2016-10-28 07:03:38 CEST
2016-10-28 07:03:38 CEST
REGLERAD INFORMATION
Ahlstrom - Interim report (Q1 and Q3)
Ahlstrom January-September 2016 interim report: All-time high quarterly operating profit combined with solid sales growth
Ahlstrom Corporation STOCK EXCHANGE RELEASE October 28, 2016 at 08:00
This is a summary of the January-September 2016 interim report. The complete
report with tables is attached to this release and available at www.ahlstrom.com
Ahlstrom January-September 2016 interim report
All-time high quarterly operating profit combined with solid sales growth
July-September 2016 compared with July-September 2015
* Net sales EUR 273.2 million (EUR 266.9 million).At constant currency rates,
growth was 3.7%.
* Adjusted EBITDA EUR 39.5 million (EUR 25.5 million), representing 14.4%
(9.5%) of net sales
* Operating profit EUR 28.9 million (EUR 9.9 million)
* Adjusted operating profit EUR 26.7 million (EUR 11.2 million), representing
9.8% (4.2%) of net sales, and the 12th consecutive quarter of year-on-year
improvement
* Profit before taxes EUR 25.1 million (EUR 8.5 million. The comparison figure
includes a capital gain of EUR 3.2 million from share sales.)
* Earnings per share EUR 0.35 (EUR 0.06)
* Net cash flow from operating activities EUR 35.6 million (EUR 24.2 million)
January-September 2016 compared with January-September 2015
* Net sales EUR 819.8 million (EUR 819.8 million).At constant currency rates,
growth was 1.9%.
* Adjusted EBITDA EUR 104.5 million (EUR 83.2 million), representing 12.8%
(10.1%) of net sales
* Operating profit EUR 62.9 million (EUR 38.2 million)
* Adjusted operating profit EUR 66.2 million (EUR 39.9 million), representing
8.1% (4.9%) of net sales
* Profit before taxes EUR 51.4 million (EUR 43.2 million. The comparison
figure includes a capital gain of EUR 20.3 million from share sales.)
* Earnings per share EUR 0.61 (EUR 0.52)
* Net cash flow from operating activities EUR 98.9 million (EUR 36.7 million)
Marco Levi, President & CEO
"July-September 2016 was an excellent quarter for us, with very strong
performance from our organization. We achieved 3.7% sales growth at constant
currency rates and profitability reached yet another record in the current
structure of the company. This was also the 12(th) consecutive improvement in
quarterly operating profit. Our hard work towards enhancing operational
efficiency and achieving a more competitive cost structure is clearly paying off
and we continued to benefit from lower variable costs during the quarter.
I am pleased that we have been able to grow our net sales for the past two
quarters on a comparable basis. This is particularly true for glassfiber,
wallcover, filtration, and tape products, as well as single-serve coffee
materials, where we achieved a breakthrough in the North American market during
the reporting period. All of our business units reported higher operating
profits and most of them increased net sales. We have also announced a EUR 23
million investment into our engine and industrial filtration portfolio to show
our commitment to growth and the further development of the company.
We will continue to execute our strategic agenda at full speed. The benefits are
clearly visible when looking at higher margins through commercial excellence,
our lean operating model, the increased capacity utilization at our recent
investments and capitalizing on new growth opportunities. As a result, we have
further accelerated our progress towards reaching our financial target of above
8% adjusted operating margin by 2018. Also, we are already well below our
gearing target thanks to the very strong cash flow generation this year."
Outlook for 2016
Ahlstrom reiterates the outlook published on September 13, 2016. The company
expects net sales in 2016 to be in the range of EUR 1,060-1,100 million. The
adjusted operating profit is expected to be 6.5%-7.5% of net sales.
The adjusted operating profit excludes restructuring costs, impairment charges
and capital gains or losses.
Key figures
EUR million Q3/2016 Q3/2015 Change, % Q1-Q3/2016 Q1-Q3/2015 Change, %
--------------------------------------------------------------------------------
Net sales 273.2 266.9 2.4 819.8 819.8 0.0
EBITDA 41.6 24.2 71.9 101.2 81.6 24.0
% of net sales 15.2 9.1 12.3 10.0
Adjustment items
included in EBITDA 2.2 -1.2 -3.4 -1.6
Adjusted EBITDA 39.5 25.5 55.0 104.5 83.2 25.6
% of net sales 14.4 9.5 12.8 10.1
Operating profit 28.9 9.9 192.8 62.9 38.2 64.4
% of net sales 10.6 3.7 7.7 4.7
Adjustment items
included in operating
profit 2.2 -1.3 -3.4 -1.7
Adjusted operating
profit 26.7 11.2 139.3 66.2 39.9 65.9
% of net sales 9.8 4.2 8.1 4.9
Profit before taxes 25.1 8.5 194.0 51.4 43.2 19.2
Profit for the period 17.9 4.1 33.5 28.8 16.3
Earnings per share 0.35 0.06 0.61 0.52
Return on capital
employed, % 23.4 6.7 16.3 8.6
Net cash flow from
operative activities 35.6 24.2 47.0 98.9 36.7 169.5
Capital expenditure 6.0 5.5 9.0 18.0 13.6 31.8
Interest-bearing net
liabilities 130.5 203.7 -36.0 130.5 203.7 -36.0
Gearing ratio, % 42.4 64.2 42.4 64.2
Equity ratio, % 38.1 34.8 38.1 34.8
Number of personnel,
at the end of the
period 3,277 3,367 -2.7 3,277 3,367 -2.7
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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 terms "Operating profit excluding non-recurring
items" has been replaced by "Adjusted operating profit" and "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
Redefined strategy and long-term financial targets
Ahlstrom's redefined strategy and new long-term financial targets extending to
the year 2018 were announced in January 2016. Global trends faced by our
customers steer our product offering and provide us with a wealth of
opportunities. We are committed to growing and creating stakeholder value by
providing the best-performing sustainable fiber-based materials.
As part of the implementation, the company's business structure was simplified
and reorganized into two business areas: Filtration & Performance and
Specialties. The aim of this change is to increase market and customer focus.
Both business areas have business unit-specific strategies and operating models.
This enables Ahlstrom to provide customer-driven product development and
tailored customer service, cost efficiency, better allocation of resources, and
specific go-to-market approaches.
The roadmap for execution outlines the change in strategy and is focused on
commercial excellence, a new lean operating model, organic growth via higher
asset turnover and growth via new platforms.
Long-term financial targets over the economic cycle:
* Operating profit margin: adjusted operating profit margin to be above 8% by
2018
* Gearing: gearing to be maintained below 100%
* Dividend policy: we aim for a stable dividend, increasing over time, based
on the annual net income performance
The adjusted operating profit margin excludes restructuring costs, impairment
charges, capital gains or losses, and discontinued operations.
Outlook in 2016
Ahlstrom reiterates the outlook published on September 13, 2016. The company
expects net sales in 2016 to be in the range of EUR 1,060-1,100 million. The
adjusted operating profit is expected to be 6.5%-7.5% of net sales.
The adjusted operating profit excludes restructuring costs, impairment charges
and capital gains or losses.
Short-term risks
The global economic outlook remains uncertain. The European markets continue to
suffer from slower growth, and Britain's decision to leave the European Union
has increased uncertainty. In addition, the recent slowdown in China has raised
concerns, although the expected shift in the country's economic structure
towards more consumer consumption and less investment 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 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.
Further 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, because it is not
possible to make a reliable estimate of the outcome of the processes.
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 January-September 2016 interim report 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
Marco Levi, President & CEO, tel. +358 (0)10 888 4700
Sakari Ahdekivi, CFO, tel. +358 (0)10 888 4768
Juho Erkheikki, Investor Relations & Financial Communications Manager, tel.
+358 (0)10 888 4731
Ahlstrom's President & CEO Marco Levi and CFO Sakari Ahdekivi will present the
report at an analyst and press conference in Helsinki on Friday, October 28 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_2016_1028_q3
Conference call details:
In Finland +358 (0)9 7479 0404
In Sweden +46 (0)8 5065 3942
In the U.K. +44 (0)20 3043 2024
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 7688290.
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 2015,
Ahlstrom's net sales amounted to EUR 1.1 billion. Our 3,300 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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