impacting Group function.' Quantifies the single NOPAT normalization; sits inside the FY anchor (no IAC in either Q1). |
| Operating profit per kilo excl. IAC (LTM) | 2.47 | Financial highlights — R12M column 📄 p.2 | AAK's headline APM — value capture per kilo (vs 2.32 reported). The metric that matters because revenue is commodity-pass-through. Segment detail: Choc & Conf Fats 4.22, Food Ingredients 2.41, Technical Products & Feed 0.65 (Q1 pages 6-8). |
| Goodwill | 2,141 | Condensed balance sheet 31.03.2026 📄 p.12 | Goodwill 2,141 at 31.03.2026 (FY2025 2,108, Note 13 page 161). Modest at ~10% of equity; accumulated impairment flat at 27 — no impairment; movement is FX + IAS 29 only. Three CGUs = the three business areas. |
| Working capital — inventory | 11,906 | Condensed balance sheet 31.03.2026 📄 p.12 | Inventory 11,906 (FY 11,752). The dominant operating-asset line; commodity-price-driven (shea/palm/rapeseed), partly fair-valued as hedged items. With AR 6,442 it drives AAK's large invested-capital base and volatile operating cash flow. |
| Working capital — accounts receivable / payable | 6,442 | Condensed balance sheet 31.03.2026 📄 p.12 | Accounts receivable 6,442 (FY 5,834) vs accounts payable 3,404 (FY 2,970). Net trade WC is large and swings with raw-material prices and sales seasonality — Q1'26 WC release of +220m vs -1,399m in Q1'25 explains the OCF swing. |
| Lease liabilities | 441 | Condensed balance sheet 31.03.2026 (FY detail Note 15 p.164) 📄 p.12 | Total lease liabilities 441 (339 non-current + 102 current); ROU 411 vs PPE 8,198 = 5%. Land/buildings + vehicles, peripheral, so EXCLUDED from IC. FY lease interest 19 already below EBIT (no NOPAT add-back). |
| Interest-bearing debt (excl leases) | 3,470 | Condensed balance sheet 31.03.2026 📄 p.12 | Liabilities to banks non-current 395 + current 3,066 + other interest-bearing current 9 = 3,470. Component of IC. AAK-disclosed net debt 2,187 (page 4); net debt/EBITDA 0.39x — modest leverage. |
| Cash and cash equivalents | 1,598 | Condensed balance sheet 31.03.2026 📄 p.12 | Cash 1,598. operational_cash = 2% x revenue = 913; excess_cash 685 deducted from IC. |
| Total equity | 21,523 | Condensed balance sheet 31.03.2026 📄 p.12 | Total equity 21,523 (parent 21,449 + NCI 74). Base of IC. Reserves line @ 31.03.2026 = -999 (accumulated translation OCI), stripped to give equity_ex_oci 22,522. |
| Accumulated OCI (translation reserve) | -999 | Comprehensive income / Reserves (FY Changes-in-Equity p.128) 📄 p.11 | FY closing Reserves -1,545 (built entirely from OCI: opening 1,002 + OCI -2,547, dominated by translation -2,545) + Q1'26 translation OCI +546 = -999. Negative FX translation reserve so equity_ex_oci rises and IC up ~999 and ROIC down. Stripped because FX swings are not operating capital decisions. |
| Income tax / effective tax rate (LTM) | -1,076 | Condensed income statement (FY Note 11 p.159) 📄 p.11 | LTM tax -1,076 on PBT 4,543 = 23.68% effective rate (FY 23.7%; Q1'26 disclosed ~23%). Used to tax adjusted EBIT to NOPAT. |
How the mttssn view has evolved — each prior dated note is preserved.