2009-07-24 07:00:00 CEST
2009-07-24 07:01:14 CEST
REGULATED INFORMATION
Ahlstrom - Interim report (Q1 and Q3)
Ahlstrom interim report January-June 2009. Second quarter EBIT positive due to implemented actions
Ahlstrom Corporation STOCK EXCHANGE RELEASE 24.7.2009
April-June 2009 compared to April-June 2008:
* Net sales were EUR 398.9 million (465.9).
* EBIT amounted to EUR 9.7 million (19.4). The figure
includes non-recurring items of EUR -3.0 million (-0.1).
* Profit before taxes was EUR 4.7 million (14.2) and
earnings per share were EUR 0.05 (0.22)
* Net cash from operating activities increased to EUR 72.8
million (5.4).
January-June 2009 compared to January-June 2008:
* Net sales were EUR 775.0 million (932.2).
* Operating loss amounted to EUR 1.0 million (operating
profit of 38.7).
The figure includes non-recurring items of EUR -3.7 million (0.8).
* Loss before taxes was EUR 13.9 million (profit before
taxes of 25.4) and earnings per share were EUR -0.21 (0.37).
* Net cash from operating activities increased to EUR 93.7
million (46.1).
Events in April-June 2009
* A new restructuring program of EUR 50 million was
announced on April 29, 2009. The full effect of the program will be
visible in 2010.
* The company initiated a project to decrease cash tied up
in working capital. The aim is to decrease the working capital by
EUR 100 million in two years.
* The maturity structure of the loan portfolio was extended
by new medium-term bilateral loan facility agreements of EUR 55
million. Ahlstrom also finalized an agreement on the refinancing of
a credit facility of EUR 200 million expiring at the end of 2009.
The new financing agreement of EUR 200 million was signed after the
review period on July 15, 2009.
Outlook for 2009
* The market environment will continue to be challenging and
difficult to forecast. The demand for Ahlstrom products revived
slightly in the second quarter, but it is anticipated to continue
at a low level.
Jan Lång, President & CEO, comments on January-June 2009:
- In a continuously challenging market situation we managed
to reach a profitable April-June EBIT by restructuring our
operations. The streamlining measures and cost reductions in the
first months are visible in the result. In addition, raw material
prices decreased and market demand picked up slightly toward the end
of the period. We have also successfully focused on improving our
cash flow and decreased our net liabilities by almost EUR 30 million
since the turn of the year. In addition, we have strengthened the
company's funding base with the support of our relationship banks.
Thanks to the new financing arrangements, the company's financing
rests on a solid base.
KEY FIGURES
+----------------------------------------------------------------------+
|EUR million | 4-6/| 4-6/|Change,| 1-6/| 1-6/|Change,|
| | 2009| 2008| %| 2009| 2008| %|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Net sales |398.9|465.9| -14.4|775.0|932.2| -16.9|
|------------------------------+-----+-----+-------+-----+-----+-------|
|EBIT (Operating profit/loss) | 9.7| 19.4| -49.8| -1.0| 38.7| -|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Profit/loss before taxes | 4.7| 14.2| -67.0|-13.9| 25.4| -|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Profit for the period | 2.5| 10.6| -76.5| -9.9| 18.4| -|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Earnings per share | 0.05| 0.22| -77.3|-0.21| 0.37| -|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Return on capital employed | | | | | | |
|(ROCE), % | 3.2| 6.3| -| -0.1| 6.3| -|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Equity ratio, % | 37.9| 41.6| -| 37.9| 41.6| -|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Gearing ratio, % | 92.0| 76.0| -| 92.0| 76.0| -|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Interest-bearing net | | | | | | |
|liabilities |569.5|547.7| 4.0|569.5|547.7| 4.0|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Investments (excluding | | | | | | |
|acquisitions) | 14.6| 33.1| -56.0| 41.5| 54.1| -23.2|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Net cash from operating | | | | | | |
|activities | 72.8| 5.4| -| 93.7| 46.1| -|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Number of employees, average |6,023|6,538| -7.9|6,104|6,538| -6.6|
|------------------------------+-----+-----+-------+-----+-----+-------|
|Number of employees, at the | | | | | | |
|end of the period |5,992|6,568| -8.8|5,992|6,568| -8.8|
+----------------------------------------------------------------------+
OPERATING ENVIRONMENT
The very challenging market conditions that emerged during the last
quarter of 2008 prevailed during the first two quarters of 2009, and
the demand for most of Ahlstrom's products was weak. However, the
weakening of the demand stopped and the demand for some products
picked up toward the end of the review period.
In the Fiber Composites segment*, the demand for Ahlstrom's products
in the automotive, construction, marine and windmill industries
continued to be exceptionally weak due to the global recession. The
windmill application market was slow, especially due to the financing
problems of new wind power plants. The Filtration business area was
burdened by a significant slowdown in the servicing of passenger and
freight transport vehicles along with the decrease in new vehicle
production. The demand for wipes was weak as well. However, the
demand for filters and wipes revived slightly during the second
quarter. Market demand for food packaging and teabag materials as
well as for nonwovens in medical applications was close to the level
of early 2008.
In the Specialty Papers segment*, the market demand in automotive,
furniture, textile as well as in release and labeling industries,
continued to suffer from the severe recession. Yet the demand picked
up slightly during the second quarter of 2009.
The decrease in the market prices of Ahlstrom's main raw materials,
natural and synthetic fibers and chemicals, started to level off and
partly turned to an increase at the end of the reporting period.
DEVELOPMENT OF NET SALES
+-------------------------------------------------------------------+
| Net sales by | 4-6/ | 4-6/ | Change, | 1-6/ | 1-6/ | Change, |
| segment | 2009 | 2008 | % | 2009 | 2008 | % |
| and business | | | | | | |
| area | | | | | | |
|---------------+-------+-------+---------+-------+-------+---------|
| Fiber | | | | | | |
| Composites | 212.4 | 257.0 | -17.4 | 421.2 | 509.0 | -17.2 |
|---------------+-------+-------+---------+-------+-------+---------|
| Advanced | | | | | | |
| Nonwovens | 44.3 | 46.2 | -4.0 | 89.7 | 90.8 | -1.3 |
|---------------+-------+-------+---------+-------+-------+---------|
| | | | | | | |
| Filtration | 69.5 | 82.9 | -16.1 | 134.5 | 162.7 | -17.4 |
|---------------+-------+-------+---------+-------+-------+---------|
| Glass & | | | | | | |
| Industrial | | | | | | |
| Nonwovens | 42.7 | 63.7 | -32.9 | 87.2 | 128.0 | -31.8 |
|---------------+-------+-------+---------+-------+-------+---------|
| Home & | | | | | | |
| Personal | | | | | | |
| Nonwovens | 58.0 | 67.8 | -14.5 | 114.3 | 133.6 | -14.4 |
|---------------+-------+-------+---------+-------+-------+---------|
| Specialty | | | | | | |
| Papers | 188.2 | 209.7 | -10.2 | 358.3 | 426.7 | -16.0 |
|---------------+-------+-------+---------+-------+-------+---------|
| Release & | | | | | | |
| Label Papers | 70.4 | 79.3 | -11.2 | 133.7 | 160.4 | -16.6 |
|---------------+-------+-------+---------+-------+-------+---------|
| Technical | | | | | | |
| Papers | 118.3 | 130.4 | -9.3 | 225.0 | 266.3 | -15.5 |
|---------------+-------+-------+---------+-------+-------+---------|
| Other | | | | | | |
| functions* | | | | | | |
| and | | | | | | |
| eliminations | -1.7 | -0.7 | - | -4.5 | -3.6 | - |
|---------------+-------+-------+---------+-------+-------+---------|
| Total net | | | | | | |
| sales | 398.9 | 465.9 | -14.4 | 775.0 | 932.2 | -16.9 |
+-------------------------------------------------------------------+
* Other functions include financing and taxation-related receivables,
liabilities and cost items, as well as earnings, costs, assets and
liabilities belonging to holding and sales companies.
Development of net sales in April-June 2009
The weakening of the sales of most of Ahlstrom's products stabilized
during the second quarter and the sales of certain products revived.
Net sales for April-June amounted to EUR 398.9 million (EUR 465.9
million). This was 14.4% down on April-June 2008 but up 6.1% from the
first quarter.
Net sales of the Fiber Composites segment amounted to EUR 212.4
million (EUR 257.0 million), representing 53% of the Group net sales.
The segment's net sales decreased by 17.4% from April-June 2008. Net
sales were reduced in all business areas due to lower volumes in most
products. The steepest fall was seen in the Glass & Industrial
Nonwovens business area (-32.9%) while net sales in the Advanced
Nonwovens area were close to the figures of the comparison period
(-4.0%). However, compared to the first quarter of 2009, net sales
increased by 1.7%, mainly due to a revival of demand in the
Filtration and Home & Personal Nonwovens business areas.
Net sales of the Specialty Papers segment amounted to EUR 188.2
million (EUR 209.7 million), representing 47% of the Group net sales.
The segment's net sales decreased by 10.2% compared to April-June
2008. Net sales were reduced in both business areas, the Release &
Label Papers (-11.2%) and Technical Papers (-9.3%). Nevertheless, the
situation improved compared to the first quarter of 2009. Net sales
in both business areas increased by approximately 11% mainly due to a
revival of demand.
Development of net sales in January-June 2009
The strong decline in the demand for most of Ahlstrom's products,
which started at the end of 2008, stabilized during the second
quarter. Due to the weak first quarter, Group net sales for
January-June amounted to EUR 775.0 million, decreasing by 16.9%
compared to the same period last year (EUR 932.2 million).
Net sales of the Fiber Composites segment amounted to EUR 421.2
million (EUR 509.0 million), representing 54% of the Group net sales.The segment's net sales decreased by 17.2% compared to January-June
2008. Net sales were reduced in all business areas due to lower
volumes in most products. The steepest fall was seen in the Glass &
Industrial Nonwovens business area (-31.8%), which suffered from a
slowdown in the construction and wind power industries. Net sales in
the Advanced Nonwovens business area was close to the level of the
comparison period (-1.3%).
Net sales of the Specialty Papers segment amounted to EUR 358.3
million (EUR 426.7 million), representing 46% of the Group net sales.
The segment's net sales decreased by 16.0% compared to January-June
2008. Net sales were reduced in both business areas, the Release &
Label Papers (-16.6%) and Technical Papers
(-15.5%).
RESULT AND PROFITABILITY
+-------------------------------------------------------------------+
| Financial result | 4-6/ | 4-6/ | Change, | 1-6/ | 1-6/ | Change, |
| by segment | 2009 | 2008 | % | 2009 | 2008 | % |
|-------------------+------+------+---------+------+------+---------|
| Fiber Composites | | | | | | |
|-------------------+------+------+---------+------+------+---------|
| EBIT (Operating | | | | | | |
| profit/loss) | 5.3 | 16.8 | -68.2 | 2.9 | 32.3 | -91.2 |
|-------------------+------+------+---------+------+------+---------|
| EBIT (Operating | | | | | | |
| profit/loss), % | 2.5 | 6.5 | - | 0.7 | 6.3 | - |
|-------------------+------+------+---------+------+------+---------|
| Return on net | | | | | | |
| assets, | | | | | | |
| RONA, % | 2.7 | 8.7 | - | 0.7 | 8.2 | - |
|-------------------+------+------+---------+------+------+---------|
| Specialty Papers | | | | | | |
|-------------------+------+------+---------+------+------+---------|
| EBIT (Operating | | | | | | |
| profit/loss) | 6.8 | 4.7 | 45.2 | 3.4 | 10.2 | -66.1 |
|-------------------+------+------+---------+------+------+---------|
| EBIT | | | | | | |
| (Operating | | | | | | |
| profit/loss), % | 3.6 | 2.2 | - | 1.0 | 2.4 | - |
|-------------------+------+------+---------+------+------+---------|
| Return on net | | | | | | |
| assets, | | | | | | |
| RONA, % | 6.8 | 4.1 | - | 1.7 | 4.4 | - |
|-------------------+------+------+---------+------+------+---------|
| Other functions* | | | | | | |
| and eliminations | | | | | | |
|-------------------+------+------+---------+------+------+---------|
| Operating | | | | | | |
| profit/loss | -2.4 | -2.0 | - | -7.3 | -3.8 | - |
|-------------------+------+------+---------+------+------+---------|
| Ahlstrom Group | | | | | | |
| total | | | | | | |
|-------------------+------+------+---------+------+------+---------|
| EBIT | | | | | | |
| (Operating | | | | | | |
| profit/loss) | 9.7 | 19.4 | -49.8 | -1.0 | 38.7 | -102.6 |
|-------------------+------+------+---------+------+------+---------|
| EBIT | | | | | | |
| (Operating | | | | | | |
| profit/loss), | | | | | | |
| % | 2.4 | 4.2 | - | -0.1 | 4.2 | - |
|-------------------+------+------+---------+------+------+---------|
| ROCE, % | 3.2 | 6.3 | - | 0.1 | 6.3 | - |
+-------------------------------------------------------------------+
* Other functions include financing and taxation-related receivables,
liabilities and cost items, as well as earnings, costs, assets and
liabilities belonging to holding and sales companies.
Result and profitability in April-June 2009
Ahlstrom's streamlining measures and the revival in demand began to
show in the Group's profitability during the second quarter. EBIT was
EUR 9.7 million (EUR 19.4 million), an improvement compared to the
operating loss of EUR 10.7 million in the first quarter. The figure
includes non-recurring items of EUR -3.0 million (EUR -0.1 million).
A decrease in the prices of raw materials and implemented
streamlining measures contributed to the result, but the performance
was burdened by lower sales volumes compared to April-June 2008, a
change in the geographical distribution of sales and increased price
pressures due to the global recession.
EBIT of the Fiber Composites segment amounted to EUR 5.3 million (EUR
16.8 million). The figure includes non-recurring items of EUR -2.0
million (EUR 1.5 million). Most of the weak performance compared to
April-June 2008 was due to weakened demand. The Glass & Industrial
Nonwovens business area saw the steepest decrease in sales.
EBIT of the Specialty Papers segment amounted to EUR 6.8 million (EUR
4.7 million), EUR 2.1 million better than a year before. The figure
includes non-recurring items of EUR -0.5 million (EUR -1.0 million).
The profitability was especially improved by the streamlining
activities and earlier restructuring measures carried out in the
Release & Label Papers business area.
Result and profitability in January-June 2009
The Group EBIT was narrowly negative, EUR -1.0 million (profit of EUR
38.7 million). Decreases in raw material prices and implemented
streamlining measures improved the result. A general decrease in
sales volumes compared to the comparison period and increased price
pressure due to the global recession burdened the result.
Non-recurring items in January-June totaled EUR -3.7 million (EUR 0.8
million), comprising mainly costs related to restructuring and
reductions of personnel. The most significant item was a
restructuring charge of EUR 1.4 million connected with the Bethune
plant in the United States booked in the second quarter in the Home &
Personal Nonwovens business area.
EBIT of the Fiber Composites segment decreased to EUR 2.9 million
(EUR 32.3 million). Non-recurring items amounted to EUR -2.7 million
(EUR 2.0 million).
The main reason for the weakened performance was the decrease in net
sales. The Glass & Industrial Nonwovens business area saw the
steepest decrease in sales.
EBIT of the Specialty Papers segment decreased to EUR 3.4 million
(EUR 10.2 million). Non-recurring items amounted to EUR -0.5 million
(EUR -0.7 million).
The main reason for the weakened performance was decreased sales in
both business areas, Release & Label Papers as well as Technical
Papers.
Ahlstrom took an active approach in adjusting its daily production to
the weak demand. The utilization of downtime in production due to
market reasons was 22.8% in January-June 2009 compared to 6.5% during
the corresponding period in 2008. Ahlstrom pursued temporary layoffs
and other flexible working hour solutions in different countries
depending on the market conditions. Globally, approximately 2,100
employees were affected by the temporary layoffs and short-time
programs during the second quarter.
Total fixed costs decreased by 4.0% from January-June 2008 as a
result of cost control and implemented streamlining measures.
Total net financial expenses were EUR 13.0 million (EUR 13.3 million
in January-June 2008). The financial expenses include net interest
expenses of EUR 12.4 million (EUR 11.6 million), exchange rate gains
of EUR 0.2 million (losses of EUR 0.2 million) and other financial
expenses of EUR 0.8 million (EUR 1.5 million).
Loss before taxes was EUR 13.9 million (profit before taxes of EUR
25.4 million).
Tax income amounted to EUR 4.0 million (income tax expenses of EUR
7.0 million).
Loss for the period was EUR 9.9 million (profit of EUR 18.4 million)
and earnings per share (EPS) weakened to EUR -0.21 (EUR 0.37).
Return on capital employed (ROCE) amounted to -0.1% (6.3%), and
return on equity (ROE) to -3.2% (5.0%).
FINANCING
In January-June 2009, net cash flow from operating activities
amounted to EUR 93.7 million (EUR 46.1 million in January-June 2008).
The cash flow was significantly improved by reduced working capital,
to which particular attention has been paid since the beginning of
the year. Operative working capital decreased by EUR 50.4 million
compared to the end of 2008.
Interest-bearing net liabilities decreased by EUR 29.2 million from
turn of the year to EUR 569.5 million (December 31, 2008: EUR 598.7
million). Ahlstrom's interest bearing liabilities amounted to EUR
602.1 million on June 30, 2009. Of the loan portfolio, approximately
12% was tied to a fixed interest rate using interest rate
derivatives, and the duration of the loan portfolio (average interest
rate tying period) was 4.9 months. The average interest rate of the
loan portfolio was approximately 2.4%.
The gearing ratio was 92.0% (December 31, 2008: 95.3%) and equity
ratio 37.9% (December 31, 2008: 36.8%).
During the review period, Ahlstrom extended the maturity structure of
its loan portfolio by making agreements on new medium term bilateral
loan facilities amounting to EUR 55 million. In addition, the company
was in the process of finalizing the refinancing of the medium term
revolving credit facility expiring in November 2009. The new
three-year financing agreement of EUR 200 million was signed after
the review period on July 15, 2009.
PERSONNEL
The number of Ahlstrom employees during January-June was 6,104
(6,538) on average and at the end of June, 5,992 (6,568). The
headcount was decreased due to the programs announced in January and
April 2009 as well as some restructuring actions taken in 2008,
mainly the closure of the Ascoli plant in Italy. At the end of June,
the highest numbers of employees were in the United States (24%),
France (20%), Italy (13%), Finland (11%) and Germany (9%).
CAPITAL EXPENDITURE
Ahlstrom did not make any major investment decisions during the first
two quarters of 2009. Ahlstrom's capital expenditure for January-June
totaled EUR 41.5 million (EUR 54.1 million excluding acquisitions in
January-June 2008). The largest on-going investment project is the
construction of a medical nonwovens plant in Gujarat, India,
amounting to EUR 38 million in total. Operations at the plant are
estimated to start in the first quarter of 2010. The project has
proceeded according to plans. The buildings are completed, and
installation of production equipment has begun.
At the Turin plant in Italy, the company completed an investment
project in which one paper machine was converted to produce
innovative nonwovens used in wallpaper materials. The first sample
batches were delivered to customers at the end of June. The new
production line uses both natural and synthetic fibers. Thanks to the
investment, Ahlstrom's wallpaper material assortment becomes the most
comprehensive on the market.
Investments in 2009 are estimated to be approximately EUR 70 million
(EUR 167.0 million in 2008, or EUR 128.0 million excluding
acquisitions).
STREAMLINING PROGRAMS
Restructuring programs
On January 7, 2009, Ahlstrom announced global restructuring plans to
respond to the decrease in demand. The company decided to take
several measures to improve profitability and adjust its operations
to the challenging market situation. Of the planned permanent layoffs
of 210 people, a total of 122 had been laid off until the end of
June. In addition, there were temporary layoffs at production sites
as well as in the headquarters and production was cut down in several
countries by taking market related downtime*. The program also
involved the closing down of unprofitable operations in Italy, which
the company announced on July 6, 2009.
Ahlstrom announced on April 29, 2009, that it was to initiate a new
restructuring program (profit improvement program), aiming at annual
savings of EUR 50 million. The savings are estimated to have full
effect in 2010. The cost of the program is estimated to be
approximately EUR 40 million in 2009, of which 50% will be
cash-related. In connection with the program, the company is
currently reviewing its cost structure and underperforming units. The
restructuring may impact 400 to 500 Ahlstrom employees globally.
The program, initiated in April, is proceeding according to plans.
With regard to the personnel cuts included in the program, a total of
138 employees had been laid off by the end of June. In June, the
company decided to permanently close down a production line at the
plant in Bethune, USA, and move its production to Green Bay, USA. The
production line belonged to the Home & Personal Nonwovens business
area, producing wipes. Personnel cuts made as a result of the closing
down will amount to 65 employees, mostly during the third quarter.
Optimization of working capital
A project to improve the turnover of working capital initiated with a
pilot stage early this year proceeded according to plans. The project
aims at decreasing the working capital by EUR 100 million over two
years. So far, the project has been started in eight plants, and in
the next few months, it will be expanded to most production sites and
functions. Between the end of 2008 and the end of June, the operative
working capital decreased by EUR 50.4 million with turnover improving
by 8 days.
Strategy review process
Ahlstrom announced on April 29, 2009, that it had begun a strategy
review process with the aim of verifying the future direction and
ambitions of the company. Conclusions can be expected towards the end
of 2009.
AUTHORIZATIONS OF THE BOARD
Ahlstrom Corporation's Annual General Meeting of Shareholders (AGM)
held on March 25, 2009 authorized the Board of Directors to
repurchase Ahlstrom shares. The maximum number of shares to be
purchased is 4,500,000. The shares may be repurchased only through
public trading at the prevailing market price by using unrestricted
shareholders' equity.
The AGM also authorized the Board of Directors to distribute a
maximum of 4,500,000 own shares held by the Company. The Board of
Directors is authorized to decide to whom and in which order the
shares will be distributed. The shares may be used 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 authorizations 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.
SHARES AND SHARE CAPITAL
Ahlstrom's share is 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-June 2009, a total of 2.4 million Ahlstrom shares were
traded for a total of EUR 16.3 million. The lowest trading price
during the review period was EUR 6.15 and the highest EUR 8.48. The
closing price on June 30, 2009 was EUR 6.33 and market capitalization
was EUR 295.4 million on June 30, 2009.
Ahlstrom Group's equity per share was EUR 13.26 at the end of the
review period (December 31, 2008: EUR 13.46).
Ahlstrom has not used the AGM authorization to repurchase or
distribute company shares.
CHANGES IN THE SHARE-BASED INCENTIVE PLAN
In May 2009, Ahlstrom's Board of Directors approved two changes to a
share-based long term incentive plan for the Corporate Executive Team
(CET), announced on February 1, 2008.
According to the original announcement, the plan will comprise three
earning periods of three calendar years (2008, 2009 and 2010). Due to
the global recession, the Board decided in May 2009 to merge the
earning periods 2009 and 2010 into one period, 2010. Thus the target
setting for the remaining time in the program will be made only for
2010. The share allocations of 2009 and 2010 will be combined
accordingly.
The plan offers a possibility to receive Ahlstrom shares and cash
(equaling the amount of taxes of the total reward) as a reward, if
the targets set by the Board for each earning period are achieved. In
May 2009, the evaluation criterion was changed from earnings per
share (EPS) to return on capital employed (ROCE).
EVENTS AFTER THE REVIEW PERIOD
Restructuring in Italy
Ahlstrom announced on July 6, 2009 that it had concluded its
co-operation negotiations with the representatives of the personnel
regarding the restructuring of Home & Personal Nonwovens business
area in Italy. The company announced that it will close down the
Gallarate plant as well as one production line in Cressa due to low
market demand and weak long-term profitability. Contrary to the
original announcement on January 7, 2009, the Carbonate plant will
not be closed. The reduction impact on personnel in all three plants,
including also the Carbonate plant, is 48. All three plants produce
nonwoven wipes.
The closures are connected with the restructuring program initiated
in January 2009, ie they are not included in the restructuring
program announced at the end of April.
Non-recurring expenses related to the closures are EUR 19 million, of
which EUR 5.2 million have a cash flow effect. The non-recurring
expenses have been booked in Ahlstrom's fourth quarter 2008 financial
results.
New financing agreement
A new EUR 200 million medium term financing agreement was signed on
July 15, 2009. The new credit facility replaces an existing
corresponding revolving credit facility expiring in November. The
credit facility will be used for general corporate financing purposes
and refinancing of the existing credit facility.
The terms and conditions of the facility agreement contain customary
covenants and undertakings including the requirement to maintain
certain net debt to equity ratios. Dividend payments and other
distributions to shareholders will also be restricted. As a result of
these restrictions dividend payments and other distributions will be
subject to an equity injection, or the issuance of other instruments
treated as equity under IFRS or other agreed subordinated debt
instruments sufficient for Ahlstrom to reduce its net debt to equity
ratio by approximately 20 percentage points as calculated based on
the company's balance sheet at the end of the first quarter of 2009,
as well as to sufficient cash flow. The restrictions do not apply to
dividends that become payable under law (minority dividend).
In the transaction, Nordea, Pohjola Bank and Skandinaviska Enskilda
Banken (SEB) acted as mandated lead arrangers and bookrunners. The
other participants are DnB NORD, Sampo Bank and BNP Paribas.
OUTLOOK
In 2009, the market environment is anticipated to continue to be
challenging and difficult to forecast. Therefore, Ahlstrom changed
its disclosure policy at the beginning of 2009. During a period of
major uncertainty, the outlook only includes forecasts of the
business and market environment. Forecasts of net sales development
will be included when the predictability of the operating environment
has returned to the previous level.
The market demand for Ahlstrom products revived slightly in the
second quarter, but it is anticipated to continue at a low level. In
addition to the restructuring programs announced in January and
April, the company will adjust its operations to the market situation
as necessary.
SHORT-TERM RISKS
The continued global recession will create several factors of
uncertainty that might impact Ahlstrom's business. Production may
need to be cut more than planned, and the risk of a steeper decrease
in sales prices will increase if weak demand continues. Due to the
weakening economy, customers' credit risks have increased and are
more difficult to insure.
In addition, after decreasing during the first months of the year,
raw material prices have begun to show the first signs of an
increase. The prices of several raw materials used by Ahlstrom began
to increase towards the end of the review period and have continued
to increase thereafter.
If the challenging market conditions persist, they may prolong the
payback period of the EUR 500 million investment program carried out
by Ahlstrom in 2007 and 2008.
The general risks of Ahlstrom's business operations are described in
more detail in Ahlstrom'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 the
International Financial Reporting Standards (IFRS). Comparable
figures refer to the same period last year unless otherwise stated.
The report is unaudited.
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, July 24, 2009
Ahlstrom Corporation
Board of Directors
ADDITIONAL INFORMATION
Jan Lång, President & CEO, tel. +358 10 888 4700
Seppo Parvi, CFO, tel. +358 10 888 4768
Ahlstrom's President & CEO Jan Lång will present the second quarter
results in Finnish in a press conference in Helsinki on July 24, 2009
at 10:00 a.m. Finnish time. The conference for media and analysts
will take place at Hotel Scandic Simonkenttä, address Simonkatu 9,
meeting room Bulsa & Freda on the street level. You are welcome to
attend.
In addition, a conference call for analysts and investors will be
held in English on July 24, 2009 at 1:00 p.m. Finnish time. The
discussion will be led by President & CEO Jan Lång. To participate in
the teleconference, please dial +358 9 2312 9202 a few minutes before
the call. Use the title of the conference call: Ahlstrom conference
call. A replay number is available until July 31, 2009. The number
for the replay is
+358 9 2314 4681, access code: 840949.
The presentation material will be available at www.ahlstrom.com >
Investors > IR presentations on July 24, 2009 after the interim
report has been published.
AHLSTROM'S FINANCIAL INFORMATION IN 2009
Ahlstrom Corporation will publish its interim report for
January-September on Wednesday, October 28, 2009.
Distribution:
NASDAQ OMX Helsinki
www.ahlstrom.com
Main media
Ahlstrom in brief
Ahlstrom is a global leader in the development, manufacture and
marketing of high performance nonwovens and specialty papers.
Ahlstrom's products are used in a large variety of applications, such
as filters, wipes, flooring, labels, and tapes. Based upon its unique
fiber expertise and innovative approach, the company has a strong
market position in several business areas in which it operates.
Ahlstrom's 6,000 employees serve customers via sales offices and
production facilities in more than 20 countries on six continents. In
2008, Ahlstrom's net sales amounted to EUR 1.8 billion. Ahlstrom's
share is quoted on the NASDAQ OMX Helsinki. The company website is at
www.ahlstrom.com.
APPENDIX
Consolidated financial statements
APPENDIX
CONSOLIDATED FINANCIAL STATEMENTS
Financial Statements are unaudited.
INCOME STATEMENT Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2009 2008 2009 2008 2008
Net sales 398.9 465.9 775.0 932.2 1,802.4
Other operating income 3.5 4.3 6.1 7.3 18.7
Expenses -366.7 -426.9 -730.9 -852.9 -1,694.2
Depreciation, amortization and
impairment charges -25.9 -23.9 -51.3 -47.9 -112.3
Operating profit / loss 9.7 19.4 -1.0 38.7 14.6
Net financial expenses -4.8 -4.7 -13.0 -13.3 -34.2
Share of profit / loss of
associated companies -0.3 -0.6 0.1 -0.0 -1.1
Profit / loss before taxes 4.7 14.2 -13.9 25.4 -20.6
Income taxes -2.2 -3.6 4.0 -7.0 4.5
Profit / loss for the period 2.5 10.6 -9.9 18.4 -16.1
Attributable to
Owners of the parent 2.5 9.9 -9.9 17.1 -17.9
Minority interest - 0.7 - 1.3 1.8
Basic and diluted
earnings per share, EUR 0.05 0.22 -0.21 0.37 -0.38
STATEMENT OF COMPREHENSIVE INCOME Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2009 2008 2009 2008 2008
Profit / loss for the period 2.5 10.6 -9.9 18.4 -16.1
Other comprehensive income, net of tax:
Translation differences 11.9 13.7 21.3 -6.8 -37.1
Hedges of net investments in foreign
operations 1.3 0.7 0.4 4.6 6.4
Cash flow hedges 0.1 0.7 0.1 0.4 -1.2
Other comprehensive income, net of tax 13.3 15.1 21.8 -1.9 -32.0
Total comprehensive income for the period 15.8 25.6 11.9 16.5 -48.1
Attributable to
Owners of the parent 15.8 21.7 11.9 14.0 -52.8
Minority interest - 3.9 - 2.5 4.7
BALANCE SHEET Jun 30, Jun 30, Dec 31,
EUR million 2009 2008 2008
ASSETS
Non-current assets
Property, plant and equipment 750.1 738.6 745.7
Goodwill 173.6 179.4 169.1
Other intangible assets 52.9 56.7 51.6
Investments in associated companies 11.5 12.4 11.4
Other investments 0.2 0.2 0.2
Other receivables 17.6 16.7 15.6
Deferred tax assets 44.4 31.2 40.4
Total non-current assets 1,050.3 1,035.1 1,033.9
Current assets
Inventories 206.8 256.9 252.5
Trade and other receivables 342.7 415.3 356.2
Income tax receivables 3.1 4.1 6.3
Other investments - 0.0 0.0
Cash and cash equivalents 32.6 20.1 58.2
Total current assets 585.3 696.4 673.2
Total assets 1,635.5 1,731.5 1,707.0
EQUITY AND LIABILITIES
Equity attributable to owners of the parent 619.0 683.0 628.1
Minority interest - 37.8 0.0
Total equity 619.0 720.8 628.1
Non-current liabilities
Interest-bearing loans and borrowings 196.1 290.2 188.7
Employee benefit obligations 84.5 84.9 84.6
Provisions 4.5 4.1 4.4
Other liabilities 0.1 0.2 0.2
Deferred tax liabilities 18.8 27.2 16.5
Total non-current liabilities 303.9 406.7 294.4
Current liabilities
Interest-bearing loans and borrowings 406.0 277.6 468.1
Trade and other payables 290.5 296.8 293.3
Income tax liabilities 2.7 7.3 3.5
Provisions 13.3 22.3 19.7
Total current liabilities 712.5 604.0 784.5
Total liabilities 1,016.5 1,010.7 1,078.9
Total equity and liabilities 1,635.5 1,731.5 1,707.0
STATEMENT OF CHANGES IN EQUITY
1) Issued capital
2) Share premium
3) Non-restricted equity reserve
4) Hedging reserve
5) Translation reserve
6) Retained earnings
7) Minority interest
8) Total equity
Attributable to
owners of the parent
EUR million 1) 2) 3) 4) 5) 6) 7) 8)
Equity at January 1,
2008 70.0 209.3 8.3 0.0 -15.5 444.3 36.0 752.4
Dividends paid and
other - - - - - -46.7 - -46.7
Purchases of
minority interest - - - - - -0.7 -0.7 -1.4
Total comprehensive
income for
the period - - - 0.4 -3.5 17.1 2.5 16.5
Equity at June 30,
2008 70.0 209.3 8.3 0.4 -19.0 414.1 37.8 720.8
Equity at January 1,
2009 70.0 209.3 8.3 -1.2 -49.1 390.9 0.0 628.1
Dividends paid and
other - - - - - -21.0 - -21.0
Purchases of
minority interest - - - - - - -0.0 -0.0
Total comprehensive
income
for the period - - - 0.1 21.7 -9.9 - 11.9
Equity at June 30,
2009 70.0 209.3 8.3 -1.1 -27.4 360.1 - 619.0
STATEMENT OF CASH FLOWS Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2009 2008 2009 2008 2008
Cash flow from operating activities
Profit / loss for the period 2.5 10.6 -9.9 18.4 -16.1
Adjustments, total 33.4 30.8 59.9 65.3 131.5
Changes in net working capital 30.6 -10.4 56.4 -10.6 47.2
Change in provisions -0.8 -11.3 -5.2 -19.8 -20.0
Financial items 4.3 -7.0 -9.0 5.5 -16.8
Taxes paid 2.9 -7.3 1.4 -12.7 -23.4
Net cash from operating activities 72.8 5.4 93.7 46.1 102.4
Cash flow from investing activities
Acquisition of Group companies -0.0 - -0.0 -11.0 -39.0
Purchases of intangible and tangible
assets -22.5 -32.9 -44.6 -57.2 -131.2
Other investing activities 0.5 4.2 1.1 13.4 16.9
Net cash from investing activities -22.0 -28.6 -43.5 -54.8 -153.4
Cash flow from financing activities
Dividends paid -21.0 -46.7 -21.0 -46.7 -46.7
Changes in loans and other financing
activities -14.2 60.2 -55.9 54.3 136.3
Net cash from financing activities -35.2 13.5 -76.9 7.6 89.7
Net change in cash and cash
equivalents 15.6 -9.7 -26.8 -1.0 38.7
Cash and cash equivalents at beginning
of period 16.6 29.3 58.2 21.3 21.3
Foreign exchange adjustment 0.4 0.5 1.2 -0.2 -1.7
Cash and cash equivalents at
end of period 32.6 20.1 32.6 20.1 58.2
KEY FIGURES Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
2009 2008 2009 2008 2008
Operating profit, % 2.4 4.2 -0.1 4.2 0.8
Return on capital employed
(ROCE), % 3.2 6.3 -0.1 6.3 1.4
Return on equity (ROE), % 1.6 5.8 -3.2 5.0 -2.3
Interest-bearing net
liabilities,
EUR million 569.5 547.7 569.5 547.7 598.7
Equity ratio, % 37.9 41.6 37.9 41.6 36.8
Gearing ratio, % 92.0 76.0 92.0 76.0 95.3
Earnings per share, EUR 0.05 0.22 -0.21 0.37 -0.38
Equity per share, EUR 13.26 14.63 13.26 14.63 13.46
Cash earnings per share, EUR 1.56 0.12 2.01 0.99 2.19
Average number of shares
during
the period, 1000's 46,671 46,671 46,671 46,671 46,671
Number of shares at the end
of
the period, 1000's 46,671 46,671 46,671 46,671 46,671
Capital expenditure, EUR
million 14.6 33.1 41.5 54.1 128.0
Capital employed, at the end
of
the period, EUR million 1,221.2 1,288.6 1,221.2 1,288.6 1,285.0
Number of employees, average 6,023 6,538 6,104 6,538 6,510
ACCOUNTING PRINCIPLES
This interim report has been prepared in accordance with IAS 34,
Interim Financial reporting, as adopted by EU and the accounting
policies set out in the Group's Financial Statements for 2008 except
for the changes below.
Changes in accounting principles
The Group has adopted the following new or amended standards and
interpretations as of January 1, 2009:
- IFRS 8 Operating segments
The Group has two reportable segments: the Fiber Composites segment
and the Specialty Papers segment.
The adoption of IFRS 8 does not have an impact on reportable
segments.
- Revised IAS 23 Borrowing costs
The Group has already earlier applied this accounting policy and the
adoption of the revised standard has no impact on the consolidated
financial statements.
- Amendment to IAS 1 A Revised presentation
The amendment has changed the presentation of financial statements.
The income statement is presented in two statements: income statement
and statement of comprehensive income. The statement of changes in
equity includes only transactions with owners and all non-owner
changes are presented in equity as a single line.
The below mentioned new and amended standards and interpretations do
not have an impact on the consolidated financial statements.
- Amendment to IFRS 2 Share-based payment: Vesting Conditions and
Cancellations
- Amendments to IAS 32 and IAS 1 Puttable Financial Instruments and
Obligations Arising on Liquidation
- IFRIC 13 Customer Loyalty Programmes
SEGMENT INFORMATION Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2009 2008 2009 2008 2008
Fiber Composites 212.4 257.0 421.2 509.0 987.4
Specialty Papers 188.2 209.7 358.3 426.7 822.4
Other operations 4.6 4.2 7.2 9.4 20.2
Internal sales -6.3 -5.0 -11.7 -13.0 -27.6
Total net sales 398.9 465.9 775.0 932.2 1,802.4
Fiber Composites 1.3 0.9 3.0 1.8 5.6
Specialty Papers 0.7 1.8 2.0 4.5 9.0
Other operations 4.3 2.3 6.7 6.7 12.9
Total internal sales 6.3 5.0 11.7 13.0 27.6
Fiber Composites 5.3 16.8 2.9 32.3 15.3
Specialty Papers 6.8 4.7 3.4 10.2 10.2
Other operations -2.5 -2.1 -7.4 -3.7 -10.7
Eliminations 0.1 0.0 0.1 -0.1 -0.2
Operating profit / loss 9.7 19.4 -1.0 38.7 14.6
Fiber Composites 918.5 956.1 918.5 956.1 947.1
Specialty Papers 597.6 680.7 597.6 680.7 609.2
Other operations 23.1 29.3 23.1 29.3 30.4
Eliminations -3.7 -10.5 -3.7 -10.5 -15.9
Investments in associated
companies 11.5 12.4 11.5 12.4 11.4
Unallocated assets 88.5 63.5 88.5 63.5 124.9
Total assets 1,635.5 1,731.5 1,635.5 1,731.5 1,707.0
Segment information is presented according to the IFRS standards.
NET SALES BY REGION Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2009 2008 2009 2008 2008
Europe 212.0 270.6 411.5 555.3 1015.9
North America 102.8 110.1 208.5 212.7 442.5
South America 42.4 45.1 79.2 87.6 189.2
Asia-Pacific 35.7 30.6 62.5 58.3 119.4
Rest of the world 6.0 9.6 13.3 18.2 35.5
Total net sales 398.9 465.9 775.0 932.2 1,802.4
CHANGES OF PROPERTY, PLANT AND
EQUIPMENT Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2009 2008 2008
Book value at Jan 1 745.7 747.7 747.7
Acquisitions through business combinations - 3.4 3.9
Additions 41.2 53.9 118.7
Disposals -0.5 -3.0 -3.7
Depreciations and impairment charges -48.3 -45.1 -97.3
Translation adjustment and other changes 11.9 -18.3 -23.5
Book value at end of the period 750.1 738.6 745.7
TRANSACTIONS WITH RELATED PARTIES Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2009 2008 2008
Transactions with associated companies
Sales and interest income 0.3 0.4 1.0
Purchases of goods and services -1.1 -1.8 -3.6
Trade and other receivables 1.5 0.1 2.6
Trade and other payables 0.3 0.4 0.3
Market prices have been used in transactions with associated
companies.
OPERATING LEASES Jun 30, Jun 30, Dec 31,
EUR million 2009 2008 2008
Current portion 6.1 5.2 6.9
Non-current portion 16.7 13.0 17.1
Total 22.9 18.2 24.0
CONTINGENT LIABILITIES Jun 30, Jun 30, Dec 31,
EUR million 2009 2008 2008
For own liabilities
Other loans
Amount of loans 0.3 0.8 0.5
Book value of pledges 0.4 0.9 0.5
For other own commitments
Guarantees 39.2 18.7 38.7
For commitments of associated companies
Guarantees 3.1 5.2 4.2
Capital expenditure commitments 17.1 26.2 36.2
Other contingent liabilities 3.5 4.2 4.7
QUARTERLY DATA Q2 Q1 Q4 Q3 Q2 Q1
EUR million 2009 2009 2008 2008 2008 2008
Net sales 398.9 376.1 419.0 451.2 465.9 466.2
Other operating income 3.5 2.7 5.6 5.8 4.3 3.1
Expenses -366.7 -364.2 -419.8 -421.5 -426.9 -425.9
Depreciation, amortization,
impairment charges -25.9 -25.3 -40.2 -24.1 -23.9 -24.1
Operating profit / loss 9.7 -10.7 -35.4 11.3 19.4 19.3
Net financial expenses -4.8 -8.2 -13.8 -7.1 -4.7 -8.6
Share of profit / loss of
associated companies -0.3 0.4 -0.3 -0.7 -0.6 0.5
Profit / loss before taxes 4.7 -18.6 -49.5 3.5 14.2 11.2
Income taxes -2.2 6.2 12.4 -1.0 -3.6 -3.4
Profit / loss for the
period 2.5 -12.4 -37.0 2.5 10.6 7.8
Attributable to
Owners of the parent 2.5 -12.4 -37.0 2.0 9.9 7.2
Minority interest - - - 0.5 0.7 0.6
QUARTERLY DATA BY SEGMENT Q2 Q1 Q4 Q3 Q2 Q1
EUR million 2009 2009 2008 2008 2008 2008
Net sales
Fiber Composites 212.4 208.8 229.1 249.3 257.0 252.0
Specialty Papers 188.2 170.1 191.6 204.0 209.7 217.0
Other operations and eliminations -1.7 -2.8 -1.7 -2.1 -0.7 -2.8
Group total 398.9 376.1 419.0 451.2 465.9 466.2
Operating profit / loss
Fiber Composites 5.3 -2.5 -24.7 7.7 16.8 15.5
Specialty Papers 6.8 -3.4 -6.5 6.5 4.7 5.5
Other operations and eliminations -2.4 -4.9 -4.2 -2.9 -2.0 -1.7
Group total 9.7 -10.7 -35.4 11.3 19.4 19.3
KEY FIGURES QUARTERLY Q2 Q1 Q4 Q3 Q2 Q1
EUR million 2009 2009 2008 2008 2008 2008
Net sales 398.9 376.1 419.0 451.2 465.9 466.2
Operating profit / loss 9.7 -10.7 -35.4 11.3 19.4 19.3
Profit / loss before taxes 4.7 -18.6 -49.5 3.5 14.2 11.2
Profit / loss for the
period 2.5 -12.4 -37.0 2.5 10.6 7.8
Gearing ratio, % 92.0 99.8 95.3 84.8 76.0 64.4
Return on capital employed
(ROCE), % 3.2 -3.3 -10.8 3.9 6.3 6.4
Earnings per share, EUR 0.05 -0.26 -0.79 0.04 0.22 0.15
Cash earnings per share,
EUR 1.56 0.45 0.67 0.53 0.12 0.87
Average number of shares
during the period, 1000's 46,671 46,671 46,671 46,671 46,671 46,671
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)
Earnings per share, EUR
Profit (loss) for the period attributable to equity holders of
the parent/
Average number of shares during the period
Cash earnings per share, EUR
Net cash from operating activities/
Average number of shares during the period
Equity per share, EUR
Equity 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 Fiber
Composites segment and the Specialty Papers segment. The Fiber
Composites segment comprises the Advanced Nonwovens, Filtration,
Glass & Industrial Nonwovens and Home & Personal Nonwovens business
areas. The Specialty Papers segment covers the Release & Label Papers
and Technical Papers business areas.
*Ahlstrom's business is reported in two segments: the Fiber
Composites segment and the Specialty Papers segment. The Fiber
Composites segment comprises the Advanced Nonwovens, Filtration,
Glass & Industrial Nonwovens and Home & Personal Nonwovens business
areas. The Specialty Papers segment covers the Release & Label Papers
and Technical Papers business areas.
**Market related downtime = downtime taken due to market reasons,
lack of orders or too high product stock. Otherwise plants could have
run normally without any other downtime.
Market related downtime % = market related downtime / manned time.
Manned time = available time - unmanned time. Time the machines were
running according to their shift system.
© 2023 Nasdaq, Inc. All Rights Reserved |