Ahlstrom - Interim report (Q1 and Q3)

Ahlstrom interim report January-June 2013: Net sales and profitability improved slightly

Ahlstrom Corporation STOCK EXCHANGE RELEASE August 7, 2013 at 09.00 a.m.

This is a summary of Ahlstrom's January-June 2013 interim report. The complete
January-June 2013 interim report with tables is attached to this release and
available at www.ahlstrom.com

Continuing operations April-June 2013 compared with April-June 2012

  * Net sales EUR 265.0 million (EUR 261.6 million).
  * Operating profit EUR 6.4 million (EUR 4.0 million).
  * Operating profit excluding non-recurring items EUR 7.9 million (EUR 7.4
    million).
  * Operating margin excluding non-recurring items 3.0% (2.8%).
  * Profit / loss before taxes EUR -3.5 million (EUR -3.3 million).
  * Earnings per share EUR -0.12 (EUR -0.11).

April-June 2013 in brief

  * Net sales and profitability improved from the comparison period.
  * Ahlstrom completed the first phase of the combination of its Label and
    Processing business in Europe with Munksjö AB. The combination created a new
    global leader in high-quality specialty papers listed on the NASDAQ OMX
    Helsinki stock exchange. The second phase, Coated Specialties in Brazil, is
    expected to be completed in the second half of 2013.
  * The company continued to launch new products including Ahlstrom
    Captimax(TM), a new best-in-class fuel filter material for passenger and
    commercial heavy-duty vehicles and off-road machinery.

Continuing operations January-June 2013 compared with January-June 2012

  * Net sales EUR 520.3 million (EUR 521.9 million).
  * Operating profit EUR 14.7 million (EUR 14.6 million).
  * Operating profit excluding non-recurring items EUR 14.4 million (EUR 17.9
    million).
  * Operating margin excluding non-recurring items 2.8% (3.4%).
  * Profit before taxes EUR 0.1 million (EUR 2.1 million).
  * Earnings per share EUR -0.09 (EUR -0.06).

Outlook for 2013

  * The outlook published on January 31, 2013 remains unchanged. Net sales from
    continuing operations are expected to be EUR 980-1,140 million. The
    operating profit margin excluding non-recurring items from continuing
    operations is expected to be 2-5% of net sales.

Jan Lång, President & CEO

- Our sales and operating profit excluding non-recurring items improved slightly
from the comparison period, but our performance did not yet meet the targets we
have set, despite the significant efforts we have taken to restructure our
product portfolio and renew our way of working. To enhance our competitiveness,
we have today announced a rightsizing program, which aims at reducing our annual
cost base by EUR 35 million in the next 18 months.  We need to adjust our cost
base to reflect the size and scope of our business now that the Label and
Processing demerger in Europe has been completed. This will unfortunately impact
the employment of about 350 people globally.

- Advanced Filtration continued to perform well in the second quarter. The
integration of Munktell, which we acquired last October, is also progressing
well. Transportation Filtration performed steadily, but there was surprising
volatility in North American demand despite the continued recovery of the U.S.
economy. The organizational adjustments to deliver more efficient execution and
improve performance in Food and Medical have also been completed.

- We can also improve profitability by strengthening our product pipeline and
bringing new differentiated products to the market more quickly. We have already
good examples from the new launches this year, which include Ahlstrom Captimax
(TM) announced in the second quarter.

Key figures from continuing operations

 EUR million          Q2/2013 Q2/2012 Change, % Q1-Q2/2013 Q1-Q2/2012 Change, %
-------------------------------------------------------------------------------
 Net sales              265.0   261.6       1.3      520.3      521.9      -0.3

 Operating profit         6.4     4.0      58.6       14.7       14.6       0.8

    % of net sales        2.4     1.5                  2.8        2.8

 Operating profit
 excl. NRI                7.9     7.4       6.3       14.4       17.9     -19.9

    % of net sales        3.0     2.8                  2.8        3.4

 Profit / Loss before
 taxes                   -3.5    -3.3      -7.3        0.1        2.1     -97.3

 Profit / Loss for
 the period              -4.9    -3.8     -30.6       -3.0       -0.2

 Earnings per share     -0.12   -0.11                -0.09      -0.06

 Return on capital
 employed, %              1.0     1.5                  3.2        3.8

 Net cash flow from
 operative
 activities*             35.5    27.5      29.2       14.1       42.0     -66.6

 Capital expenditure     20.7    19.5       6.3       32.2       31.5       2.2

 Number of personnel,
 at the end of period   3,781   3,869      -2.3      3,781      3,869      -2.3
-------------------------------------------------------------------------------
*Including discontinued operations

Operating environment

The operating environment remained unchanged during the second quarter as the
overall demand in Ahlstrom's main markets continued to be soft with regional
variations. Geographically, demand in Europe remained weak, particularly in the
southern part of the continent. The North American market showed some positive
signs, while growth was fastest in Asia.

In the Advanced Filtration business area, the markets for gas turbine,
laboratory and life science filtration, and water applications continued to
strengthen, particularly in North America and Asia.

In the Building and Energy business area, demand for wind energy applications
weakened. Demand for flooring materials in Europe, and Russia in particular,
stayed at a healthy level during the review period. Demand for wallpaper and
wallcovering materials in Europe and China remained stable.

In the Food and Medical business area, the markets for tape, food packaging and
beverage materials (e.g. teabags) strengthened in North America, while remaining
soft in Europe and Asia during the review period. Demand for medical materials
weakened.

In the Transportation Filtration business area, the market for transportation
filtration materials was volatile during the second quarter, especially for
heavy duty vehicles in North America. Demand for transportation filtration
materials in Europe was stable despite the sluggish macroeconomic development in
the region. Demand in Asia continued to grow.

Market pulp prices stabilized in the second quarter, but prices were still
higher than in the comparison period. The prices of synthetic fibers such as
polyester and viscose were stable or in decline, whereas polypropylene prices
rose. The prices of chemicals in general were either stable or in decline, while
the prices of liquid solvents like phenolic resins increased. In its production,
Ahlstrom uses chemicals such as latex, titanium dioxide, liquid solvents and
starch. Natural gas prices increased in Europe and remained stable in North
America.

Discontinued operations

Combination of the Label and Processing business and Munksjö AB

On May 24, 2013, Ahlstrom completed the first phase (LP Europe demerger) of the
combination of its Label and Processing business in Europe and Munksjö AB. The
combination created a new global leader in high-quality specialty papers.

The second phase of the transaction, the demerger of Coated Specialties in
Brazil, is expected to be completed during the second half of this year. On July
4, 2013, Ahlstrom's Extraordinary General Meeting approved the demerger of
Coated Specialties.

The Label and Processing business in Europe was reported as discontinued
operations until May 27, 2013. Coated Specialties in Brazil continues to be
reported as part of the discontinued operations until the transaction has been
completed for that part.

Ahlstrom has started the process of divesting its abrasive backings and pre-
impregnated décor paper businesses in Osnabrück, Germany, to a third party as a
consequence of the commitments provided to the European Commission. These two
businesses are also reported as part of the discontinued operations. The
divestment is expected to be finalized by the end of 2013.

Result from discontinued operations

In April-June 2013, the profit from discontinued operations for the period was
EUR 66.7 million (EUR 3.1 million) including approximately a EUR 90.6 million
demerger effect, which include a recognition of distribution liability to fair
value and a write down related to the fair valuation of Munksjö Oyj shares. The
April-June figure also includes a net of tax EUR 30.9 million impairment loss
recognized on the re-measurement to fair value and costs to sell, mainly related
to the demerger effect of Coated Specialties in Brazil, which is expected to
take place during the second half of 2013.

The operative result for the European operation of the Label and Processing
business has been included until May 27, 2013. The operative results from Coated
Specialties and the Brazilian operation of the former Home and Personal business
area were included throughout the review period. The two production lines at
Osnabrück to be divested to a third party were also reported as discontinued
operations. All operative figures exclude depreciation.

In January-June 2013, the profit from discontinued operations for the period was
EUR 72.7 million (EUR 7.7 million).

Result including discontinued operations

In April-June 2013, the profit for the period including discontinued operations
was EUR 61.8 million (EUR 0.6 million loss). Earnings per share with the effect
of interest on the hybrid bond were EUR 1.31 (EUR 0.04 loss).

Return on equity (ROE) was 60.0% (-0.5%).

In January-June 2013, the profit for the period including discontinued
operations was EUR 69.7 million (EUR 7.4 million). Earnings per share with the
effect of interest on the hybrid bond were EUR 1.47 (EUR 0.11).

Return on equity (ROE) was 33.3% (2.7%).

The figures above include the demerger effects explained in the previous
section.

Events after the review period

Rightsizing program

Following the closing of the Label and Processing demerger, Ahlstrom initiates a
rightsizing program, announced earlier today, to reflect the new size and scope
of the company. The aim is to make the company's cost base leaner while
maintaining sufficient resources globally. The company's target is to achieve
EUR 35 million in cost savings by the end of 2014. The figure includes the
previously announced EUR 15 million cost reductions, of which approximately EUR
10 million will be derived from costs that will be transferred to Munksjö Oyj.
 As of June 30, 2013, approximately EUR 1.4 million in cost savings was achieved
and only minor restructuring costs were booked.

The cost savings will be derived from rightsizing the activities and the common
cost base of the functions worldwide. Ahlstrom will book non-recurring costs of
approximately EUR 15 million in 2013-2014 from the program, which is estimated
to affect 350 people globally.

Outlook

The outlook published on January 31, 2013 remains unchanged. Net sales from
continuing operations are expected to be EUR 980-1,140 million in 2013. The
operating profit margin excluding non-recurring items from continuing operations
is expected to be 2-5% of net sales.

In 2013, investments excluding acquisitions from continuing operations are
estimated to be approximately EUR 75 million (EUR 74.1 million in 2012). The
estimate includes investments that were already announced in 2011 and 2012, such
as the wallcovering materials line Binzhou, China, and the additional capacity
in filtration materials in Turin, Italy.

Short-term risks

The global economic outlook remains uncertain with limited visibility. The
European economy may face a prolonged slowdown as proposed cuts in public
spending and tax increases coupled with record-high levels of unemployment
reduce disposable incomes. Recent indicators for the U.S. economy are more
positive, yet they continue to be mixed. In Asia, particularly the Chinese
economy may grow at a slower pace than earlier anticipated.

Slower economic growth, or even a temporary contraction, poses risks to
Ahlstrom's financial performance. It may lead to lower sales volumes and force
Ahlstrom to initiate more market-related shutdowns at plants, which could affect
profitability. The uncertainty related to global economic growth, increased
volatility in our main markets and limited visibility are making it more
difficult to forecast future developments.

In recent years, Ahlstrom has initiated investment projects, especially in
China, that are in a start-up phase, or will be in the near future. The
company's financial performance may be negatively affected by the
commercialization of the new production lines.

Ahlstrom's main raw materials are natural fibers, mainly pulp, synthetic fibers,
and chemicals. The prices of some of the key raw materials used by Ahlstrom
remain at a high level and are volatile.

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 at www.ahlstrom.com and in the report by the Board
of Directors in the company's Annual Report 2012. The risk management process is
also described in the Corporate Governance Statement, also available on the
company's website.

*   *   *

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.

Disclosure procedure
Ahlstrom follows the disclosure procedure enabled by the Finnish Financial
Supervision Authority and hereby publishes its interim report enclosed to this
stock exchange release. The company's interim report January-June 2013 is
attached to this release in pdf format and is also available on the company's
web site at www.ahlstrom.com.

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 2013 interim report at a Finnish-language press and analyst
conference in Helsinki today,  August 7, 2013, at 10:00 a.m. (CET+1). The
conference will take place at Ahlstrom's head office at Alvar Aallon katu 3 C.

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
7, 2013, at 2:30 p.m. (CET+1). To participate in the conference call, please
call (09) 2310 1620 in Finland or +44 (0)20 3427 1907 outside Finland a few
minutes before the conference begins. The access code is 5023517.

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 7, 2013, after the Interim
Report is published, at www.ahlstrom.com > Investors > Reports and presentations> 2013. Material in Finnish will be available at www.ahlstrom.fi > Sijoittajat >
Katsaukset ja presentaatiot > 2013.

Financial information in 2013

+--------------------------------+--------------------+-------------+
|Report                          |Date of publication |Silent period|
+--------------------------------+--------------------+-------------+
|Interim report January-September|Thursday, October 24|October 1-24 |
+--------------------------------+--------------------+-------------+
During the silent period, Ahlstrom will not communicate with capital market
representatives.

Ahlstrom in brief

Ahlstrom is a high performance fiber-based 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, medical gowns
and drapes, diagnostics, wallcoverings, flooring and food packaging. We have a
leading market position in the businesses in which we operate. In 2012,
Ahlstrom's net sales from continuing operations (excluding Label and Processing
business) amounted to EUR 1 billion. Our 3,800 employees serve customers in 28
countries on six continents. Ahlstrom's share is quoted on the NASDAQ OMX
Helsinki. More information available at www.ahlstrom.com.





[HUG#1721593]

Attachments:

January-June 2013 Interim report.pdf