2012-08-09 08:00:00 CEST
2012-08-09 08:01:06 CEST
REGULATED INFORMATION
Ahlstrom - Interim report (Q1 and Q3)
Ahlstrom interim report January-June 2012: Financial performance below comparison period: full-year guidance intact
Ahlstrom Corporation STOCK EXCHANGE RELEASE August 9, 2012 at 9.00 a.m.
Continuing operations April-June 2012 compared with April-June 2011
* Net sales EUR 413.2 million (EUR 423.7 million).
* Operating profit EUR 7.4 million (EUR 22.1 million).
* Operating profit excluding non-recurring items EUR 13.2 million (EUR 20.4
million).
* Operating margin excluding non-recurring items 3.2% (4.8%).
* Profit before taxes EUR 0.8 million (EUR 14.3 million).
* Earnings per share EUR -0.06 (EUR 0.16).
April-June 2012 in brief
* Weaker operating profit was due to the exceptional foreign exchange rate
fluctuations towards the end of the quarter, impacting mainly the Label and
Processing business area. In addition, the shortfall in volumes had a
negative impact on profitability.
* Ahlstrom continued to successfully launch new products, including air
filtration applications for the automotive and heavy duty vehicle industries
and announced the expansion of the well-received Acti-V(TM) technology in
release papers.
* A manufacturing waste reduction project was completed during the review
period. Annual cost savings estimated at EUR 20 million are expected in
2012.
Continuing operations January-June 2012 compared with January-June 2011
* Net sales EUR 819.0 million (EUR 846.2 million).
* Operating profit EUR 24.5 million (EUR 41.6 million).
* Operating profit excluding non-recurring items EUR 30.5 million (EUR 40.0
million).
* Operating margin excluding non-recurring items 3.7% (4.7%).
* Profit before taxes EUR 13.2 million (EUR 28.5 million).
* Earnings per share EUR 0.08 (EUR 0.30).
Events after the review period
* Ahlstrom completed the investment in a filtration material production line
at its site in Turin, Italy. The new line, utilizing latest technology, will
also support the growing business of advanced filtration.
Outlook for 2012
* Ahlstrom reiterates its outlook for 2012 published in February, in spite of
the volatility and limited visibility in the markets. Net sales from
continuing operations are expected to be EUR 1,575-1,735 million. Operating
profit excluding non-recurring items from continuing operations is expected
to be EUR 60-80 million.
Jan Lång, President & CEO
- We experienced large fluctuations in sales across segments and geographic
areas during the second quarter, which is rather typical in a cautious demand
environment. The Filtration business area performed steadily with particularly
good progress in Advanced Filtration with highly differentiated materials. China
sales were below our expectations, primarily driven by slowing of the building
industry.
- Our operating profit did not meet our expectations primarily due to the
shortfall in volumes and was exceptionally affected by the sharp weakening of
the euro.
- Our efforts to generate growth through unique products are gaining good
momentum, helped by our improved global process harmonization and focus. We
expect that this will increasingly contribute to our results in the near future.
Key figures from continuing operations
EUR million Q2/2012 Q2/2011 Change, % Q1-Q2/2012 Q1-Q2/2011 Change, %
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Net sales 413.2 423.7 -2.5 819.0 846.2 -3.2
Operating profit 7.4 22.1 -66.4 24.5 41.6 -41.2
% of net sales 1.8 5.2 3.0 4.9
Operating profit
excl. NRI 13.2 20.4 -35.4 30.5 40.0 -23.8
% of net sales 3.2 4.8 3.7 4.7
Profit before taxes 0.8 14.3 -94.4 13.2 28.5 -53.7
Profit / Loss for
the period -1.6 8.5 -119.0 6.2 16.8 -63.3
Earnings per share -0.06 0.16 0.08 0.30
Return on capital
employed, % 2.6 10.2 5.1 9.4
Capital expenditure 22.5 12.5 79.5 35.8 17.3 107.0
Number of personnel,
at the end of period 5,152 5,217 -1.2 5,152 5,217 -1.2
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*The Home and Personal business area is reported separately as discontinued
operations.
Operating environment
The operating environment remained challenging during the second quarter
compared to the beginning of the year as the overall demand was soft with
increasing volatility. Geographically, demand in Europe was weak, whereas the
development in North America was more favorable. The slowdown that started at
the end of last year in the Asian market, and particularly in China, continued.
The demand for flooring materials in Europe was stable during the review period
after an increase earlier in the year. The wallcovering materials market in
China declined during the review period following a slowdown in the housing and
property market, while demand for wallpaper in Europe remained at a good level.
The market for specialty reinforcements used by the wind energy industry was
still weak.
The market for transportation filtration materials in North America continued to
grow in the second quarter, whereas demand in Europe was still soft. The
advanced filtration material markets served by Ahlstrom, particularly gas
turbine and life science filtration, gained strength.
The markets for tape, food packaging and beverage (e.g. teabag,) materials were
weaker during the review period, while the demand for medical materials was
stable.
The overall market for specialty paper products remained soft. The demand for
base papers for metallization, flexible packaging papers, and furniture foils
declined in the second quarter, while the market for abrasive papers was stable.
The market pulp prices increased somewhat in the second quarter. However, they
remained below the comparison period except for specialty pulps, such as
mercerized cellulose. The appreciation of the U.S. dollar increased pulp prices
denominated in euros. The prices for synthetic fibers such as polypropylene
remained stable 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
Net sales by
business area Q2/2012 Q2/2011 Change, % Q1-Q2/2012 Q1-Q2/2011 Change, %
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Building and Energy 63.0 79.6 -20.8 131.6 161.6 -18.6
Filtration 93.3 83.8 11.3 180.8 166.1 8.8
Food and Medical 89.4 90.9 -1.7 178.4 184.3 -3.2
Label and Processing 173.0 183.2 -5.5 341.5 364.8 -6.4
Other functions* and
eliminations -5.5 -13.8 -13.2 -30.6
Total net sales 413.2 423.7 -2.5 819.0 846.2 -3.2
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*Other functions include financing and taxation-related items, as well as
earnings and costs belonging to holding and sales companies.
April-June 2012 compared with April-June 2011
Ahlstrom's second-quarter 2012 net sales decreased by 2.5% to EUR 413.2 million,
compared with EUR 423.7 million in the second quarter 2011. The decline was
mainly due to lower sales volumes, capacity closures and weaker product mix. 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 offset by a
weaker product mix.
Breakdown of the net sales change at comparable currency rates:
Change, %
-----------------------------------------------
Q2/2011
Price and mix -1.2
Currency 3.6
Volume -2.1
Closures, divestments and new assets -2.7
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Q2/2012 -2.5
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Total sales volumes in tons fell 4.8% from the comparison period. Sales volumes
declined in Building and Energy (-27.7%), Food and Medical (-12.6%) and Label
and Processing (-0.7%). Filtration (1.7%) reported an increase. Total sales
volumes, excluding the impact from capacity closures mainly at Building and
Energy, decreased by 1.5%.
January-June 2012 compared with January-June 2011
In January-June 2012, net sales decreased by 3.2% to EUR 819.0 million, compared
with EUR 846.2 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 offset by a weaker product mix.
Breakdown of the net sales change at comparable currency rates:
Change, %
-----------------------------------------------
Q1-Q2/2011
Price and mix -0.2
Currency 2.3
Volume -2.7
Closures, divestments and new assets -2.6
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Q1-Q2/2012 -3.2
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Total sales volumes in tons fell 5.3% from the comparison period. Sales volumes
declined in Building and Energy (-24.3%), Food and Medical (-11.8%) and Label
and Processing (-1.7%). Filtration (0.4%) reported again increase. Total sales
volumes, excluding the impact from closures mainly at Building and Energy,
decreased by 2.2%.
Result and profitability from continuing operations
Financial result by
segment Q2/2012 Q2/2011 Change, % Q1-Q2/2012 Q1-Q2/2011 Change, %
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Building and Energy
Operating profit 1.9 0.2 4.5 3.3 38.0
% of net sales 2.9 0.2 3.4 2.0
Operating profit
excl. NRI 1.9 0.2 4.5 3.3 38.0
% of net sales 2.9 0.2 3.4 2.0
Filtration
Operating profit 3.0 6.6 -55.0 9.0 13.7 -34.0
% of net sales 3.2 7.9 5.0 8.2
Operating profit
excl. NRI 6.8 6.1 11.8 13.1 14.3 -8.3
% of net sales 7.3 7.3 7.3 8.6
Food and Medical
Operating profit 0.9 2.9 -69.4 3.0 5.8 -47.8
% of net sales 1.0 3.1 1.7 3.2
Operating profit
excl. NRI 1.3 2.9 -53.2 3.5 5.8 -39.9
% of net sales 1.5 3.1 2.0 3.2
Label and Processing
Operating profit 4.2 10.5 -60.4 9.9 16.7 -40.8
% of net sales 2.4 5.8 2.9 4.6
Operating profit
excl. NRI 4.2 8.8 -52.5 10.0 15.0 -33.5
% of net sales 2.4 4.8 2.9 4.1
Other functions* and
eliminations
Operating profit -2.5 1.9 -2.0 2.1
Ahlstrom Group total
Operating
profit/loss 7.4 22.1 -66.4 24.5 41.6 -41.2
% of net sales 1.8 5.2 3.0 4.9
Operating profit
excl. NRI 13.2 20.4 -35.4 30.5 40.0 -23.8
% of net sales 3.2 4.8 3.7 4.7
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*Other functions include financing and taxation-related items, as well as
earnings and costs belonging to holding and sales companies.
April-June 2012 compared with April-June 2011
Ahlstrom's second-quarter 2012 operating profit was EUR 7.4 million (EUR 22.1
million), including non-recurring items of EUR -5.7 million (EUR 1.8 million).
The non-recurring items include a cost of approximately EUR 2.8 million related
to the closure of a Filtration plant in Spain. Operating profit excluding non-
recurring items was EUR 13.2 million (EUR 20.4 million).
Operating profit was negatively impacted by lower sales volumes and the
resulting increase in market-related downtime in production at plants, and
increased energy costs stemming from higher natural gas prices in Italy and
Brazil. Foreign exchange rates had a negative net impact of approximately EUR
4.4 million on operating profit. The appreciation of the U.S. dollar increased
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 last year and
efficiency gains in the supply chain had a positive impact on profitability. In
addition, short-term cost mitigation, related to maintenance and temporary lay-
offs, had a positive effect on profitability.
Ahlstrom's market-related downtime in production was 6.9% in the second quarter
of 2012, compared with 5.3% in the corresponding period.
Profit before taxes was EUR 0.8 million (EUR 14.3 million).
Income taxes amounted to EUR 2.4 million (EUR 5.8 million). The effective tax
rate was impacted by the relatively large share of pretax profits in countries
with higher tax rates and the loss of deferred tax income in Spain following an
asset closure.
Loss for the period was EUR 1.6 million (EUR 8.5 million profit). Earnings per
share were EUR -0.06 (EUR 0.16).
January-June 2012 compared with January-June 2011
In January-June 2012, operating profit was EUR 24.5 million (EUR 41.6 million),
including non-recurring items of EUR -6.0 million (EUR 1.6 million). Operating
profit excluding non-recurring items was EUR 30.5 million (EUR 40.0 million).
Operating profit was negatively impacted by lower sales volumes and the
resulting increase in market-related downtime in production at plants, and
increased energy costs stemming from higher natural gas in Italy and Brazil.
Foreign exchange rates had a negative net impact of approximately EUR 5.1
million on operating profit. The appreciation of the U.S. dollar increased 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 lower raw material costs had a positive impact on
profitability. The first-half 2012 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 with product qualifications. The
process has been slower than anticipated at the beginning of this year. Both
assets are part of the Food and Medical business area.
Ahlstrom's market-related downtime in production was 6.4% in the first half of
2012, compared with 5.6% in the corresponding period.
Profit before taxes was EUR 13.2 million (EUR 28.5 million).
Income taxes amounted to EUR 7.0 million (EUR 11.7 million). The effective tax
rate was impacted by the relatively large share of pretax profits in countries
with higher tax rates and the loss of deferred tax income in Spain following an
asset closure.
Profit for the period was EUR 6.2 million (EUR 16.8 million). Earnings per share
were EUR 0.08 (EUR 0.30).
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 June 21, 2012, the
Brazilian part of the business is expected to be transferred in the third
quarter of 2012. Ahlstrom had previously anticipated that the transfer would
have taken place in the second quarter of 2012.
The transfer is subject to receiving all necessary Brazilian regulatory permits
for the operations. Ahlstrom is working in cooperation with Suominen to find a
solution within the given timeframe. However, there is a degree of uncertainty
related to the timing of the closing. The remaining EUR 25 million of the total
transaction value of EUR 170 million will be settled after the transfer of the
Brazilian operation.
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 April-June 2012, the profit for the period from discontinued operations was
EUR 0.8 million, compared with a EUR 17.1 million loss in the comparison period.
The second-quarter 2011 figure includes the Home and Personal business area as a
whole, while the second-quarter 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 18.4 million after tax related to the
divestment.
In January-June 2012, the profit for the period from discontinued operations was
EUR 0.8 million, compared with a EUR 15.8 million loss in the comparison period.
The first-half 2011 figure includes the Home and Personal business area as a
whole, while the first-half 2012 figure includes the Brazilian part only. The
2011 figure includes the above mentioned impairment loss and costs to sell
related to the divestment.
Result including discontinued operations
In April-June 2012, the loss for the period including discontinued operations
was EUR 0.8 million (EUR 8.6 million loss). Earnings per share were EUR -0.05
(EUR -0.21).
Return on equity (ROE) was -0.6% (-5.3%).
In January-June 2012, the profit for the period including discontinued
operations was EUR 7.0 million (EUR 1.0 million). Earnings per share were EUR
0.10 (EUR -0.04).
Return on equity (ROE) was 2.4% (0.3%).
Business Area review
Building and Energy
EUR million Q2/2012 Q2/2011 Change, % Q1-Q2/2012 Q1-Q2/2011 Change, %
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Net sales 63.0 79.6 -20.8 131.6 161.6 -18.6
Operating profit 1.9 0.2 4.5 3.3 38.0
% of net sales 2.9 0.2 3.4 2.0
Operating profit
excl. NRI 1.9 0.2 4.5 3.3 38.0
% of net sales 2.9 0.2 3.4 2.0
RONA, % 5.6 0.4 7.0 4.3
Sales volumes, 000s
tons 25.0 34.6 -27.7 52.4 69.2 -24.3
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Net sales in April-June 2012 fell by 20.8% to EUR 63.0 million, compared with
EUR 79.6 million in April-June 2011. The decline was mainly due to the asset and
production line closures in Karhula, Turin, and Bishopville last year. Net sales
were also negatively impacted by lower demand for wallcovering materials in
China. Glassfiber tissue used in flooring applications as well as specialty
materials (e.g. for the automotive and building industries) had a positive
impact on net sales. Operating profit increased to EUR 1.9 million (EUR 0.2
million). 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.
In January-June 2012, net sales were EUR 131.6 million (EUR 161.6 million) and
operating profit excluding non-recurring items was EUR 4.5 million (EUR 3.3
million).
Filtration
EUR million Q2/2012 Q2/2011 Change, % Q1-Q2/2012 Q1-Q2/2011 Change, %
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Net sales 93.3 83.8 11.3 180.8 166.1 8.8
Operating profit 3.0 6.6 -55.0 9.0 13.7 -34.0
% of net sales 3.2 7.9 5.0 8.2
Operating profit
excl. NRI 6.8 6.1 11.8 13.1 14.3 -8.3
% of net sales 7.3 7.3 7.3 8.6
RONA, % 6.7 16.3 10.3 16.7
Sales volumes, 000s
tons 29.7 29.2 1.7 57.9 57.7 0.4
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Net sales in April-June 2012 rose by 11.3% to EUR 93.3 million, compared with
EUR 83.8 million in April-June 2011. The increase was due to increased volumes,
higher selling prices, and a favorable currency effect. Net sales benefited from
the continued growth in the North American transportation filtration markets.
Advanced filtration sales, such as gas turbine, life science and water
applications, also rose. Operating profit excluding non-recurring items rose to
EUR 6.8 million (EUR 6.1 million) due to the improved product mix. Increased
natural gas prices and costs of specialty pulps had a negative impact on
profitability. Operating profit amounted to EUR 3.0 million (EUR 6.6 million).
The 2012 figure includes a non-recurring cost of approximately EUR 2.8 million
from the closure of a plant in Spain.
During the second quarter 2012, the business area introduced new air filtration
products used by the automotive and heavy duty vehicle industries.
In January-June 2012, net sales were EUR 180.8 million (EUR 166.1 million) and
operating profit excluding non-recurring items was EUR 13.1 million (EUR 14.3
million).
Food and Medical
EUR million Q2/2012 Q2/2011 Change, % Q1-Q2/2012 Q1-Q2/2011 Change, %
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Net sales 89.4 90.9 -1.7 178.4 184.3 -3.2
Operating profit 0.9 2.9 -69.4 3.0 5.8 -47.8
% of net sales 1.0 3.1 1.7 3.2
Operating profit
excl. NRI 1.3 2.9 -53.2 3.5 5.8 -39.9
% of net sales 1.5 3.1 2.0 3.2
RONA, % 1.6 5.7 2.9 5.7
Sales volumes, 000s
tons 29.1 33.3 -12.6 59.1 67.0 -11.8
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Net sales in April-June 2012 fell by 1.7% to EUR 89.4 million, compared with EUR
90.9 million in April-June 2011. The decrease was due to lower sales volumes in
tape, food packaging and beverage materials. Higher selling prices and a
favorable currency effect had a positive impact on net sales. Operating profit
excluding non-recurring items decreased to EUR 1.3 million (EUR 2.9 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 0.9 million (EUR 2.9 million).
In January-June 2012, net sales were EUR 178.4 million (EUR 184.3 million) and
operating profit excluding non-recurring items was EUR 3.5 million (EUR 5.8
million).
Label and Processing
EUR million Q2/2012 Q2/2011 Change, % Q1-Q2/2012 Q1-Q2/2011 Change, %
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Net sales 173.0 183.2 -5.5 341.5 364.8 -6.4
Operating profit 4.2 10.5 -60.4 9.9 16.7 -40.8
% of net sales 2.4 5.8 2.9 4.6
Operating profit
excl. NRI 4.2 8.8 -52.5 10.0 15.0 -33.5
% of net sales 2.4 4.8 2.9 4.1
RONA, % 7.0 15.3 8.3 12.1
Sales volumes, 000s
tons 148.6 149.7 -0.7 292.7 297.8 -1.7
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Net sales in April-June 2012 fell by 5.5% to EUR 173.0 million, compared with
EUR 183.2 million in April-June 2011 due to a weaker product mix and lower
selling prices in certain segments. Release liners, such as clay coated papers
and applications using Acti-V(TM) technology, supported net sales. Operating
profit excluding non-recurring items was EUR 4.2 million (EUR 8.8 million). The
result was negatively impacted by the depreciation of the euro mainly against
the U.S. dollar, a weaker product mix, and higher energy costs in Brazil.
Streamlining measures taken at the Jacarei plant in Brazil and the Osnabrück
plant in Germany had a positive impact on profitability. Operating profit
amounted to EUR 4.2 million (EUR 10.5 million).
The business area announced selling price increases from the beginning of June
to compensate for the increased raw material and energy costs that occurred
during the first half of the year.
During the second-quarter 2012, Label and Processing announced the expansion of
its recently launched Ahlstrom Acti-V(TM) technology to all supercalendered
release papers manufactured at its La Gère plant in France. It also extended the
range of release papers produced in Brazil.
In January-June 2012, net sales were EUR 341.5 million (EUR 364.8 million) and
operating profit excluding non-recurring items was EUR 10.0 million (EUR 15.0
million).
Financing (including discontinued operations)
Net cash flow from operating activities in April-June 2012 amounted to EUR 27.5
million (EUR 27.6 million), and cash flow after investments was EUR 13.8 million
(EUR 16.9 million). In January-June 2012, net cash flow from operating
activities amounted to EUR 42.0 million (EUR 46.2 million), and cash flow after
investments was EUR 9.2 million (EUR 30.0 million).
As of June 30, 2012, operative working capital amounted to EUR 171.8 million
(EUR 176.7 million at the end of 2011). Its turnover fell by two days and was
38 days at the end of the review period.
Ahlstrom's interest-bearing net liabilities stood at EUR 290.2 million (EUR
237.8 million at the end of 2011). Ahlstrom's interest bearing liabilities
amounted to EUR 338.9 million. The duration of the loan portfolio (average
interest rate fixing period) was 20 months and the capital weighted average
interest rate was 4.52%. The average maturity of the loan portfolio was 44.3
months.
In April-June 2012, net financial expenses were EUR 4.9 million (EUR 6.7
million). Net financial expenses include net interest expenses of EUR 4.3
million (EUR 4.3 million), a financing exchange rate gain of EUR 0.3 million
(EUR 0.8 million loss), and other financial expenses of EUR 0.9 million (EUR
1.6 million).
In January-June 2012, net financial expenses were EUR 9.5 million (EUR 12.0
million). Net financial expenses include net interest expenses of EUR 7.7
million (EUR 8.0 million), a financing exchange rate gain of EUR 0.1 million
(EUR 1.2 million loss), and other financial expenses of EUR 1.9 million (EUR
2.7 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 335.1 million (EUR 352.3 million). In addition, the company had undrawn
uncommitted credit facilities and cash pool overdraft limits of EUR 156.3
million (EUR 146.8 million) available.
The gearing ratio stood at 51.5% (38.2% at the end of 2011). The equity ratio
was 40.4% (43.6% at the end of 2011).
Capital expenditure
Ahlstrom's capital expenditure excluding acquisitions from continuing operations
totaled EUR 22.5 million in April-June 2012 (EUR 12.5 million). In January-June
2012, capital expenditure was EUR 35.8 million (EUR 17.3 million). The
expenditure includes projects such as the joint venture for production of crepe
papers in Longkou, China, and the filtration materials capacity increase in
Turin announced last year.
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.
Waste management program
The project launched in 2010 to reduce material waste in manufacturing was
completed during the review period. The targeted reduction of 15% in waste of
the annual volume equaling annual savings of about EUR 20 million is expected to
be fully visible in 2012.
Personnel
Ahlstrom employed on average of 5,119 people* in January-June 2012 (5,174), and
5,152 people (5,217) at the end of the period. At the end of the period, the
highest numbers of employees were in France (23.8%), the United States (19.3%),
Italy (10.8%), Finland (9.8%), Germany (7.4%), and Brazil (6.9%).
Changes in the Executive Management Team
Aki Saarinen was appointed Executive Vice President, Strategic Business
Development, and member of the Executive Management Team as of June 11, 2012. He
reports to Jan Lång, President & CEO.
Saarinen is responsible for managing business development related processes and
exploring new business opportunities within Ahlstrom.
*The figure is based on continuing operations and was calculated as full-time
equivalents.
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-June 2012, a total of 1.11 million Ahlstrom shares were traded
for a total of EUR 15.5 million. The lowest trading price was EUR 11.86 and the
highest EUR 15.45. The closing price on June 29, 2012, was EUR 12.70. Market
capitalization at the end of the review period was EUR 585.5 million, excluding
the shares owned by the parent company and Ahlcorp Oy, which is a management
ownership company.
At the end of June 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 10.16 at the end of the review period
(December 31, 2011: EUR 11.50).
Product and technology development
Ahlstrom continued to introduce new products during the second quarter of 2012.
The Filtration business area launched new air filtration products for automotive
and heavy duty vehicles.
The Label and Processing business area announced the expansion of its recently
launched Ahlstrom Acti-V(TM) technology to all supercalendered release papers
manufactured at its La Gère plant in France. The products are used for Pressure
Sensitive Adhesive (PSA) labeling, as well as for specialty tape and industrial
applications.
The Label and Processing business area also extended the range of release papers
produced at its Jacareì plant in Brazil with the introduction of calendered
Ahlstrom SILCA(TM) Soft grades. This new calendered backing paper, particularly
well adapted for labelstock applications, offers the required properties for
secure siliconizing and a reliable converting process.
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.
Changes in the Board's Nomination Committee
On June 18, 2012, Ahlstrom's Board of Directors appointed Thomas Ahlström as a
non-board member of its Nomination Committee. He replaced Carl Ahlström, who had
informed the board that he was no longer available for the position.
Thomas Ahlström represents Antti Ahlström Perilliset Oy, which is Ahlstrom's
biggest shareholder. In addition to three board members, the Nomination
Committee consists of two non-board members representing major shareholders. The
composition of the committee aims at increasing shareholder influence in
nomination matters.
Events after the review period
Ahlstrom completed the investment in a filtration material production line at
its site in Turin, Italy. The new line, utilizing latest technology, will also
support the growing business of advanced filtration. The investment was
approximately EUR 17.5 million.
Outlook
Ahlstrom reiterates its outlook for 2012 published in February, in spite of the
volatility and limited visibility in the markets. Net sales from continuing
operations are expected to be EUR 1,575-1,735 million. Operating profit
excluding non-recurring items from continuing operations is expected to be EUR
60-80 million.
In 2012, investments excluding acquisitions from continuing operations are
estimated to be approximately EUR 100 million (EUR 66.4 million in 2011). The
estimate includes investments that were already announced in 2011, 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.
Short-term risks
The possible further spread of the European debt crisis, especially in Italy and
Spain, and slower growth in Asia pose additional risks to Ahlstrom's financial
performance. Recent indicators in the U.S. also suggest that economic growth may
be slowing since the beginning of the year. 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.
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, August 9, 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-June 2012 interim report at a Finnish language press and analyst
conference in Helsinki today, August 9, 2012, at 10:00 a.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, August
9, 2012, at 2:00 p.m. (CET+1). To participate in the conference call, please
dial (09) 6937 9590 in Finland or +44 (0)20 3364 5381 outside Finland a few
minutes before the conference begins. The access code is 5451119.
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 August 9, 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 2012
Ahlstrom will publish financial information in 2012 as follows:
+--------------------------------+-------------------+-------------+
|Report |Date of publication|Silent period|
+--------------------------------+-------------------+-------------+
|Interim Report January-September|Monday, October 22 |October 1-22 |
+--------------------------------+-------------------+-------------+
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 Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2012 2011 2012 2011 2011
------------------------------------------------------------------------------
Continuing operations
Net sales 413.2 423.7 819.0 846.2 1 607.2
Cost of goods sold -360.3 -366.2 -707.6 -731.1 -1 421.9
------------------------------------------------------------------------------
Gross profit 52.8 57.5 111.4 115.1 185.4
Sales and marketing expenses -14.8 -11.7 -29.1 -25.0 -50.0
R&D expenses -4.8 -4.0 -9.4 -8.9 -17.9
Administrative expenses -27.5 -23.8 -51.1 -44.5 -90.1
Other operating income 1.9 5.0 3.2 6.8 12.3
Other operating expense -0.2 -0.8 -0.5 -1.8 -19.6
------------------------------------------------------------------------------
Operating profit / loss 7.4 22.1 24.5 41.6 20.1
Net financial expenses -4.9 -6.6 -9.5 -11.8 -22.6
Share of profit / loss of associated
companies -1.7 -1.3 -1.7 -1.3 -4.0
------------------------------------------------------------------------------
Profit / loss before taxes 0.8 14.3 13.2 28.5 -6.6
Income taxes -2.4 -5.8 -7.0 -11.7 -5.6
------------------------------------------------------------------------------
Profit / loss for the period from
continuing operations -1.6 8.5 6.2 16.8 -12.2
------------------------------------------------------------------------------
Discontinued operations
Profit/loss for the period 0.9 1.3 1.0 2.7 3.4
Impairment loss recognised on the
remeasurement
to fair value and cost to sell -0.1 -18.4 -0.2 -18.5 -23.4
------------------------------------------------------------------------------
Profit / loss for the period from
discontinued operations 0.8 -17.1 0.8 -15.8 -20.0
------------------------------------------------------------------------------
------------------------------------------------------------------------------
Profit/loss for the period -0.8 -8.6 7.0 1.0 -32.2
------------------------------------------------------------------------------
Attributable to
Owners of the parent -0.8 -8.6 7.4 0.8 -32.2
Non-controlling interest -0.1 -0.0 -0.4 0.2 -0.0
------------------------------------------------------------------------------
Continuing operations
Earnings per share, EUR
- Basic and diluted * -0.06 0.16 0.08 0.30 -0.38
------------------------------------------------------------------------------
Including discontinued operations
Earnings per share, EUR
- Basic and diluted * -0.05 -0.21 0.10 -0.04 -0.81
------------------------------------------------------------------------------
* With the effect of interest on hybrid
bond for the period, net of tax
------------------------------------------------------------------------------
STATEMENT OF COMPREHENSIVE INCOME Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2012 2011 2012 2011 2011
------------------------------------------------------------------------------
Profit / loss for the period -0.8 -8.6 7.0 1.0 -32.2
Other comprehensive income. net of tax
Translation differences -1.0 0.5 -3.3 -16.1 -11.9
Share of other comprehensive income of associates 0.4 - 0.4 - -
Hedges of net investments in foreign operations - - - - -
Cash flow hedges - -0.4 - -0.1 -
------------------------------------------------------------------------------
Other comprehensive income. net of tax -0.6 0.2 -2.9 -16.2 -11.9
------------------------------------------------------------------------------
Total comprehensive income for the period -1.4 -8.4 4.2 -15.2 -44.1
------------------------------------------------------------------------------
Attributable to
Owners of the parent -1.3 -8.4 4.5 -15.4 -44.0
Non-controlling interest -0.1 -0.0 -0.4 0.2 -0.0
-------------------------------------------------------------------------------
BALANCE SHEET Jun 30, Jun 30, Dec 31,
EUR million 2012 2011 2011
-------------------------------------------------------------------------------
ASSETS
Non-current assets
Property, plant and equipment 546.5 548.6 553.4
Goodwill 112.6 109.9 113.8
Other intangible assets 45.6 39.5 47.6
Investments in associated companies 35.5 9.3 36.6
Other investments 0.4 2.5 0.4
Other receivables 55.0 45.1 51.9
Deferred tax assets 60.7 52.8 61.2
-------------------------------------------------------------------------------
Total non-current assets 856.3 807.7 865.0
Current assets
Inventories 188.0 191.0 185.8
Trade and other receivables 273.4 287.3 241.4
Income tax receivables 1.2 1.7 2.4
Other investments - - -
Cash and cash equivalents 48.4 26.0 94.0
-------------------------------------------------------------------------------
Total current assets 511.0 506.1 523.6
Assets classified as held for sale 29.1 224.2 42.3
-------------------------------------------------------------------------------
Total assets 1,396.4 1,538.0 1,430.8
-------------------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to owners of the parent 468.6 561.7 530.1
Hybrid bond 80.0 80.0 80.0
Non-controlling interest 15.0 1.0 12.6
-------------------------------------------------------------------------------
Total equity 563.6 642.8 622.7
Non-current liabilities
Interest-bearing loans and borrowings 240.8 245.6 274.2
Employee benefit obligations 76.0 75.0 73.3
Provisions 3.9 2.8 4.5
Other liabilities 5.7 3.4 4.8
Deferred tax liabilities 28.0 29.2 28.8
-------------------------------------------------------------------------------
Total non-current liabilities 354.3 356.1 385.5
Current liabilities
Interest-bearing loans and borrowings 98.2 120.0 58.1
Trade and other payables 354.3 343.4 328.8
Income tax liabilities 5.2 5.6 5.6
Provisions 18.3 7.0 20.4
-------------------------------------------------------------------------------
Total current liabilities 476.0 476.0 412.8
-------------------------------------------------------------------------------
Total liabilities 830.3 832.0 798.3
Liabilities directly associated with assets classified
as held for sale 2.5 63.2 9.8
-------------------------------------------------------------------------------
Total equity and liabilities 1,396.4 1,538.0 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 - - - - - - 0.8 0.8 0.2 - 1.0
Other comprehensive
income, net of tax
Translation
differences - - - - -16.1 - - -16.1 - - -16.1
Share of other
comprehensive
income
of associates - - - - - - - - - - -
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 - - - - - - - - - - -
Share ownership
plan for EMT - - - - - - - - - - -
Change in non-
controlling
interests - - - - - - - - - - -
Share-based
incentive plan - - - - - 2.0 -1.1 0.9 - - 0.9
-------------------------------------------------------------------------------
Equity at June
30, 2011 70.0 209.3 8.3 -0.1 2.7 -4.3 275.9 561.7 1.0 80.0 642.8
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
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 - - - - - - 7.4 7.4 -0.4 - 7.0
Other comprehensive
income, net of tax
Translation
differences - - - - -3.3 - - -3.3 0.3 - -3.0
Share of other
comprehensive
income
of associates - - - - 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 June
30, 2012 70.0 209.3 8.3 0.0 4.0 -7.4 184.4 468.6 15.0 80.0 563.6
-------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS - including
discontinued operations Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2012 2011 2012 2011 2011
-------------------------------------------------------------------------------
Cash flow from operating activities
Profit / loss for the period -0.8 -8.6 7.0 1.0 -32.2
Adjustments, total 27.5 48.1 55.1 83.3 141.2
Changes in net working capital 8.3 -6.9 -4.1 -39.4 -10.7
Change in provisions -0.0 0.2 -2.8 -0.1 14.0
Financial items -5.5 -2.7 -9.7 4.4 -20.8
Income taxes paid / received -2.0 -2.4 -3.4 -3.1 -7.9
-------------------------------------------------------------------------------
Net cash from operating activities 27.5 27.6 42.0 46.2 83.7
Cash flow from investing activities
Acquisition of Group companies - - - - -1.0
Purchases of intangible and tangible assets -20.8 -14.1 -42.2 -21.6 -60.0
Other investing activities 7.2 3.4 9.4 5.4 117.7
-------------------------------------------------------------------------------
Net cash from investing activities -13.7 -10.7 -32.8 -16.2 56.7
Cash flow from financing activities
Dividends paid and other -60.0 -40.8 -60.0 -41.1 -41.2
Repurchase of own shares - - - - -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 6.6 25.6 5.5 13.6 -18.9
-------------------------------------------------------------------------------
Net cash from financing activities -53.4 -15.2 -54.5 -27.4 -70.7
Net change in cash and cash equivalents -39.6 1.7 -45.3 2.6 69.7
Cash and cash equivalents at the beginning of
the period 88.2 24.8 94.4 24.6 24.6
Foreign exchange adjustment 0.2 0.0 -0.3 -0.6 0.1
-------------------------------------------------------------------------------
Cash and cash equivalents at the end of the
period 48.8 26.6 48.8 26.6 94.4
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
KEY FIGURES Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
2012 2011 2012 2011 2011
-------------------------------------------------------------------------------
Continuing operations
Personnel costs -82.3 -79.9 -157.0 -158.4 -323.6
Depreciation and amortization -18.8 -22.2 -37.7 -43.5 -84.5
Impairment charges -0.3 - 0.0 - -10.8
-------------------------------------------------------------------------------
Operating profit, % 1.8 5.2 3.0 4.9 1.3
Return on capital employed (ROCE), % 2.6 10.2 5.1 9.4 2.0
Basic earnings per share *, EUR -0.06 0.16 0.08 0.30 -0.38
Capital expenditure, EUR million 22.5 12.5 35.8 17.3 66.4
-------------------------------------------------------------------------------
Number of employees, average 5,110 5,201 5,119 5,174 5,181
Including discontinued operations
Personnel costs -82.6 -88.7 -157.6 -176.1 -353.8
Depreciation and amortization -18.8 -26.0 -37.7 -51.3 -92.3
Impairment charges -0.3 -13.5 0.0 -13.5 -32.7
-------------------------------------------------------------------------------
Operating profit, % 2.0 0.7 3.1 2.5 0.1
Return on capital employed (ROCE), % 2.8 1.1 5.1 4.6 -0.1
Return on equity (ROE), % -0.6 -5.3 2.4 0.3 -4.9
-------------------------------------------------------------------------------
Interest-bearing net liabilities, EUR
million 290.2 338.4 290.2 338.4 237.8
Equity ratio, % 40.4 42.2 40.4 42.2 43.6
Gearing ratio, % 51.5 52.6 51.5 52.6 38.2
-------------------------------------------------------------------------------
Basic earnings per share *, EUR -0.05 -0.21 0.10 -0.04 -0.81
Equity per share, EUR 10.16 12.12 10.16 12.12 11.50
Average number of shares during the
period, 1000's 46,105 46,349 46,105 46,299 46,282
Number of shares at the end of the
period, 1000's 46,105 46,349 46,105 46,349 46,105
-------------------------------------------------------------------------------
Capital expenditure, EUR million 23.1 14.0 36.4 20.0 70.4
Capital employed at the end of the
period, EUR million 902.5 1,007.7 902.5 1,007.7 955.0
Number of employees, average 5,140 5,774 5,146 5,743 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 Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2012 2011 2012 2011 2011
---------------------------------------------------------------------
Building and Energy 63.0 79.6 131.6 161.6 296.2
Filtration 93.3 83.8 180.8 166.1 324.5
Food and Medical 89.4 90.9 178.4 184.3 361.9
Label and Processing 173.0 183.2 341.5 364.8 678.1
Other operations 24.0 19.3 46.3 34.3 71.1
Internal sales -29.6 -33.0 -59.6 -64.9 -124.6
---------------------------------------------------------------------
Total net sales 413.2 423.7 819.0 846.2 1,607.2
Building and Energy 0.9 0.9 1.9 2.5 3.8
Filtration 3.1 2.4 5.7 4.5 9.4
Food and Medical 5.6 9.7 11.2 19.3 34.1
Label and Processing 6.3 8.5 13.8 16.1 32.4
Other operations 13.6 11.5 27.0 22.4 44.9
---------------------------------------------------------------------
Total internal sales 29.6 33.0 59.6 64.9 124.6
Building and Energy 1.9 0.2 4.5 3.3 -27.8
Filtration 3.0 6.6 9.0 13.7 22.8
Food and Medical 0.9 2.9 3.0 5.8 12.0
Label and Processing 4.2 10.5 9.9 16.7 11.6
Other operations -2.4 1.9 -2.1 2.1 1.5
Eliminations -0.1 0.1 0.1 -0.0 0.0
---------------------------------------------------------------------
Operating profit / loss 7.4 22.1 24.5 41.6 20.1
Return on capital employed (RONA), %
Building and Energy 5.6 0.4 7.0 4.3 -19.8
Filtration 6.7 16.3 10.3 16.7 13.6
Food and Medical 1.6 5.7 2.9 5.7 5.7
Label and Processing 7.0 15.3 8.3 12.1 4.4
Group (ROCE), % 2.6 10.2 5.1 9.4 2.0
Building and Energy 130.5 153.4 130.5 153.4 129.4
Filtration 181.5 161.8 181.5 161.8 168.5
Food and Medical 216.5 195.4 216.5 195.4 208.4
Label and Processing 228.9 273.9 228.9 273.9 247.2
Other operations 8.3 -4.0 8.3 -4.0 10.9
Eliminations -0.2 -0.3 -0.2 -0.3 -0.3
---------------------------------------------------------------------
Total net assets 765.5 780.1 765.5 780.1 764.1
Building and Energy 4.1 1.9 4.8 3.2 7.5
Filtration 7.2 5.7 11.4 6.5 21.8
Food and Medical 7.4 2.2 14.3 4.0 16.4
Label and Processing 3.1 2.0 4.4 2.1 17.9
Other operations 0.8 0.8 0.9 1.6 2.8
---------------------------------------------------------------------
Total capital expenditure 22.5 12.5 35.8 17.3 66.4
Building and Energy -2.4 -4.6 -5.6 -9.3 -18.2
Filtration -5.8 -4.1 -10.2 -8.2 -16.7
Food and Medical -4.7 -4.7 -9.2 -9.4 -18.4
Label and Processing -6.2 -7.2 -12.7 -14.3 -27.9
Other operations 0.4 -1.6 -0.1 -2.2 -3.2
---------------------------------------------------------------------
Total depreciation and amortization -18.8 -22.2 -37.7 -43.5 -84.5
Building and Energy -0.3 - 0.0 - -11.1
Filtration - - - - -
Food and Medical - - - - -
Label and Processing - - - - 0.2
Other operations - - - - -
---------------------------------------------------------------------
Total impairment charges -0.3 - 0.0 - -10.8
Building and Energy - - - - -29.0
Filtration -3.8 0.5 -4.1 -0.6 0.8
Food and Medical -0.5 - -0.5 - 0.3
Label and Processing - 1.7 -0.1 1.7 -2.0
Other operations -1.4 -0.5 -1.4 0.4 0.4
---------------------------------------------------------------------
Total non-recurring items -5.7 1.8 -6.0 1.6 -29.6
---------------------------------------------------
SEGMENT INFORMATION Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
Thousands of tons 2012 2011 2012 2011 2011
---------------------------------------------------
Building and Energy 25.0 34.6 52.4 69.2 127.1
Filtration 29.7 29.2 57.9 57.7 110.9
Food and Medical 29.1 33.3 59.1 67.0 128.7
Label and Processing 148.6 149.7 292.7 297.8 557.5
Other operations 2.6 2.7 4.9 4.8 9.3
Eliminations -10.8 -13.8 -22.6 -27.3 -52.0
---------------------------------------------------
Total sales tons 224.3 235.7 444.4 469.3 881.6
Segment information is presented according to the IFRS standards.
-----------------------------------------------------------------------------
NET SALES BY REGION - including discontinued
operations Q2 Q2 Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2012 2011 2012 2011 2011
-----------------------------------------------------------------------------
Europe 220.5 267.4 445.7 534.7 981.2
North America 81.1 110.2 158.7 222.2 420.6
South America 54.6 54.2 106.1 106.2 212.8
Asia-Pacific 52.2 56.4 97.8 107.6 202.4
Rest of the world 7.6 8.7 16.4 17.7 35.7
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Total net sales 416.0 496.8 824.7 988.4 1,852.6
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CHANGES OF PROPERTY, PLANT AND
EQUIPMENT - including discontinued operations Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2012 2011 2011
---------------------------------------------------------------------
Book value at Jan 1 573.3 704.9 704.9
Acquisitions through business combinations - - -
Additions 35.9 18.5 69.5
Disposals -6.7 -0.2 -87.9
Depreciations and impairment charges -35.9 -48.8 -103.2
Translation differences and other changes -0.9 -21.4 -10.0
Book value at the end of the period 565.8 653.0 573.3
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TRANSACTIONS WITH RELATED PARTIES - including discontinued
operations Q1-Q2 Q1-Q2 Q1-Q4
EUR million 2012 2011 2011
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Transactions with associated companies
Sales and interest income 10.0 0.3 5.0
Purchases of goods and services -11.9 -1.4 -4.2
Trade and other receivables 6.8 0.1 7.3
Trade and other payables 1.0 - 3.4
Market prices have been used in transactions with associated companies.
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OPERATING LEASES - including discontinued
operations Jun 30, Jun 30, Dec 31,
EUR million 2012 2011 2011
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Current portion 5.9 6.9 5.8
Non-current portion 20.2 18.9 19.7
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Total 26.1 25.7 25.5
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COLLATERALS AND COMMITMENTS - including discontinued
operations Jun 30, Jun 30, Dec 31,
EUR million 2012 2011 2011
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Mortgages 73.0 73.0 73.0
Pledges 0.5 0.2 0.3
Commitments
Guarantees given on behalf of group companies 12.5 20.1 19.5
Guarantees given on behalf of associated companies 19.0 15.0 15.0
Capital expenditure commitments 25.4 19.6 19.4
Other commitments 2.4 2.0 3.1
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QUARTERLY DATA Q2 Q1 Q4 Q3 Q2 Q1
EUR million 2012 2012 2011 2011 2011 2011
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Continuing operations
Net sales 413.2 405.8 371.3 389.7 423.7 422.5
Cost of goods sold -360.3 -347.3 -331.8 -359.0 -366.2 -364.9
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Gross profit 52.8 58.5 39.6 30.7 57.5 57.6
Sales and marketing expenses -14.8 -14.3 -13.6 -11.4 -11.7 -13.2
R&D expenses -4.8 -4.6 -4.0 -4.9 -4.0 -4.9
Administrative expenses -27.5 -23.6 -22.6 -23.0 -23.8 -20.7
Other operating income 1.9 1.4 4.2 1.4 5.0 1.8
Other operating expense -0.2 -0.3 -7.6 -10.2 -0.8 -0.9
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Operating profit / loss 7.4 17.0 -4.2 -17.3 22.1 19.5
Net financial expenses -4.9 -4.6 -4.9 -6.0 -6.6 -5.2
Share of profit / loss of
associated companies -1.7 0.0 -1.6 -1.1 -1.3 -0.0
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Profit / loss before taxes 0.8 12.4 -10.7 -24.4 14.3 14.3
Income taxes -2.4 -4.6 1.8 4.3 -5.8 -5.9
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Profit / loss for the period from
continuing
operations -1.6 7.8 -8.9 -20.2 8.5 8.3
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Discontinued operations
Profit/loss for the period 0.9 0.2 -1.1 1.9 1.3 1.3
Impairment loss recognised on the
remeasurement to fair value and
cost to sell -0.1 -0.1 -4.9 -0.2 -18.4 -0.1
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Profit / loss for the period from
discontinued operations 0.8 0.1 -6.0 1.8 -17.1 1.3
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Profit/loss for the period -0.8 7.9 -14.8 -18.4 -8.6 9.6
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Attributable to
Owners of the parent -0.8 8.2 -14.6 -18.4 -8.6 9.4
Non-controlling interest -0.1 -0.3 -0.2 -0.0 -0.0 0.2
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QUARTERLY DATA BY SEGMENT Q2 Q1 Q4 Q3 Q2 Q1
EUR million 2012 2012 2011 2011 2011 2011
----------------------------------------------------------------------
Net sales
Building and Energy 63.0 68.5 65.8 68.9 79.6 82.0
Filtration 93.3 87.5 79.7 78.7 83.8 82.3
Food and Medical 89.4 89.0 86.1 91.5 90.9 93.4
Label and Processing 173.0 168.5 149.6 163.6 183.2 181.7
Other operations and eliminations -5.5 -7.7 -9.9 -12.9 -13.8 -16.9
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Group total 413.2 405.8 371.3 389.7 423.7 422.5
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Operating profit / loss
Building and Energy 1.9 2.7 -7.7 -23.4 0.2 3.1
Filtration 3.0 6.1 4.6 4.5 6.6 7.1
Food and Medical 0.9 2.2 2.0 4.2 2.9 3.0
Label and Processing 4.2 5.7 -1.5 -3.7 10.5 6.2
Other operations and eliminations -2.5 0.4 -1.7 1.1 1.9 0.1
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Group total 7.4 17.0 -4.2 -17.3 22.1 19.5
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Operating profit / loss excl. NRI
Building and Energy 1.9 2.7 -1.1 -0.9 0.2 3.1
Filtration 6.8 6.3 3.5 4.2 6.1 8.2
Food and Medical 1.3 2.2 1.6 4.3 2.9 3.0
Label and Processing 4.2 5.8 -0.8 -0.6 8.8 6.2
Other operations and eliminations -1.0 0.4 -1.6 1.1 2.5 -0.8
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Group total 13.2 17.4 1.7 8.0 20.4 19.7
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Sales tons, thousands of tons
Building and Energy 25.0 27.4 27.5 30.3 34.6 34.7
Filtration 29.7 28.1 26.3 27.0 29.2 28.4
Food and Medical 29.1 30.0 29.2 32.4 33.3 33.7
Label and Processing 148.6 144.1 124.6 135.1 149.7 148.2
Other operations and eliminations -8.1 -9.5 -9.8 -10.3 -11.1 -11.4
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Group total 224.3 220.1 197.8 214.4 235.7 233.6
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KEY FIGURES QUARTERLY Q2 Q1 Q4 Q3 Q2 Q1
EUR million 2012 2012 2011 2011 2011 2011
-------------------------------------------------------------------------------
Continuing operations
Net sales 413.2 405.8 371.3 389.7 423.7 422.5
Operating profit / loss 7.4 17.0 -4.2 -17.3 22.1 19.5
Profit / loss before taxes 0.8 12.4 -10.7 -24.4 14.3 14.3
Profit / loss for the period -1.6 7.8 -8.9 -20.2 8.5 8.3
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Return on capital employed (ROCE), % 2.6 7.4 -2.6 -8.6 10.2 9.2
Basic earnings per share *, EUR -0.06 0.14 -0.22 -0.47 0.16 0.14
Including discontinued operations
Net sales 416.0 408.7 397.9 466.2 496.8 491.6
Operating profit / loss 8.2 17.1 -8.9 -13.5 3.6 20.8
Profit / loss before taxes 1.6 12.5 -17.4 -20.7 -4.4 15.5
Profit / loss for the period -0.8 7.9 -14.8 -18.4 -8.6 9.6
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Gearing ratio, % 51.5 38.3 38.2 54.3 52.6 48.4
Return on capital employed (ROCE), % 2.8 7.2 -4.3 -5.7 1.1 8.2
Basic earnings per share *, EUR -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 46,180 46,350 46,349 46,248
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* 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
* The figure is based on continuing operations and was calculated as full-time
equivalents.
[HUG#1632848]
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