2017-01-27 07:30:37 CET
2017-01-27 07:30:37 CET
REGULATED INFORMATION
Ahlstrom - Financial Statement Release
Ahlstrom Financial Statements Release 2016: Record high profitability in 2016 with accelerated sales growth in the last quarter of the year
Ahlstrom Corporation FINANCIAL STATEMENTS RELEASE January 27, 2017 at 08:30 EET
This is a summary of the Financial Statements Release 2016. The complete report
with tables is attached to this release and available at www.ahlstrom.com
Ahlstrom Financial Statements Release 2016
Record high profitability in 2016 with accelerated sales growth in the last
quarter of the year
October-December 2016 compared with October-December 2015
* Net sales EUR 266.1 million (EUR 255.0 million).At constant currency rates,
growth was 4.9%.
* Adjusted EBITDA EUR 26.4 million (EUR 21.6 million), representing 9.9%
(8.5%) of net sales
* Operating profit EUR 8.0 million (EUR 16.4 million loss)
* Adjusted operating profit EUR 14.4 million (EUR 7.6 million), representing
5.4% (3.0%) of net sales
* Profit before taxes EUR 4.8 million (EUR 20.5 million loss)
* Earnings per share EUR 0.00 (EUR -0.46)
* Net cash flow from operating activities EUR 26.9 million (EUR 23.3 million)
January-December 2016 compared with January-December 2015
* Net sales EUR 1,085.9 million (EUR 1,074.7 million).At constant currency
rates, growth was 2.6%.
* Adjusted EBITDA EUR 130.9 million (EUR 104.8 million), representing 12.1%
(9.7%) of net sales
* Operating profit EUR 70.8 million (EUR 21.9 million)
* Adjusted operating profit EUR 80.6 million (EUR 47.5 million), representing
7.4% (4.4%) of net sales
* Profit before taxes EUR 56.3 million (EUR 22.6 million. The comparison
figure includes a capital gain of EUR 20.3 million from share sales.)
* Earnings per share EUR 0.61 (EUR 0.06)
* Net cash flow from operating activities EUR 125.8 million (EUR 60.0 million)
Major events
* Ahlstrom announced a plan to merge with Munksjö Oyj to create a leader in
sustainable and innovative-fiber solutions. In conjunction, Sakari Ahdekivi
was appointed interim President & CEO of Ahlstrom. He replaced Marco Levi,
who left the company in November as a consequence of the merger
announcement.
* The Extraordinary General Meetings of Ahlstrom and Munksjö approved the
merger on January 11, 2017. The transaction is expected to be completed at
the beginning of the second quarter of 2017.
* The EGM of Ahlstrom also authorized the Board of Directors to distribute an
extraordinary dividend of EUR 0.49 per share in lieu of an annual payout
Sakari Ahdekivi, interim President & CEO
"In 2016, we achieved an all-time high profitability in the current structure of
the company and our balance sheet is much stronger than before. During the
latter part of the year we also demonstrated our ability to grow, something we
have lacked in the past few years, and achieved remarkable growth in net sales
of close to 5% at constant currency rates in the last quarter of the year. In
addition to higher sales, we also benefited from improved operational efficiency
and lower variable costs. Our business units made good progress and the majority
improved their sales and operating profits throughout the year.
We have executed on our strategy at an accelerated pace. Our margins have
clearly increased thanks to improved commercial excellence, a leaner operating
model, higher capacity utilization and our ability to capture new growth
opportunities. As a result, we came close to achieving our 2018 profitability
target of above 8% adjusted operating profit margin already in 2016.
The planned merger with Munksjö Oyj is a major strategic milestone in the recent
history of Ahlstrom. This combination will create a leader in innovative and
sustainable fiber-based solutions. The deal will create substantial value to our
stakeholders by offering further opportunities for growth and improved
operational efficiency. A strong balance sheet and cash generation will support
growth of the combined company. The focus will now be on completing the merger
and the subsequent integration of the two companies."
Outlook
Ahlstrom does not provide an outlook for the year 2017 due to the planned merger
with Munksjö, which is expected to be completed at the beginning of the second
quarter of 2017.
Key figures
EUR million Q4/2016 Q4/2015 Change, % 2016 2015 Change, %
--------------------------------------------------------------------------------
Net sales 266.1 255.0 4.4 1 085.9 1 074.7 1.0
EBITDA 20.0 14.8 34.6 121.1 96.4 25.6
% of net sales 7.5 5.8 11.2 9.0
Adjustment items included in
EBITDA -6.4 -6.7 -9.8 -8.3
Adjusted EBITDA 26.4 21.6 22.3 130.9 104.8 25.0
% of net sales 9.9 8.5 12.1 9.7
Operating profit 8.0 -16.4 70.8 21.9 223.8
% of net sales 3.0 -6.4 6.5 2.0
Adjustment items included in
operating profit -6.4 -23.9 -9.8 -25.6
Adjusted operating profit 14.4 7.6 90.3 80.6 47.5 69.8
% of net sales 5.4 3.0 7.4 4.4
Profit before taxes 4.8 -20.5 56.3 22.6 148.4
Profit for the period 1.4 -20.2 34.9 8.6
Earnings per share -0.00 -0.46 0.61 0.06
Return on capital employed,
% 6.5 -11.4 13.6 3.9
Net cash flow from operative
activities 26.9 23.3 15.6 125.8 60.0 109.8
Capital expenditure 20.0 13.7 46.1 37.9 27.3 39.0
Interest-bearing net
liabilities 140.8 195.9 -28.1 140.8 195.9 -28.1
Gearing ratio, % 44.6 65.4 44.6 65.4
Equity ratio, % 38.2 35.8 38.2 35.8
Number of personnel, at the
end of the period 3,233 3,311 -2.4 3,233 3,311 -2.4
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Ahlstrom has adopted the European Securities and Markets Authority (ESMA)
guidelines on Alternative Performance Measures, which became effective on July
3, 2016. The company uses alternative performance measures to reflect the
underlying business performance and to improve comparability. These alternative
performance measures should, however, not be considered as a substitute for
measures of performance in accordance with IFRS.
Ahlstrom has used revised terminology since the beginning of 2016. In
accordance, the previously used term "Operating profit excluding non-recurring
items" has been replaced by "Adjusted operating profit" and the term "EBITDA
excluding non-recurring items" by "Adjusted EBITDA".
Adjusted items affecting comparability and alternative performance measures used
by Ahlstrom are defined:
Adjustment items: restructuring costs, impairment charges, capital gains or
losses
EBITDA = Operating profit + depreciation and amortizations + impairments
Adjusted EBITDA = EBITDA - Adjustment items
Adjusted operating profit = Operating profit - Adjustment items
Ahlstrom and Munksjö to combine
On November 7, 2016, Ahlstrom Corporation and Munksjö Oyj announced a plan merge
the two companies. The combination will create a global leader in sustainable
and innovative fiber-based solutions. The combination is expected to create
significant value for the stakeholders in the combined company through stronger
global growth opportunities and improved operational efficiency. The combined
company's growth ambitions will be supported by a strong balance sheet and
strong cash flow generation.
* Ahlstrom and Munksjö will merge through an absorption merger whereby
Ahlstrom's shareholders will receive Munksjö shares as merger consideration
* Ahlstrom's shareholders will receive 0.9738 new shares in Munksjö for each
share held in Ahlstrom as merger consideration, corresponding to an
ownership in the combined company of approximately 47.2% for current
Ahlstrom shareholders and approximately 52.8% for current Munksjö
shareholders
* In connection with the merger Ahlstrom proposes to distribute funds in the
total amount of approximately EUR 23 million, corresponding to EUR 0.49 per
share before the combination is completed in lieu of the company's ordinary
annual distribution
* The Extraordinary General Meetings of both companies have approved the
merger, which is expected to be completed at the beginning of the second
quarter of 2017
Unaudited pro forma financials of the combined company and certain other
information, such as composition of the management team can be found in the
merger prospectus, published on December 16, 2016.
Short-term risks
The global economic outlook varies based on region. Growth in the U.S. is
expected to be the highest among developed economies, while that in Europe is
expected to continue growing at a moderate pace. Britain's decision to leave the
European Union as well as swings in political tendencies across several nations
has increased uncertainty. China's expected shift in its economic structure
towards more consumer consumption and less investment has caused some concerns,
but it can also provide opportunities.
Slower-than-anticipated economic growth poses risks for Ahlstrom's financial
performance. It may lead to lower sales volumes and force the company to
initiate market-related shutdowns at plants, which could affect profitability.
Tougher competition through competitors' increased production capacity,
aggressive pricing as well as the adoption of new technologies may also affect
profitability. Shifts in the pattern of demand for the company's products may
strain the flexibility of its asset base and leave some assets underutilized,
while others may become over-loaded.
Swings in currency exchange rates may lead to fluctuations in net sales and
profitability. Ahlstrom's main raw materials are wood pulp, synthetic fibers,
and chemicals. The prices of these key raw materials are volatile, and any
increases may affect the company's profitability depending on its ability to
mitigate the risk.
In some of the Group companies, income tax returns are under examination in tax
audits or have been already disputed by the tax authorities. The main items
under discussion or already disputed relate to transfer pricing and
restructuring issues. Based on an evaluation of the current state of these
processes, no significant tax provisions have been booked.
Ahlstrom and Munksjö have announced a plan to merge in 2017. The process may
cause loss of business focus at Ahlstrom and the loss of skilled personnel and
know-how.
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 for 2015. 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 publishes its Financial Statements Release 2016 enclosed to this stock
exchange release. The report is attached to this release in pdf format and is
also available on the company's web site at www.ahlstrom.com.
Additional information
Sakari Ahdekivi, interim President & CEO, tel. +358 (0)10 888 4768
Juho Erkheikki, Investor Relations & Financial Communications Manager, tel.
+358 (0)10 888 4731
Ahlstrom's interim President & CEO Sakari Ahdekivi will present the report at an
analyst and press conference in Helsinki on Friday, January 27 at 11:00 a.m.
Finnish time. The event will take place at Ahlstrom's head office, Alvar Aallon
katu 3 C, second floor, meeting room Antti.
The combined webcast and teleconference will be held in English and can be
viewed at the following address:
http://qsb.webcast.fi/a/ahlstrom/ahlstrom_2017_0127_q4
Conference call details:
In Finland +358 (0)9 7479 0404
In Sweden +46 (0)8 5065 3942
In the U.K. +44 (0)330 336 9411
To participate via telephone, please dial in a few minutes before the conference
begins. A list of phone numbers for other countries is available at
www.ahlstrom.com/Investors. The confirmation code is 9071340.
An on-demand webcast of the conference will be available on Ahlstrom's website
for twelve months after the call.
The presentation material will be available at
www.ahlstrom.com/en/Investors/Reports-and-presentations/2016/ after the report
has been published.
Ahlstrom in brief
Ahlstrom provides innovative fiber-based materials with a function in everyday
life. We are committed to growing and creating stakeholder value by proving the
best performing sustainable fiber-based materials. Our products are used in
everyday applications such as filters, medical fabrics, life science and
diagnostics, wallcoverings, tapes, and food and beverage packaging. In 2016,
Ahlstrom's net sales amounted to EUR 1.1 billion. Our 3,200 employees serve
customers in 22 countries. Ahlstrom's share is quoted on the Nasdaq Helsinki.
More information is available at www.ahlstrom.com.
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