AAK AB (publ)
STO:AAK
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
207.9369
340
|
| Price Target |
|
We'll email you a reminder when the closing price reaches SEK.
Choose the stock you wish to monitor with a price alert.
This alert will be permanently deleted.
AAK AB (publ)
You don't have any saved screeners yet
Ladies and gentlemen, welcome to the AAK Audiocast for Teleconference Q4 2021. Today, I'm pleased to present CEO, Johan Westman. [Operator Instructions] Johan, please begin the meeting.
Thank you so much. Good afternoon, everyone, and welcome to the AAK Quarter 4 2021 Earnings Call. With me today, I have our CFO, Tomas Bergendahl. And together with me, we will run this presentation and as always, happy to take any questions at the end. The agenda for today on Page 2 is first highlights of the quarter, some discussions on key events, highlights for the year as well as financial updates and a few concluding remarks from myself. With that, let's head into first a short summary of quarter 4, Page 3. We closed the year on a good note, one could say. Finished strong with volume growth as well as increasing our earnings per kilo or EBIT per kilo. Our operating profit per kilo is up 3% year-on-year and that resulted in total in an operating profit, which is up 9% year-on-year. If we look at that in fixed currency rates, that would even be up 13% year-on-year. So all in all, a good trend that continues into the quarter and that, in spite, of still a quite dynamic business environment, one could argue with COVID a bit on and off in terms of restrictions, inflation as well as challenges in global transportation but the organization has really continued to deliver, to manage. And with that, we are able to deliver strong numbers on the back of that. If we then move to the next page, just very short, we were present at the Food Ingredients Europe Trade Fair, where we are happy to share that we were awarded. We were awarded for AkoBisc GO!, which is a nomination and an award in the food tech innovation category, and we were also nominated in other categories. So very glad to see that and shows that we continue to push forward and to be very relevant for our customers. We've also had our Capital Markets Day in November, and this one, we had face-to-face COVID allowing that. Very nice to see investors and colleagues in the industry being represented and having a good conversation presenting AAK and so forth. And if we then turn to next page on Page 5 that is, we also reiterated at the Capital Markets Day, our ambition or our financial target, which is to increase our earnings, our EBIT by 10% year-on-year. Now those of you who follow us know that we have a track record to do that and now we reinforce that going forward. That is something that takes a lot of strategic ambition, direction as well as hard work. The way we see this and call it the ingredient list to perform going forward is resting on 4 pillars or 4 ingredients, which is really continued market growth for plant-based oils and fats where we focus and for us to take a good portion of that, topping that up with a continued focus on optimizing not only our operations, but also the segments that we choose to deliver in certain industries. We also see that we continue going forward to do structural growth in terms of continued greenfield investments as well as M&A or joint ventures. And last but not least, a maintained strong focus where we stand strong on codeveloping together with our customers, focusing on high value-added solutions and a strong sustainability offering to our customers and together with our partners in the supply chain. If we combine this, we are confident that we can also continue to drive strong performance going forward. If we then move on to Page 6, looking at the year as a whole, we delivered an all-time high result in terms of higher volumes, 5% year-on-year. Adjusted operating profit, which is based on a -- adjusted operating profit per kilo being up 5%, leading to a total operating profit adjusted at plus 11% year-on-year or the same number in fixed currency rates plus 18% year-on-year. So all in all, a strong result with a strong finish to the 2021 year in a very dynamic and challenging environment one could argue. This also led to us continue to delivering a strong earnings per share. And based on that, the Board of Directors has proposed a dividend of SEK 2.5, up from SEK 2.30 last year. In addition to this, we've also performed very nicely in terms of having an organization that is dedicated to our progress on sustainability. We have set high bars in terms of targets for how we will impact our supply chains going forward. And I'm also very glad to summarize 2021 from that perspective, where we have made strong progress against our targets on, for example, verified deforestation-free supply chain as well as traceability as well as our microfinancing women program, Kolo Nafaso in West Africa, many examples of very strong performance from AAK. On that note on sustainability, on Page 7, we today also announced in the press release that we are investing, in this case, in our own operations. We announced that we will invest SEK 500 million in 2 biomass boilers in our plant in Aarhus, Denmark. This is expected to lead to a CO2 reduction or reduction of emissions by 90% for the orders plant alone. But this also represents a 16% reduction of total AAK CO2 emissions when calculated in accordance with the science-based target Scope 1 definitions. On top of that, we are also saving money. We are reducing the cost for energy by SEK 100 million per annum. So all in all, a very good example of a real sustainable investment, improving our earnings as well as reducing the CO2 emissions, making our operations better and reducing that negative footprint in CO2. And to build on that a bit and connecting it to the way we source, this now creates a very nice supply chain for shea. We buy shea kernels from West Africa. It starts with a woman traditionally going out in the bush to a wild grown tree, picking up fruits, shea fruits, cooking them, drying them, taking the kernels, moving that to a -- selling the kernels to us and others. We collect them, in this case, we transport them to Denmark, where we crush the shea kernels in order to get value-added oils and fats, shea oils and fats, used in Chocolate & Confectionery solutions, used in personal care, skin care solutions as well as technical applications. The leftover is a shea meal. With this, we will now take that shea meal, and we will burn it for power to operate the plant, closing the loop in a circular way. Not only that, the ashes that will then be left over can also be used as fertilized or fertilizers. So really an investment to improve our supply chain where we have acted and are continuously moving the ball forward in terms of improving sustainability. West Africa, where we source is also where we have our Kolo Nafaso program, which today includes 350,000 women in West Africa, where we improved the livelihood by allowing micro financing, helping with bank accounts and so forth. Very proud of the achievements that we have done in our organization, both in our sourcing and now in the way we continue to improve our operations in turn. With that, moving to Page 8. Food Ingredients, the business area of Food Ingredients. We continue to report organic growth. Our volumes are up 5% year-on-year, leading to -- with an operating profit per kilo, up 1%, leading to operating profit being up 6% year-on-year. So really a good driver here as well. In the quarter specifically, we see a continued or a good rebound in Foodservice, where compared to last year, we have had higher sales into restaurant chains, hotel chains and so forth. And not only that, of course, cool kitchens and other, call it, customer segments where COVID has had an impact. We've also seen a strengthened profitability. Even though volumes were not higher, we saw a good profitability increase in bakery. So all in all, seeing a good development also in Food Ingredients. With that, moving into Page 9, Chocolate & Confectionery Fats business area, strong positive trend that we have seen in the earlier quarters also continued in the fourth quarter. Volume is up 12% and that leads us through an operating profit, which is up 12% as well year-on-year, very strong improvement. Looking at that in fixed currency, it is up 20%. So in this case, we are growing faster than the market, especially in terms of earnings. And this is based on a strong demand, basically in all regions. And with regards to product solutions, it's really filling fat and same specialty solutions that remains really strong across the globe. This, in all becomes a record all-time high result for also our Chocolate & Confectionery Fats business area. And last but not least, Technical Products & Feed on Page 10. Another stellar quarter from this organization with operating profit being up 46% year-on-year, even with a slight reduction in volumes. The main driver on a year-on-year perspective is really a higher demand for natural ingredients within Technical Products & Solutions as well as a better margin in our feeds business. So all in all, continue on a positive trend and also in this case, increasing the EBIT per kilo quite significantly, up now to SEK 1.01 per kilo. All in all, a strong finish basically in all business areas and in there with Technical Products & Feed. With those comments on our business areas and the financials, I hand it over to more details to Tomas, our CFO.
Thank you, Johan. Good afternoon, everyone. We're now on Page 11. As you can see, the uncertainty and volatility in the raw material markets has continued during Q4, with prices continuing the trend higher. The price increases that we've experienced during the past 18 to 24 months are at historical high levels. And as Johan has mentioned before and as you can see from our results in Q4, we are managing the situation well with an EBIT per kilo development that are -- that is positive. However, the increase in raw material prices impacts our working capital and, therefore, also our cash flow. Moving to Slide 12. And as you can see from the picture here, the operating cash flow as we define it and based on EBITDA adjusted for changes in working capital, improved somewhat in Q4 compared to previous quarters. However, working capital was still negatively impacting our cash flow driven by increased raw material prices. And with the current raw material prices and the levels and increases that we've seen, we expect the negative impact on cash flow to continue in at least the first half of 2022. We usually have a lag of 6 to 9 months. If we look at CapEx, it amounted to SEK 251 million in the quarter, totaling for the year SEK 621 million and with the guidance range that we provided before of SEK 600 million to SEK 700 million for 2021. And the guidance we give on the expectation on our spend on CapEx for next year or this year 2022, we expect to end up just north of SEK 1 billion for the year.Moving on to Slide 13. Looking at our return on capital employed, which has now for the third quarter, showing a stable high level at 15.6% in the quarter and is up from the low point that we experienced mid-2020 at the beginning of the pandemic. And moving on to Page 14, where we show our net debt-to-EBITDA levels, and it remains at a low level at 1.25 in Q4. And this provides AAK with ample room to grow both organically through investments, CapEx and through acquisition as well. Back to you, Johan.
Thank you, Tomas. And with that, we are at the last page in the presentation, concluding remarks on Page 15. I think we can all agree that the world around us is still dynamic. There are, for sure, some short to midterm uncertainty. But at the same time, we see that underlying trends like sustainability, health and nutrition, indulgence, it's still there. And we have been able to operate and manage a situation which is very similar in the last year, meaning that it's been a dynamic environment with quite a few factors impacting our business. But still, we have an organization that really continues to deliver and push on hard going forward.So with that, we don't see any reason to change our view on the strong underlying trends, and we remain focused on really producing high value-added oils and fats, plant-based oils and fats. And we're fully committed to making better happen going forward, and living our purpose. And with that, I think it's time to end this call and open up for questions.
[Operator Instructions] Our first question comes from the line of Heidi Vesterinen from BNP Paribas.
I have a question first on Special Nutrition. I think you talked about negative mix in Q4. Could you explain what that was? And was this a one-off Q4 event? Or do you expect this to continue into 2022? And then on a related note, I think last call, we had talked about how Special Nutrition margins were challenged because you have annual contracts with respect to pricing, but raw material costs had increased. So as we go into 2022, as you get into new contracts, should we expect Special Nutrition gross margins to improve year-on-year? Those are my questions.
Well, thank you. And I mean, you're highlighting and basically, this report also highlights what we had talked about before. So within the result of Food Ingredients, we have, as you know, also from the Capital Markets Day, we have many eggs in the baskets. And some are moving stronger, some are more and less strong. Within Special Nutrition, we see a continued strong position for AAK, good volumes. But at the same time, for some of our solutions and with the price situation in China for China, call it, the margin in the mix of the basket also in this quarter somewhat on the low side, which impacted that. And that -- I mean, that's the situation. Part of that coming from, call it, raw materials and ability to price or not going forward, as you mentioned. And part of that just based on competitive landscape. So still a good business, still a good position. But in terms of year-on-year margins somewhat lower margin mix in our basket.
Are you able to comment on the outlook for 2022, please? And can you talk about the competitive landscape? Is there more competition in Special Nutrition scenario? Are they local players or global ones?
Yes, not really. This is more linked to that in China -- in the volumes moving to China is a slightly different competitive landscape than in the rest of the world, which we have mentioned before. And not a lot of competitors, not a big difference, but a slightly different way of operating in China, selling in China. And that's it.
And the next question comes from the line of Oskar Lindstrom from Danske Bank.
Two questions from my side. The first one here is on the raw material price increases, which are also prompting sales price increases on your side. Is that in any way sort of impacting end demand for some of your products? I mean we've heard about consumer goods producers and retailers increasing shelf prices now in early 2022 to -- in a response to cost inflation. I mean, do you foresee any impact on demand or the demand mix in your case? That's my first question.
We haven't seen that yet, no. And in a large part of our total product mix, one could argue that it's quite resilient. Then, of course, if things go bananas, there are certain categories that you could expect pricing having a power, for example, within confectionery. But so far, we have seen good demand, and I think there is a fair share of capabilities for the retailers to increase prices and still get volume through. It's an inflation generally, right? So we don't see a specific big demand shift because of inflation.
And just to add there, Oskar, as well that our products that go into CCF, for example, they make up, depending upon where you are in the world and what's allowed 5% to 10% of the product. And if you look at our slide on Slide 11, the cocoa butter remains fairly stable price-wise. So we're not -- even if the price goes up on our products, it makes up, as I said, 5% to 10% of the finished product based on regulations, right?
Right, right. Okay. And then I'd like to come back to this question of mix change in Special Nutrition in China. And then you mentioned a little bit here that there were slightly different competitive environment and a slightly different pricing environment. Could you maybe say a little bit more about what's happening in China in Special Nutrition in terms of the mix between domestic and foreign customers to you? And what's happening with your sales and price mix basically and what we could expect going into 2022 here?
Yes, it's basically the same trend that we have articulated for some time. We see Chinese players growing and multinationals having reduced volumes, call it, in terms of our customer base, meaning that there is a shift from production and sales of infant formula blends, shifting in more and more to Chinese players. So they are growing. They've been -- this is a shift which is not in Q4. This has been ongoing for quite some time. And with that, we are also moving, and we have done a good job in being very relevant. So we have a good market share. We're relevant with many of these players. But within that, there is also a slightly different setup of competitors to us when we compete and expectations on price in this portfolio. And whether inflation is there or not, you're always standing shoulder to shoulder to a competitor in every region that you operate. And in this case, we just know that, that mix that we see today is slightly lower price than the mix that we have had in the past, but this is not a quarter shift, this is something that we have seen over time and what we have explained a few times before. So that's what it is. I mean, slightly lower prices on certain product categories.
And the talk -- earlier, there was some talk about changes in legislation regarding what kind of a claims could be made regarding ingredients, et cetera, from producers of infant formula. What's happening with that? And how do you see that impacting you?
Well, there hasn't been a lot of change. There is rather an existing legislation where in many countries in Europe and elsewhere in the world, you cannot make claims, which you can in China. So nothing has happened there. If that were to change, you might see an increased demand for high value-added ingredients also being higher in Europe, U.S. and other regions. So that's an opportunity if that was to change, right? So -- and that's what it is. But I think this quarter also shows together with a few others this year, the mix that we have, which is the total mix, and we stand on very many legs also in Food Ingredients. So despite this, we're able to show a year-on-year increase of our earnings in Food Ingredients.
And the next question comes from the line of Alex Jones from Bank of America.
Firstly, on the chocolate margin this quarter, it's very strong sequentially. And I guess last year, the fourth quarter was also quite strong. Could you talk about the drivers of that and whether that's sort of a new normal margin we should expect seasonally around the Christmas period each year or whether there are any sort of one-off factors in that? That would be the first question.
Well, thank you. And yes, well, strong. And here, we -- I think the main driver here is really the continued strong demand in the market in our position and being able to capture that because year-on-year, we're not increasing our margin, but it is a good margin, I agree, which is very much helped from getting good leverage on higher volumes and being efficient in our own operations. So the seasonality here is rather around total demand, which is stronger in Q3, Q4, typically building up for our customers to produce and deliver for Christmas and Easter and so forth. So the seasonality is there, and we have been able to capture good volumes and with that get good leverage on our assets.
Second question on the biomass boiler that you talked about. Could you just confirm in terms of the CapEx frame whether that's on top of the CapEx guidance that you gave at the Capital Markets Day and the SEK 100 million energy price savings? Would that be at sort of normalized energy prices or does this -- in fact, you refer to up to SEK 100 million that you're baking in sort of some element of the higher energy prices we're seeing currently?
Yes. Thank you. Good question. So call it the CapEx as such, call it, baked in, but if anything, pushing, it's slightly north, right? So guidance is SEK 1 billion -- a north of SEK 1 billion going forward, where part of this will come this year and part of this will come next year. And in terms of savings, we have, of course, and we articulated that in the meeting today with our Board of Directors. Of course, we did -- done a bit of simulation around energy prices and so forth, and no one knows what the future will bring. But we do stand by this one. I think it's a very good investment, combining CO2 reductions with savings. And we have taken into account currently high prices, but we also don't know what they will be going forward. So it's simulated a bit up and down what would happen, and this is in relation to average prices that we've seen for the last couple of years.
Final question, if I may...
It could be higher, it could be lower compared to actual prices in the future years, right? I mean that's a given, but we don't know.
Final question, if I may on now plant-based. You talked about continued good growth. And I think at the Capital Markets Day, you showed us volumes have been up nearly 50% year-to-date, given that some of the pure-play plant-based companies you talked about slightly slower growth. Could you confirm for us whether your growth has also slowed even if it remains at a very good level or what you're seeing in that space generally?
Yes, we are very relevant in that market. So what you see as an average in plant-based meat solutions or meat alternatives, I should say, and dairy alternatives is also relevant for us, right. So we continue to grow this quarter slightly lower than earlier quarter, just what you just confirmed there, and that's what it is. And -- but we were very relevant. And as I've said many times, long term, we do believe in this. But I'm not surprised that there is a bit of a 2 steps forward, 1 step back in terms of adoption and penetration in the market. Still, for us, it's a small portion, as you know, of our total volumes and earnings.
The next question comes from the line of Per Jørgensen from I&T Asset Management.
Impressive results. Very good to see. My questions is a bit of a follow-up from the former participants around the CapEx. If we take the volume -- total volume this year, it's around all-time high. Will you see the CapEx as more debottlenecking so you can actually increase your volume further on the group level? That's my first question. Coming back to your Page 5 with the average EBIT -- strong EBIT improvement year-over-year, the market growth is there. Optimization is about what I'm asking. High value-added will probably continue. Do you, in some sort of way, need a structural growth to continue with the average 10%? That's my second question. And then my final question on the TPF, part impressive. Is that also a new level or is it more -- will it more fluctuate in the future?
Per, thank you for your questions. And if I understood correctly, your first question was not on the announced CapEx, it was on CapEx, in general.
That's right. That's right. Yes.
Okay. Fair enough. And for sure, it includes debottlenecking, certainly. I mean we -- I mean that's -- whenever we can do that, that is just great, right? So -- but our going-forward CapEx would be like the historic CapEx. There will be a mix of sustainability and productivity investments like the one we announced today. There will be maintenance CapEx as a ground plate, and there will be debottlenecking as well as greenfield operations going forward. We don't think that we can -- which is part of the -- maybe last question on -- or second question, structural. If you include that, I do see that we will, going forward, have greenfield, new as well as bolt-on acquisitions for regions, countries and/or capacity as well as acquisitions regarding adjacent ingredients and/or new technology, right? And I mentioned before and on the Capital Markets Day, I think we do need a combination of these 4 pillars or ingredients, if we speak our own language overtime. So in order to repeat a very bold target and exponential one of 10% year-on-year EBIT growth, I do think that we need over time to see both market growth optimization, structure growth and a continued drive on EBIT per kilo by focusing on high value-added solutions. Now in a specific year, it could be all organic and other year could be more of structural. But over time, I do think we need to include all these ingredients to be able to deliver but also the opportunities to do them all, right? Otherwise, we wouldn't [indiscernible]. And then last question on TPF. I mean, you see a very strong performance over the recent time period, which, we are, of course, happy for and good driving the organization. What I think really will maintain there as a strong trend is the opportunities around different industries, companies leaving fossil-based input material one way or the other. I think that drive will continue. Now we have also seen very strong operations internally. We have had some help of good crushing margins for the small piece that is around rated crushing. So will this be the new level, or will it fluctuate a bit? But I do think it will be fluctuating a bit, but on a good level. I cannot comment any more than that, but we see there are a few underlying trends that are -- support a good trend. But this was, for sure, a stellar quarter.
In the quarter, the crushing margin quarter-over-quarter is about the same. So the improvement lies with our Natural Ingredients business in Q4 '21, which is a very positive sign.
As well as good margins in the feed business.
And the next question comes from the line of Kenneth Toll from Carnegie.
Yes. So being last in line, most of my questions have been answered. But one thing is that the announced investment that you are doing to cut costs and also carbon dioxide emissions, do you see similar opportunities at other locations you have around the globe?
Yes. Of course, we are always trying to -- I mean, this is part of optimizing. Optimizing our footprint from a sustainability point of view as well as from a cost point of view. This is one good example. We're certainly looking for other opportunities similar to this. In this case, it's specific to burning the shea meal and the shea meal we only have in this plant. So this particular one is for this plant, but our strive to find similar opportunities and to do a double or triple play by cutting costs, improving our productivity as well as reducing our CO2 footprint is certainly something that we drive for in our strategic agenda, where sustainability is an important pillar. We do demand of every CapEx that we're doing. We are making that in our business case approval process. We are looking at the CO2 impact from each investments.
You also had good volume growth in the Chocolate & Confectionery Fats business, and you say that you had good market demand and success there. But could you elaborate a little bit on what you are doing because you must take market shares a little bit with those high volume increase for?
Yes. And we are a very strong player in the Chocolate & Confectionery Fats market. We've been recognized over time for being a very knowledgeable partner. Our co-development process, we're very close to the global players and chocolate manufacturers. And with that position, it gives us opportunities. Of course, we talked a bit in these calls over time about dynamics, pricing dynamics and so forth. And -- but when it comes to the competence and our ability to drive products and solutions for our customers, we are -- we have a strong position, and we do a good job. And I think that helps. In some cases, we win a spot order. Other cases, we win an order based on a codeveloped solution. And in other cases, it is, call it, just the market growth with that specific customer.
So Fuji Oil integrated forward a couple of years ago buying chocolate manufacturing operations, have that affected your opportunities to take market share, as you believe?
I will not comment on our competitors specifically, but what they bought is a company producing -- they are one step forward in supply chain producing chocolate compounds and so forth like a few other players, and they -- those players are our customers, in general. And in our industry, we do sell to competition, and we buy from competition depending on ingredients. But in the total scheme of things, it hasn't impacted our ability. I mean, you see that on the numbers, right? In a specific case, it can certainly have had an impact where they control the opportunity to sell their own ingredients. But in the total scheme of things, we have been able to be very relevant with the total global demand in chocolate.
The next question comes from the line of Karri Rinta from Handelsbanken.
I would like to continue discussing Chocolate & Confectionery Fats and TPF and maybe if I look at the graph showing the EBIT per kilo for Chocolate & Confectionery Fats, I see that both in the fourth quarter of '21 and fourth quarter '20 spiked up quite nicely while the prior years were more sort of flattish. So if I were to say that it's mostly about COVID and lockdowns and restrictions. And going forward, it will be more difficult to reach those levels, what would be the counterargument to that? Or is there any sort of sense to my -- this statement?
I think I mean, it's a relevant question. And as I mentioned before, I think there's been so long time now with COVID. So what is the COVID impact? How much have we really changed our daily life? I mean we have changed our lives in terms of traveling less and spending more time in front of teams and virtual meetings and so forth. But at the same time, the population of the world will continue to eat, will continue to spend time with our families and friends, even if it's enclosure. And we continue to indulge yourselves. We focus on exercising and nutrition, but we also indulge yourself and allow us some premium products. So it's very difficult to say what is actually a COVID impact or not what we could see was that it was a negative impact in the beginning there with a wet blanket over the whole industry, probably a bit of destocking and so forth. And then we saw a positive trend all the way from Q3 2020 and forward. So I think it's hard to say that Q4 last year and Q4 this year should be a very significant COVID impact. But I don't have the answers, but what it seems like more is that we, as consumers, have found our way to buy through different channels, whether that is a click to buy or now being able to go to the grocery store and feel safe again after vaccinations and so forth. So I think it's very difficult to draw a simple conclusion saying this is a COVID impact, it will reverse or is it actually a systematic impact of the underlying trends that are there. We'll see. Time will tell. But what we do see is a strong demand for these products in the market.
And then the -- about your M&A strategy. You have done bolt-on acquisitions, and you have talked about larger acquisitions, but the -- and you have pretty low net debt-to-EBITDA since raw material prices are weighing on your cash flow. So is that a constraint at the moment because you don't really generate that much cash flow. So you maybe are a little bit more reluctant to engage in larger acquisitions until raw material prices come down and your cash flows improve?
No, definitely not. I mean if you look at our net debt-to-EBITDA, we're still very low. So you could argue that the raw material pricing, yes, it has an impact, right? It's eating our operating cash flow, but that will level out as soon as prices level out. And if they even start to come down then you'll see a very positive help from cash flow. So even with these high levels, we are still at the level with a very low net-debt-to-EBITDA. So no, that's not an issue for us. I mean we follow that, and we know what happens and we don't necessarily like that it's building cash, but it's very natural in the way we operate. So we continue to focus on finding good targets and moving things forward. And whenever possible, we'll make M&A happen.
Perfect. And then finally, just out of curiosity, this shea meal that you will use as a fuel the new bio boilers, what did you do -- what do you currently do with that?
We try to do the best we can, and we sell it off. There are uptakes in players in Europe, for example, that can today buy it and use it for energy or other solutions. In this case, we will use it for ourselves and reduce our need of other energy sources.
[Operator Instructions] We have another question from the line of Alex Sloane from Barclays.
Just 2 questions from me. Just the first one on Chocolate & Confectionery Fats. Johan, you mentioned in 2020, there was possibly some destocking at the height of the COVID impact and maybe some of that has reversed. As you think about the inventory levels of your products at your customers, how do you see those versus history today? That's the first one. And then just the second one, just going back to the first question on Special Nutrition and the dynamics that you outlined in Q4, is it fair to assume those continue in 2022?
And on the first one there, we don't have complete visibility at our customer inventory levels. We discussed this a lot in general, of course, and we follow as close as we can and with the information we have. We haven't seen any major shifts in terms of kind of destocking and stocking over the recent -- we saw that certainly in the beginning of COVID. But if I talk in recent history, we don't see that. We see more of the dynamics in terms of end consumer demands moving its way forward. But I cannot guarantee whether 1 or 2 customers have built more because of disturbance risk or less because of high cost levels. Let's see. But I cannot say it's either this or that at the moment. So if anything, it seems, call it, more normalized levels, if anything, but without the full visibility.In terms of the dynamic in Special Nutrition, the dynamic I speak about, and we comment is the dynamic -- the dynamics that we've seen over some time. So with that, it's not the Q4 specific. We've seen the shift over time. And with that, I also think it will continue, right? So we are competing in China, and we are very relevant, but it becomes a year-on-year shift as we slide into that. But once that stabilizes then we continue from that level. So in a year-on-year perspective, it should be fading away and creating a new platform to grow from. But as a dynamic, the competitive situation and the competitors we have, I think they will be the same in 2022 as they were in 2021.
And as there are no further questions, I will hand it back to the speakers.
Thank you so much. And as always, thank you listeners for your questions and comments. And with that, I thank you, everyone, for listening in. And we conclude 2021 for AAK on a strong note. Thank you so much.
Thank you.
This concludes our conference call. Thank you all for attending. You may now disconnect your lines.