Ahlstrom January-March 2016 interim report: Profitability improvement continued despite lower demand in some key markets
(Thomson Reuters ONE) -
Ahlstrom Corporation STOCK EXCHANGE RELEASE April 28, 2016 at 08:30 EET
This is a summary of the January-March 2016 interim report. The complete report
with tables is attached to this release and available at www.ahlstrom.com
Ahlstrom January-March 2016 interim report
Profitability improvement continued despite lower demand in some key markets
Continuing operations January-March 2016 compared with January-March 2015
* Net sales EUR 243.7 million (EUR 251.5 million). Net sales at constant
currencies declined by 2.5%
* Operating profit EUR 8.7 million (EUR 11.0 million)
* Adjusted operating profit EUR 12.9 million (EUR 10.3 million), representing
5.3% (4.1%) of net sales, and the tenth consecutive quarter of year-on-year
improvement
* Profit before taxes EUR 4.8 million (EUR 12.1 million)
* Earnings per share EUR 0.01 (EUR 0.13)
* Net cash flow from operating activities EUR 8.4 million (EUR -1.5 million),
the first positive first-quarter operating cash flow since 2012
Marco Levi, President & CEO
"January-March 2016 marked our tenth consecutive quarter of year-on-year
improvement in profitability, with the majority of our businesses delivering
higher margins. In addition to the tailwind we received from lower input costs,
we have achieved this through better pricing, optimization of our product mix as
well as lower cost structure.
In the Filtration & Performance segment, the Wallcover & Poster business
delivered higher sales and margin with the Industrial Nonwovens unit making
steady progress. In the Specialties segment, the Advanced Liquid Technologies,
Tape, and Medical units all improved profitability. However, the subdued demand
conditions in some of our markets, such as filtration as well as tape and
medical products, were reflected in our overall net sales performance.
I'm also happy to say that we have delivered our first positive first-quarter
operating cash flow in four years. The improving trend in our financial
performance gives us confidence and we are on track to reach our target of over
8 percent adjusted operating profit margin by 2018. We are executing our
redefined strategy announced at the beginning of the year, and our new operating
model is gaining momentum and bringing us further cost savings."
Outlook for 2016
Ahlstrom reiterates the outlook published on January 29, 2016. The company
expects net sales from continuing operations in 2016 to be in the range of EUR
950-1,050 million. The adjusted operating profit from continuing operations is
expected to be 4.2%-5.2% of net sales.
The outlook excludes the Building & Wind business unit, which has been reported
as part of discontinued operations from the beginning of 2016. The adjusted
operating profit excludes restructuring costs, impairment charges and capital
gains or losses.
Key figures
EUR million Q1/2016 Q1/2015 Change, % 2015
---------------------------------------------------------------------------
Net sales 243.7 251.5 -3.1 991.6
Adjusted EBITDA* 25.0 23.4 6.8 94.6
% of net sales 10.3 9.3 9.5
Operating profit 8.7 11.0 -20.5 16.6
% of net sales 3.6 4.4 1.7
Adjusted operating profit* 12.9 10.3 25.3 41.6
% of net sales 5.3 4.1 4.2
Profit before taxes 4.8 12.1 -60.5 17.1
Profit for the period 1.9 7.2 -73.2 3.4
Earnings per share, EUR 0.01 0.13 -0.05
Return on capital employed, % 6.9 7.2 3.0
Net cash flow from operative activities ** 8.4 -1.5 60.0
Capital expenditure 4.2 2.9 45.7 26.0
Interest-bearing net liabilities ** 194.9 254.0 -23.3 195.9
Gearing ratio, % ** 66.5 74.0 65.4
Equity ratio, % ** 34.9 34.3 35.8
Number of personnel at end of period 3,019 3,108 -2.9 3,043
---------------------------------------------------------------------------
EBITDA = earnings before interest, taxes, depreciation and amortization
* Excluding restructuring costs, impairment charges and capital gains or losses.
** Including discontinued operations
Discontinued operations
On January 21, 2016, Ahlstrom announced the planned divestment of its glassfiber
business to Owens Corning. As a consequence, the Building & Wind business unit
is reported in discontinued operations until the transaction has been completed.
The German competition authority has opened a second-phase investigation into
the planned divestment to allow enough time to complete an appropriate review of
the transaction. Ahlstrom and Owens Corning aim to complete the transaction
during the first half of 2016. However, it is possible that the completion will
not take place until the second half of 2016.
Result from discontinued operations
In January-March 2016, profit from discontinued operations for the period was
EUR 1.6 million (EUR 1.6 million).
Result including discontinued operations
In January-March 2016, net sales including discontinued operations were EUR
267.2 million (271.8 million). Profit for the period was EUR 3.5 million (EUR
8.8 million profit) and earnings per share were EUR 0.04 (EUR 0.17). The
earnings per share include the interest payment on the hybrid bond after tax.
The return on capital employed (ROCE) was 8.0% (8.1%), and the return on equity
(ROE) was 4.7% (10.7%).
Redefined strategy and long-term financial targets
Ahlstrom's redefined strategy and new long-term financial targets extending to
the year 2018 were announced during the first-quarter of 2016. Global trends
faced by our customers steer our product offering and provide us with a wealth
of opportunities. We are committed to growing and creating stakeholder value by
providing the best performing sustainable fiber-based materials.
As part of the implementation the company's business structure was simplified
and reorganized into two business areas: Filtration & Performance and
Specialties. The aim of this change is to increase market and customer focus.
Both segments have business unit specific strategies and operating models. This
enables us to provide customer-driven product development and tailored customer
service, cost efficiency, better allocation of resources, and specific go-to-
market approaches.
The roadmap for execution outlines the change in strategy and is focused on
commercial excellence, a new lean operating model, organic growth via higher
asset turnover and growth via new platforms.
Long-term financial targets over the economic cycle:
* Operating profit margin: Adjusted operating profit margin to be above 8% by
2018
* Gearing: Gearing to be maintained below 100%
* Dividend policy: We aim for a stable dividend, increasing over time, based
on the annual net income performance
The adjusted operating profit margin excludes restructuring costs, impairment
charges, capital gains or losses, and discontinued operations.
Short-term risks
The global economic outlook remains uncertain. The European markets continue to
suffer from slower growth, and the outcome of Britain's referendum on its
membership in the European Union increases uncertainty. In addition, the recent
slowdown in China has raised concerns, although the expected shift in the
country's economic structure towards more consumer consumption and less
investment can also provide opportunities.
Slower-than-anticipated economic growth poses risks to Ahlstrom's financial
performance. It may lead to lower sales volumes and force the company to
initiate market-related shutdowns at plants, which could affect profitability.
Tightened competition through competitors' increased production capacity,
aggressive pricing as well as adoption of new technologies can also affect
profitability. Shifts in the pattern of demand for the company's products can
strain the flexibility of its asset base and leave some assets underutilized,
while others are over-loaded.
Further swings in currency exchange rates may lead to fluctuations in net sales
and profitability. Ahlstrom's main raw materials are wood pulp, synthetic
fibers, and chemicals. The prices of these key raw materials are volatile, and
possible increases can affect the company's profitability depending on its
ability to mitigate the risk.
The general risks facing Ahlstrom's business operations are described in greater
detail on the company website at www.ahlstrom.com and in the report by the Board
of Directors in the company's Annual Report for 2015. The risk management
process is also described in the Corporate Governance Statement, also available
on the company's website.
This report contains certain forward-looking statements that reflect the present
views of the company's management. The statements contain uncertainties and
risks and are thus subject to changes in the general economic situation and in
the company's business.
Disclosure procedure
Ahlstrom publishes its January-March 2016 interim report enclosed to this stock
exchange release. The report is attached to this release in pdf format and is
also available on the company's web site at www.ahlstrom.com.
Additional information
Marco Levi, President & CEO, tel. +358 (0)10 888 4700
Sakari Ahdekivi, CFO, tel. +358 (0)10 888 4768
Juho Erkheikki, Financial Communications & Investor Relations Manager, tel.
+358 (0)10 888 4731
Ahlstrom's President & CEO Marco Levi and CFO Sakari Ahdekivi will present the
report at an analyst and press conference in Helsinki on Thursday, April 28 at
11:00 a.m. Finnish time. The event will take place at Ahlstrom's head office,
Alvar Aallon katu 3 C, second floor, Antti meeting room.
The combined webcast and teleconference will be held in English and can be
viewed at the following address:
http://qsb.webcast.fi/a/ahlstrom/ahlstrom_2016_0428_q1
Conference call details:
In Finland +358 (0)9 2310 1621
In Sweden +46 (0)8 5033 6539
In the U.K. +44 (0)20 3427 1915
To participate via telephone, please dial in a few minutes before the conference
begins. A list of phone numbers for other countries is available at
www.ahlstrom.com/Investors. The confirmation code is 9954843.
An on-demand webcast of the conference will be available on Ahlstrom's website
for twelve months after the call.
The presentation material will be available at
www.ahlstrom.com/en/Investors/Reports-and-presentations/2016/ after the report
has been published
Financial information in 2016
+-------------------------------------+-------------------+---------------+
|Report |Date of publication|Silent period |
+-------------------------------------+-------------------+---------------+
|Interim report January-June 2016 |Wednesday, August 3|July 1-August 2|
+-------------------------------------+-------------------+---------------+
|Interim report January-September 2016|Friday, October 28 |October 1-27 |
+-------------------------------------+-------------------+---------------+
During the silent period, Ahlstrom will not communicate with capital market
representatives.
Ahlstrom in brief
Ahlstrom provides innovative fiber-based materials with a function in everyday
life. We are committed to growing and creating stakeholder value by proving the
best performing sustainable fiber-based materials. Our products are used in
everyday applications such as filters, medical fabrics, life science and
diagnostics, wallcoverings, tapes, and food and beverage packaging. In 2015,
Ahlstrom's net sales amounted to EUR 1.1 billion. Our 3,300 employees serve
customers in 22 countries. Ahlstrom's share is quoted on the Nasdaq Helsinki.
More information is available at www.ahlstrom.com.
January-March 2016:
http://hugin.info/132525/R/2007672/742314.pdf
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Source: Ahlstrom Oyj via GlobeNewswire
[HUG#2007672]
Unternehmensinformation / Kurzprofil:
Datum: 28.04.2016 - 07:30 Uhr
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News-ID 467070
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