2017-05-15 17:45:16 CEST
2017-05-15 17:45:16 CEST
BIRTINGARSKYLDAR UPPLÝSNINGAR
Ahlstrom-Munksjö Oyj - Other information disclosed according to the rules of the Exchange
Ahlstrom-Munksjö publishes comparative pro forma financial information and provides an outlook for EBITDA development in 2017
AHLSTROM-MUNKSJÖ STOCK EXCHANGE RELEASE, MAY 15, 2017 at 17:45 CEST Ahlstrom-Munksjö Oyj publishes pro forma financial information for 2015, 2016 and for each of the quarters in 2016 in addition to the first quarter in 2017 to illustrate the financial impact of the merger as if the merger had been completed in the beginning of 2015. Pro forma information is presented separately for group level and for the new business areas that represent the business area structure for the new company. The merger of Ahlstrom Corporation and Munksjö Oyj was completed on April 1, 2017 and created a global leader in innovative and sustainable fiber-based materials with combined pro forma net sales of approximately EUR 2.15 billion, around 6,000 employees, and 41 production and converting facilities in 14 countries. The unaudited pro forma financial information including the basis of presentation and selected notes are included in the appendix included as an attachment to this release. The pro forma information is presented for illustrative purposes only, and has been compiled assuming that the merger had been completed on January 1, 2015. In addition, the unaudited pro forma information reflects the impacts of the refinancing transactions that took place or have been announced in connection with the completion of the merger. The pro forma information does not reflect the anticipated annual synergy benefits of EUR 35 million comprising mainly of lower fixed costs and coordination of purchases and production. The company is also working on identifying further business synergies such as integrating the former business area Graphics and Packaging into the new business area Specialties, to develop a combined product and service offering. Key figures at Group and business area level are presented in the tables below consistently with how Ahlstrom-Munksjö will continue to report in the future. Ahlstrom-Munksjö plans to report its interim and annual reports consistently starting from the half-year report January-June 2017, to be published on July 25, 2017. Key figures Pro forma, MEUR FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Net sales 2,147.9 2,124.6 566.9 535.9 561.0 523.5 527.5 Comparable EBITDA 268.7 203.0 79.4 59.9 77.3 70.2 61.3 Comparable EBITDA 12.5 % 9.6 % 14.0 11.2 13.8 13.4 11.6 % margin, % % % % % EBITDA 239.9 189.0 75.5 35.6 76.0 72.9 55.4 Comparable operating 168.7 99.1 54.5 34.1 52.5 44.7 37.4 result excluding PPA Operating result 104.7 39.6 42.9 0.6 42.5 38.7 22.8 Net result 49.8 27.7 24.2 -10.4 23.7 23.0 13.5 Earnings per share 0.51 0.29 0.25 -0.11 0.25 0.24 0.14 (EPS), EUR EPS excluding merger 0.71 0.29 0.25 0.08 0.25 0.24 0.14 related items, EUR Cash generated from 232.1 124.7 42.9 -4.6 89.1 72.0 75.6 operating activities Capital expenditure 77.7 65.9 16.4 14.8 15.4 16.7 30.8 Average number of 5,974 6,150 5,925 5,955 5,984 5,987 5,973 employees, FTE Definitions on pro forma comparable EBITDA and comparable operating result excluding PPA as well as pro forma earnings per share are described at the end of this release. Outlook for 2017 Ahlstrom-Munksjö expects its comparable EBITDA[1] (http://connect.ne.cision.com#_ftn1) in 2017 to be higher than in the previous year (Pro forma EUR 268.7 million). No other changes to the outlook published on April 26, 2017 have been made. The full outlook is as follows: Market outlook: The demand outlook for 2017 for Ahlstrom-Munksjö’s fiber-based products is expected to remain stable at the current good level for most of the product segments and to reflect the seasonal pattern. Price increases are implemented as customer contracts expire to mitigate for raw material price increases in certain segments, particularly in the Decor and Release Paper Europe businesses. The price increases will take effect towards the end of the second quarter. EBITDA: comparable EBITDA in 2017 is expected to be higher than in the previous year. Shutdowns: The annual maintenance and vacation shutdowns in the second and third quarter as well as the seasonal shutdowns at the end of 2017 are expected to be carried out to about the same extent as in 2016. However the maintenance shutdown usually carried out in the third quarter in the Swedish plant Billingsfors, will be replaced by shorter stops in the second and fourth quarter, due to changes in the shift form. The next maintenance shut down at the pulp production facility in Aspa in Sweden will be carried out in the fourth quarter of 2017. Capital expenditure: The cash flow effect of current capital expenditure for fixed assets in 2017 is expected to be approximately EUR 70 million. In addition, the cash flow impact of the strategic investments in the Arches mill and in Madisonville is expected to be approximately EUR 10 million and EUR 8 million respectively. Items affecting comparability Fair valuation of inventory adjustment imposed by merger accounting principles is expected to have a negative impact of approximately EUR 11 million and will be recognized in the April-June 2017 operating result. Long-term financial targets The company’s Board of Directors has set the following long-term financial targets: · EBITDA margin above 14% over a business cycle · Net gearing below 100% · A stable and annually increasing dividend, to be paid biannually Main markets Ahlstrom-Munksjö offers a broad range of fiber-based materials and products and has leading global positions in areas such as filtration, decor papers, release liners, and compostable food and beverage packaging. The company has four business areas that it reports separately: Decor, Filtration and Performance, Industrial Solutions and Specialties. Its main customer segments include the automotive, construction and home decoration, fast-moving consumer goods, energy, printing, medical, and diagnostics industries. In 2016, Ahlstrom-Munksjö derived about 60% of its total net sales from Europe, 24% from the Americas and 16% from the Asia-Pacific region. Know-how in fiber-based technology, an efficient manufacturing platform and ability to serve global customers locally form its competitive advantage. The company uses predominantly renewable fibers as raw materials, including hardwood and softwood pulp as well various specialty pulps, abaca and viscose, and wood. Other input materials include titanium dioxide, chemicals such as methanol, resins and latex. To a lesser extend synthetic fibers such as polyester and polypropylene are used. The company’s main energy sources include electricity from the grid, natural gas and heat from its sites. Business areas Ahlstrom-Munksjö has four business areas that best support the combined company’s strategy and which are consistent with how Ahlstrom-Munksjö evaluates its operational performance. We have presented below for each our business areas net sales, sold tons, comparable EBITDA and comparable EBITDA margin on a pro forma basis for 2015, 2016 and for each of the quarters in 2016 in addition to Q1/2017. Decor The Decor business area is one of the leading manufacturers in the market for paper-based surfacing for wood-based materials, such as laminate flooring, furniture and interiors. Decor develops high-tech and innovative papers for high and low pressure laminates, print base paper and pre-impregnated paper. Pro forma, MEUR FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Net sales 364.6 372.6 95.4 93.2 97.8 84.9 88.7 Sales volumes, 000s tons 182.8 183.4 48.6 46.0 49.0 43.1 44.7 Comparable EBITDA 53.7 42.6 11.3 13.7 17.6 11.0 11.4 Comparable EBITDA margin, % 14.7% 11.4% 11.8% 14.7% 18.0% 13.0% 12.9% Filtration and Performance The Filtration and Performance business area produces engine oil, fuel and air as well as industrial air filtration materials, glass fiber used in flooring applications and wind turbines, industrial nonwoven products for automotive, construction, textile and hygiene applications as well as wallcover materials. Pro forma, MEUR FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Net sales 617.2 595.3 169.0 151.9 159.2 156.5 149.5 Sales volumes, 000s tons 195.0 179.6 52.4 46.9 50.6 50.0 47.6 Comparable EBITDA 94.0 72.7 31.8 20.0 24.9 29.7 19.5 Comparable EBITDA margin, % 15.2% 12.2% 18.8% 13.2% 15.6% 19.0% 13.0% Industrial Solutions The Industrial Solutions business area produces release liners, abrasive backings, electrotechnical insulation papers, specialty pulp, thin papers, balancing foils as well as fine art and printing papers. Pro forma, MEUR FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Net sales 627.2 614.0 166.0 154.8 164.3 150.4 157.6 Sales volumes, 000s tons 604.2 585.6 156.0 153.0 157.9 146.1 147.3 Comparable EBITDA 93.1 68.8 28.4 19.0 23.5 21.9 28.7 Comparable EBITDA margin, % 14.8% 11.2% 17.1% 12.3% 14.3% 14.6% 18.2% Specialties The Specialties business area produces food and beverage packaging materials, laboratory and life science diagnostics as well as water filtration materials, tape products, and medical fabrics. In addition, it makes hot oil cooking and milk filtration materials, graphic papers for sticky notes and envelopes, metallized labels as well as printed and coated products. Pro forma, MEUR FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Net sales 577.7 584.4 145.9 147.3 149.5 141.2 139.8 Sales volumes, 000s tons 245.1 241.3 59.7 62.9 64.7 58.2 59.3 Comparable EBITDA 64.5 51.3 17.5 15.7 19.1 16.5 13.2 Comparable EBITDA margin, % 11.2% 8.8% 12.0% 10.7% 12.8% 11.7% 9.4% Selected pro forma financial information on business areas The following table summarizes the pro forma financial information for our business areas for all periods presented. In addition to the key performance measures presented on a quarterly basis, we have presented additional pro forma key information for our business areas below for capital expenditure and depreciation and amortization for annual periods 2015 and 2016. Net sales by FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 business area, MEUR Decor 364.6 372.6 95.4 93.2 97.8 84.9 88.7 Filtration 617.2 595.3 169.0 151.9 159.2 156.5 149.5 and Performance Industrial 627.2 614.0 166.0 154.8 164.3 150.4 157.6 Solutions Specialties 577.7 584.4 145.9 147.3 149.5 141.2 139.8 Other and -38.8 -41.6 -9.4 -11.3 -9.8 -9.4 -8.2 eliminations1 Total net 2,147.9 2,124.6 566.9 535.9 561.0 523.5 527.5 sales Sales volumes FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 by business area, 000s tons Decor 182.8 183.4 48.6 46.0 49.0 43.1 44.7 Filtration 195.0 179.6 52.4 46.9 50.6 50.0 47.6 and Performance Industrial 604.2 585.6 156.0 153.0 157.9 146.1 147.3 Solutions Specialties 245.1 241.3 59.7 62.9 64.7 58.2 59.3 Other and -19.1 -19.5 -4.8 -5.4 -5.2 -4.2 -4.3 eliminations1 Total sales 1,208.0 1,170.4 312.1 303.3 316.9 293.2 294.6 volumes Comparable FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 EBITDA by business area, MEUR Decor 53.7 42.6 11.3 13.7 17.6 11.0 11.4 Filtration 94.0 72.7 31.8 20.0 24.9 29.7 19.5 and Performance Industrial 93.1 68.8 28.4 19.0 23.5 21.9 28.7 Solutions Specialties 64.5 51.3 17.5 15.7 19.1 16.5 13.2 Other and -36.6 -32.4 -9.5 -8.5 -7.8 -8.9 -11.4 eliminations1 Total 268.7 203.0 79.4 59.9 77.3 70.2 61.3 comparable EBITDA Comparable FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 EBITDA margin by business area, % Decor 14.7% 11.4% 11.8% 14.7% 18.0% 13.0% 12.9% Filtration 15.2% 12.2% 18.8% 13.2% 15.6% 19.0% 13.0% and Performance Industrial 14.8% 11.2% 17.1% 12.3% 14.3% 14.6% 18.2% Solutions Specialties 11.2% 8.8% 12.0% 10.7% 12.8% 11.7% 9.4% Other and N/A N/A N/A N/A N/A N/A N/A eliminations1 Total 12.5% 9.6% 14.0% 11.2% 13.8% 13.4% 11.6% comparable EBITDA margin, % Depreciation and amortization, MEUR FY2016 FY2015 Decor 7.4 8.0 Filtration and Performance 48.1 50.3 Industrial Solutions 37.7 37.9 Specialties 37.7 48.8 Other and eliminations1 4.3 4.5 Total depreciation and amortization 135.2 149.5 Capital expenditure, MEUR FY2016 FY2015 Decor 5.3 11.6 Filtration and Performance 19.4 14.8 Industrial Solutions 21.9 23.5 Specialties 16.2 11.6 Other and eliminations1 14.8 4.4 Total capital expenditure 77.7 65.9 1 Other comprise in addition to eliminations of unallocated head office costs for the following functions: CEO, Group Finance, Treasury, Investor Relations, Strategy, Legal, Communications, Group IT and HR. The head office costs comprise mainly of salaries, rents and professional fees. Financial strength Ahlstrom-Munksjö has a strong balance sheet and cash generation abilities to support strategic growth. As a result of the merger, Ahlstrom-Munksjö’s total assets on a pro forma basis amount to EUR 2,527.9 million as at March 31, 2017. Non-current assets of EUR 1,751.3 million consist mainly of tangible assets of EUR 882.3 million, goodwill of EUR 442.4 million and other intangible assets of EUR 332.9 million. The most material fair value adjustments to non-current assets resulting from purchase accounting adjustments consists of a fair value adjustment of EUR 138.5 million to Ahlstrom’s property plant and equipment, additional intangible assets amounting to EUR 279.7 million including Ahlstrom trademark, customer relationships and technology and the goodwill arising from the merger, totaling to EUR 216.2 million. Total equity amounts to EUR 1,062.6 million on the pro forma combined balance sheet as at March 31, 2017, representing an increase mainly from Munksjö stand -alone equity by EUR 632.6 million resulting from the issuance of new Ahlstrom -Munksjö shares as merger consideration for Ahlstrom’s shareholders. Ahlstrom-Munksjö’s interest bearing pro forma net debt was EUR 432.4 million and pro forma gearing stood at 40.7% as of March 31, 2017. A new financing was arranged for Ahlstrom-Munksjö following the merger. It includes multicurrency term facilities and a revolving credit facility as well as a bridge facility. The effective date for the amendments to the terms and conditions of the EUR 100 million senior unsecured callable fixed rate notes due 2019, originally issued by Ahlstrom and transferred to Ahlstrom-Munksjö in the merger, occurred on April 1, 2017. In addition, Ahlstrom-Munksjö redeemed the EUR 100 million (nominal amount) hybrid bond, originally issued by Ahlstrom, on May 3, 2017 as the merger also constituted a corporate restructuring event as defined under the terms and conditions. The measures are expected to lower the financial costs of Ahlstrom-Munksjö. Pro forma key balance sheet figures MEUR 31.3.2017 Cash and cash equivalents 200.6 Net debt 432.4 Gearing ratio, % 40.7 % Equity 1,062.6 Pro forma cash generated from operating activities, MEUR To illustrate Ahlstrom-Munksjö’s ability to generate operating cash flows, cash flow information for cash generated from operating activities is presented below on a pro forma basis. The historical cash flows for Munksjö and Ahlstrom have been adjusted for the pro forma cash impact for the transaction costs, purchase price allocation adjustments, cash flows relating to the sale of Osnabrück, the AM Real Estate S.r.l. and for the impact from the new financing agreements. See more detail for the basis for presentation in the appendix included in this release as an attachment. MEUR FY2016 FY2015 Q1/17 Q1/16 Q2/16 Q3/16 Q4/16 Cash generated from 232.1 124.7 42.9 -4.6 89.1 72.0 75.6 operating activities Pro forma comparable EBITDA and comparable operating result excluding PPA Ahlstrom-Munksjö presents comparable EBITDA and comparable operating result and comparable operating result excluding PPA in addition to EBITDA and operating result to reflect the underlying business performance and to enhance comparability from period to period. Comparable performance measures exclude items affecting comparability being material items outside ordinary course of business such as gains and losses on asset and business disposals, direct transaction costs related to business acquisitions, costs for closure of business operations and restructurings, one-off items arising from purchase price allocation such as inventory fair value adjustments and compensation related to environmental damages arising from unexpected or rare events. Other items include fines (such as VAT tax audit fines) or other similar stipulated payments. Ahlstrom-Munksjö believes that EBITDA, comparable EBITDA, comparable operating result excluding PPA and comparable operating result measures provide meaningful supplemental information to the financial measures presented in the consolidated income statement prepared in accordance with IFRS to Ahlstrom -Munksjö’s management and the readers of its financial statements by excluding items outside ordinary course of business which reduce comparability from period to period. EBITDA, comparable EBITDA and comparable operating result are not accounting measures defined or specified in IFRS in accordance with the “Alternative Performance Measures” guidance issued by the European Securities and Markets Authority (“ESMA”) and are, therefore, considered non-IFRS financial measures, which should not be viewed in isolation or as a substitute to the IFRS financial measures. Companies do not calculate alternative performance measures in a uniform way and, therefore, the alternative performance measures presented in this release may not be comparable with similarly named measures presented by other companies. Pro forma earnings per share Pro forma basic earnings per share is calculated by dividing the pro forma net result attributable to equity holders of the parent by the pro forma weighted average number of shares outstanding as adjusted for the merger. Pro forma diluted earnings per share is calculated by adding the historical dilution effect to the calculated pro forma weighted average number of shares. The merger is assumed to have no dilution effect for pro forma purposes as Ahlstrom-Munksjö did not have any dilutive instruments outstanding at the merger date. To enhance comparability, Ahlstrom-Munksjö is also presenting pro forma earnings per share excluding merger related items that will not have a continuing impact on the combined company’s results. These pro forma adjustments that have been eliminated for the purpose of calculating pro forma earnings per share excluding merger related items were fair value adjustment on inventories, gain on sale of Osnabrück and transaction costs and the related tax impact. For pro forma purposes, these merger related items are included in the 2016 pro forma income statement and the Q1/2016 pro forma income statement. APPENDIX: UNAUDITED PRO FORMA FINANCIAL INFORMATION ---------------------------------------------------------------------- [1] (http://connect.ne.cision.com#_ftnref1) Adjusted for items affecting comparability For further information, please contact: Juho Erkheikki, Investor & Media Relations Manager, tel. +358 50 413 45 83, juho.erkheikki@ahlstrom-munksjo.com Ahlstrom-Munksjö in brief Ahlstrom-Munksjö is a global leader in fiber-based materials, supplying innovative and sustainable solutions to customers worldwide. Our offerings include decor paper, filter media, release liners, abrasive backings, nonwovens, electrotechnical paper, glass fiber materials, food packaging and labeling, tape, medical fiber materials and solutions for diagnostics. Combined annual net sales are about EUR 2.15 billion and we employ 6,000 people. The Ahlstrom -Munksjö share is listed on the Nasdaq Helsinki and Stockholm. The company was formed on April 1, 2017 through the merger of Ahlstrom Corporation and Munksjö Oyj. Read more at www.ahlstrom-munksjo.com.
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