2012-10-22 11:00:00 CEST
2012-10-22 11:01:10 CEST
REGULATED INFORMATION
Ahlstrom - Quarterly report
Ahlstrom interim report January-September 2012: Major steps taken in execution of strategy
Ahlstrom Corporation STOCK EXCHANGE RELEASE October 22, 2012 at 12.00 noon
Continuing operations July-September 2012 compared with July-September 2011
* Net sales EUR 391.7 million (EUR 389.7 million).
* Operating profit EUR 9.4 million (EUR -17.3 million).
* Operating profit excluding non-recurring items EUR 9.3 million (EUR 8.0
million).
* Operating margin excluding non-recurring items 2.4% (2.0%).
* Profit before taxes EUR 0.3 million (EUR -24.4 million).
* Earnings per share EUR -0.16 (EUR -0.47).
July-September 2012 highlights
* Ahlstrom continued to focus its business and announced the demerger of the
Label and Processing business area, which will be combined with Munksjö AB
to form a new global leader in specialty papers.
* Consistent with the company's growth strategy Ahlstrom announced the
acquisition of Munktell Filter AB, which will further strengthen the
company's offering in advanced filtration business, particularly in life
science and laboratory applications.
Continuing operations January-September 2012 compared with January-September
2011
* Net sales EUR 1210.7 million (EUR 1235.9 million).
* Operating profit EUR 33.9 million (EUR 24.3 million).
* Operating profit excluding non-recurring items EUR 39.8 million (EUR 48.0
million).
* Operating margin excluding non-recurring items 3.3% (3.9%).
* Profit before taxes EUR 13.5 million (EUR 4.1 million).
* Earnings per share EUR -0.08 (EUR -0.17).
Outlook for 2012
* On October 16, 2012, Ahlstrom revised its outlook for 2012. Net sales from
continuing operations are expected to be EUR 1,550-1,630 million. Operating
profit excluding non-recurring items from continuing operations is expected
to be EUR 48-58 million.
Jan Lång, President & CEO
- Combining the Label and Processing business area with Munksjö is a significant
step in our strategy execution, allowing us to focus our resources on areas
where we see the most attractive growth opportunities. Another recent strategic
step is the Munktell acquisition, which is a prime example of our growth
ambition. The transaction enables us to broaden our product portfolio and expand
our geographical presence.
- We were able to improve our profit margin somewhat in the third quarter,
helped by good pricing management despite the weakening market. However, our
profit was hurt by the shortfall in sales volumes and adverse currency effects.
- In Europe, we saw a slowdown in demand especially towards the end of the
quarter, while a recovery in China has been delayed. Our sales volume
development for the remainder of the year is expected to be weaker than we had
earlier anticipated, and as a result we have revised our guidance. We have
actively sought to mitigate the impact from the shortfall in sales volumes and
will continue to do so.
Key figures from continuing operations
Q1-Q3/ Q1-Q3/
EUR million Q3/2012 Q3/2011 Change, % 2012 2011 Change, %
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Net sales 391.7 389.7 0.5 1,210.7 1,235.9 -2.0
Operating profit / loss 9.4 -17.3 33.9 24.3 39.4
% of net sales 2.4 -4.4 2.8 2.0
Operating profit excl. NRI 9.3 8.0 17.1 39.8 48.0 -17.0
% of net sales 2.4 2.0 3.3 3.9
Profit / Loss before taxes 0.3 -24.4 13.5 4.1 229.2
Profit / Loss for the
period -6.3 -20.2 68.7 -0.1 -3.3 96.1
Earnings per share -0.16 -0.47 -0.08 -0.17
Return on capital
employed, % 2.6 -8.6 4.3 3.7
Capital expenditure 19.6 13.2 48.0 55.4 30.5 81.5
Number of personnel, at
the end of period 5,053 5,169 -2.3 5,053 5,169 -2.3
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*The Home and Personal business area is reported separately as discontinued
operations.
Operating environment
The operating e0nvironment remained challenging during the third quarter as the
overall demand was soft with increasing volatility. Geographically, demand in
Europe was weak, whereas the development in North America was more favorable.
Recovery in the Asian market, and particularly in China, has been delayed.
The demand for flooring, wallpaper and wallcovering materials in Europe was
stable during the review period. The wallcovering materials market in China
showed some signs of stabilization following earlier declines. The demand for
specialty reinforcements used by the wind energy industry weakened further.
The market for transportation filtration materials in North America continued to
grow in the third quarter, while some signs of slowdown were noted towards the
end of the review period. The demand for transportation filtration materials in
Europe remained soft. The advanced filtration material markets served by
Ahlstrom, particularly gas turbine and life science filtration, continued to
strengthen.
The markets for tape, food packaging and beverage materials (e.g. teabag)
remained weak during the review period, while the demand for medical materials
was stable.
The overall market for specialty paper products stayed soft. The demand for base
papers for metallization, flexible packaging papers, and furniture foils
declined in the third quarter, while the market for abrasive papers was stable.
The market pulp prices decreased somewhat in the third quarter and remained
below the levels in the comparison period except for specialty pulps, such as
mercerized cellulose. The prices for synthetic fibers such as polypropylene
increased in the quarter. The prices for chemicals in general continued to
decline, although they remained at a high level. In its production, Ahlstrom
uses chemicals such as latex, titanium dioxide, starch, and clay.
Development of net sales from continuing operations
Q1-Q3/ Q1-Q3/
Net sales by business area Q3/2012 Q3/2011 Change, % 2012 2011 Change, %
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Building and Energy 56.0 68.9 -18.7 187.6 230.5 -18.6
Filtration 87.4 78.7 11.1 268.2 244.8 9.6
Food and Medical 93.7 91.5 2.4 272.1 275.8 -1.4
Label and Processing 161.8 163.6 -1.1 503.3 528.4 -4.8
Other functions* and
eliminations -7.2 -12.9 -20.4 -43.6
Total net sales 391.7 389.7 0.5 1,210.7 1,235.9 -2.0
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*Other functions include financing and taxation-related items, as well as
earnings and costs belonging to holding and sales companies.
July-September 2012 compared with July-September 2011
Ahlstrom's third-quarter 2012 net sales increased by 0.5% to EUR 391.7 million,
compared with EUR 389.7 million in the third quarter 2011. The increase was
mainly due to a favorable currency effect as the U.S. dollar appreciated against
the euro. Lower sales volumes and capacity closures had a negative impact on net
sales. Higher selling prices were partially offset by a weaker product mix.
Breakdown of the net sales change at comparable currency rates:
Change, %
------------------------------------------------
Q3/2011
Price and mix 0.8
Currency 3.7
Volume -2.0
Closures, divestments, and new assets -2.0
------------------------------------------------
Q3/2012 0.5
------------------------------------------------
Total sales volumes in tons fell 4.0% from the comparison period. Sales volumes
declined in Building and Energy (-26.9%, or -9.1% excluding capacity closures)
and in Food and Medical (-10.8%). Filtration (1.5%) and Label and Processing
(0.7%) reported an increase. Total sales volumes, excluding the impact from
capacity closures mainly at Building and Energy, decreased by 1.5%.
January-September 2012 compared with January-September 2011
In January-September 2012, net sales decreased by 2.0% to EUR 1,210.7 million,
compared with EUR 1,235.9 million in the comparison period. The decline was
mainly due to lower sales volumes and capacity closures. A favorable currency
effect, mainly as the U.S. dollar appreciated against the euro, had a positive
impact on net sales. Higher selling prices were partially offset by a weaker
product mix.
Breakdown of the net sales change at comparable currency rates:
Change, %
-------------------------------------------
Q1-Q3/2011
Price and mix 0.1
Currency 2.8
Volume -2.5
Closures, divestments, and new assets -2.4
-------------------------------------------
Q1-Q3/2012 -2.0
-------------------------------------------
Total sales volumes in tons fell 4.9% from the comparison period. Sales volumes
declined in Building and Energy (-25.1%, or -5.1% excluding capacity closures),
Food and Medical (-11.4%) and Label and Processing (-1.0%). Filtration (0.7%)
reported again increase. Total sales volumes, excluding the impact from closures
mainly at Building and Energy, decreased by 2.0%.
Result and profitability from continuing operations
Financial result by Q1-Q3/
segment Q3/2012 Q3/2011 Change, % 2012 Q1-Q3/ 2011 Change, %
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Building and Energy
Operating profit 2.0 -23.4 6.5 -20.1
% of net sales 3.5 -34.0 3.5 -8.7
Operating profit
excl. NRI 1.7 -0.9 6.3 2.4 163.8
% of net sales 3.1 -1.3 3.3 1.0
Filtration
Operating profit 5.1 4.5 13.0 14.1 18.2 -22.4
% of net sales 5.8 5.7 5.3 7.4
Operating profit
excl. NRI 5.3 4.2 27.7 18.4 18.5 -0.2
% of net sales 6.1 5.3 6.9 7.5
Food and Medical
Operating profit 2.4 4.2 -41.3 5.5 10.0 -45.1
% of net sales 2.6 4.6 2.0 3.6
Operating profit
excl. NRI 3.1 4.3 -28.0 6.6 10.1 -34.8
% of net sales 3.3 4.7 2.4 3.7
Label and
Processing
Operating profit -1.4 -3.7 61.7 8.5 13.1 -35.0
% of net sales -0.9 -2.2 1.7 2.5
Operating profit
excl. NRI -1.4 -0.6 -126.3 8.6 14.4 -40.4
% of net sales -0.9 -0.4 1.7 2.7
Other functions*
and eliminations
Operating profit 1.4 1.1 -0.7 3.2
Ahlstrom Group
total
Operating
profit/loss 9.4 -17.3 33.9 24.3 39.4
% of net sales 2.4 -4.4 2.8 2.0
Operating profit
excl. NRI 9.3 8.0 17.1 39.8 48.0 -17.0
% of net sales 2.4 2.0 3.3 3.9
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*Other functions include financing and taxation-related items, as well as
earnings and costs belonging to holding and sales companies.
July-September 2012 compared with July-September 2011
Ahlstrom's third-quarter 2012 operating profit was EUR 9.4 million (EUR 17.3
million loss), including non-recurring items of EUR 0.1 million (EUR -25.3
million). Operating profit excluding non-recurring items was EUR 9.3 million
(EUR 8.0 million). In 2011, the most significant non-recurring items included
costs to end production of glassfiber and glassfiber mats in Karhula, Finland
and close down a hybrid wallcover production line in Turin, Italy. All these
assets were part of the Building and Energy business area.
The increase in profitability was mainly due to higher selling prices. The
profit improvement program implemented at the end of last year and efficiency
gains in the supply chain improved profitability. In addition, short-term cost
mitigation, related to maintenance and temporary lay-offs, had a positive effect
on profitability.
Operating profit was hurt by lower sales volumes and increased energy costs
stemming from higher natural gas prices in Italy and Brazil. In addition,
foreign exchange rates had a negative net impact of approximately EUR 3.7
million on operating profit. The EUR/USD exchange rate development affected pulp
prices denominated in euros, hurting profitability mainly in the Label and
Processing business area. This was partially offset by exports from the euro
area priced in other currencies, mainly in U.S. dollars.
Ahlstrom's market-related downtime in production was 6.6% in the third quarter
of 2012, compared with 8.7% in the corresponding period.
Profit before taxes was EUR 0.3 million (EUR 24.4 million loss).
Income taxes amounted to EUR 6.6 million (tax credit EUR 4.3 million). The
effective tax rate was impacted by the relatively large share of pretax profits
in countries with higher tax rates. In addition, no tax credit revenues were
recognized for the companies with uncertain profit forecast and for the
associated companies.
Loss for the period was EUR 6.3 million (EUR 20.2 million loss). Earnings per
share with the effect of interest on hybrid bond were EUR -0.16 (EUR -0.47).
January-September 2012 compared with January-September 2011
In January-September 2012, operating profit was EUR 33.9 million (EUR 24.3
million), including non-recurring items of EUR -5.9 million (EUR -23.7 million).
The non-recurring items include a cost of approximately EUR 3.4 million related
to the closure of a Filtration plant in Spain. Operating profit excluding non-
recurring items was EUR 39.8 million (EUR 48.0 million). The 2011 operating
profit includes non-recurring items mentioned earlier in the text.
Operating profit was negatively impacted by lower sales volumes, and increased
energy costs stemming from higher natural gas in Italy and Brazil. Foreign
exchange rates had a negative net impact of approximately EUR 8.8 million on
operating profit. The EUR/USD exchange rate development affected pulp prices
denominated in euros, hurting profitability mainly in the Label and Processing
business area. This was partially offset by exports from the euro area priced in
other currencies, mainly in U.S. dollars.
The profit improvement program implemented at the end of 2011, efficiency gains
in the supply chain, and higher selling prices had a positive impact on
profitability. The 2012 operating profit was also positively affected by the
release of annual remuneration accruals from 2011 worth about EUR 2.8 million.
The commercialization of the biodegradable teabag material line in Chirnside and
the medical material plant in Mundra continued. Both assets are part of the Food
and Medical business area.
Ahlstrom's market-related downtime in production was 6.5% in the first nine
months of 2012, compared with 6.6% in the corresponding period.
Profit before taxes was EUR 13.5 million (EUR 4.1 million).
Income taxes amounted to EUR 13.7 million (EUR 7.4 million). The effective tax
rate was impacted by the relatively large share of pretax profits in countries
with higher tax rates. In addition, no tax credit revenues were recognized for
the companies with uncertain profit forecast and for the associated companies.
Loss for the period was EUR 0.1 million (EUR 3.3 million loss). Earnings per
share with the effect of interest on hybrid bond were EUR -0.08 (EUR -0.17).
Divestment of the Home and Personal business area
Ahlstrom's former wipes fabrics business, Home and Personal, was transferred to
Suominen Corporation on October 31, 2011. As announced on September 27, 2012,
the transfer of the wipes business in Brazil to Suominen Corporation will be
postponed. Ahlstrom had previously anticipated that the transfer would have
taken place in the third quarter of 2012.
All necessary Brazilian regulatory permits for the operations in addition to
competition clearances have been received. The parties are negotiating the
prerequisites, including financing of the remaining EUR 25 million of the total
transaction value of EUR 170 million, for completing the transaction. The aim is
to transfer the operations in Brazil to Suominen as soon as possible.
Discontinued operations
Home and Personal was reported separately as discontinued operations until
October 31, 2011. The Brazilian operation of Home and Personal will be reported
as discontinued operations until the transaction is concluded for that part.
In July-September 2012, the profit for the period from discontinued operations
was EUR 0.9 million, compared with EUR 1.8 million in the comparison period. The
third-quarter 2011 figure includes the Home and Personal business area as a
whole, while the third-quarter 2012 figure includes the Brazilian part only.
In January-September 2012, the profit for the period from discontinued
operations was EUR 1.7 million, compared with a EUR 14.0 million loss in the
comparison period. The 2011 figure includes the Home and Personal business area
as a whole, while the 2012 figure includes the Brazilian part only. The 2011
figure includes an impairment loss recognized on the remeasurement to fair value
and costs to sell of EUR 18.6 million after tax related to the divestment.
Result including discontinued operations
In July-September 2012, the loss for the period including discontinued
operations was EUR 5.5 million (EUR 18.4 million loss). Earnings per share with
the effect of interest on hybrid bond were EUR -0.14 (EUR -0.43).
Return on equity (ROE) was -3.9% (-11.7%).
In January-September 2012, the profit for the period including discontinued
operations was EUR 1.6 million (EUR 17.4 million loss). Earnings per share with
the effect of interest on hybrid bond were EUR -0.04 (EUR -0.47).
Return on equity (ROE) was 0.4% (-3.5%).
Business Area review
Building and Energy
EUR million Q3/2012 Q3/2011 Change, % Q1-Q3/2012 Q1-Q3/2011 Change, %
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Net sales 56.0 68.9 -18.7 187.6 230.5 -18.6
Operating profit 2.0 -23.4 6.5 -20.1
% of net sales 3.5 -34.0 3.5 -8.7
Operating profit
excl. NRI 1.7 -0.9 6.3 2.4 163.8
% of net sales 3.1 -1.3 3.3 1.0
RONA, % 6.1 -67.6 6.8 -19.6
Sales volumes, 000s
tons 22.2 30.3 -26.9 74.5 99.6 -25.1
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Net sales in July-September 2012 fell by 18.7% to EUR 56.0 million, compared
with EUR 68.9 million in July-September 2011. The decline was mainly due to the
asset and production line closures in Karhula, Turin, and Bishopville in the
fourth quarter of 2011. Net sales were also negatively impacted by lower demand
for wallcovering materials in China. Flooring applications, wallpaper and
wallcovering as well as specialty materials (e.g. for the automotive and
building industries) had a positive impact on net sales in Europe. Operating
profit excluding non-recurring items increased to EUR 1.7 million (EUR 0.9
million loss). The measures related to the profit improvement program had a
positive impact on operating profit. Lower sales volumes and consequent
increased market-related downtime in production had a negative impact on
profitability. Operating profit was EUR 2.0 million (EUR 23.4 million loss).
In January-September 2012, net sales were EUR 187.6 million (EUR 230.5 million)
and operating
profit excluding non-recurring items was EUR 6.3 million (EUR 2.4 million).
Filtration
EUR million Q3/2012 Q3/2011 Change, % Q1-Q3/2012 Q1-Q3/2011 Change, %
-------------------------------------------------------------------------------
Net sales 87.4 78.7 11.1 268.2 244.8 9.6
Operating profit 5.1 4.5 13.0 14.1 18.2 -22.4
% of net sales 5.8 5.7 5.3 7.4
Operating profit
excl. NRI 5.3 4.2 27.7 18.4 18.5 -0.2
% of net sales 6.1 5.3 6.9 7.5
RONA, % 11.2 11.1 10.8 14.8
Sales volumes, 000s
tons 27.4 27.0 1.5 85.3 84.6 0.7
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Net sales in July-September 2012 rose by 11.1% to EUR 87.4 million, compared
with EUR 78.7 million in July-September 2011. Net sales benefited particularly
from advanced filtration materials, such as gas turbine, life science, and
laboratory applications, as well as from a favorable currency effect. Operating
profit excluding non-recurring items rose to EUR 5.3 million (EUR 4.2 million)
due to an improved product mix. Increased natural gas prices in Italy, and costs
of specialty pulps had a negative impact on profitability. Operating profit
amounted to EUR 5.1 million (EUR 4.5 million).
In January-September 2012, net sales were EUR 268.2 million (EUR 244.8 million)
and operating
profit excluding non-recurring items was EUR 18.4 million (EUR 18.5 million).
Food and Medical
EUR million Q3/2012 Q3/2011 Change, % Q1-Q3/2012 Q1-Q3/2010 Change, %
-------------------------------------------------------------------------------
Net sales 93.7 91.5 2.4 272.1 275.8 -1.4
Operating profit 2.4 4.2 -41.3 5.5 10.0 -45.1
% of net sales 2.6 4.6 2.0 3.6
Operating profit
excl. NRI 3.1 4.3 -28.0 6.6 10.1 -34.8
% of net sales 3.3 4.7 2.4 3.7
RONA, % 4.4 8.3 3.4 6.4
Sales volumes, 000s
tons 28.9 32.4 -10.8 88.0 99.4 -11.4
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Net sales in July-September 2012 rose by 2.4% to EUR 93.7 million, compared with
EUR 91.5 million in July-September 2011. The increase was due to higher selling
prices and favorable currency effect. Lower volumes, due to a weak demand for
tape and food packaging products in Europe and Asia and an exit from some
unprofitable markets, had however a negative impact on net sales. Operating
profit excluding non-recurring items decreased to EUR 3.1 million (EUR 4.3
million) due to the lower sales volumes and resulting increase in market related
downtime in production at plants. Improved product mix had a positive impact on
profitability. Operating profit amounted to EUR 2.4 million (EUR 4.2 million).
In January-September 2012, net sales were EUR 272.1 million (EUR 275.8 million)
and operating
profit excluding non-recurring items was EUR 6.6 million (EUR 10.1 million).
Label and Processing
EUR million Q3/2012 Q3/2011 Change, % Q1-Q3/2012 Q1-Q3/2011 Change, %
-------------------------------------------------------------------------------
Net sales 161.8 163.6 -1.1 503.3 528.4 -4.8
Operating profit -1.4 -3.7 61.7 8.5 13.1 -35.0
% of net sales -0.9 -2.2 1.7 2.5
Operating profit
excl. NRI -1.4 -0.6 -126.3 8.6 14.4 -40.4
% of net sales -0.9 -0.4 1.7 2.7
RONA, % -2.5 -5.6 4.9 6.6
Sales volumes, 000s
tons 136.0 135.1 0.7 428.7 432.9 -1.0
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Net sales in July-September 2012 fell by 1.1% to EUR 161.8 million, compared
with EUR 163.6 million in July-September 2011 due to a weaker product mix in
certain segments. Release liners, such as recently introduced Acti-V(TM)
products, supported net sales. Operating loss excluding non-recurring items was
EUR 1.4 million (EUR 0.6 million loss). The result was negatively impacted by
the EUR/USD exchange rate, a weaker product mix, and higher energy costs in
Brazil and Italy. Streamlining measures taken at the Jacarei plant in Brazil and
the Osnabrück plant in Germany had a positive impact on profitability. Operating
loss amounted to EUR 1.4 million (EUR 3.7 million loss).
The business area implemented selling price increases during the third quarter
to compensate for the increased raw material and energy costs that occurred
during the first half of the year.
In January-September 2012, net sales were EUR 503.3 million (EUR 528.4 million)
and operating
profit excluding non-recurring items was EUR 8.6 million (EUR 14.4 million).
Financing (including discontinued operations)
Net cash flow from operating activities in July-September 2012 amounted to EUR
21.2 million (EUR 26.7 million), and cash flow after investments was EUR 9.5
million (EUR 15.4 million). In January-September 2012, net cash flow from
operating activities amounted to EUR 63.2 million (EUR 72.8 million), and cash
flow after investments was EUR 18.7 million (EUR 45.4 million).
As of September 30, 2012, operative working capital amounted to EUR 169.9
million (EUR 176.7 million at the end of 2011). Its turnover improved by two
days and was 39 days at the end of the review period.
Ahlstrom's interest-bearing net liabilities stood at EUR 279.8 million (EUR
237.8 million at the end of 2011). Ahlstrom's interest bearing liabilities
amounted to EUR 328.9 million. The duration of the loan portfolio (average
interest rate fixing period) was 17.7 months and the capital weighted average
interest rate was 4.68%. The average maturity of the loan portfolio was 41.9
months.
In July-September 2012, net financial expenses were EUR 5.1 million (EUR 6.1
million). Net financial expenses include net interest expenses of EUR 4.1
million (EUR 5.2 million), a financing exchange rate loss of EUR 0.2 million
(EUR 0.2 million gain), and other financial expenses of EUR 0.8 million (EUR
1.1 million).
In January-September 2012, net financial expenses were EUR 14.6 million (EUR
18.1 million). Net financial expenses include net interest expenses of EUR 11.8
million (EUR 13.2 million), a financing exchange rate loss of EUR 0.1 million
(EUR 1.0 million loss), and other financial expenses of EUR 2.7 million (EUR
3.8 million).
The company's liquidity continues to be good. At the end of the review period,
its total liquidity, including cash and unused committed credit facilities, was
EUR 331.3 million (EUR 399.2 million). In addition, the company had undrawn
uncommitted credit facilities and cash pool overdraft limits of EUR 150.8
million (EUR 146.7 million) available.
The gearing ratio stood at 50.4% (38.2% at the end of 2011). The equity ratio
was 40.8% (43.6% at the end of 2011).
Capital expenditure
Ahlstrom's capital expenditure excluding acquisitions from continuing operations
totaled EUR 19.6 million in July-September 2012 (EUR 13.2 million). In January-
September 2012, capital expenditure was EUR 55.4 million (EUR 30.5 million). The
expenditure includes projects such as the joint venture for production of crepe
papers in Longkou, China, a wallcovering materials production line in Binzhou,
China, and the filtration materials capacity increase in Turin announced in
2010.
During the third quarter 2012, Ahlstrom announced an investment in additional
capacity in filtration materials at its site in Turin, Italy. The approximately
EUR 10 million investment will be operational by the third quarter of 2013 and
will consist of an upgrade to a paper machine producing filter media for
transportation and gas turbine applications.
Combination of Label and Processing and Munksjö AB
On August 28, 2012, Ahlstrom signed an agreement with EQT, the principal owner
of the Sweden-based Munksjö AB, to combine its Label and Processing business
area with Munksjö AB to form a global leader in specialty papers through two
partial demergers: one consisting of the Label and Processing operations in
Europe (LP Europe) and one in Brazil (Coated Specialties). The new company will
be called Munksjö Corporation (in Finnish Munksjö Oyj) and its shares will be
listed on NASDAQ OMX Helsinki. The transaction enables Ahlstrom to focus
exclusively on its value-added business areas: Building and Energy, Filtration
and Food and Medical. Meanwhile, the Label and Processing business area can be
further developed together with Munksjö.
Acquisition of Munktell
On September 5, 2012, Ahlstrom announced the acquisition of Munktell Filter AB
as a strategic step to expand the advanced filtration business particularly in
life science and laboratory applications. Under the agreement, Ahlstrom acquires
100 percent of the shares in Munktell Filter AB, as well as its holdings in
Munktell & Filtrak GmbH, Filtres Fioroni SA and Munktell Inc. The enterprise
value of the transaction was approximately EUR 20 million, including the planned
subsequent buyouts of minority interests. Through the transaction, Ahlstrom will
become a global leader in life science and laboratory media filtration.
Development programs
Development programs, aimed at enhancing the planning and harmonization of
common processes, were continued during the review period as communicated
earlier. Ahlstrom aims to increase customer focus and enhance the management of
the entire product and supply chain by strengthening and better aligning global
processes.
Profit improvement program
In December 2011, Ahlstrom concluded its profit improvement program. The program
aims to improve annual operating profit by approximately EUR 15 million starting
from 2012 and affecting 362 employees at various sites, including Karhula in
Finland, Bishopville in the U.S., Turin in Italy, Jacarei in Brazil, and
Osnabrück in Germany. The company recognized a total non-recurring cost of
approximately EUR 31.5 million in 2011. The overall impact of the non-recurring
items of the program is cash neutral.
Personnel
Ahlstrom employed an average of 5,111 people* in January-September 2012 (5,179),
and 5,053 people (5,169) at the end of the period. At the end of the period, the
highest numbers of employees were in France (24.4%), the United States (19.1%),
Italy (11.4%), Finland (8.1%), Germany (7.6%), and Brazil (7.0%).
Shares and share capital
Ahlstrom's shares are listed on the NASDAQ OMX Helsinki. Ahlstrom has one series
of shares. The share is classified under NASDAQ OMX's Materials sector and the
trading code is AHL1V.
During January-September 2012, a total of 1.45 million Ahlstrom shares were
traded for a total of EUR 19.8 million. The lowest trading price was EUR 11.86
and the highest EUR 15.45. The closing price on September 28, 2012, was EUR
13.20. Market capitalization at the end of the review period was EUR 608.6
million, excluding the shares owned by the parent company and Ahlcorp Oy, which
is a management ownership company.
At the end of September 2012, Ahlstrom held a total of 269,005 of its own
shares, corresponding to approximately 0.58% of the total shares and votes.
Ahlstrom Group's equity per share was EUR 10.00 at the end of the review period
(December 31, 2011: EUR 11.50).
Annual General Meeting
Ahlstrom Corporation's Annual General Meeting of Shareholders (AGM) was held on
April 4, 2012.
The AGM resolved to distribute a dividend totaling EUR 1.30 per share for the
fiscal year that ended on December 31, 2011 from the retained earnings in
accordance with the proposal of the Board of Directors: a dividend of EUR 0.87
per share and an extra dividend of EUR 0.43 per share based on cash generated
from the divestiture of the Home and Personal business area. In addition, the
AGM resolved to reserve EUR 100,000 to be used for donations at the discretion
of the Board of Directors.
The AGM approved the financial statements for 2011 and discharged the members of
the Board of Directors and the President and CEO from liability for the fiscal
year January 1-December 31, 2011.
The AGM confirmed the number of Board members as seven. Sebastian Bondestam,
Lori J. Cross, Esa Ikäheimonen, Pertti Korhonen, Anders Moberg and Peter
Seligson were re-elected as members of the Board of Directors. Nathalie
Ahlström, born 1974, was elected as a new member. The term of the Board of
Directors will expire at the close of the next Annual General Meeting.
PricewaterhouseCoopers Oy was re-elected as Ahlstrom's auditor as recommended by
the Audit Committee. PricewaterhouseCoopers Oy has designated Authorized Public
Accountant Eero Suomela as the Responsible Auditor.
Authorizations to repurchase and distribute the company's own shares as well as
to accept them as pledge
The AGM authorized the Board of Directors to repurchase and distribute the
Company's own shares as well as to accept them as pledge as proposed by the
Board of Directors. The number of shares to be repurchased or accepted as pledge
by virtue of the authorization shall not exceed 4,000,000 shares in the Company,
yet always taking into account the limitations set forth in the Companies' Act
as regards the maximum number shares owned by or pledged to the Company or its
subsidiaries. The shares may be repurchased only through public trading at the
prevailing market price by using unrestricted shareholders' equity. The rules
and guidelines of NASDAQ OMX Helsinki Oy and Euroclear Finland Ltd shall be
followed in the repurchase.
The authorization includes the right for the Board of Directors to decide upon
all other terms and conditions for the repurchase of the Company's own shares,
or their acceptance as pledge including the right to decide on the repurchase of
the Company's own shares otherwise than in proportion to the shareholders'
holdings in the Company.
By virtue of the authorization, the Board of Directors has the right to resolve
to distribute a maximum of 4,000,000 own shares held by the Company. The Board
of Directors will be authorized to decide to whom and in which order the own
shares will be distributed. The Board of Directors may decide on the
distribution of the Company's own shares otherwise than in proportion to the
existing pre-emptive right of shareholders to purchase the Company's own shares.
The shares may be used e.g. as consideration in acquisitions and in other
arrangements as well as to implement the Company's share-based incentive plans
in the manner and to the extent decided by the Board of Directors. The Board of
Directors also has the right to decide on the distribution of the shares in
public trading for the purpose of financing possible acquisitions. The
authorization also includes the right for the Board of Directors to resolve on
the sale of the shares accepted as a pledge. The authorization includes the
right for the Board of Directors to resolve upon all other terms and conditions
for the distribution of the shares held by the Company.
The authorizations for the Board of Directors to repurchase the Company's own
shares, to distribute them as well as to accept them as pledge are valid for 18
months from the close of the Annual General Meeting but will, however, expire at
the close of the next Annual General Meeting, at the latest.
Decisions taken by the Board of Directors
After the AGM, the organization meeting of the Board of Directors elected Peter
Seligson as Chairman and Pertti Korhonen as Vice Chairman of the Board.
The Board of Directors appointed three permanent committees. The members of the
Audit Committee are Esa Ikäheimonen (Chairman), Sebastian Bondestam and Lori J.
Cross. The members of the Compensation Committee are Peter Seligson (Chairman),
Pertti Korhonen and Anders Moberg. Five persons were appointed as members of the
Nomination Committee: Peter Seligson (Chairman), Pertti Korhonen and Anders
Moberg as well as the non-board members Carl Ahlström and Risto Murto. The
composition of the Nomination Committee aims to increase shareholder influence
in nomination matters.
Change in the Board of Directors
Nathalie Ahlström (M.Sc., Tech) decided to tender her resignation as a member of
Ahlstrom's Board of Directors due to a conflict of interest caused by her taking
up a new executive position. The resignation became effective from September
1, 2012.
The Board of Directors will continue with six members until the next Annual
General Meeting in 2013: Peter Seligson (Chairman), Pertti Korhonen (Vice
Chairman), Sebastian Bondestam, Lori J. Cross, Esa Ikäheimonen and Anders
Moberg.
Events after the review period
Increase in Vimpu Intressenter AB's shareholding
On October 2, 2012, Ahlstrom received an announcement from Vimpu Intressenter Ab
regarding a change in the shareholding of the said shareholder.
According to the announcement, Vimpu Intressenter's shareholding in Ahlstrom
Corporation had on October 2, 2012, exceeded 5% (1/20) of the share capital and
voting rights of Ahlstrom Corporation. Vimpu Intressenter now owns 2,358,013
shares of Ahlstrom Corporation, which represents 5.05% of the share capital and
voting rights of Ahlstrom Corporation.
Notice to the Extraordinary General Meeting
A notice to the Extraordinary General Meeting was published on October
15, 2012. Ahlstrom will hold an Extraordinary General Meeting on November
27, 2012. The EGM will decide on the planned two partial demergers of Ahlstrom
Corporation in relation to the combination of Ahlstrom Group's Label and
Processing business and Munksjö AB that was announced on August 28, 2012.
Change in outlook
On October 16, 2012, Ahlstrom revised its 2012 outlook for net sales and
operating profit excluding non-recurring items. The company's sales volume
development for the remainder of the year is expected to be weaker than the
company had earlier estimated due to lower than expected demand in key markets.
Demand has been reduced due to the continued slowdown especially in the
economies in Europe. In addition, recovery in China has been delayed.
Outlook
Net sales from continuing operations are expected to be EUR 1,550-1,630 million
in 2012. Operating profit excluding non-recurring items from continuing
operations is expected to be EUR 48-58 million.
In 2012, investments excluding acquisitions from continuing operations are
estimated to be approximately EUR 85 million (EUR 66.4 million in 2011).
Ahlstrom had previously estimated investments to amount to approximately EUR
100 million. In addition to the investments announced this year, the estimate
also includes investments that were already announced in 2011 and 2010, such as
the wallcovering materials line and upgrades to the filtration material line in
Binzhou, China, as well as the joint venture for the production of crepe papers
in Longkou, China.
The demerger of the Label and Processing business area is subject to an approval
by the Extraordinary General Meeting to be held on November 27, 2012. Following
an approval by the EGM, the business area will be reported as part of
discontinued operations and consequently Ahlstrom will publish a new outlook for
net sales and operating profit excluding non-recurring items immediately after
the EGM.
Short-term risks
The possible further spread of the European debt crisis and the resulting
prolonged slowdown of economies, and slower growth in Asia pose additional risks
to Ahlstrom's financial performance. Proposed cuts in public spending and tax
increases in many European countries reduce disposable incomes. Recent
indicators for the U.S. economy are more mixed. Slower economic growth, or even
a temporary contraction, may lead to lower sales volumes and force Ahlstrom to
initiate more market-related shutdowns at plants that could affect
profitability. The uncertainty related to global economic growth, increased
volatility in our main markets, and limited visibility makes it more difficult
to forecast future developments.
Ahlstrom's main raw materials are natural fibers, mainly pulp, synthetic fibers,
and chemicals. The company is one of the world's largest buyers of market pulp.
Despite the recent declines, the prices of some key raw materials used by
Ahlstrom remain at a high level with increased volatility.
If global economic growth slows down further, maintaining current sales prices
may be at risk and sustaining the current level of profitability may be
compromised, even if raw material prices fall at the same time.
The general risks facing Ahlstrom's business operations are described in greater
detail on the company website www.ahlstrom.com and in the report by the Board of
Directors in the company's Annual Report 2011. The risk management process is
also described in the Corporate Governance Statement, also available on the
company's website.
* * *
This interim report has been prepared in accordance with International Financial
Reporting Standards (IFRS). Comparable figures refer to the same period last
year unless otherwise stated.
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.
Helsinki, October 22, 2012
Ahlstrom Corporation
Board of Directors
Additional information
Jan Lång, President & CEO, tel. +358 (0)10 888 4700
Seppo Parvi, CFO, tel. +358 (0)10 888 4768
Ahlstrom's President & CEO Jan Lång and CFO Seppo Parvi will present the
January-September 2012 interim report at a Finnish-language press and analyst
conference in Helsinki today, October 22, 2012, at 1:30 p.m. (CET+1). The
conference will take place at Event Arena Bank, Unioninkatu 20. The meeting room
will be announced on the display board in the lobby.
In addition, President & CEO Lång and CFO Parvi will hold a conference call in
English for analysts, investors and representatives of the media today, October
22, 2012, at 3:00 p.m. (CET+1). To participate in the conference call, please
dial (09) 6937 9543 in Finland or +44 (0)20 3140 8286 outside Finland a few
minutes before the conference begins. The access code is 3104023.
The conference call can also be listened to live on the Internet. The link to
the English-language presentation (an audio webcast) including slides is
available on the company website at www.ahlstrom.com. Questions may also be
submitted in writing via the Internet. Listening to the conference call requires
registration.
An on-demand webcast including slides is available for viewing and listening on
the company website for one year after the conference call.
Presentation material will be available on October 22, 2012, after the Interim
Report is published, at www.ahlstrom.com > Investors > Reports and presentations> 2012. Material in Finnish will be available at www.ahlstrom.fi > Sijoittajat >
Katsaukset ja presentaatiot > 2012.
Ahlstrom's financial information in 2013
Ahlstrom will publish financial information in 2013 as follows:
+----------------------------------+--------------------+---------------+
|Report |Date of publication |Silent period |
+----------------------------------+--------------------+---------------+
|Financial statements bulletin 2012|Thursday, January 31|January 1-31 |
+----------------------------------+--------------------+---------------+
|Interim Report January-March |Thursday, April 25 |April 1-25 |
+----------------------------------+--------------------+---------------+
|Interim Report January-June |Wednesday, August 7 |July 1-August 7|
+----------------------------------+--------------------+---------------+
|Interim Report January-September |Thursday, October 24|October 1-24 |
+----------------------------------+--------------------+---------------+
During the silent period, Ahlstrom will not communicate with capital market
representatives.
Ahlstrom in brief
Ahlstrom is a high performance materials company, partnering with leading
businesses around the world to help them stay ahead. Our products are used in a
large variety of everyday applications, such as filters, surgical gowns and
drapes, wallcoverings, flooring, labels and food packaging. We have a leading
market position in the businesses in which we operate. Our 5,200 employees serve
customers in 28 countries on six continents. In 2011, Ahlstrom's net sales
amounted to EUR 1.6 billion. The company's share is quoted on the NASDAQ OMX
Helsinki. More information is available at www.ahlstrom.com.
Appendix
Consolidated financial statements
Appendix: Consolidated financial statement
Financial statements are unaudited.
-------------------------------------------------------------------------------
INCOME STATEMENT Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
EUR million 2012 2011 2012 2011 2011
-------------------------------------------------------------------------------
Continuing operations
Net sales 391.7 389.7 1,210.7 1,235.9 1,607.2
Cost of goods sold -339.7 -359.0 -1,047.4 -1,090.1 -1,421.9
-------------------------------------------------------------------------------
Gross profit 52.0 30.7 163.4 145.8 185.4
Sales and marketing expenses -14.7 -11.4 -43.8 -36.4 -50.0
R&D expenses -4.6 -4.9 -14.0 -13.8 -17.9
Administrative expenses -23.2 -23.0 -74.4 -67.5 -90.1
Other operating income 0.8 1.4 4.0 8.1 12.3
Other operating expense -0.8 -10.2 -1.3 -12.0 -19.6
-------------------------------------------------------------------------------
Operating profit / loss 9.4 -17.3 33.9 24.3 20.1
Net financial expenses -5.1 -6.0 -14.6 -17.8 -22.6
Share of profit / loss of equity
accounted investments -4.0 -1.1 -5.7 -2.4 -4.0
-------------------------------------------------------------------------------
Profit / loss before taxes 0.3 -24.4 13.5 4.1 -6.6
Income taxes -6.6 4.3 -13.7 -7.4 -5.6
-------------------------------------------------------------------------------
Profit / loss for the period from
continuing operations -6.3 -20.2 -0.1 -3.3 -12.2
-------------------------------------------------------------------------------
Discontinued operations
Profit/loss for the period 0.9 1.9 1.9 4.5 3.4
Impairment loss recognized on the re-
measurement to fair value and cost to
sell - -0.2 -0.2 -18.6 -23.4
-------------------------------------------------------------------------------
Profit / loss for the period from
discontinued operations 0.9 1.8 1.7 -14.0 -20.0
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Profit/loss for the period -5.5 -18.4 1.6 -17.4 -32.2
-------------------------------------------------------------------------------
Attributable to
Owners of the parent -5.0 -18.4 2.5 -17.5 -32.2
Non-controlling interest -0.5 -0.0 -0.9 0.2 -0.0
-------------------------------------------------------------------------------
Continuing operations
Earnings per share, EUR
- Basic and diluted * -0.16 -0.47 -0.08 -0.17 -0.38
-------------------------------------------------------------------------------
Including discontinued operations
Earnings per share, EUR
- Basic and diluted * -0.14 -0.43 -0.04 -0.47 -0.81
-------------------------------------------------------------------------------
* With the effect of interest on
hybrid bond for the period, net of
tax
-------------------------------------------------------------------------------
STATEMENT OF COMPREHENSIVE INCOME Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
EUR million 2012 2011 2012 2011 2011
-------------------------------------------------------------------------------
Profit / loss for the period -5.5 -18.4 1.6 -17.4 -32.2
Other comprehensive income, net of tax
Translation differences -2.5 -11.3 -5.7 -27.4 -11.9
Share of other comprehensive income of equity
accounted investments -0.0 - 0.4 - -
Hedges of net investments in foreign operations - - - - -
Cash flow hedges - -0.0 - -0.1 -
-------------------------------------------------------------------------------
Other comprehensive income, net of tax -2.5 -11.3 -5.4 -27.5 -11.9
-------------------------------------------------------------------------------
Total comprehensive income for the period -7.9 -29.7 -3.8 -44.9 -44.1
-------------------------------------------------------------------------------
Attributable to
Owners of the parent -7.4 -29.7 -2.9 -45.1 -44.0
Non-controlling interest -0.5 -0.0 -0.9 0.2 -0.0
--------------------------------------------------------------------
BALANCE SHEET Sep 30, Sep 30, Dec 31,
EUR million 2012 2011 2011
--------------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment 535.1 531.3 553.4
Goodwill 111.1 107.5 113.8
Other intangible assets 45.3 37.6 47.6
Equity accounted investments 34.7 8.2 36.6
Other investments 0.4 2.5 0.4
Other receivables 55.6 46.5 51.9
Deferred tax assets 58.8 60.4 61.2
--------------------------------------------------------------------
Total non-current assets 841.1 794.0 865.0
Current assets
Inventories 188.1 188.2 185.8
Trade and other receivables 255.5 257.3 241.4
Income tax receivables 1.0 2.0 2.4
Other investments - - -
Cash and cash equivalents 48.7 21.0 94.0
--------------------------------------------------------------------
Total current assets 493.3 468.5 523.6
Assets classified as held for sale 26.8 228.4 42.3
--------------------------------------------------------------------
Total assets 1,361.1 1,491.0 1,430.8
--------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to owners of the parent 461.2 532.2 530.1
Hybrid bond 80.0 80.0 80.0
Non-controlling interest 14.2 1.0 12.6
--------------------------------------------------------------------
Total equity 555.4 613.2 622.7
Non-current liabilities
Interest-bearing loans and borrowings 229.9 232.0 274.2
Employee benefit obligations 76.0 75.7 73.3
Provisions 3.6 2.8 4.5
Other liabilities 9.1 3.8 4.8
Deferred tax liabilities 30.9 31.1 28.8
--------------------------------------------------------------------
Total non-current liabilities 349.4 345.5 385.5
Current liabilities
Interest-bearing loans and borrowings 99.1 112.9 58.1
Trade and other payables 331.5 330.5 328.8
Income tax liabilities 5.7 4.8 5.6
Provisions 18.5 23.1 20.4
--------------------------------------------------------------------
Total current liabilities 454.7 471.3 412.8
--------------------------------------------------------------------
Total liabilities 804.1 816.8 798.3
Liabilities directly associated with assets
classified as held for sale 1.6 60.9 9.8
--------------------------------------------------------------------
Total equity and liabilities 1,361.1 1,491.0 1,430.8
--------------------------------------------------------------------
--------------------------
STATEMENT OF CHANGES IN
EQUITY
1) Issued capital
2) Share premium
3) Non-restricted equity
reserve
4) Hedging reserve
5) Translation reserve
6) Own shares
7) Retained earnings
8) Total attributable to
owners of the parent
9) Non-controlling
interest
10) Hybrid bond
11) Total equity
EUR million 1) 2) 3) 4) 5) 6) 7) 8) 9) 10) 11)
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Equity at January
1, 2011 70.0 209.3 8.3 0.0 18.8 6.4 323.0 623.0 0.9 80.0 703.8
Profit / loss for
the period - - - - - - -17.5 -17.5 0.1 - -17.4
Other comprehensive
income, net of tax
Translation
differences - - - - -27.4 - - -27.4 - - -27.4
Share of other
comprehensive
income of
equity accounted
investments - - - - - - - - - - -
Hedges of net
investments in
foreign
operations - - - - - - - - - - -
Cash flow
hedges - - - -0.1 - - - -0.1 - - -0.1
Dividends paid and
other - - - - - - -41.1 -41.1 - - -41.1
Hybrid bond - - - - - - - - - - -
Interest on hybrid
bond - - - - - - -5.6 -5.6 - - -5.6
Purchases of own
shares - - - - - -0.1 - -0.1 - - -0.1
Share ownership
plan for EMT - - - - - - - - - - -
Change in non-
controlling
interests - - - - - - - - - - -
Share-based
incentive plan - - - - - 2.1 -1.0 1.1 - - 1.1
-------------------------------------------------------------------------------
Equity at September
30, 2011 70.0 209.3 8.3 0.1 -8.6 4.3 257.7 532.2 1.0 80.0 613.2
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Equity at January
1, 2012 70.0 209.3 8.3 0.0 6.9 7.4 243.0 530.1 12.6 80.0 622.7
Profit / loss for
the period - - - - - - 2.5 2.5 -0.9 - 1.6
Other comprehensive
income, net of tax
Translation
differences - - - - -5.7 - - -5.7 0.0 - -5.7
Share of other
comprehensive
income of
equity accounted
investments - - - - 0.4 - - 0.4 - - 0.4
Hedges of net
investments in
foreign
operations - - - - - - - - - - -
Cash flow
hedges - - - - - - - - - - -
Dividends paid and
other - - - - - - -60.4 -60.4 - - -60.4
Hybrid bond - - - - - - - - - - -
Interest on hybrid
bond - - - - - - -5.7 -5.7 - - -5.7
Purchases of own
shares - - - - - - - - - - -
Share ownership
plan for EMT - - - - - - - - - - -
Change in non-
controlling
interests - - - - - - - - 2.5 - 2.5
Share-based
incentive plan - - - - - - 0.1 0.1 - - 0.1
-------------------------------------------------------------------------------
Equity at September
30, 2012 70.0 209.3 8.3 0.0 1.6 7.4 179.5 461.2 14.2 80.0 555.4
-------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS - including discontinued
operations Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
EUR million 2012 2011 2012 2011 2011
-------------------------------------------------------------------------------
Cash flow from operating activities
Profit / loss for the period -5.5 -18.4 1.6 -17.4 -32.2
Adjustments, total 33.5 33.7 88.6 117.0 141.2
Changes in net working capital 2.9 10.8 -1.2 -28.6 -10.7
Change in provisions -4.4 15.8 -7.2 15.7 14.0
Financial items -4.8 -13.0 -14.6 -8.6 -20.8
Income taxes paid / received -0.5 -2.3 -4.0 -5.4 -7.9
-------------------------------------------------------------------------------
Net cash from operating activities 21.2 26.7 63.2 72.8 83.7
Cash flow from investing activities
Acquisition of Group companies - 0.3 - 0.3 -1.0
Purchases of intangible and tangible assets -21.0 -12.5 -63.2 -34.0 -60.0
Other investing activities 9.4 0.9 18.8 6.3 117.7
-------------------------------------------------------------------------------
Net cash from investing activities -11.6 -11.3 -44.5 -27.4 56.7
Cash flow from financing activities
Dividends paid and other - - -60.0 -41.1 -41.2
Repurchase of own shares - -0.1 - -0.1 -3.1
Investment to Ahlstrom Corporation shares
related to share ownership plan for EMT - - - - -
Payments received on hybrid bond - - - - -
Interest on hybrid bond - - - - -7.6
Changes in loans and other financing activities -8.8 -19.4 -3.3 -5.7 -18.9
-------------------------------------------------------------------------------
Net cash from financing activities -8.8 -19.4 -63.3 -46.8 -70.7
Net change in cash and cash equivalents 0.8 -4.0 -44.5 -1.5 69.7
Cash and cash equivalents at the beginning of
the period 48.8 26.6 94.4 24.6 24.6
Foreign exchange adjustment -0.5 -0.6 -0.8 -1.2 0.1
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the
period 49.1 21.9 49.1 21.9 94.4
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
KEY FIGURES Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
2012 2011 2012 2011 2011
-------------------------------------------------------------------------------
Continuing operations
Personnel costs -74.1 -84.6 -231.1 -243.1 -323.6
Depreciation and amortization -18.6 -20.8 -56.3 -64.3 -84.5
Impairment charges - -9.1 0.0 -9.1 -10.8
-------------------------------------------------------------------------------
Operating profit, % 2.4 -4.4 2.8 2.0 1.3
Return on capital employed (ROCE), % 2.6 -8.6 4.3 3.7 2.0
Basic earnings per share *, EUR -0.16 -0.47 -0.08 -0.17 -0.38
Capital expenditure, EUR million 19.6 13.2 55.4 30.5 66.4
-------------------------------------------------------------------------------
Number of employees, average 5,093 5,192 5,111 5,179 5,181
Including discontinued operations
Personnel costs -74.4 -93.6 -232.0 -269.7 -353.8
Depreciation and amortization -18.6 -20.8 -56.3 -72.1 -92.3
Impairment charges - -9.1 0.0 -22.6 -32.7
-------------------------------------------------------------------------------
Operating profit, % 2.6 -2.9 2.9 0.7 0.1
Return on capital employed (ROCE), % 2.9 -5.7 4.4 1.3 -0.1
Return on equity (ROE), % -3.9 -11.7 0.4 -3.5 -4.9
-------------------------------------------------------------------------------
Interest-bearing net liabilities, EUR
million 279.8 333.2 279.8 333.2 237.8
Equity ratio, % 40.8 41.2 40.8 41.2 43.6
Gearing ratio, % 50.4 54.3 50.4 54.3 38.2
-------------------------------------------------------------------------------
Basic earnings per share *, EUR -0.14 -0.43 -0.04 -0.47 -0.81
Equity per share, EUR 10.00 11.48 10.00 11.48 11.50
Average number of shares during the period,
1000's 46,105 46,350 46,105 46,316 46,282
Number of shares at the end of the period,
1000's 46,105 46,346 46,105 46,346 46,105
-------------------------------------------------------------------------------
Capital expenditure, EUR million 19.8 14.0 56.2 34.1 70.4
Capital employed at the end of the period,
EUR million 884.3 968.3 884.3 968.3 955.0
Number of employees, average 5,122 5,762 5,139 5,748 5,666
-------------------------------------------------------------------------------
* With the effect of interest on hybrid bond for the period, net of tax
ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance with IAS 34, Interim
Financial reporting, as adopted by EU and the accounting principles set out in
the Group's Financial Statements for 2011.
Suominen has been included in the consolidated accounts as an associated
company.
-------------------------------------------------------------------------
SEGMENT INFORMATION Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
EUR million 2012 2011 2012 2011 2011
-------------------------------------------------------------------------
Building and Energy 56.0 68.9 187.6 230.5 296.2
Filtration 87.4 78.7 268.2 244.8 324.5
Food and Medical 93.7 91.5 272.1 275.8 361.9
Label and Processing 161.8 163.6 503.3 528.4 678.1
Other operations 22.6 18.1 69.0 52.4 71.1
Internal sales -29.8 -31.0 -89.4 -95.9 -124.6
-------------------------------------------------------------------------
Total net sales 391.7 389.7 1,210.7 1,235.9 1,607.2
Building and Energy 0.7 0.6 2.6 3.2 3.8
Filtration 2.7 2.0 8.4 6.5 9.4
Food and Medical 6.6 8.5 17.8 27.8 34.1
Label and Processing 5.9 8.7 19.7 24.8 32.4
Other operations 13.9 11.2 40.9 33.6 44.9
-------------------------------------------------------------------------
Total internal sales 29.8 31.0 89.4 95.9 124.6
Building and Energy 2.0 -23.4 6.5 -20.1 -27.8
Filtration 5.1 4.5 14.1 18.2 22.8
Food and Medical 2.4 4.2 5.5 10.0 12.0
Label and Processing -1.4 -3.7 8.5 13.1 11.6
Other operations 1.4 1.0 -0.7 3.2 1.5
Eliminations -0.0 0.1 0.0 0.0 0.0
-------------------------------------------------------------------------
Operating profit / loss 9.4 -17.3 33.9 24.3 20.1
Return on capital employed (RONA), %
Building and Energy 6.1 -67.6 6.8 -19.6 -19.8
Filtration 11.2 11.1 10.8 14.8 13.6
Food and Medical 4.4 8.3 3.4 6.4 5.7
Label and Processing -2.5 -5.6 4.9 6.6 4.4
Group (ROCE), % 2.6 -8.6 4.3 3.7 2.0
Building and Energy 124.6 123.3 124.6 123.3 129.4
Filtration 180.5 161.3 180.5 161.3 168.5
Food and Medical 223.4 205.7 223.4 205.7 208.4
Label and Processing 215.4 248.9 215.4 248.9 247.2
Other operations 11.2 -9.4 11.2 -9.4 10.9
Eliminations -0.2 -0.3 -0.2 -0.3 -0.3
-------------------------------------------------------------------------
Total net assets 754.9 729.5 754.9 729.5 764.1
Building and Energy 3.0 1.5 7.8 4.6 7.5
Filtration 4.8 4.4 16.2 10.8 21.8
Food and Medical 5.9 2.6 20.2 6.5 16.4
Label and Processing 3.9 4.4 8.4 6.5 17.9
Other operations 1.9 0.4 2.8 2.0 2.8
-------------------------------------------------------------------------
Total capital expenditure 19.6 13.2 55.4 30.5 66.4
Building and Energy -2.8 -4.6 -8.4 -14.0 -18.2
Filtration -4.3 -4.2 -14.5 -12.4 -16.7
Food and Medical -4.8 -4.5 -14.0 -14.0 -18.4
Label and Processing -6.2 -7.0 -18.9 -21.3 -27.9
Other operations -0.5 -0.5 -0.6 -2.7 -3.2
-------------------------------------------------------------------------
Total depreciation and amortization -18.6 -20.8 -56.3 -64.3 -84.5
Building and Energy - -9.1 0.0 -9.1 -11.1
Filtration - - - - -
Food and Medical - - - - -
Label and Processing - - - - 0.2
Other operations - - - - -
-------------------------------------------------------------------------
Total impairment charges - -9.1 0.0 -9.1 -10.8
Building and Energy 0.2 -22.5 0.2 -22.5 -29.0
Filtration -0.2 0.3 -4.3 -0.3 0.8
Food and Medical -0.6 -0.1 -1.1 -0.1 0.3
Label and Processing - -3.0 -0.1 -1.3 -2.0
Other operations 0.8 0.0 -0.7 0.5 0.4
-------------------------------------------------------------------------
Total non-recurring items 0.1 -25.3 -5.9 -23.7 -29.6
---------------------------------------------------
SEGMENT INFORMATION Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Thousands of tons 2012 2011 2012 2011 2011
---------------------------------------------------
Building and Energy 22.2 30.3 74.5 99.6 127.1
Filtration 27.4 27.0 85.3 84.6 110.9
Food and Medical 28.9 32.4 88.0 99.4 128.7
Label and Processing 136.0 135.1 428.7 432.9 557.5
Other operations 1.6 2.6 6.5 7.3 9.3
Eliminations -10.2 -12.9 -32.8 -40.1 -52.0
---------------------------------------------------
Total sales tons 205.8 214.4 650.2 683.7 881.6
Segment information is presented according to the IFRS standards.
-------------------------------------------------------------------------------
NET SALES BY REGION - including
discontinued operations Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
EUR million 2012 2011 2012 2011 2011
-------------------------------------------------------------------------------
Europe 211.3 242.5 657.0 777.2 981.2
North America 78.9 112.2 237.6 334.4 420.6
South America 50.8 55.1 156.9 161.3 212.8
Asia-Pacific 48.1 46.1 145.9 153.7 202.4
Rest of the world 6.1 10.3 22.5 28.0 35.7
-------------------------------------------------------------------------------
Total net sales 395.1 466.2 1 219.8 1 454.6 1 852.6
-------------------------------------------------------------------------------
CHANGES OF PROPERTY, PLANT AND
EQUIPMENT - including discontinued operations Q1-Q3 Q1-Q3 Q1-Q4
EUR million 2012 2011 2011
-------------------------------------------------------------------------------
Book value at Jan 1 573.3 704.9 704.9
Acquisitions through business
combinations - - -
Additions 53.7 32.5 69.5
Disposals -15.3 -0.2 -87.9
Depreciations and impairment charges -53.6 -76.2 -103.2
Translation differences and other
changes -3.9 -22.1 -10.0
Book value at the end of the period 554.3 638.7 573.3
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TRANSACTIONS WITH RELATED PARTIES - including
discontinued operations Q1-Q3 Q1-Q3 Q1-Q4
EUR million 2012 2011 2011
-------------------------------------------------------------------------------
Transactions with associated companies
Sales and interest income 17.3 0.4 5.0
Purchases of goods and services -12.3 -2.3 -4.2
Trade and other receivables 10.1 0.1 7.3
Trade and other payables 1.9 0.2 3.4
-------------------------------------------------------------------------------
Market prices have been used in transactions with associated
companies.
-------------------------------------------------------------------------------
OPERATING LEASES - including discontinued operations Sep 30, Sep 30, Dec 31,
EUR million 2012 2011 2011
-------------------------------------------------------------------------------
Current portion 6.6 7.1 5.8
Non-current portion 23.3 18.8 19.7
-------------------------------------------------------------------------------
Total 29.8 25.9 25.5
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
COLLATERALS AND COMMITMENTS - including discontinued
operations Sep 30, Sep 30, Dec 31,
EUR million 2012 2011 2011
-------------------------------------------------------------------------------
Mortgages 73.0 73.0 73.0
Pledges 0.7 0.2 0.3
Commitments
Guarantees given on behalf of group companies 12.2 20.4 19.5
Guarantees given on behalf of associated companies 19.0 15.0 15.0
Capital expenditure commitments 29.3 20.5 19.4
Other commitments 1.9 2.3 3.1
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
QUARTERLY DATA Q3 Q2 Q1 Q4 Q3 Q2 Q1
EUR million 2012 2012 2012 2011 2011 2011 2011
-------------------------------------------------------------------------------
Continuing operations
Net sales 391.7 413.2 405.8 371.3 389.7 423.7 422.5
Cost of goods sold -339.7 -360.3 -347.3 -331.8 -359.0 -366.2 -364.9
-------------------------------------------------------------------------------
Gross profit 52.0 52.8 58.5 39.6 30.7 57.5 57.6
Sales and marketing expenses -14.7 -14.8 -14.3 -13.6 -11.4 -11.7 -13.2
R&D expenses -4.6 -4.8 -4.6 -4.0 -4.9 -4.0 -4.9
Administrative expenses -23.2 -27.5 -23.6 -22.6 -23.0 -23.8 -20.7
Other operating income 0.8 1.9 1.4 4.2 1.4 5.0 1.8
Other operating expense -0.8 -0.2 -0.3 -7.6 -10.2 -0.8 -0.9
-------------------------------------------------------------------------------
Operating profit / loss 9.4 7.4 17.0 -4.2 -17.3 22.1 19.5
Net financial expenses -5.1 -4.9 -4.6 -4.9 -6.0 -6.6 -5.2
Share of profit / loss of
equity accounted investments -4.0 -1.7 0.0 -1.6 -1.1 -1.3 -0.0
-------------------------------------------------------------------------------
Profit / loss before taxes 0.3 0.8 12.4 -10.7 -24.4 14.3 14.3
Income taxes -6.6 -2.4 -4.6 1.8 4.3 -5.8 -5.9
-------------------------------------------------------------------------------
Profit / loss for the period
from continuing operations -6.3 -1.6 7.8 -8.9 -20.2 8.5 8.3
-------------------------------------------------------------------------------
Discontinued operations
Profit/loss for the period 0.9 0.9 0.2 -1.1 1.9 1.3 1.3
Impairment loss recognized on
the remeasurement to fair
value and cost to sell - -0.1 -0.1 -4.9 -0.2 -18.4 -0.1
-------------------------------------------------------------------------------
Profit / loss for the period
from discontinued operations 0.9 0.8 0.1 -6.0 1.8 -17.1 1.3
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Profit/loss for the period -5.5 -0.8 7.9 -14.8 -18.4 -8.6 9.6
-------------------------------------------------------------------------------
Attributable to
Owners of the parent -5.0 -0.8 8.2 -14.6 -18.4 -8.6 9.4
Non-controlling interest -0.5 -0.1 -0.3 -0.2 -0.0 -0.0 0.2
----------------------------------------------------------------------------
QUARTERLY DATA BY SEGMENT Q3 Q2 Q1 Q4 Q3 Q2 Q1
EUR million 2012 2012 2012 2011 2011 2011 2011
----------------------------------------------------------------------------
Net sales
Building and Energy 56.0 63.0 68.5 65.8 68.9 79.6 82.0
Filtration 87.4 93.3 87.5 79.7 78.7 83.8 82.3
Food and Medical 93.7 89.4 89.0 86.1 91.5 90.9 93.4
Label and Processing 161.8 173.0 168.5 149.6 163.6 183.2 181.7
Other operations and eliminations -7.2 -5.5 -7.7 -9.9 -12.9 -13.8 -16.9
----------------------------------------------------------------------------
Group total 391.7 413.2 405.8 371.3 389.7 423.7 422.5
----------------------------------------------------------------------------
Operating profit / loss
Building and Energy 2.0 1.9 2.7 -7.7 -23.4 0.2 3.1
Filtration 5.1 3.0 6.1 4.6 4.5 6.6 7.1
Food and Medical 2.4 0.9 2.2 2.0 4.2 2.9 3.0
Label and Processing -1.4 4.2 5.7 -1.5 -3.7 10.5 6.2
Other operations and eliminations 1.4 -2.5 0.4 -1.7 1.1 1.9 0.1
----------------------------------------------------------------------------
Group total 9.4 7.4 17.0 -4.2 -17.3 22.1 19.5
----------------------------------------------------------------------------
Operating profit / loss excl. NRI
Building and Energy 1.7 1.9 2.7 -1.1 -0.9 0.2 3.1
Filtration 5.3 6.8 6.3 3.5 4.2 6.1 8.2
Food and Medical 3.1 1.3 2.2 1.6 4.3 2.9 3.0
Label and Processing -1.4 4.2 5.8 -0.8 -0.6 8.8 6.2
Other operations and eliminations 0.6 -1.0 0.4 -1.6 1.1 2.5 -0.8
----------------------------------------------------------------------------
Group total 9.3 13.2 17.4 1.7 8.0 20.4 19.7
----------------------------------------------------------------------------
Sales tons, thousands of tons
Building and Energy 22.2 25.0 27.4 27.5 30.3 34.6 34.7
Filtration 27.4 29.7 28.1 26.3 27.0 29.2 28.4
Food and Medical 28.9 29.1 30.0 29.2 32.4 33.3 33.7
Label and Processing 136.0 148.6 144.1 124.6 135.1 149.7 148.2
Other operations and eliminations -8.6 -8.1 -9.5 -9.8 -10.3 -11.1 -11.4
----------------------------------------------------------------------------
Group total 205.8 224.3 220.1 197.8 214.4 235.7 233.6
----------------------------------------------------------------------------
-------------------------------------------------------------------------------
KEY FIGURES QUARTERLY Q3 Q2 Q1 Q4 Q3 Q2 Q1
EUR million 2012 2012 2012 2011 2011 2011 2011
-------------------------------------------------------------------------------
Continuing operations
Net sales 391.7 413.2 405.8 371.3 389.7 423,7 422,5
Operating profit / loss 9.4 7.4 17.0 -4.2 -17.3 22,1 19,5
Profit / loss before taxes 0.3 0.8 12.4 -10.7 -24.4 14,3 14,3
Profit / loss for the period -6.3 -1.6 7.8 -8.9 -20.2 8,5 8,3
-------------------------------------------------------------------------------
Return on capital employed
(ROCE), % 2.6 2.6 7.4 -2.6 -8.6 10,2 9,2
Basic earnings per share *,
EUR -0.16 -0.06 0.14 -0.22 -0.47 0,16 0,14
Including discontinued
operations
Net sales 395.1 416.0 408.7 397.9 466.2 496,8 491,6
Operating profit / loss 10.3 8.2 17.1 -8.9 -13.5 3,6 20,8
Profit / loss before taxes 1.2 1.6 12.5 -17.4 -20.7 -4,4 15,5
Profit / loss for the period -5.5 -0.8 7.9 -14.8 -18.4 -8,6 9,6
-------------------------------------------------------------------------------
Gearing ratio, % 50.4 51.5 38.3 38.2 54.3 52,6 48,4
Return on capital employed
(ROCE), % 2.9 2.8 7.2 -4.3 -5.7 1,1 8,2
Basic earnings per share *,
EUR -0.14 -0.05 0.15 -0.34 -0.43 -0,21 0,17
Average number of shares
during the period, 1000's 46 105 46,105 46,105 46,180 46,350 46,349 46,248
-------------------------------------------------------------------------------
* With the effect of interest on hybrid bond for the period, net of tax
Calculation of key figures
Interest-bearing net liabilities
Interest-bearing loans and borrowings - Cash and cash equivalents - Other
investments (current)
Equity ratio, %
Total equity/
x 100
Total assets - Advances received
Gearing ratio, %
Interest-bearing net liabilities/
x 100
Total equity
Return on equity (ROE), %
Profit (loss) for the period/
x 100
Total equity (annual average)
Return on capital employed (ROCE), %
Profit (loss) before taxes + Financing expenses/
x 100
Total assets (annual average) - Non-interest bearing
liabilities (annual average)
Return on capital employed (RONA), %
Operating profit (loss)/
x 100
Working capital (annual average) + Property, plant and equipment and
Intangible assets (annual average)
Basic earnings per share, EUR
Profit (loss) for the period - Non-controlling interest - Interest on hybrid
bond for the period, net of tax/
Average number of shares during the period
Diluted earnings per share, EUR
Profit (loss) for the period - Non-controlling interest - Interest on hybrid
bond for the period, net of tax/
Average diluted number of shares during the period
Equity per share, EUR
Equity attributable to owners of the parent/
Number of outstanding shares at the end of the
period
[HUG#1650953]
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