Over the last few months, extensive restrictions and lockdown measures have been implemented in most countries around the world, which has resulted in a negative impact on demand and earnings within most industries that AAK serves. In response, the company has decided to optimize their cost base in affected segments.
“In spite of the short- to mid-term impact from the corona pandemic, we see no reason to adjust our view on the strong favorable underlying long-term trends in our markets and we continue to remain prudently optimistic about the future”, says Johan Westman, President and CEO. “However, in order to support our long-term ambition, we have decided to accelerate the optimization of our structure.”
Therefore, AAK has initiated structural measures including cost items affecting comparability of about SEK200m (approx. EUR20m), which will be reported in the operating profit in the second quarter of 2020. Approximately 35–40% is expected to impact cash flow. These measures are expected to reach full run-rate by the second half of 2021.
“The planned initiatives, including mainly global workforce reductions and procurement savings, are fully in line with our strategic direction to optimize our Bakery, Dairy and Foodservice businesses and will also fund strategic investments in other segments, for example, Plant-based Foods”, says Johan Westman.