KARLSHAMN, SWEDEN — AAK has initiated structural measures designed to generate annual savings of about SEK 150 million ($16 million), the Karlshamn-based company said June 25.
“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,” said Johan Westman, president and chief executive officer.
Global restrictions and lockdown measures instituted in response to the coronavirus (COVID-19) pandemic have had a negative impact on demand and earnings within most industries that AAK serves, according to AAK.
“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,” Mr. Westman said. “However, in order to support our long-term ambition, we have decided to accelerate the optimization of our structure.”
The structural measures should reach full run-rate by the second half of 2021. The measures include cost items affecting comparability of about SEK 200 million, which will be reported in the operating profit in the second quarter of 2020. About 35% to 40% is expected to impact cash flow.
AAK plans to release more information on July 17 when the company will release an interim report for the second quarter.