Ahlstrom Corporation STOCK EXCHANGE RELEASE 28.4.2011 at 15.00
January-March 2011 compared with January-March 2010:
* Net sales EUR 491.6 million (EUR 441.0 million), an increase of 11.5% year-
on-year.
* Operating profit EUR 20.8 million (EUR 14.0 million) and operating profit
excluding non-recurring items EUR 21.3 million (EUR 13.7 million).
* Operating margin excluding non-recurring items 4.3% (3.1%).
* Profit before taxes EUR 15.5 million (EUR 7.4 million).
* Earnings per share EUR 0.17 (EUR 0.09).
* Net cash flow from operating activities EUR 18.5 million (EUR 32.1
million).
Highlights in January-March 2011
* Encouraging net sales development with 11.5% year-on-year growth.
* Ahlstrom launched its renewed brand and brand identity.
* Production at the Louveira filtration plant in Brazil was fully resumed
within a month after flooding in January.
Outlook for 2011
* Ahlstrom maintains its outlook for 2011. Net sales for the current year are
estimated to amount to EUR 1,920-2,080 million. Operating profit excluding
non-recurring items is estimated to be EUR 90-110 million.
Jan Lång, President & CEO:
- Our development continued to be positive in the first quarter despite of the
persisting raw material cost inflation. Nevertheless, we managed to improve our
profitability. Active management of the supply chain cost base, notably in
manufacturing and sourcing, improved our competitiveness. Going forward, active
pricing management remains among our top priorities in safeguarding our
profitability, especially against the increasing chemical and synthetic fiber
costs this year.
- We launched a new brand identity in February reflecting the company's refined
strategy, values and new operating model, as well as a new corporate image.
- Our employees at the Louveira filtration plant in Brazil did an excellent job
in cleaning up the site after the flood and limiting the damages incurred to a
minimum.
Key figures
Q1/ Q1/ Change,
Million EUR 2011 2010 % 2010
Net sales 491.6 441.0 11.5 1,894.2
Operating profit 20.8 14.0 48.3 53.7
Operating profit excl. NRI 21.3 13.7 55.0 74.2
% of net sales 4.3 3.1 3.9
Profit before taxes 15.5 7.4 110.5 25.5
Profit for the period 9.6 5.5 74.8 17.9
Earnings per share 0.17 0.09 - 0.26
Return on capital employed
(ROCE), % 8.2 5.2 - 5.0
Equity ratio, % 42.3 43.1 - 45.6
Gearing ratio, % 48.4 55.3 - 46.9
Interest-bearing net
liabilities 315.2 375.9 -16.1 330.1
Capital expenditure
(excluding acquisitions) 6.0 6.5 -7.2 51.1
Net cash flow from
operating activities 18.5 32.1 -42.2 167.5
Number of personnel, at the
end of the period 5,719 5,787 -1.2 5,688
Operating environment
The demand for Ahlstrom's products continued to grow in the first quarter 2011,
with the exception of specialty papers. Growth was particularly strong in
wallcover, building and food packaging materials. The demand for wipes turned
positive after a decline in the fourth quarter 2010. Geographically, the Asia-
Pacific region showed again the strongest growth in net sales. Europe and North
America reported solid growth as well.
Cost inflation related to the main raw materials used by Ahlstrom continued in
the review period. Prices of synthetic fibers, such as polymers and chemicals,
increased significantly during the first quarter, driven by increasing demand in
Asia, tight availability and higher oil prices. Pulp prices in the first quarter
2011 remained at the high levels of the fourth quarter 2010. Increased raw
material costs were partly compensated by higher selling prices in the quarter.
Development of net sales
Net sales by business area Q1/ Q1/ Change, 2010
2011 2010 %
Building and Energy 78.6 62.1 26.7 268.9
Filtration 82.3 79.0 4.2 339.8
Food and Medical 93.4 82.0 13.9 354.7
Home and Personal 79.0 66.0 19.5 290.8
Label and Processing 181.7 172.0 5.6 724.3
Other functions* and eliminations -23.3 -20.1 - -84.4
Total net sales 491.6 441.0 11.5 1,894.2
* Other functions include financing and taxation-related items, as well as
earnings and costs belonging to holding and sales companies.
Net sales in January-March 2011
Ahlstrom's first-quarter 2011 net sales increased 11.5% to EUR 491.6 million,
compared with EUR 441.0 million in the first quarter 2010.
On a comparable basis, about 10% of the net sales increase was driven by price
increases and product mix. Currency effect increased net sales by about 1.5% and
higher volumes by about 3%. Divestments of the Dust Filtration business and the
Altenkirchen plant announced at the end of 2010 reduced net sales by about 3%.
The Asia-Pacific region (+28.3%) and Europe (+10.7%) reported the fastest year-
on-year growth. Net sales in South America grew by 9.6% and 8.9% in North
America.
Volumes rose in all but one Business Area from the first quarter 2010. Building
and Energy (+15.2%), Home and Personal (+10.9%), Food and Medical (+9.0%), and
Filtration (+1.5%) increased their volumes, while Label and Processing (-5.1%)
reported a decline. Divestments of the Dust Filtration business, part of
Filtration, in the U.S. and the Altenkirchen plant, part of Label and
Processing, in Germany had a total negative impact of about 2% on volumes.
Building and Energy
Building and Energy net sales rose 26.7% to EUR 78.6 million (EUR 62.1 million).
The increase resulted from higher selling prices and the continued growth in the
wallcover, building and flooring material markets. Positive development in the
wind power markets using Ahlstrom's fiberglass products continued in Europe.
Filtration
Filtration net sales increased 4.2% to EUR 82.3 million (EUR 79.0 million).
Growth was supported by the improved demand in the transportation industry
globally as well as increased selling prices to cover higher chemicals and
specialty pulp costs.
Food and Medical
Food and Medical net sales rose 13.9% to EUR 93.4 million (EUR 82.0 million).
The increase was due to the higher volumes of food packaging materials and
medical drapes applications as well as increased selling prices. Further price
increases have been announced to cover increased raw materials costs.
Home and Personal
Home and Personal net sales increased 19.5% to EUR 79.0 million (EUR 66.0
million). The increase was driven by higher volumes, particularly in Europe, as
well as increased selling prices. Further price increases have been announced to
cover increased raw material costs.
Label and Processing
Label and Processing net sales rose 5.6% to EUR 181.7 million (EUR 172.0
million). The increase was due to higher selling prices to cover increased raw
material costs. Volumes, however, declined, partly due to the divestment of the
Altenkirchen plant in 2010.
Result and profitability
Financial result Q1/ Q1/ Change, 2010
by business area 2011 2010 MEUR
Building and Energy
Operating profit excl. NRI 2.3 -1.8 4.1 1.3
% of net sales 3.0 -2.8 - 0.5
Operating profit/loss 2.3 -1.8 4.1 1.3
Filtration
Operating profit excl. NRI 8.2 7.5 0.8 27.8
% of net sales 10.0 9.4 - 8.2
Operating profit/loss 7.1 7.5 -0.4 3.1
Food and Medical
Operating profit excl. NRI 3.0 4.0 -1.0 14.0
% of net sales 3.2 4.8 - 4.0
Operating profit/loss 3.0 4.0 -1.0 13.0
Home and Personal
Operating profit excl. NRI 2.5 0.4 2.0 6.3
% of net sales 3.1 0.7 - 2.2
Operating profit/loss 2.2 0.4 1.8 6.1
Label and Processing
Operating profit excl. NRI 6.2 5.3 0.9 30.6
% of net sales 3.4 3.1 - 4.2
Operating profit/loss 6.2 5.3 0.9 32.2
Other functions* and eliminations
Operating profit/Loss 0.0 -1.4 1.4 -2.0
Ahlstrom Group total
Operating profit excl. NRI 21.3 13.7 7.5 74.2
% of net sales 4.3 3.1 - 3.9
Operating profit/loss 20.8 14.0 6.8 53.7
ROCE, % 8.2 5.2 - 5.0
* Other functions include financing and taxation-related items, as well as
earnings and costs belonging to holding and sales companies.
Result and profitability in January-March 2011
Ahlstrom's first-quarter 2011 operating profit was EUR 20.8 million (EUR 14.0
million) including non-recurring items of EUR -0.4 million (EUR 0.3 million).
Operating profit excluding non-recurring items was EUR 21.3 million (EUR 13.7
million).
The most significant non-recurring items in the first quarter 2011 were the
following:
* Filtration booked a loss of EUR 1.1 million due to the flooding at Louveira
and is related to insurance policy deductibles and additional freight costs.
* In other functions, Ahlstrom booked a gain of EUR 1.0 million related to the
sale of the Wuxi plant in China.
There were no significant non-recurring items in the first quarter 2010.
The operating profit was positively impacted by higher volumes and improved
efficiency, offsetting a poorer product mix in some Business Areas. Supply chain
cost management, particularly in manufacturing and sourcing, had a positive
impact on profitability. The challenges in the ramp-up and commercialization of
the new production lines continued to have a negative impact on profitability.
Increased raw material costs were partly compensated by higher selling prices in
the quarter. Further selling price increases have been announced for the second
quarter in order to compensate for the cost inflation incurred in the first
quarter.
Ahlstrom's market related downtime in production was 6.6% in the first quarter
2011 compared with 10.8% in the comparison period.
Building and Energy
Building and Energy operating profit excluding non-recurring items increased to
EUR 2.3 million from a loss of EUR 1.8 million in the first quarter 2010,
boosted by the improved utilization rate levels. This was partially offset by
the ramp-up costs of the hybrid wallcover line in Turin, Italy. No non-recurring
items were booked.
Filtration
Filtration operating profit excluding non-recurring items was EUR 8.2 million
(EUR 7.5 million). The result was helped by increased volumes and better
efficiency. Operating profit amounted to EUR 7.1 million (EUR 7.5 million) and
was adversely impacted by the non-recurring costs related to the flood at the
Louveira plant.
Food and Medical
Food and Medical operating profit excluding non-recurring items decreased to EUR
3.0 million (EUR 4.0 million). The result was burdened by the poor product mix
and higher raw material costs. The medical nonwovens plant in Mundra, India, and
the teabag material line in Chirnside, U.K., continued to weaken profitability.
No non-recurring items were booked.
Home and Personal
Home and Personal operating profit excluding non-recurring items rose to EUR
2.5 million (EUR 0.4 million). The result was supported by improved material
efficiency, such as lower production waste, and higher volumes. Operating profit
amounted to EUR 2.2 million (EUR 0.4 million).
Label and Processing
Label and Processing operating profit excluding non-recurring items increased to
EUR 6.2 million (EUR 5.3 million), helped by better manufacturing efficiencies.
La Gere improved profitability albeit still burdening the result. No non-
recurring items were booked.
Net financial expenses were EUR 5.3 million (EUR 6.7 million). Net financial
expenses include net interest expenses of EUR 3.8 million (EUR 5.7 million),
financing exchange rate losses of EUR 0.4 million (EUR 0.4 million gain), and
other financial expenses of EUR 1.2 million (EUR 1.4 million).
Profit before taxes was EUR 15.5 million (EUR 7.4 million).
Income taxes amounted to EUR 5.9 million (EUR 1.9 million).
Profit for the period was EUR 9.6 million (EUR 5.5 million). Earnings per share
were EUR 0.17 (EUR 0.09).
Return on capital employed (ROCE) amounted to 8.2% (5.2%), and return on equity
(ROE) was 5.7% (3.2%).
Financing
Net cash flow from operating activities amounted to EUR 18.5 million in the
first quarter 2011 (EUR 32.1 million), and cash flow after investments was EUR
13.1 million (EUR 25.1 million).
During the first quarter 2011, operative working capital increased by EUR 16.1
million to EUR 210.4 million from the end of 2010. Its turnover rose by two days
and was 39 days at the end of the review period.
Ahlstrom's interest-bearing net liabilities decreased by EUR 14.8 million from
the end of 2010 to EUR 315.2 million (December 31, 2010: EUR 330.1 million).
Ahlstrom's interest bearing liabilities amounted to EUR 340.1 million. The
duration of the loan portfolio (average interest rate fixing period) was 25
months and the capital weighted average interest rate was 4.36%. The average
maturity of the loan portfolio was 37 months.
The company's liquidity is good. At the end of the review period, its total
liquidity, including cash, unused committed credit facilities and cash pool
limits was about EUR 418 million. In addition, the company had uncommitted
credit facilities of about EUR 76 million available.
The gearing ratio increased to 48.4% (December 31, 2010: 46.9%). The equity
ratio was 42.3% (December 31, 2010: 45.6%).
Capital expenditure
Ahlstrom's capital expenditure excluding acquisitions totaled EUR 6.0 million in
January-March 2011 (EUR 6.5 million).
Changes in Executive Management Team
In March 2011, Luc Rousselet was appointed Executive Vice President, Supply
Chain, and member of the Executive Management Team as of June 15, 2011.
In April 2011, Paul H. Stenson was appointed Executive Vice President, Business
Development, and member of the Executive Management Team as of May 30, 2011.
Both Rousselet and Stenson will report to Jan Lång, the President & CEO.
Implementation of the new operating model
In conjunction with the reorganization last year, Ahlstrom started the
implementation of its new operating model. By strengthening and harmonizing
global processes the company aims to increase its customer focus and enhance the
management of the entire product and supply chain. During the first quarter
2011, development programs aimed at enhancing planning and harmonization of
processes continued.
Ahlstrom plans to spend EUR 12 million in 2011 on the development programs to
harmonize global processes and for significant training activities.
Waste management program
The project to reduce material waste in manufacturing launched in 2010 has
progressed as planned. Ahlstrom aims to reduce production waste volume by 15
percent, which equals to annual savings of approximately EUR 20 million as of
2012. By the end of the first quarter 2011, the project had been launched at 22
plants out of the total of 37, and the intention is to expand it to all
production units by the end of this year.
Personnel
Ahlstrom employed on average 5,729 people[1] in the first quarter 2011 (5,773),
and 5,719 people (5,787) at the end of the period. The number of personnel
increased through an acquisition in China and the hiring of new employees in
India. The number of personnel has decreased due to the earlier announced unit
divestments. At the end of the period, the highest numbers of employees were in
the United States (22.2%), France (21.3%), Italy (12.4%), Finland (11.1%),
Brazil (7.2%) and Germany (6.8%).
Annual General Meeting
Ahlstrom Corporation's Annual General Meeting of Shareholders (AGM) was held on
March 30, 2011.
The AGM resolved to distribute a dividend of EUR 0.88 per share for the fiscal
year that ended on December 31, 2010 from the retained earnings in accordance
with the proposal of the Board of Directors. 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 and discharged the members of the
Board of Directors and the President & CEO from liability for the fiscal year
January 1-December 31, 2010.
The AGM confirmed the number of Board members to be seven. Thomas Ahlström,
Sebastian Bondestam, Lori J. Cross, Anders Moberg and Peter Seligson were re-
elected as members of the Board of Directors. Esa Ikäheimonen and Pertti
Korhonen were elected as new members. 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 of 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 was 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 has also
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), Thomas Ahlström and Sebastian
Bondestam. The members of the Compensation Committee are Peter Seligson
(Chairman), Lori J. Cross 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 at increasing
shareholder influence in nomination matters.
Other events in January-March 2011
The Louveira plant in Brazil resumed full production after the facility was hit
by floods in January. During the shutdown Ahlstrom was able to supply its
customers from Louveira's inventory, which was not damaged in the flooding.
Ahlstrom also started to import filtration material from its plants in North
America and Europe to ensure the most urgent deliveries to its South American
customers.
In February, Ahlstrom launched its renewed brand and brand identity to better
reflect the company's refined strategy, new operating model and values.
In March, the company agreed to sell the buildings, land and assets of its
Ascoli plant in Italy to Eurocomet. The value of the transaction is
approximately EUR 4.0 million, of which the land and buildings comprise EUR 2.5
million. Ahlstrom will book a non-recurring gain of approximately EUR 2.0
million in its second-quarter financial results.
In March, Ahlstrom completed the divestment of the Wuxi plant in China to Andrew
Industries. The sale was announced in December 2010.
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-March 2011, a total of 3.48 million Ahlstrom shares were traded
for a total of EUR 58.6 million. The lowest trading price was EUR 14.75 and the
highest EUR 18.23. The closing price on March 31, 2011 was EUR 17.38. The market
capitalization at the end of the review period was EUR 805.6 million, excluding
the shares owned by the parent company and Ahlcorp Oy, which is a management
ownership company.
Ahlstrom Group's equity per share was EUR 12.30 at the end of the review period
(December 31, 2010: EUR 13.48).
Outlook
Ahlstrom's outlook remains unchanged. The demand for most of Ahlstrom's products
is anticipated to increase this year, backed by global economic growth. The
growth rate is expected to stabilize from 2010.
Ahlstrom estimates net sales for the current year to amount to EUR 1,920-2,080
million. Operating profit excluding non-recurring items is estimated to be EUR
90-110 million. In 2010, Ahlstrom's net sales were EUR 1,894.2 million and
operating profit excluding non-recurring items was EUR 74.2 million.
The cost inflation of raw materials continues to be a challenge. The company
will continue to increase selling prices in order to cover the recent and
possible future increases in raw material costs.
In 2011, investments excluding acquisitions are estimated to be approximately
EUR 105 million (EUR 51.1 million in 2010). The figure includes investments that
have already been announced such as the filtration material capacity increase in
Turin and the crepe paper plant investment together with a joint venture partner
in China.
Short-term risks
Economic growth in Asia and other emerging markets has continued to be strong.
Growth in Europe and North America has also reached a more sustainable basis.
However, the development still varies from area to area. It is still difficult
to assess the possible impacts of the earthquake in Japan and the unrest in the
Middle East and northern Africa on global economic growth.
Global inflation has accelerated at a faster pace than earlier anticipated, led
by higher oil and commodity prices. This may impact disposable incomes adversely
and slow down economic growth, and thus the demand for products manufactured by
Ahlstrom might be affected accordingly. In addition, cuts in public expenditure
due to the debt crisis and tax increases in Europe pose a risk to a sustained
growth. If global economic growth slows down, the planned price increases may
not materialize and even the risk of reductions in selling prices might grow.
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.
The prices of synthetic fibers are expected to continue rising in the second
quarter, while the price level of some chemicals has stabilized.
If the prices of raw materials remain at a high level or continue to rise, and
the increased raw material costs cannot be passed onto selling prices,
maintaining the current profitability level might be compromised.
The general risks of 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 2010. The risk management process is
also described in the Corporate Governance Statement available on the company
website.
* * *
This interim report has been prepared in accordance with the 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, April 28, 2011
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 hold a conference
call in English for analysts, investors and representatives of the media today,
April 28, 2011 at 5:00 p.m. (CET+1). To participate in the conference call,
please dial (09) 2319 4349 in Finland or +44 (0)20 7806 1950 outside Finland a
few minutes before the conference begins. The access code is 9434510.
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 April 28, 2011 after the Interim
Report is published, at www.ahlstrom.com > Investors > Reports and presentations
> 2011. Material in Finnish will be available at www.ahlstrom.fi > Sijoittajat >
Katsaukset ja presentaatiot > 2011.
In addition, President & CEO Lång and CFO Parvi will present the January-March
2011 interim report in a Finnish-language press and analyst conference in
Helsinki tomorrow, April 29, 2011, at 9:00 a.m. (CET+1). The conference will
take place at Event Arena Bank, address Unioninkatu 20, 2nd floor. The meeting
room will be announced on the display board in the lobby.
Ahlstrom's financial information in 2011
Ahlstrom will publish financial information in 2011 as follows:
+--------------------------------+--------------------+----------------+
|Report |Date of publication |Silent period |
+--------------------------------+--------------------+----------------+
|Interim Report January-June |Wednesday, August 10|July 1-August 10|
+--------------------------------+--------------------+----------------+
|Interim Report January-September|Monday, 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 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, wallcovers, wipes,
flooring, labels and food packaging. We have a leading market position in the
businesses in which we operate. Our 5,700 employees serve customers in 26
countries on six continents. In 2010, Ahlstrom's net sales amounted to EUR 1.9
billion. The company's share is quoted on the NASDAQ OMX Helsinki. More
information available at www.ahlstrom.com.
Appendix
Consolidated financial statements
Appendix
Financial statements are unaudited.
----------------------------------------------------------------------
INCOME STATEMENT Q1 Q1 Q1-Q4
EUR million 2011 2010 2010
----------------------------------------------------------------------
Net sales 491.6 441.0 1,894.2
Cost of goods sold -427.3 -385.3 -1,647.7
----------------------------------------------------------------------
Gross profit 64.4 55.7 246.5
Sales and marketing expenses -14.7 -13.3 -52.6
R&D expenses -5.2 -4.6 -20.3
Administrative expenses -24.5 -25.0 -108.8
Other operating income 1.8 2.1 17.1
Other operating expense -0.9 -0.8 -28.1
----------------------------------------------------------------------
Operating profit / loss 20.8 14.0 53.7
Net financial expenses -5.3 -6.7 -26.8
Share of profit / loss of associated companies -0.0 -0.0 -1.4
----------------------------------------------------------------------
Profit / loss before taxes 15.5 7.4 25.5
Income taxes -5.9 -1.9 -7.6
----------------------------------------------------------------------
Profit / loss for the period 9.6 5.5 17.9
----------------------------------------------------------------------
Attributable to
Owners of the parent 9.4 5.5 17.9
Non-controlling interest 0.2 - 0.0
----------------------------------------------------------------------
Earnings per share, EUR
- Basic and diluted * 0.17 0.09 0.26
* With the effect of interest on hybrid bond for the period, net of tax
-----------------------------------------------------------------
STATEMENT OF COMPREHENSIVE INCOME Q1 Q1 Q1-Q4
EUR million 2011 2010 2010
-----------------------------------------------------------------
Profit / loss for the period 9.6 5.5 17.9
Other comprehensive income, net of tax
Translation differences -16.6 23.0 39.2
Hedges of net investments in foreign operations - -2.0 -2.8
Cash flow hedges 0.2 -0.3 0.8
-----------------------------------------------------------------
Other comprehensive income, net of tax -16.4 20.7 37.3
-----------------------------------------------------------------
Total comprehensive income for the period -6.8 26.2 55.2
-----------------------------------------------------------------
Attributable to
Owners of the parent -7.0 26.2 55.2
Non-controlling interest 0.2 - 0.0
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BALANCE SHEET Mar 31, Mar 31, Dec 31,
EUR million 2011 2010 2010
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ASSETS
Non-current assets
Property, plant and equipment 666.9 724.0 704.9
Goodwill 150.4 158.5 156.2
Other intangible assets 47.3 53.2 49.5
Investments in associated companies 10.6 12.0 10.7
Other investments 0.4 0.2 0.4
Other receivables 37.5 23.4 35.8
Deferred tax assets 55.4 59.3 54.9
--------------------------------------------------------------------
Total non-current assets 968.5 1,030.7 1,012.4
Current assets
Inventories 208.1 181.3 198.0
Trade and other receivables 337.0 332.2 305.8
Income tax receivables 1.8 3.6 2.4
Other investments - - -
Cash and cash equivalents 24.8 27.2 24.6
--------------------------------------------------------------------
Total current assets 571.7 544.3 530.8
--------------------------------------------------------------------
Total assets 1,540.2 1,575.0 1,543.2
--------------------------------------------------------------------
EQUITY AND LIABILITIES
Equity attributable to owners of the parent 570.2 599.3 623.0
Hybrid bond 80.0 80.0 80.0
Non-controlling interest 1.0 - 0.9
--------------------------------------------------------------------
Total equity 651.2 679.3 703.8
Non-current liabilities
Interest-bearing loans and borrowings 251.9 183.6 261.7
Employee benefit obligations 75.8 78.9 76.2
Provisions 3.0 5.0 3.1
Other liabilities 3.2 0.7 4.4
Deferred tax liabilities 28.3 27.9 27.7
--------------------------------------------------------------------
Total non-current liabilities 362.1 296.1 373.1
Current liabilities
Interest-bearing loans and borrowings 88.2 219.4 93.0
Trade and other payables 425.3 366.1 361.1
Income tax liabilities 5.9 3.5 4.4
Provisions 7.5 10.6 7.8
--------------------------------------------------------------------
Total current liabilities 526.8 599.6 466.2
--------------------------------------------------------------------
Total liabilities 889.0 895.7 839.3
--------------------------------------------------------------------
Total equity and liabilities 1,540.2 1,575.0 1,543.2
--------------------------------------------------------------------
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, 2010 70.0 209.3 8.3 -0.8 -17.7 - 336.6 605.6 - 80.0 685.6
Profit / loss for the
period - - - - - - 5.5 5.5 - - 5.5
Other comprehensive
income,
net of tax
Translation
differences - - - - 23.0 - - 23.0 - - 23.0
Hedges of net
investments
in foreign
operations - - - - -2.0 - - -2.0 - - -2.0
Cash flow hedges - - - -0.3 - - - -0.3 - - -0.3
Dividends paid and
other - - - - - - -26.0 -26.0 - - -26.0
Hybrid bond - - - - - - - - - - -
Interest on hybrid
bond - - - - - - -5.6 -5.6 - - -5.6
Purchases of own
shares - - - - - -0.9 - -0.9 - - -0.9
Share ownership plan
for EMT - - - - - - - - - - -
Change in non-
controlling
interests - - - - - - - - - - -
Share-based incentive
plan - - - - - - 0.0 0.0 - - 0.0
--------------------------------------------------------------------------------
Equity at March
31, 2010 70.0 209.3 8.3 -1.2 3.3 -0.9 310.5 599.3 - 80.0 679.3
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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 - - - - - - 9.4 9.4 0.2 - 9.6
Other comprehensive
income,
net of tax
Translation
differences - - - - -16.6 - - -16.6 - - -16.6
Hedges of net
investments
in foreign
operations - - - - - - - - - - -
Cash flow hedges - - - 0.2 - - - 0.2 - - 0.2
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 1.0 - - 1.0
--------------------------------------------------------------------------------
Equity at March
31, 2011 70.0 209.3 8.3 0.2 2.2 -4.3 284.6 570.2 1.0 80.0 651.2
--------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS Q1 Q1 Q1-Q4
EUR million 2011 2010 2010
--------------------------------------------------------------------------------
Cash flow from operating activities
Profit / loss for the period 9.6 5.5 17.9
Adjustments, total 35.2 33.5 145.2
Changes in net working capital -32.4 12.7 69.2
Change in provisions -0.2 -2.2 -4.9
Financial items 7.1 -16.2 -53.2
Income taxes paid / received -0.7 -1.3 -6.8
--------------------------------------------------------------------------------
Net cash from operating activities 18.5 32.1 167.5
Cash flow from investing activities
Acquisition of Group companies - - -11.2
Purchases of intangible and tangible assets -7.5 -7.5 -48.7
Other investing activities 2.0 0.5 11.3
--------------------------------------------------------------------------------
Net cash from investing activities -5.5 -7.0 -48.7
Cash flow from financing activities
Dividends paid and other -0.3 - -25.9
Repurchase of own shares - -0.9 -2.0
Investment to Ahlstrom Corporation shares related to share
ownership plan for EMT - - -3.5
Payments received on hybrid bond - - -
Interest on hybrid bond - - -7.6
Changes in loans and other financing activities -11.9 -17.5 -76.9
--------------------------------------------------------------------------------
Net cash from financing activities -12.2 -18.4 -115.8
Net change in cash and cash equivalents 0.8 6.6 2.9
Cash and cash equivalents at the beginning of the period 24.6 19.9 19.9
Foreign exchange adjustment -0.6 0.6 1.7
--------------------------------------------------------------------------------
Cash and cash equivalents at the end of the period 24.8 27.2 24.6
--------------------------------------------------------------------------------
------------------------------------------------------------------------------
KEY FIGURES Q1 Q1 Q1-Q4
2011 2010 2010
------------------------------------------------------------------------------
Personnel costs -87.4 -84.1 -350.0
Depreciation and amortization -25.2 -25.5 -104.8
Impairment charges - -0.0 -0.2
------------------------------------------------------------------------------
,
Operating profit, % 4.2 3.2 2.8
Return on capital employed (ROCE), % 8.2 5.2 5.0
Return on equity (ROE), % 5.7 3.2 2.6
------------------------------------------------------------------------------
,
Interest-bearing net liabilities, EUR million 315.2 375.9 330.1
Equity ratio, % 42.3 43.1 45.6
Gearing ratio, % 48.4 55.3 46.9
------------------------------------------------------------------------------
,
Basic earnings per share *, EUR 0.17 0.09 0.26
Equity per share, EUR 12.30 12.86 13.48
Average number of shares during the period, 1000's 46,248 46,642 46,514
Number of shares at the end of the period, 1000's 46,349 46,596 46,224
------------------------------------------------------------------------------
,
Capital expenditure, EUR million 6.0 6.5 51.1
Capital employed at the end of the period, EUR million 991.3 1,082.4 1,058.5
Number of employees, average 5,729 5,773 5,823
* 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 2010 except for the changes below.
Changes in accounting principles
The following new or amended standards and interpretations which the Group has
adopted as of January 1, 2011 have not had impact on the consolidated financial
statements.
- IAS 32 Financial Instruments: Presentation (amendment) - Classification of
Rights Issues
- IAS 24 Related Party Disclosures (revised)
- IFRIC 14 Prepayments of a Minimum Funding Requirement (amendment)
- IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
Disposals of businesses in 2011
On December 7, 2010 Ahlstrom signed an agreement to sell Wuxi plant in China and
three production lines in Bethune in the USA to Andrew Industries. Ahlstrom
completed the sales of production lines in Bethune on December 22, 2010 and the
sales of Wuxi on March 31, 2011. The value of the Wuxi transaction is EUR 1.1
million.
-------------------------------------------------------
DISPOSALS OF BUSINESSES Book values of assets
EUR million disposed of
-------------------------------------------------------
Property, plant and equipment -
Intangible assets -
Inventories 0.1
Trade and other receivables 0.2
Cash and cash equivalents 0.2
Financial liabilities -
Trade and other payables 0.3
-------------------------------------------------------
Net assets 0.3
Total transaction value 1.1
Consideration received (in cash) 0.4
Cash (disposed of) 0.2
-------------------------------------------------------
Net cash inflow 0.2
-----------------------------------------------------------
SEGMENT INFORMATION Q1 Q1 Q1-Q4
EUR million 2011 2010 2010
-----------------------------------------------------------
Building and Energy 78.6 62.1 268.9
Filtration 82.3 79.0 339.8
Food and Medical 93.4 82.0 354.7
Home and Personal 79.0 66.0 290.8
Label and Processing 181.7 172.0 724.3
Other operations 15.4 9.5 44.4
Internal sales -38.7 -29.6 -128.8
-----------------------------------------------------------
Total net sales 491.6 441.0 1 894.2
Building and Energy 4.2 3.5 14.3
Filtration 2.1 1.9 7.3
Food and Medical 9.6 7.0 34.5
Home and Personal 6.2 5.3 24.4
Label and Processing 7.6 7.7 30.5
Other operations 9.1 4.2 17.7
-----------------------------------------------------------
Total internal sales 38.7 29.6 128.8
Building and Energy 2.3 -1.8 1.3
Filtration 7.1 7.5 3.1
Food and Medical 3.0 4.0 13.0
Home and Personal 2.2 0.4 6.1
Label and Processing 6.2 5.3 32.2
Other operations 0.2 -1.4 -2.0
Eliminations -0.2 -0.0 0.1
-----------------------------------------------------------
Operating profit / loss 20.8 14.0 53.7
Return on capital employed (RONA), %
Building and Energy 6.3 -4.4 0.9
Filtration 17.2 16.7 1.8
Food and Medical 5.7 7.7 6.3
Home and Personal 4.7 0.9 3.1
Label and Processing 8.9 6.9 10.9
Group (ROCE), % 8.2 5.2 5.0
Building and Energy 149.9 161.0 147.7
Filtration 163.1 183.7 166.1
Food and Medical 202.8 211.2 213.0
Home and Personal 186.3 202.9 190.1
Label and Processing 278.7 300.9 277.9
Other operations -51.0 -37.3 -1.1
Eliminations -0.5 -0.4 -0.3
-----------------------------------------------------------
Total net assets 929.4 1 022.0 993.3
Building and Energy 1.2 0.4 6.0
Filtration 0.8 0.3 6.8
Food and Medical 1.8 4.4 13.0
Home and Personal 1.3 0.0 3.8
Label and Processing 0.1 1.0 19.4
Other operations 0.8 0.3 2.1
-----------------------------------------------------------
Total capital expenditure 6.0 6.5 51.1
Building and Energy -4.7 -4.4 -18.1
Filtration -4.1 -4.7 -19.1
Food and Medical -4.8 -4.4 -20.2
Home and Personal -4.0 -4.2 -16.6
Label and Processing -7.1 -7.2 -28.4
Other operations -0.6 -0.6 -2.3
-----------------------------------------------------------
Total depreciation and amortization -25.2 -25.5 -104.8
Building and Energy - - -
Filtration - - -
Food and Medical - - -
Home and Personal - - -0.0
Label and Processing - -0.0 -0.1
Other operations - - -
-----------------------------------------------------------
Total impairment charges - -0.0 -0.2
Building and Energy - - -
Filtration -1.1 - -24.7
Food and Medical - - -1.0
Home and Personal -0.2 - -0.3
Label and Processing - 0.0 1.6
Other operations 1.0 0.3 3.8
-----------------------------------------------------------
Total non-recurring items -0.4 0.3 -20.5
----------------------------------------
SEGMENT INFORMATION Q1 Q1 Q1-Q4
EUR million 2011 2010 2010
----------------------------------------
Building and Energy 33.8 29.3 121.1
Filtration 28.4 28.0 115.1
Food and Medical 33.7 30.9 125.4
Home and Personal 27.6 24.9 104.1
Label and Processing 148.2 156.2 601.0
Other operations 2.1 1.7 8.2
Eliminations -15.9 -15.8 -63.0
----------------------------------------
Total sales tons 257.9 255.2 1,011.9
Segment information is presented according to the IFRS standards.
----------------------------------------
NET SALES BY REGION Q1 Q1 Q1-Q4
EUR million 2011 2010 2010
----------------------------------------
Europe 267,3 241,5 987,3
North America 112,0 102,9 455,9
South America 52,0 47,4 214,1
Asia-Pacific 51,2 39,9 197,5
Rest of the world 9,1 9,3 39,4
----------------------------------------
Total net sales 491,6 441,0 1 894,2
-------------------------------------------------------------
CHANGES OF PROPERTY, PLANT AND
EQUIPMENT Q1-Q1 Q1-Q1 Q1-Q4
EUR million 2011 2010 2010
-------------------------------------------------------------
Book value at Jan 1 704.9 717.6 717.6
Acquisitions through business combinations - - 12.2
Additions 5.2 6.5 49.9
Disposals -0.0 -0.1 -10.2
Depreciations and impairment charges -24.0 -24.1 -99.2
Translation differences and other changes -19.2 24.2 34.6
Book value at the end of the period 666.9 724.0 704.9
---------------------------------------------------------
TRANSACTIONS WITH RELATED PARTIES Q1-Q1 Q1-Q1 Q1-Q4
EUR million 2011 2010 2010
---------------------------------------------------------
Transactions with associated companies
Sales and interest income 0.1 0.1 0.5
Purchases of goods and services -0.8 -0.5 -2.8
Trade and other receivables 0.1 0.0 0.1
Trade and other payables 0.1 0.3 0.2
Market prices have been used in transactions with associated companies.
--------------------------------------------
OPERATING LEASES Mar 31, Mar 31, Dec 31,
EUR million 2011 2010 2010
--------------------------------------------
Current portion 6,5 6,7 7,1
Non-current portion 19,5 19,6 20,3
--------------------------------------------
Total 25,9 26,3 27,4
--------------------------------------------
-----------------------------------------------------------
COLLATERALS AND COMMITMENTS Mar 31, Mar 31, Dec 31,
EUR million 2011 2010 2010
-----------------------------------------------------------
Mortgages 73.0 73.0 73.0
Pledges 0.2 0.3 0.2
Commitments
Guarantees given on behalf of group
companies 18.7 20.1 19.8
Guarantees given on behalf of
associated companies 15.0 1.0 -
Capital expenditure commitments 14.0 7.7 3.6
Other commitments 1.6 3.0 2.6
----------------
------------------------------------------------------------------------
QUARTERLY DATA Q1 Q4 Q3 Q2 Q1
EUR million 2011 2010 2010 2010 2010
------------------------------------------------------------------------
Net sales 491.6 481.4 482.4 489.4 441.0
Cost of goods sold -427.3 -425.6 -420.5 -416.3 -385.3
------------------------------------------------------------------------
Gross profit 64.4 55.8 61.9 73.1 55.7
Sales and marketing expenses -14.7 -12.5 -12.7 -14.1 -13.3
R&D expenses -5.2 -5.4 -5.2 -5.1 -4.6
Administrative expenses -24.5 -28.4 -25.9 -29.5 -25.0
Other operating income 1.8 8.3 0.9 5.9 2.1
Other operating expense -0.9 -24.6 -2.1 -0.6 -0.8
------------------------------------------------------------------------
Operating profit / loss 20.8 -7.0 16.9 29.8 14.0
Net financial expenses -5.3 -5.4 -7.9 -6.9 -6.7
Share of profit / loss of associated
companies -0.0 -0.2 -0.7 -0.4 -0.0
------------------------------------------------------------------------
Profit / loss before taxes 15.5 -12.6 8.3 22.5 7.4
Income taxes -5.9 5.8 -4.2 -7.4 -1.9
------------------------------------------------------------------------
Profit / loss for the period 9.6 -6.8 4.1 15.1 5.5
------------------------------------------------------------------------
Attributable to
Owners of the parent 9.4 -6.8 4.1 15.1 5.5
Non-controlling interest 0.2 -0.0 0.0 - -
----------------------------------------------------------------
QUARTERLY DATA BY SEGMENT Q1 Q4 Q3 Q2 Q1
EUR million 2011 2010 2010 2010 2010
----------------------------------------------------------------
Net sales
Building and Energy 78.6 72.2 66.3 68.3 62.1
Filtration 82.3 84.9 87.4 88.5 79.0
Food and Medical 93.4 92.3 88.7 91.7 82.0
Home and Personal 79.0 75.2 78.3 71.3 66.0
Label and Processing 181.7 181.9 182.2 188.1 172.0
Other operations and eliminations -23.3 -25.2 -20.5 -18.6 -20.1
----------------------------------------------------------------
Group total 491.6 481.4 482.4 489.4 441.0
----------------------------------------------------------------
Operating profit / loss
Building and Energy 2.3 1.2 0.5 1.4 -1.8
Filtration 7.1 -20.7 7.0 9.4 7.5
Food and Medical 3.0 2.1 1.6 5.3 4.0
Home and Personal 2.2 1.7 2.6 1.3 0.4
Label and Processing 6.2 5.0 7.7 14.2 5.3
Other operations and eliminations 0.0 3.8 -2.6 -1.8 -1.4
----------------------------------------------------------------
Group total 20.8 -7.0 16.9 29.8 14.0
----------------------------------------------------------------
Sales tons, thousands of tons
Building and Energy 33.8 31.8 28.8 31.2 29.3
Filtration 28.4 28.5 28.9 29.7 28.0
Food and Medical 33.7 32.1 30.1 32.3 30.9
Home and Personal 27.6 26.5 27.5 25.2 24.9
Label and Processing 148.2 143.3 144.5 156.9 156.2
Other operations and eliminations -13.8 -14.8 -12.8 -13.2 -14.1
----------------------------------------------------------------
Group total 257.9 247.4 247.1 262.1 255.2
----------------------------------------------------------------
--------------------------------------------------------------------------------
KEY FIGURES QUARTERLY Q1 Q4 Q3 Q2 Q1
EUR million 2011 2010 2010 2010 2010
--------------------------------------------------------------------------------
Net sales 491.6 481.4 482.4 489.4 441.0
Operating profit / loss 20.8 -7.0 16.9 29.8 14.0
Profit / loss before taxes 15.5 -12.6 8.3 22.5 7.4
Profit / loss for the period 9.6 -6.8 4.1 15.1 5.5
--------------------------------------------------------------------------------
Gearing ratio, % 48.4 46.9 47.7 50.3 55.3
Return on capital employed (ROCE), % 8.2 -2.5 6.0 10.9 5.2
Basic earnings per share *, EUR 0.17 -0.18 0.06 0.29 0.09
Average number of shares during the period, 46,248 46,305 46,517 46,596 46,642
1000's
--------------------------------------------------------------------------------
* 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)
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
[HUG#1510141]
Ahlstrom interim report January-March 2011: Profitability improved in a challenging cost environment
| Source: Ahlstrom
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