2Q26 preview: slight downside to Q2 cons but more than priced in

Research evidence excerpt

2Q26 preview: slight downside to Q2 cons but more than priced in

higher

12/27E 16.56 16.12 -3 16.22

biofuel blending mandates) on AAK's volumes, profitability and FCF, as well as some

12/28E 18.18 17.83 -2 17.44

downside to Q2 earnings estimates due to a tough prior year EBIT comp. While we agree

the near term setup is difficult, shares are pricing in a more structural deterioration in Priyanka Patel

growth trends which we don't believe to be the case. Analyst

priyanka.patel@ubs.com

Investor concerns appear overdone +44-20-7568 0016

We outline three key points: (1) on volumes: inflationary pressure on consumers could Charles Eden, ACA

impact volume growth but this isn't specific to AAK and we note its exposure to more Analyst

charles.eden@ubs.com

defensive food end markets. In previous raw material inflationary cycles, group volumes

+44-20-7568 9622

declined by 1-3% while EBIT growth was still resilient driven by mix optimisation. Self

help measures which have been driving a sequential improvement in volumes already as Christian Bell, CFA

well as easy comps in CCF with cocoa inflation easing and key customers (link) guiding Analyst

christian.bell@ubs.com

to slight growth in 2H could help buffer against any weakness in food end markets; (2)

+44-20-7901 5493

on profitability: AAK has consistently shown in previous cycles that it can pass on raw

material inflation to protect EBIT/kg; and (3) FCF: if we assume working capital outflows

similar to FY21/22 of around SEK 5bn when palm oil prices last peaked, this would equal

around SEK 20/share vs the share price fall of c. SEK 44/share since Q1 results. This

would be a very aggressive assumption with our raw material tracker showing around

10% inflation y/y in key raw mats (seen from 2H26 if spot prices hold) vs 50% on