Ahlstrom interim report January-September 2009: Streamlining measures
continued with success
(Thomson Reuters ONE) - Ahlstrom Corporation STOCK EXCHANGE RELEASE 27.10.2009July-September 2009 compared to July-September 2008* Net sales were EUR 400.6 million (451.2).* EBIT amounted to EUR 13.1 million (11.3) including non-recurring items of EUR -4.4 million (-0.2).* Profit before taxes was EUR 7.3 million (3.5) and earnings per share were EUR 0.10 (0.04).* Net cash from operating activities increased to EUR 67.3 million (24.7).January-September 2009 compared to January-September 2008* Net sales were EUR 1,175.6 million (1,383.4).* EBIT amounted to EUR 12.1 million (50.0) including non-recurring items of EUR -8.2 million (0.6).* Loss before taxes was EUR 6.6 million (profit before taxes 28.9) and earnings per share were EUR -0.11 (0.41).* Net cash from operating activities increased to EUR 161.0 million (70.8).Events in January-September 2009* Restructuring programs and project to optimize working capital proceeded according to plan. Since the turn of the year, the number of employees decreased by 516 people and working capital by EUR 81.1 million with turnover improving by 15 days.* Gearing ratio decreased to 81.9% (December 31, 2008: 95.3%).Strategy review process* Conclusions of the strategy review process started in April were completed.Outlook for 2009* No significant changes in the market situation are expected during the rest of the year. Despite the improved quarterly performance, both net sales and EBIT for 2009 are expected to fall short of the level in 2008.Jan Lång, President & CEO, comments:- Despite the challenging market environment, we reached apositive EBIT for July-September, particularly owing to streamliningefforts, cost control and lower raw material prices. Employees havecommitted themselves excellently to our target of shifting the focustowards cash flow and working capital reduction. Our net debtdecreased by over EUR 87 million since the turn of the year. Still,our profitability is not satisfactory, so the streamlining effortswill continue. Due to risen raw material prices, we have alsoannounced price increases.- We have today published our new strategic direction. In thefuture, our business will be based on two very distinct businessmodels: the value-added business and the operational excellencebusiness. The focus is on profitable growth, with the return oncapital employed (ROCE) as the most important indicator. Its targetlevel of 13% remains unchanged.KEY FIGURES+--------------------------------------------------------------------------+|EUR million | 7-9/| 7-9/|Change,| 1-9/| 1-9/|Change,|| | 2009| 2008| %| 2009| 2008| %||------------------------------+-----+-----+-------+-------+-------+-------||Net sales |400.6|451.2| -11.2|1,175.6|1,383.4| -15.0||------------------------------+-----+-----+-------+-------+-------+-------||EBIT (Operating profit/loss) | 13.1| 11.3| 15.5| 12.1| 50.0| -75.9||------------------------------+-----+-----+-------+-------+-------+-------||Profit/loss before taxes | 7.3| 3.5| -| -6.6| 28.9| -||------------------------------+-----+-----+-------+-------+-------+-------||Profit for the period | 4.9| 2.5| 92.3| -5.0| 20.9| -||------------------------------+-----+-----+-------+-------+-------+-------||Earnings per share | 0.10| 0.04| -| -0.11| 0.41| -||------------------------------+-----+-----+-------+-------+-------+-------||Return on capital employed | | | | | | ||(ROCE), % | 4.8| 3.9| -| 1.5| 5.5| -||------------------------------+-----+-----+-------+-------+-------+-------||Equity ratio, % | 39.3| 39.5| -| 39.3| 39.5| -||------------------------------+-----+-----+-------+-------+-------+-------||Gearing ratio, % | 81.9| 84.8| -| 81.9| 84.8| -||------------------------------+-----+-----+-------+-------+-------+-------||Interest-bearing net | | | | | | ||liabilities |511.3|588.2| -13.1| 511.3| 588.2| -13.1||------------------------------+-----+-----+-------+-------+-------+-------||Investments (excluding | | | | | | ||acquisitions) | 12.4| 36.5| -66.0| 53.9| 90.5| -40.5||------------------------------+-----+-----+-------+-------+-------+-------||Net cash from operating | | | | | | ||activities | 67.3| 24.7| -| 161.0| 70.8| -||------------------------------+-----+-----+-------+-------+-------+-------||Number of employees, average |5,899|6,544| -9.9| 6,034| 6,537| -7.7||------------------------------+-----+-----+-------+-------+-------+-------||Number of employees, | | | | | | ||at the end of the period |5,849|6,452| -9.3| 5,849| 6,452| -9.3|+--------------------------------------------------------------------------+OPERATING ENVIRONMENTThe very challenging market conditions resulting from the recessioncontinued until the end of the first half of 2009, when the weakeningof demand for Ahlstrom's products stopped and the demand for someproducts began to pick up. The positive trend continued duringJuly-September, but demand did not increase to the level of thecorresponding period last year.In the Fiber Composites segment*, the recession has not impacted thedemand for Ahlstrom's food packaging and teabag materials ornonwovens in medical applications. In January-September, their demandremained close to the usual level. The demand for Ahlstrom'sconstruction materials increased slightly in July-September comparedto the first half of the year. Also the demand for wipes andtransportation filtration media improved after the weak January-June.In addition, preparations for the possible spread of the A(H1N1)virus that causes swine flu had a slightly increasing impact on thedemand for face masks and wipes. On the other hand, windmill andmarine markets continued to be weak.In the Specialty Papers segment*, the market demand in release andlabel papers, which picked up during the second quarter, continued toincrease and approached the level of the third quarter of 2008. Thedemand for wall covers and posters as well as industrial papers alsoincreased. On the other hand, the automotive, furniture and textilemarkets continued to be weak.The increase in the market prices of Ahlstrom's main raw materials,natural and synthetic fibers and chemicals, which began in June,mainly continued.DEVELOPMENT OF NET SALES+----------------------------------------------------------------------+|Net sales by segment | 7-9/| 7-9/|Change,| 1-9/| 1-9/|Change,||and business area | 2009| 2008| %| 2009| 2008| %||--------------------------+-----+-----+-------+-------+-------+-------||Fiber Composites |216.5|249.3| -13.1| 637.7| 758.3| -15.9||--------------------------+-----+-----+-------+-------+-------+-------|| Advanced Nonwovens | 41.6| 48.1| -13.5| 131.3| 138.9| -5.5||--------------------------+-----+-----+-------+-------+-------+-------|| Filtration | 70.5| 77.6| -9.1| 205.0| 240.3| -14.7||--------------------------+-----+-----+-------+-------+-------+-------|| Glass & Industrial | | | | | | ||Nonwovens | 46.8| 58.9| -20.5| 134.1| 187.0| -28.3||--------------------------+-----+-----+-------+-------+-------+-------|| Home & Personal | | | | | | ||Nonwovens | 59.5| 67.5| -11.9| 173.8| 201.1| -13.6||--------------------------+-----+-----+-------+-------+-------+-------||Specialty Papers |185.9|204.0| -8.9| 544.2| 630.7| -13.7||--------------------------+-----+-----+-------+-------+-------+-------|| Release & Label Papers| 72.1| 80.7| -10.7| 205.8| 241.0| -14.6||--------------------------+-----+-----+-------+-------+-------+-------|| Technical Papers |115.5|123.4| -6.4| 340.5| 389.7| -12.6||--------------------------+-----+-----+-------+-------+-------+-------||Other functions* and | | | | | | ||eliminations | -1.8| -2.1| -| -6.3| -5.7| -||--------------------------+-----+-----+-------+-------+-------+-------||Total net sales |400.6|451.2| -11.2|1,175.6|1,383.4| -15.0|+----------------------------------------------------------------------+* Other functions include financing and taxation-related receivables,liabilities and cost items, as well as earnings, costs, assets andliabilities belonging to holding and sales companies.Development of net sales in July-September 2009Net sales decreased in all of Ahlstrom's business areas compared tothe third quarter of 2008. Compared to April-June 2009, net salesremained unchanged. Net sales for July-September amounted to EUR400.6 million (EUR 451.2 million), reducing by 11.2% compared toJuly-September 2008.Net sales of the Fiber Composites segment amounted to EUR 216.5million (EUR 249.3 million), representing 54% of the Group's netsales. The segment's net sales were decreased by 13.1% compared toJuly-September 2008. Net sales were reduced in all business areas dueto lower volumes in most products. Net sales in the AdvancedNonwovens business area (-13.5%) was impacted by an extended summershut-down. The steepest fall (-20.5%) was seen in the Glass &Industrial Nonwovens business area. On the other hand, net sales ofGlass & Industrial Nonwovens increased by 9.6% compared to April-Junethis year, particularly owing to the picking up of the demand forconstruction materials.Net sales of the Specialty Papers segment amounted to EUR 185.9million (EUR 204.0 million), representing 46% of the Group's netsales. Net sales were reduced by 8.9% compared to July-September2008. Net sales were reduced in both business areas due to lowervolumes and sales prices in most products. In the Technical Papersbusiness area, the reduction was smaller (-6.4%), which isparticularly due to an increase in the sales of wall covers andposter papers. Sales of Release & Label Papers decreased by 10.7%from July-September 2008, but increased slightly compared toApril-June this year.Development of net sales in January-September 2009Group net sales were reduced in all business areas due to lowervolumes in most products. Net sales for January-September 2009amounted to EUR 1,175.6 million, down by 15.0% on the correspondingperiod the previous year (EUR 1,383.4 million). The comparisonfigures show that during the corresponding period in 2008, the globalrecession had only a slight negative impact on sales towards the endof the period.Net sales of the Fiber Composites segment amounted to EUR 637.7million (EUR 758.3 million), representing 54% of the Group's netsales. Net sales fell by 15.9% compared to January-September 2008.Net sales of the Advanced Nonwovens business area were close to thelevel of January-September 2008 (-5.5%), while Glass & IndustrialNonwovens net sales fell by 28.3%.Net sales of the Specialty Papers segment amounted to EUR 544.2million (EUR 630.7 million), representing 46% of the Group's netsales. Net sales decreased by 13.7% compared to January-September2008. Net sales were reduced in both business areas, the Release &Label Papers (-14.6%) and Technical Papers(-12.6%).RESULT AND PROFITABILITY+-------------------------------------------------------------------+| Financial result | 7-9/ | 7-9/ | Change, | 1-9/ | 1-9/ | Change, || by segment | 2009 | 2008 | % | 2009 | 2008 | % ||-------------------------------------------------------------------|| Fiber Composites ||-------------------------------------------------------------------|| EBIT | | | | | | || (Operating | | | | | | || profit/loss) | 8.8 | 7.7 | 14.1 | 11.6 | 40.0 | -70.9 ||------------------+------+------+---------+-------+------+---------|| EBIT | | | | | | || (Operating | | | | | | || profit/loss), | | | | | | || % | 4.1 | 3.1 | - | 1.8 | 5.3 | - ||------------------+------+------+---------+-------+------+---------|| Return on net | | | | | | || assets, | | | | | | || RONA, % | 4.7 | 3.8 | - | 2.0 | 6.7 | - ||-------------------------------------------------------------------|| Specialty Papers ||-------------------------------------------------------------------|| EBIT | | | | | | || (Operating | | | | | | || profit/loss) | 7.3 | 6.5 | 12.6 | 10.8 | 16.7 | -35.4 ||------------------+------+------+---------+-------+------+---------|| EBIT | | | | | | || (Operating | | | | | | || profit/loss), | | | | | | || % | 3.9 | 3.2 | - | 2.0 | 2.6 | - ||------------------+------+------+---------+-------+------+---------|| Return on net | | | | | | || assets, | | | | | | || RONA, % | 7.6 | 5.7 | - | 3.7 | 4.9 | - ||------------------+------+------+---------+-------+------+---------|| Other functions* | | | | | | || and eliminations | | | | | | ||------------------+------+------+---------+-------+------+---------|| Operating | | | | | | || profit/loss | -3.0 | -2.9 | - | -10.3 | -6.7 | - ||------------------+------+------+---------+-------+------+---------|| Ahlstrom Group | | | | | | || total | | | | | | ||------------------+------+------+---------+-------+------+---------|| EBIT | | | | | | || (Operating | | | | | | || profit/loss) | 13.1 | 11.3 | 15.5 | 12.1 | 50.0 | -75.9 ||------------------+------+------+---------+-------+------+---------|| EBIT | | | | | | || (Operating | | | | | | || profit/loss), | | | | | | || % | 3.3 | 2.5 | - | 1.0 | 3.6 | - ||------------------+------+------+---------+-------+------+---------|| ROCE, % | 4.8 | 3.9 | - | 1.5 | 5.5 | - |+-------------------------------------------------------------------+* Other functions include financing and taxation-related receivables,liabilities and cost items, as well as earnings, costs, assets andliabilities belonging to holding and sales companies.Result and profitability in July-September 2009Compared to July-September 2008, Ahlstrom's profitability wasimproved by low raw material prices and the improved demand pattern,but above all, by the implemented streamlining measures and internalcost control. The performance was burdened by lower sales volumescompared to July-September 2008 and increased price pressures due tothe global recession. The Group EBIT was EUR 13.1 million (EUR 11.3million). The figure includes non-recurring items of EUR -4.4 million(EUR -0.2 million).EBIT of the Fiber Composites segment amounted to EUR 8.8 million (EUR7.7 million). The figure includes non-recurring items of EUR -1.1million (EUR 0.3 million).EBIT of the Specialty Papers segment amounted to EUR 7.3 million (EUR6.5 million). The figure includes non-recurring items of EUR -2.4million (EUR 0.1 million).Result and profitability in January-September 2009The Group EBIT was EUR 12.1 million (EUR 50.0 million). Thedifference is above all due to the reduction in sales volumes becauseof the global recession, particularly during the first quarter, andincreased price pressure. Implemented streamlining measures, marketdemand picking up at the end of the second quarter and lower rawmaterial prices, particularly during the first two quarters of theyear, improved the result.Non-recurring items in January-September totaled EUR -8.2 million(EUR 0.6 million), comprising mainly restructuring and reduction ofpersonnel. The most significant item in the second quarter was arestructuring of EUR 1.4 million connected with the Bethune plant inthe United States in the Home & Personal Nonwovens business area.Non-recurring items amounting to EUR 1.7 million were recognized inthe third quarter due to the restructuring of the Filtration andRelease & Label Papers business areas at the Turin plant in Italy.EBIT of the Fiber Composites segment decreased to EUR 11.6 million(EUR 40.0 million). Non-recurring items amounted to EUR -3.8 million(EUR 2.2 million).EBIT of the Specialty Papers segment was reduced to EUR 10.8 million(EUR 16.7 million). The figure includes non-recurring items of EUR-2.9 million (EUR -0.6 million).Ahlstrom continued an active approach in adjusting its dailyproduction to weak demand. The market related downtime in productionwas 20.3% in January-September 2009 compared to 6.0% during thecorresponding period in 2008. Ahlstrom pursued temporary layoffs andother flexible working hour solutions in different countriesdepending on the market conditions. Globally, approximately 2,400employees were affected by the temporary layoffs and other flexibleworking hour arrangements during January-September (550 in thecorresponding period in 2008) and 1,400 during July-September (350).Fixed costs were 4.1% lower than in January-September 2008 as aresult of cost control and implemented streamlining measures.Total net financial expenses were EUR 19.8 million (EUR 20.4 millionin January-September 2008). The net financial expenses include netinterest expenses of EUR 18.3 million (EUR 17.8 million), exchangerate losses of EUR 0.2 million (EUR 0.4 million) and other financialexpenses of EUR 1.2 million (EUR 2.1 million).Loss before taxes was EUR 6.6 million (profit before taxes of EUR28.9 million).Tax income amounted to EUR 1.6 million (income tax expenses of EUR7.9 million).Loss for the period was EUR 5.0 million (profit of EUR 20.9 million)and earnings per share (EPS) were EUR -0.11 (EUR 0.41).Return on capital employed (ROCE) amounted to 1.5% (5.5%), and returnon equity (ROE) to -1.1% (3.9%).FINANCINGIn January-September 2009, net cash flow from operating activitiesamounted to EUR 161.0 million (EUR 70.8 million in January-September2008). Cash flow was improved by significantly reduced workingcapital, to which particular attention has been paid since thebeginning of the year. Operative working capital fell by EUR 81.1million compared to the end of 2008.Interest-bearing net liabilities fell by EUR 87.4 million from theturn of the year to EUR 511.3 million (December 31, 2008: EUR 598.7million). Ahlstrom's interest-bearing liabilities amounted to EUR547.5 million on September 30, 2009. Of the loan portfolio,approximately 33% was tied to a fixed interest rate using interestrate derivatives or loan contracts. The duration of the loanportfolio (average interest rate tying period) was 10 months and theaverage interest rate was approximately 3.7%.The gearing ratio was 81.9% (December 31, 2008: 95.3%) and the equityratio 39.3% (December 31, 2008: 36.8%).Ahlstrom has actively been extending the maturity structure of itsloan portfolio during 2009. During the first half of the year, thecompany made agreements on new medium-term bilateral loan facilitiesamounting to EUR 55 million, and during the summer it signed athree-year, EUR 200 million agreement on the refinancing of themedium-term revolving credit facility of the same amount expiring inNovember 2009. In addition, Ahlstrom signed an agreement on pensionloans amounting to EUR 56 million in the fall. The average maturityof the raised pension loans is 3.5 years, and they improve therepayment profile of the company's loan portfolio correspondingly.PERSONNELThe number of Ahlstrom employees during January-September was 6,034on average (6,537 employees on the corresponding period in 2008) andat the end of September, 5,849 (6,452). At the end of 2008, thenumber of employees was 6,365.During January-September 2009, the headcount decreased by 516 personsdue to the programs announced in January and April 2009 as well assome restructuring actions taken in 2008, mainly the closure of theAscoli plant in Italy.At the end of September, the highest numbers of employees were in theUnited States (24%), France (21%), Italy (13%), Finland (11%) andGermany (9%).CAPITAL EXPENDITUREAhlstrom did not make any major investment decisions during thereview period. Ahlstrom's capital expenditure for January-Septembertotaled EUR 53.9 million (EUR 90.5 million excluding acquisitions inJanuary-September 2008).The largest on-going investment project is the construction of amedical nonwovens plant in Gujarat, India. Operations at the plantare estimated to start in the first quarter of 2010. The project hasproceeded according to plans, and the buildings and installations ofequipment are nearly complete. The estimated total cost of theproject is EUR 38 million.STREAMLINING PROGRAMSRestructuring programsAhlstrom has launched two restructuring programs this year to improveand adjust operational activities to the changed market demand. Inaddition, a project to optimize working capital was initiated inearly 2009. All of the programs have proceeded according to plan.January programOn January 7, 2009, Ahlstrom announced global restructuring plans toimprove profitability and adjust operations to the challenging marketsituation. Of the permanent layoffs of 210 people as part of theprogram, a total of 172 had been laid by the end of September. Inaddition, there were temporary layoffs at production sites as well asat the head office, and production was cut down in several countriesby market related downtime**.The program involved the closing down of unprofitable operations atthe plants in Italy that belong to the Home & Personal Nonwovensbusiness area and produce nonwoven wipes. On July 6, 2009, thecompany announced that it will close down the Gallarate plant as wellas one production line in Cressa. The reduction impact on personnelrelated to the closures was approximately 50. Non-recurring expenseswere EUR 19 million, of which EUR 5.2 million have a cash floweffect. The non-recurring expenses have been booked in Ahlstrom'sfourth quarter 2008 financial results.April programAhlstrom announced on April 29, 2009 that it was to initiate anotherrestructuring program, aiming for annual savings of EUR 50 million.The savings are estimated to have full effect in 2010.In April, Ahlstrom estimated that the restructuring may have animpact on 400 to 500 Ahlstrom employees globally. A total of 251employees were laid off by the end of September.The largest personnel cut implemented so far was related to thecompany's June decision to permanently close down a production lineat the plant in Bethune, USA, and move its production to Green Bay,USA. The production line belonged to the Home & Personal Nonwovensbusiness area, producing wipes. Personnel cuts made as a result ofthe closing down total 65 employees, and most of them were laid offduring the third quarter.Ahlstrom announced on September 14, 2009, that it will start newcooperation negotiations at the plant in Karhula, Finland, to reduceapproximately 100 positions and temporarily lay off 80 employees. Theactions are targeted to adapt the production volumes of specialtyreinforcements and glass fiber tissue to match the demand. Inaddition, the company announced on October 6, 2009, that it willstart negotiations to adjust production at its Altenkirchen plant inGermany. The adjustments are estimated to result in a reduction ofapproximately 65 positions (see Events after the review period).When announcing the April program, its cost was estimated to beapproximately EUR 40 million in 2009, of which 50% cash-related.Approximately 8 million of the costs were realized by the end ofSeptember, and the total cost of the program is now estimated to beabout EUR 34 million by the end of 2009, of which 60% cash-related.The costs are lower than estimated due to the implemented measuresdiffering slightly from the planned solutions. However, this will notimpact upon the target for annual savings of EUR 50 million.Optimization of working capitalThe project to optimize working capital initiated at the beginning of2009 is proceeding according to plan. The project aims at reducingthe working capital by EUR 100 million over two years. So far, theproject has been initiated at 12 plants and, in the next few months,it will be rolled out to most production sites and functions. DuringJanuary-September, the operative working capital fell by EUR 81.1million with turnover improving by 15 days to 61 days at the end ofSeptember.AUTHORIZATIONS OF THE BOARDAhlstrom Corporation's Annual General Meeting of Shareholders (AGM)held on March 25, 2009, authorized the Board of Directors torepurchase Ahlstrom shares. The maximum number of shares to bepurchased is 4,500,000. The shares may be repurchased only throughpublic trading at the prevailing market price by using unrestrictedshareholders' equity.The AGM also authorized the Board of Directors to distribute amaximum of 4,500,000 own shares held by the company. The Board ofDirectors is authorized to decide to whom and in which order theshares will be distributed. The shares may be used as considerationin acquisitions and in other arrangements as well as to implement thecompany's share-based incentive plans in the manner and to the extentdecided by the Board of Directors. The Board of Directors also hasthe right to decide on the distribution of the shares in publictrading for the purpose of financing possible acquisitions.The authorizations are valid for 18 months from the close of theAnnual General Meeting but will, however, expire at the close of thenext Annual General Meeting, at the latest.SHARES AND SHARE CAPITALAhlstrom's share is listed on the NASDAQ OMX Helsinki. Ahlstrom hasone series of shares. The share is classified under NASDAQ OMX'sMaterials sector and the trading code is AHL1V.During January-September 2009, a total of 3.4 million Ahlstrom shareswere traded for a total of EUR 25.1 million. The lowest trading priceduring the review period was EUR 6.15 and the highest EUR 10.00. Theclosing price on September 30, 2009, was EUR 9.25, and marketcapitalization was EUR 431.7 million on September 30, 2009.Ahlstrom Group's equity per share was EUR 13.38 at the end of thereview period (December 31, 2008: EUR 13.46).Ahlstrom has not used the AGM authorization to repurchase ordistribute company shares.EVENTS AFTER THE REVIEW PERIODKey conclusions of the strategy review processAhlstrom has published a stock exchange release today, October 27,2009, announcing that it has completed the conclusions of thestrategy review process initiated in April 2009. The aim of theprocess was to verify the future direction and ambitions of thecompany. The development of business operations will be based onprofitable growth, with increased focus in Asia. At the same time,the company aims to manage its balance sheet and reduce its gearingratio.In accordance with the revised strategy, Ahlstrom's operations willbe based on two distinct business models resulting from differentcompetitive situations, market growth potential and possibilities todifferentiate in various product lines. The first business model isbased on providing customers with added value products and the secondon operational excellence.The value-added business will be the company's primary growth engine,developing through organic growth and possibly by making smallacquisitions. Innovative new products that help Ahlstrom's customersbecome more competitive will create the foundation of success. Thecluster will include the Fiber Composites segment's AdvancedNonwovens and Glass & Industrial Nonwovens business areas as well astransportation and liquid filtration media in the Filtration businessarea. It will also include crepe papers and vegetable parchment fromthe Technical Papers business area of the Specialty Papers segment.The operational excellence business will be key to support the growthof the company. The main focus will be to develop cost effectiveproducts serving customer needs, through, for instance, alternativeraw materials or new technological solutions. The cluster covers theRelease & Label Papers business area and the majority of theTechnical Papers business area in the Specialty Papers segment. Inthe Fiber Composites segment, it will include the Home & PersonalNonwovens business area and air filtration media in the Filtrationbusiness area.The long-term target of the strategy is to strengthen Ahlstrom'scompetitive position and generate returns that are in line with thecompany's financial targets. One of the most important indicators isreturn on capital employed (ROCE), which should reach its targetlevel of 13%. In January-September ROCE was 1.5% and inJuly-September 4.8%. Measures to reach these targets will becontinued with regard to the product lines and units falling belowthe target level.Negotiations on production adjustments at the Altenkirchen plant inGermanyAs part of the April restructuring program, Ahlstrom announced onOctober 6, 2009, that it will start negotiations to adjust productionat its Altenkirchen plant in Germany. The adjustments are estimatedto result in a reduction of approximately 65 positions.The specialty materials produced at the plant are used in theautomotive, construction and other industries, and the target is toadjust their production to the current demand. The plant is part ofthe Technical Papers business area.OUTLOOKAt the beginning of the year, Ahlstrom estimated that the marketenvironment would continue to be challenging and difficult toforecast during 2009. As a result, Ahlstrom announced that it wouldchange its disclosure policy so that during a period of majoruncertainty, the outlook would only include forecasts of the businessand market environment. The company reported that forecasts of netsales development would be included only when the predictability ofthe operating environment had returned to the previous level. Aspredictability has returned to a better level than during the firsthalf of the year, Ahlstrom has decided to start again the estimationof the future outlook on a calendar year basis in terms of thedevelopment of both net sales and EBIT.The slight increase in the market demand for Ahlstrom's productstowards the end of the second quarter continued during the thirdquarter. Despite the improved quarterly performance, demandnevertheless remains low. Net sales for January-September 2009 were15% down on January-September 2008, and the market related downtimein the production was approximately 20%. No significant changes inthe market situation are expected during the rest of the year.Ahlstrom's net sales for 2009 are estimated to fall short of thelevel of 2008.The Group EBIT is also expected to fall short of the previous year,mainly due to lower sales volumes, price pressure and non-recurringitems. Successfully implemented streamlining measures and adaptationof operations to market situation combined with lower raw materialprices were not sufficient to compensate for the impact of low salesvolumes.In addition to the restructuring programs announced in January andApril, the company will continue adjusting its operations to themarket situation as necessary.Investments in 2009 are estimated to be approximately EUR 70 million(EUR 167.0 million in 2008, or EUR 128.0 million excludingacquisitions).SHORT-TERM RISKSDespite some positive signs, the global recession still continues andcauses several factors of uncertainty that might impact Ahlstrom'sbusiness. Production may need to be cut more than planned, and therisk of a decrease in sales prices will increase if the low demandcontinues. So far, bad debts have remained low, but Ahlstrom'scustomer credit risks have increased due to the weakening economicsituation and are more difficult to cover with credit insurances.In addition, raw material prices which decreased during the firstmonths of the year, the price of pulp in particular, have beenincreasing since last summer and the increase is estimated tocontinue also during the fourth quarter.If the challenging market conditions persist, they may prolong thepayback period of the EUR 500 million investment program carried outby Ahlstrom in 2007 and 2008.The general risks in Ahlstrom's business operations are described inmore detail in the company's annual report 2008 on pages 24 to 29,and on the Internet at www.ahlstrom.com. * * *This interim report has been prepared in accordance with theInternational Financial Reporting Standards (IFRS). Comparablefigures refer to the same period last year unless otherwise stated.The report is unaudited.This report contains certain forward-looking statements that reflectthe present views of the company's management. The statements containuncertainties and risks and are thus subject to changes in thegeneral economic situation and in the company's business.Helsinki, October 27, 2009Ahlstrom CorporationBoard of DirectorsADDITIONAL INFORMATIONJan Lång, President & CEO, tel. +358 10 888 4700Seppo Parvi, CFO, tel. +358 10 888 4768Ahlstrom's President & CEO Jan Lång will present the third quarterresults in Finnish at a press conference in Helsinki on October 27,2009, at 2:00 p.m. Finnish time. The conference will take place atEvent Arena Bank, address Unioninkatu 20, 2nd floor. The name of themeeting room will be displayed on the display board in the lobby. Youare welcome to attend.In addition, an international conference call for analysts andinvestors will be held on October 27, 2009, at 4:00 p.m. Finnishtime. The discussion will be led by President & CEO Jan Lång. Toparticipate in the teleconference, please dial +358 9 2313 9201 inHelsinki or +44 20 7162 0077 in London a few minutes before theconference begins. When connecting to the conference call, please usethe conference id 848199. A replay number is available until November3, 2009. The numbers for the replay are +358 9 2314 4681(instructions in Finnish) and +44 20 7031 4064 (instructions inEnglish). The access code is the same as the conference call id(848199).The presentation material will be available at www.ahlstrom.com >Investors > IR presentations on October 27, 2009, after the interimreport has been published.AHLSTROM'S FINANCIAL INFORMATION IN 2010Ahlstrom will publish its financial information in 2010 as follows:Report Date of publication Silent periodFinancial statements bulletin Wednesday, February January 1-February2009 3 3Interim report January-March Thursday, April 29 April 1-April 29Interim report January-June Wednesday, August July 1-August 11 11Interim report Tuesday, October 26 October 1-OctoberJanuary-September 26During the silent period, Ahlstrom will refrain from contact with therepresentatives of the capital market.The annual report 2009 will be published during the week startingMarch 15.The Annual General Meeting of Shareholders (AGM) will be held onWednesday, March 31, 2010, at 1:00 p.m. in Finlandia Hall, addressMannerheimintie 13 e, Helsinki, Finland.Distribution:NASDAQ OMX Helsinkiwww.ahlstrom.comPrincipal mediaAhlstrom in briefAhlstrom is a global leader in the development, manufacture andmarketing of high performance nonwovens and specialty papers.Ahlstrom's products are used in a large variety of everydayapplications, such as filters, wipes, flooring, labels, and tapes.Based upon its unique fiber expertise and innovative approach, thecompany has a strong market position in several business areas inwhich it operates. Ahlstrom's 6,000 employees serve customers viasales offices and production facilities in more than 20 countries onsix continents. In 2008, Ahlstrom's net sales amounted to EUR 1.8billion. Ahlstrom's share is quoted on the NASDAQ OMX Helsinki. Thecompany website is at www.ahlstrom.com.APPENDIXConsolidated financial statementsAPPENDIXCONSOLIDATED FINANCIAL STATEMENTSFinancial Statements are unaudited.INCOME STATEMENT Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4EUR million 2009 2008 2009 2008 2008Net sales 400.6 451.2 1,175.6 1,383.4 1,802.4Other operating income 2.0 5.8 8.1 13.1 18.7Expenses -364.4 -421.5 -1,095.3 -1,274.4 -1,694.2Depreciation, amortizationand impairment charges -25.0 -24.1 -76.3 -72.1 -112.3Operating profit / loss 13.1 11.3 12.1 50.0 14.6Net financial expenses -6.8 -7.1 -19.8 -20.4 -34.2Share of profit / loss ofassociatedcompanies 1.0 -0.7 1.1 -0.8 -1.1Profit / loss before taxes 7.3 3.5 -6.6 28.9 -20.6Income taxes -2.4 -1.0 1.6 -7.9 4.5Profit / loss for the period 4.9 2.5 -5.0 20.9 -16.1Attributable toOwners of the parent 4.9 2.0 -5.0 19.1 -17.9Minority interest - 0.5 - 1.8 1.8Basic and dilutedearnings per share, EUR 0.10 0.04 -0.11 0.41 -0.38STATEMENT OFCOMPREHENSIVE INCOME Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4EUR million 2009 2008 2009 2008 2008Profit / loss for the period 4.9 2.5 -5.0 20.9 -16.1Other comprehensive income,net of tax:Translation differences 1.1 -0.2 22.3 -7.0 -37.1Hedges of net investments inforeign operations -0.5 -1.4 -0.1 3.1 6.4Cash flow hedges -0.1 -0.3 -0.0 0.1 -1.2Other comprehensive income,net of tax 0.4 -1.9 22.2 -3.8 -32.0Total comprehensive incomefor the period 5.2 0.6 17.2 17.1 -48.1Attributable toOwners of the parent 5.2 -1.6 17.2 12.4 -52.8Minority interest - 2.2 - 4.7 4.7BALANCE SHEET Sep 30, Sep 30, Dec 31,EUR million 2009 2008 2008ASSETSNon-current assetsProperty, plant and equipment 733.7 762.1 745.7Goodwill 173.5 182.3 169.1Other intangible assets 52.2 55.6 51.6Investments in associated companies 12.5 11.7 11.4Other investments 0.2 0.2 0.2Other receivables 19.7 17.3 15.6Deferred tax assets 45.3 33.7 40.4Total non-current assets 1,037.1 1,062.9 1,033.9Current assetsInventories 182.0 269.1 252.5Trade and other receivables 330.7 392.6 356.2Income tax receivables 2.7 4.8 6.3Other investments - 0.0 0.0Cash and cash equivalents 36.2 24.3 58.2Total current assets 551.6 690.8 673.2Total assets 1,588.7 1,753.7 1,707.0EQUITY AND LIABILITIESEquity attributable to owners of the parent 624.3 693.5 628.1Minority interest - 0.0 0.0Total equity 624.3 693.5 628.1Non-current liabilitiesInterest-bearing loans and borrowings 362.3 360.3 188.7Employee benefit obligations 84.5 86.1 84.6Provisions 4.4 4.0 4.4Other liabilities 0.3 0.2 0.2Deferred tax liabilities 20.9 25.5 16.5Total non-current liabilities 472.3 476.1 294.4Current liabilitiesInterest-bearing loans and borrowings 185.3 252.2 468.1Trade and other payables 292.3 306.7 293.3Income tax liabilities 3.0 6.8 3.5Provisions 11.5 18.5 19.7Total current liabilities 492.1 584.2 784.5Total liabilities 964.4 1,060.2 1,078.9Total equity and liabilities 1,588.7 1,753.7 1,707.0STATEMENT OF CHANGES IN EQUITY1) Issued capital2) Share premium3) Non-restricted equity reserve4) Hedging reserve5) Translation reserve6) Retained earnings7) Minority interest8) Total equity Attributable to owners of the parentEUR million 1) 2) 3) 4) 5) 6) 7) 8)Equity at January1, 2008 70.0 209.3 8.3 0.0 -15.5 444.3 36.0 752.4Dividends paid andother - - - - - -46.7 - -46.7Purchases ofminority interest - - - - - 11.4 -40.7 -29.3Total comprehensiveincomefor the period - - - 0.1 -6.8 19.1 4.7 17.1Equity at September30, 2008 70.0 209.3 8.3 0.1 -22.3 428.1 0.0 693.5Equity at January1, 2009 70.0 209.3 8.3 -1.2 -49.1 390.9 0.0 628.1Dividends paid andother - - - - - -21.0 - -21.0Purchases ofminority interest - - - - - - -0.0 -0.0Total comprehensiveincomefor the period - - - -0.0 22.2 -5.0 - 17.2Equity at September30, 2009 70.0 209.3 8.3 -1.3 -26.9 364.9 - 624.3STATEMENT OF CASH FLOWS Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4EUR million 2009 2008 2009 2008 2008Cash flow from operatingactivitiesProfit / loss for the period 4.9 2.5 -5.0 20.9 -16.1Adjustments, total 33.1 32.9 93.0 98.2 131.5Changes in net working capital 38.7 19.7 95.1 9.1 47.2Change in provisions -2.0 -5.3 -7.1 -25.0 -20.0Financial items -6.8 -19.9 -15.8 -14.4 -16.8Taxes paid -0.5 -5.3 0.9 -18.0 -23.4Net cash from operating activities 67.3 24.7 161.0 70.8 102.4Cash flow from investing activitiesAcquisition of Group companies - -27.9 -0.0 -38.9 -39.0Purchases of intangible and tangibleassets -13.3 -34.3 -58.0 -91.5 -131.2Other investing activities 2.1 2.9 3.2 16.4 16.9Net cash from investing activities -11.2 -59.3 -54.8 -114.1 -153.4Cash flow from financing activitiesDividends paid - - -21.0 -46.7 -46.7Changes in loans and other financingactivities -52.8 39.0 -108.7 93.3 136.3Net cash from financing activities -52.8 39.0 -129.7 46.6 89.7Net change in cash and cashequivalents 3.3 4.3 -23.5 3.3 38.7Cash and cash equivalents atbeginning of period 32.6 20.1 58.2 21.3 21.3Foreign exchange adjustment 0.3 -0.1 1.5 -0.3 -1.7Cash and cash equivalents atend of period 36.2 24.3 36.2 24.3 58.2KEY FIGURES Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4 2009 2008 2009 2008 2008Operating profit, % 3.3 2.5 1.0 3.6 0.8Return on capital employed(ROCE), % 4.8 3.9 1.5 5.5 1.4Return on equity (ROE), % 3.1 1.4 -1.1 3.9 -2.3Interest-bearing netliabilities,EUR million 511.3 588.2 511.3 588.2 598.7Equity ratio, % 39.3 39.5 39.3 39.5 36.8Gearing ratio, % 81.9 84.8 81.9 84.8 95.3Earnings per share, EUR 0.10 0.04 -0.11 0.41 -0.38Equity per share, EUR 13.38 14.86 13.38 14.86 13.46Cash earnings per share, EUR 1.44 0.53 3.45 1.52 2.19Average number of sharesduringthe period, 1000's 46,671 46,671 46,671 46,671 46,671Number of shares at the endofthe period, 1000's 46,671 46,671 46,671 46,671 46,671Capital expenditure, EURmillion 12.4 36.5 53.9 90.5 128.0Capital employed, at the endofthe period, EUR million 1,171.8 1,305.9 1,171.8 1,305.9 1,285.0Number of employees, average 5,899 6,544 6,034 6,537 6,510ACCOUNTING PRINCIPLESThis interim report has been prepared in accordance with IAS 34,Interim Financial reporting, as adopted by EU and the accountingpolicies set out in the Group's Financial Statements for 2008 exceptfor the changes below.Changes in accounting principlesThe Group has adopted the following new or amended standards andinterpretations as of January 1, 2009:- IFRS 8 Operating segmentsThe Group has two reportable segments: the Fiber Composites segmentand the Specialty Papers segment.The adoption of IFRS 8 does not have an impact on reportablesegments.- Revised IAS 23 Borrowing costsThe Group has already earlier applied this accounting policy and theadoption of the revised standard has no impact on the consolidatedfinancial statements.- Amendment to IAS 1 A Revised presentationThe amendment has changed the presentation of financial statements.The income statement is presented in two statements: income statementand statement of comprehensive income. The statement of changes inequity includes only transactions with owners and all non-ownerchanges are presented in equity as a single line.The below mentioned new and amended standards and interpretations donot have an impact on the consolidated financial statements.- Amendment to IFRS 2 Share-based payment: Vesting Conditions andCancellations- Amendments to IAS 32 and IAS 1 Puttable Financial Instruments andObligations Arising on Liquidation- IFRIC 13 Customer Loyalty ProgrammesSEGMENT INFORMATION Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4EUR million 2009 2008 2009 2008 2008Fiber Composites 216.5 249.3 637.7 758.3 987.4Specialty Papers 185.9 204.0 544.2 630.7 822.4Other operations 4.1 5.3 11.3 14.7 20.2Internal sales -5.9 -7.4 -17.6 -20.4 -27.6Total net sales 400.6 451.2 1,175.6 1,383.4 1,802.4Fiber Composites 1.3 1.6 4.3 3.3 5.6Specialty Papers 0.6 2.7 2.6 7.2 9.0Other operations 4.0 3.1 10.7 9.8 12.9Total internal sales 5.9 7.4 17.6 20.4 27.6Fiber Composites 8.8 7.7 11.6 40.0 15.3Specialty Papers 7.3 6.5 10.8 16.7 10.2Other operations -3.0 -2.8 -10.4 -6.5 -10.7Eliminations 0.0 -0.1 0.1 -0.1 -0.2Operating profit / loss 13.1 11.3 12.1 50.0 14.6Fiber Composites 892.5 989.5 892.5 989.5 947.1Specialty Papers 573.8 661.2 573.8 661.2 609.2Other operations 24.8 29.7 24.8 29.7 30.4Eliminations -4.6 -12.6 -4.6 -12.6 -15.9Investments in associatedcompanies 12.5 11.7 12.5 11.7 11.4Unallocated assets 89.8 74.2 89.8 74.2 124.9Total assets 1,588.7 1,753.7 1,588.7 1,753.7 1,707.0Segment information is presented according to the IFRS standards.NET SALES BY REGION Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4EUR million 2009 2008 2009 2008 2008Europe 212.9 241.0 624.4 796.3 1015.9North America 99.5 114.9 308.0 327.6 442.5South America 46.9 53.3 126.1 140.8 189.2Asia-Pacific 32.0 33.7 94.5 92.0 119.4Rest of the world 9.3 8.4 22.7 26.6 35.5Total net sales 400.6 451.2 1,175.6 1,383.4 1,802.4CHANGES OF PROPERTY, PLANT ANDEQUIPMENT Q1-Q3 Q1-Q3 Q1-Q4EUR million 2009 2008 2008Book value at Jan 1 745.7 747.7 747.7Acquisitions through business combinations - 3.8 3.9Additions 52.9 89.3 118.7Disposals -0.7 -3.1 -3.7Depreciations and impairment charges -71.8 -67.8 -97.3Translation adjustment and other changes 7.7 -7.8 -23.5Book value at end of the period 733.7 762.1 745.7TRANSACTIONS WITH RELATED PARTIES Q1-Q3 Q1-Q3 Q1-Q4EUR million 2009 2008 2008Transactions with associated companiesSales and interest income 0.4 0.7 1.0Purchases of goods and services -1.7 -2.7 -3.6Trade and other receivables 0.0 0.3 2.6Trade and other payables 0.2 0.3 0.3Market prices have been used in transactions with associatedcompanies.OPERATING LEASES Sep 30, Sep 30, Dec 31,EUR million 2009 2008 2008Current portion 6.7 6.9 6.9Non-current portion 15.2 18.1 17.1Total 21.9 25.0 24.0CONTINGENT LIABILITIES Sep 30, Sep 30, Dec 31,EUR million 2009 2008 2008For own liabilitiesOther loansAmount of loans 0.2 0.5 0.5Book value of pledges 0.3 0.6 0.5For other own commitmentsGuarantees 41.5 16.1 38.7For commitments of associated companiesGuarantees 2.1 4.2 4.2Capital expenditure commitments 13.2 41.9 36.2Other contingent liabilities 4.1 4.4 4.7QUARTERLY DATA Q3 Q2 Q1 Q4 Q3 Q2 Q1EUR million 2009 2009 2009 2008 2008 2008 2008Net sales 400.6 398.9 376.1 419.0 451.2 465.9 466.2Other operatingincome 2.0 3.5 2.7 5.6 5.8 4.3 3.1Expenses -364.4 -366.7 -364.2 -419.8 -421.5 -426.9 -425.9Depreciation,amortization,impairment charges -25.0 -25.9 -25.3 -40.2 -24.1 -23.9 -24.1Operating profit /loss 13.1 9.7 -10.7 -35.4 11.3 19.4 19.3Net financialexpenses -6.8 -4.8 -8.2 -13.8 -7.1 -4.7 -8.6Share of profit /loss ofassociated companies 1.0 -0.3 0.4 -0.3 -0.7 -0.6 0.5Profit / loss beforetaxes 7.3 4.7 -18.6 -49.5 3.5 14.2 11.2Income taxes -2.4 -2.2 6.2 12.4 -1.0 -3.6 -3.4Profit / loss forthe period 4.9 2.5 -12.4 -37.0 2.5 10.6 7.8Attributable toOwners of the parent 4.9 2.5 -12.4 -37.0 2.0 9.9 7.2Minority interest - - - - 0.5 0.7 0.6QUARTERLY DATABY SEGMENT Q3 Q2 Q1 Q4 Q3 Q2 Q1EUR million 2009 2009 2009 2008 2008 2008 2008Net salesFiber Composites 216.5 212.4 208.8 229.1 249.3 257.0 252.0Specialty Papers 185.9 188.2 170.1 191.6 204.0 209.7 217.0Other operations andeliminations -1.8 -1.7 -2.8 -1.7 -2.1 -0.7 -2.8Group total 400.6 398.9 376.1 419.0 451.2 465.9 466.2Operating profit / lossFiber Composites 8.8 5.3 -2.5 -24.7 7.7 16.8 15.5Specialty Papers 7.3 6.8 -3.4 -6.5 6.5 4.7 5.5Other operations andeliminations -3.0 -2.4 -4.9 -4.2 -2.9 -2.0 -1.7Group total 13.1 9.7 -10.7 -35.4 11.3 19.4 19.3KEY FIGURESQUARTERLY Q3 Q2 Q1 Q4 Q3 Q2 Q1EUR million 2009 2009 2009 2008 2008 2008 2008Net sales 400.6 398.9 376.1 419.0 451.2 465.9 466.2Operating profit /loss 13.1 9.7 -10.7 -35.4 11.3 19.4 19.3Profit / loss beforetaxes 7.3 4.7 -18.6 -49.5 3.5 14.2 11.2Profit / loss forthe period 4.9 2.5 -12.4 -37.0 2.5 10.6 7.8Gearing ratio, % 81.9 92.0 99.8 95.3 84.8 76.0 64.4Return on capitalemployed (ROCE), % 4.8 3.2 -3.3 -10.8 3.9 6.3 6.4Earnings per share,EUR 0.10 0.05 -0.26 -0.79 0.04 0.22 0.15Cash earnings pershare, EUR 1.44 1.56 0.45 0.67 0.53 0.12 0.87Average number ofsharesduring the period,1000's 46,671 46,671 46,671 46,671 46,671 46,671 46,671CALCULATION OF KEY FIGURESInterest-bearing net liabilitiesInterest-bearing loans and borrowings - Cash and cash equivalents -Other investments (current)Equity ratio, %Totalequity/ x100Total assets - Advances receivedGearing ratio, %Interest-bearing net liabilities/ x100Total equityReturn on equity (ROE), %Profit (loss) for the period/ x100Total equity (annual average)Return on capital employed (ROCE), %Profit (loss) before taxes + Financing expenses/ x 100Total assets (annual average) - Non-interest bearing liabilities(annual average)Earnings per share, EURProfit (loss) for the period attributable to equity holders ofthe parent/Average number of shares during the periodCash earnings per share, EURNet cash from operating activities/Average number of shares during the periodEquity per share, EUREquity attributable to equity holders of the parent/Number of shares at the end of the period*Ahlstrom's business is reported in two segments: the FiberComposites segment and the Specialty Papers segment. The FiberComposites segment comprises the Advanced Nonwovens, Filtration,Glass & Industrial Nonwovens and Home & Personal Nonwovens businessareas. The Specialty Papers segment covers the Release & Label Papersand Technical Papers business areas.*Ahlstrom's business is reported in two segments: the FiberComposites segment and the Specialty Papers segment. The FiberComposites segment comprises the Advanced Nonwovens, Filtration,Glass & Industrial Nonwovens and Home & Personal Nonwovens businessareas. The Specialty Papers segment covers the Release & Label Papersand Technical Papers business areas.** Market related downtime = downtime taken due to market reasons,lack of orders or too high product stock. Otherwise plants could haverun normally without any other downtime.Market related downtime % = market related downtime / manned time.Manned time = available time - unmanned time. Time the machines wererunning according to their shift system.http://hugin.info/132525/R/1350322/325781.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 27.10.2009 - 11:10 Uhr
Sprache: Deutsch
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