Ahlstrom Corporation STOCK EXCHANGE RELEASE 10.8.2011 at 09.45

Continuing operations April-June 2011 compared with April-June 2010:

• Net sales EUR 423.7 million (EUR 424.9 million). 

• Operating profit EUR 22.1 million (EUR 28.2 million) and operating profit excluding non-recurring items EUR 20.4 million (EUR 27.4 million). 

• Operating margin excluding non-recurring items 4.8% (6.4%). 

• Profit before taxes EUR 14.3 million (EUR 21.0 million).  

• Earnings per share EUR 0.16 (EUR 0.26). 

Highlights in April-June 2011

• Ahlstrom announced a EUR 30 million investment in wallcover materials manufacturing in China. 

• The company signed a five-year EUR 250 million revolving credit facility. 

Continuing operations January-June 2011 compared with January-June 2010:

• Net sales EUR 846.2 million (EUR 806.6 million). 

• Operating profit EUR 41.6 million (EUR 41.3 million) and operating profit excluding non-recurring items EUR 40.0 million (EUR 40.2 million). 

• Operating margin excluding non-recurring items 4.7% (5.0%). 

• Profit before taxes EUR 28.5 million (EUR 27.5 million).  

• Earnings per share EUR 0.30 (EUR 0.33).  

Events after the review period: Divestment of Home and Personal business area

• Ahlstrom signed an agreement to divest its Home and Personal business area to Suominen Corporation. The total value of the transaction is approximately EUR 170 million. 

Outlook for 2011

• On August 4, Ahlstrom updated its outlook for 2011 following the agreement to divest its Home and Personal business area. The outlook is in line with the previous one given on July 18, 2011, however excluding discontinued operations. The company expects net sales from continuing operations to be EUR 1,580-1,740 million and operating profit excluding non-recurring items of EUR 67-87 million.  

Jan Lång, President & CEO:

- We accelerated the execution of our strategy. The divestment of Home and Personal enables us to further drive profitable growth in businesses chosen as our strategic priorities. Also, the development programs we have implemented to strengthen the way we manage the business are being executed solidly. In terms of growth, we took further steps in Asia as we announced investments to start the production of high-quality wallcover materials and specialty reinforcements to the wind energy industry in China.

- Our teams have been working with high intensity and good success over the past year to actively manage pricing and safeguard our profitability. However, given the challenging market environment we were not able to fully compensate for the increased costs, particularly related to synthetic fibers and chemicals during the second quarter. We assume that the business environment will continue to be challenging, given the current instability of the global economy. The recent turbulence in the global markets has reduced visibility going forward.

- We have addressed our cost structure through group-wide development programs to improve manufacturing efficiency, particularly in reducing production waste and sourcing costs. Going forward, we will continue to address this with increased vigor and strive to streamline our overall cost base in the supply chain.

Key figures from continuing operations

Home and Personal business area is reported separately as discontinued operations.

Operating environment

The overall demand remained stable in the second quarter 2011, however the market slowed down somewhat towards the end of the review period. The demand for wallcover, and flooring materials continued to grow in the quarter, while demand for flexible packaging papers and release liners declined.

Cost inflation related to the main raw materials used by Ahlstrom continued in the review period. Prices of synthetic fibers, such as polyester and polypropylene, and chemicals peaked during the second quarter and remained at high levels at the end of the period. Pulp prices remained at the high levels of the first quarter 2011.

In March, the European Commission imposed a lower level antidumping duty on imports of certain glassfiber products originating from the People's Republic of China to the European Union. This had a negative impact on the European glassfiber market.  

Development of net sales from continuing operations

* Other functions include financing and taxation-related items, as well as earnings and costs belonging to holding and sales companies. Home and Personal business area is reported separately as discontinued operations.

April-June 2011 compared with April-June 2010

Ahlstrom's second-quarter 2011 net sales decreased 0.3% to EUR 423.7 million, compared with EUR 424.9 million in the second quarter 2010.

On a comparable basis, net sales increased by about 4.8% due to price increases and product mix. Currency effect decreased net sales by about 3.7% and higher volumes increased net sales by about 1.7%. Divestments of the Dust Filtration business and the Altenkirchen plant announced at the end of 2010 reduced net sales by about 3.1%.

Total sales volumes fell 1.5%. On a comparable basis, volumes increased by 0.4%. Divestments of the Dust Filtration business, part of Filtration, and the Altenkirchen plant, part of Label and Processing, had a total negative impact of about 1.9% on sales volumes. Sales volumes rose in the Building and Energy (+8.8%) and Food and Medical (+3.3%) business areas. Filtration (-1.5%) and Label and Processing (-4.6%) reported a decline.

January-June 2011 compared with January-June 2010

Net sales in January-June 2011 increased 4.9% to EUR 846.2 million, compared with EUR 806.6 million in January-June 2010.

On a comparable basis, net sales increased by about 6.6% due to price increases and product mix. Currency effect decreased net sales by about 1.2% and higher sales volumes increased net sales by about 2.8%. Divestments of the Dust Filtration business and the Altenkirchen plant announced at the end of 2010 reduced net sales by about 3.3%.

Result and profitability from continuing operations

April-June 2011 compared with April-June 2010

Ahlstrom's second-quarter 2011 operating profit was EUR 22.1 million (EUR 28.2 million) including non-recurring items of EUR 1.8 million (EUR 0.8 million). Operating profit excluding non-recurring items was EUR 20.4 million (EUR 27.4 million). The 2010 figure was favorably impacted by a gain of approximately EUR 4.2 million from selling carbon dioxide emission rights. In April-June 2011, the figure was EUR 0.2 million.

The most significant non-recurring items in the second quarter 2011 were the following:

• Label and Processing booked a gain of approximately EUR 1.9 million from the asset sale of its Ascoli plant in Italy. The plant was closed in 2008.  

There were no significant non-recurring items in the second quarter 2010.  

The operating profit was negatively impacted as increased raw material costs were not fully compensated by higher selling prices. The ramp-up and commercialization of the teabag materials line in Chirnside, the La Gere plant, the hybrid wallcover line in Turin and the Mundra plant, which were part of the 2007 and 2008 investment program, continued. The challenges of the new lines in Chirnside and Turin continued to have a negative impact on profitability from the comparison period. The medical materials plant in Mundra and La Gere, part of Label and Processing, improved profitability from the comparison period, but are still behind their targets. Improved efficiency, particularly in manufacturing and sourcing, had a positive impact on profitability.

Ahlstrom's market related downtime in production was 5.3% in the second quarter 2011 compared with 8.5% in the comparison period.

Profit before taxes was EUR 14.3 million (EUR 21.0 million).

Income taxes amounted to EUR 5.8 million (EUR 7.4 million).

Profit for the period was EUR 8.5 million (EUR 13.6 million). Earnings per share were EUR 0.16 (EUR 0.26).

January-June 2011 compared with January-June 2010

Ahlstrom's January-June 2011 operating profit was EUR 41.6 million (EUR 41.3 million) including non-recurring items of EUR 1.6 million (EUR 1.1 million). Operating profit excluding non-recurring items was EUR 40.0 was (EUR 40.2 million). The 2010 figure was favorably impacted by a gain of approximately EUR 4.2 million from selling carbon dioxide emission rights. In January-June 2011, the figure was EUR 0.2 million.

The most significant non-recurring items in January-June 2011 in addition to the one mentioned above were the following:

• Filtration booked a loss of EUR 1.1 million after the flooding at Louveira in the first quarter. The loss was related to damages not covered by insurance policy after an initial reimbursement and additional freight costs.  About EUR 0.5 million was reversed in the second quarter following the settlement of an insurance claim.  

• 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 half 2010.  

Ahlstrom's market related downtime in production in January-June 2011 was 5.6% compared with 8.7% in the comparison period.

Profit before taxes was EUR 28.5 million (EUR 27.5 million).

Income taxes amounted to EUR 11.7 million (EUR 9.3 million).

Profit for the period was EUR 16.8 million (EUR 18.2 million). Earnings per share were EUR 0.30 (EUR 0.33).

Discontinued operations

Following the agreement to divest Home and Personal to Suominen, the segment has been classified as an asset held for sale and reported separately as discontinued operations as a result.

In April-June 2011, the loss for the period from discontinued operations was EUR 17.1 million, compared with a profit of EUR 1.5 million in the comparison period. The 2011 figure includes an impairment loss and cost to sell of EUR 18.4 million after tax related to the divestment.

In January-June 2011, the loss for the period from discontinued operations was EUR 15.8 million euros (profit EUR 2.4 million).

Result including discontinued operations

In April-June 2011, the loss for the period including discontinued operations was EUR 8.6 million (EUR 15.1 million profit). Earnings per share were EUR -0.21 (EUR 0.29).

Return on return on equity (ROE) was -5.3% (8.6%).

In January-June 2011, the profit for the period including discontinued operations was EUR 1.0 million (EUR 20.6 million). Earnings per share were EUR -0.04 (EUR 0.38).

Return on equity (ROE) was 0.3% (5.8%).

Business Area review

Building and Energy

Net sales in April-June 2011 rose 12.8% to EUR 77.0 million, compared with EUR 68.3 million in April-June 2010. The increase resulted from the continued sales volume growth in the wallcover and flooring material markets, and higher selling prices. Operating loss excluding non-recurring items was EUR 0.5 million (EUR 1.4 million profit). The results was burdened by the ramp-up costs of the hybrid wallcover line in Turin, Italy, higher fiber costs and lower sales volumes in the wind mill industry in North America.  Lowered antidumping duty on imports of certain glassfiber products from People's Republic of China to the European had negative impact on European market and also affected profitability of Building and Energy. No non-recurring items were booked.

In January-June 2011, net sales were EUR 155.6 million (EUR 130.3 million) and operating profit excluding non-recurring items EUR 1.8 million (EUR 0.4 million loss).

Filtration

Net sales in April-June 2011 decreased 5.4% to EUR 83.8 million, compared with EUR 88.5 million in April-June 2010 as adverse currency effects and divested businesses offset higher selling prices. Net sales were supported by transportation filtration sales in South America and Asia. Operating profit excluding non-recurring items fell to EUR 6.1 million (EUR 9.4 million) as increased raw material costs, changes in sales mix and adverse currency effect mitigated improved efficiency and higher selling prices. Operating profit amounted to EUR 6.6 million (EUR 9.4 million).

In January-June 2011, net sales were EUR 166.1 million (EUR 167.5 million) and operating profit excluding non-recurring items EUR 14.3 million (EUR 16.8 million).

Food and Medical

Net sales in April-June 2011 fell 0.9% to EUR 90.9 million, compared with EUR 91.7 million in April-June 2010. The decline was due to adverse currency effects. Higher sales volumes of medical applications had a positive impact on net sales. Operating profit excluding non-recurring items decreased to EUR 2.9 million (EUR 4.5 million). The result was negatively impacted by higher raw material costs and unfavorable mix in some product segments. The Mundra plant in India improved its performance, albeit still not reaching positive operating profit. The teabag material line in Chirnside, U.K., continued to weaken profitability as well. Operating profit was EUR 2.9 million (EUR 5.3 million).

In January-June 2011, net sales were EUR 184.3 million (EUR 173.8 million) and operating profit excluding non-recurring items EUR 5.8 million (EUR 8.5 million).

Label and Processing  

Net sales in April-June 2011 fell 2.6% to EUR 183.2 million, compared with EUR 188.1 million in April-June 2010. The decline was due to lower sales volumes in flexible packaging papers and the divestment of the Altenkirchen plant in 2010. Higher sales volumes of graphics & industrial papers and metalized labels had a positive effect on net sales. Operating profit excluding non-recurring items decreased to EUR 8.8 million (EUR 14.2 million) due to lower sales volumes and as increased raw material costs were not fully compensated by higher selling prices. Changes in the geographical sales mix also effected profitability. The La Gere plant improved performance and reported a positive result in the review period. Operating profit amounted to EUR 10.5 million (EUR 14.2 million).

In January-June 2011, net sales were EUR 364.8 million (EUR 360.1 million) and operating profit excluding non-recurring items EUR 15.0 million (EUR 19.5 million).

Financing (including discontinued operations)

Net cash flow from operating activities in January-June 2011 amounted to EUR 46.2 million (EUR 77.2 million), and cash flow after investments was EUR 30.0 million (EUR 64.1 million).  In April-June 2011, net cash flow from operating activities was EUR 27.6 million (EUR 45.1 million).

During January-June 2011, operative working capital increased by EUR 28.5 million to EUR 222.8 million from the end of 2010, but remained clearly below the year ago level. Its turnover rose by four days and was 41 days at the end of the review period. At the end of the second quarter 2010, operative working capital stood at EUR 241.0 million and turnover days was 45.

Ahlstrom's interest-bearing net liabilities increased by EUR 8.3 million from the end of 2010 to EUR 338.4 million (December 31, 2010: EUR 330.1 million). Ahlstrom's interest bearing liabilities amounted to EUR 365.0 million. The duration of the loan portfolio (average interest rate fixing period) was 22 months and the capital weighted average interest rate was 4.17%. The average maturity of the loan portfolio was 34 months.

In January-June 2011, net financial expenses were EUR 12.0 million (EUR 13.5 million). Net financial expenses include net interest expenses of EUR 8.0 million (EUR 11.3 million), financing exchange rate losses of EUR 1.2 million (EUR 0.5 million gain), and other financial expenses of EUR 2.7 million (EUR 2.7 million).

In April-June 2011, net financial expenses were EUR 6.7 million (EUR 6.9 million). Net financial expenses include net interest expenses of EUR 4.3 million (EUR 5.6 million), financing exchange rate losses of EUR 0.8 million (EUR 0.1 million gain), and other financial expenses of EUR 1.6 million (EUR 1.4 million).

The company's liquidity continues to be good. At the end of the review period, its total liquidity, including cash, unused committed credit facilities and cash pool limits was about EUR 402 million. In addition, the company had uncommitted credit facilities of about EUR 98 million available.

In June, Ahlstrom signed a new EUR 250 million five-year revolving credit facility to be used for general corporate purposes. This facility refinances the company's existing EUR 200 million revolving credit facility signed in 2009.

The gearing ratio increased to 52.6% (December 31, 2010: 46.9%). The equity ratio was 42.2% (December 31, 2010: 45.6%).

Capital expenditure (including discontinued operations)

Ahlstrom's capital expenditure excluding acquisitions totaled EUR 20.0 million in January-June 2011 (EUR 11.8 million).  In April-June 2011, investments totalled EUR 14.0 million (EUR 5.3 million).

In June, Ahlstrom announced that it will invest a total of EUR 7 million at its Stenay plant in France to be able to produce lower grammage grades, enhancing the quality of one-side coated papers for metalized labels and flexible packaging.

In June, Ahlstrom announced that it will invest a total of EUR 30 million in a new wallcover substrates production line at its Binzhou plant in China, where the company is already manufacturing filtration materials. Deliveries from the new line are expected to start in early 2013.

In May, Ahlstrom announced that it will invest in additional capacity in transportation filtration materials at its site in Louveira, Brazil. The investment will be completed in the first quarter of 2012.

Changes in the Executive Management Team

Patrick Jeambar, Executive Vice President, Label and Processing Business Area, will step down from the Executive Management Team as of September 1, 2011.

Daniele Borlatto, Vice President, Release & Label and Supply Chain, will succeed Jeambar as the Executive Vice President, Label and Processing Business Area. He will take over his new role on September 1, 2011, when he will also become a member of the Executive Management Team reporting to Jan Lång, President and CEO.

Luc Rousselet, Executive Vice President, Supply Chain, and Paul H. Stenson, Executive Vice President, Business Development, started as members of the Executive Management Team in June as announced earlier.

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 half of 2011, development programs aimed at enhancing the planning and harmonization of processes continued.

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 June 2011, the project had been launched at 27 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

Authorizations of the Board of Directors

The Annual General Meeting of Shareholders held on March 30, 2011 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.

The company holds a total of 25,005 own shares, corresponding to approximately 0.05% of the total shares and votes.  They were repurchased for the implementation of the company's share-based incentive programs.

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-June 2011, a total of 4.14 million Ahlstrom shares were traded for a total of EUR 70.0 million. The lowest trading price was EUR 14.75 and the highest EUR 18.23. The closing price on June 30, 2011 was EUR 16.07. The market capitalization at the end of the review period was EUR 744.8 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 12.12 at the end of the review period (December 31, 2010: EUR 13.48).

Events after the review period

On July 18, 2011, Ahlstrom updated its outlook for operating profit in 2011. The company expected its operating profit excluding non-recurring items for 2011 to be lower than earlier anticipated due to continuing cost inflation in raw materials prices. The estimate for the full year net sales was maintained.  

On July 26, 2011, Claudio Ermondi, Executive Vice President, Product & Technology Development and member of the Executive Management Team, resigned from Ahlstrom with immediate effect. His duties and responsibilities were transferred to Paul Stenson.

Divestment of Home and Personal business area

On August 4, 2011, Ahlstrom signed an agreement to divest its wipes fabrics business area, Home and Personal, to Suominen Corporation. The total value of the transaction is approximately EUR 170 million. Under the agreement, Ahlstrom sells the operations of its Home and Personal business area to Suominen and receives a total of EUR 170 million in cash, of which Ahlstrom has committed to use a total of EUR 30 million to subscribe for shares in Suominen in a directed share issue. Home and Personal is reported separately as discontinued operations. At the same time, Ahlstrom updated its outlook for the continuing operations.

Ahlstrom will become the largest shareholder in Suominen with a minimum stake of 20% and a maximum stake of 28.2% depending on the size of the share issue. The cash portion of the deal will be adjusted accordingly. Ahlstrom has agreed to a two-year lock-up period for a minimum of 20% ownership in holding its Suominen shares.  

Outlook

The overall demand for most of Ahlstrom's products is forecast to remain stable. The company will actively seek to increase selling prices in order to cover the recent and possible future increases in raw material costs.  However, due to the slowdown in the market towards the end of the second quarter 2011, it has been more challenging to successfully implement price increases.

Ahlstrom estimates net sales from continuing operations for the current year to amount to EUR 1,580-1,740 million. Operating profit excluding non-recurring items from continuing operations is estimated to be EUR 67-87 million. The outlook is in line with the previous one given on July 18, 2011, however excluding discontinued operations.

In 2011, investments excluding acquisitions are estimated to be approximately EUR 100 million (EUR 51.1 million in 2010). The figure includes investments that have already been announced in 2010 and 2011, such as the filtration material capacity increase in Turin, and the crepe paper plant investment together with a joint venture partner in China and the wallcover materials line in China.

Short-term risks

Economic growth in Asia and other emerging markets has continued to be strong, while that in Europe and North America seems to have slowed down somewhat from the beginning of the year. However, the situation varies between different regions. The possible contagion of the sovereign debt crisis in Europe poses an additional risk to economic growth and sales development at Ahlstrom.  

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.

The increased uncertainty related to the global economic growth and cost inflation makes it more difficult to forecast future developments.

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. Forecasting raw material costs linked directly to the oil price is difficult due to geopolitical developments.    

If global economic growth slows down further, the planned price increases may not materialize and even the risk of reductions in selling prices grows.  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, August 10, 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 present the January-June 2011 interim report in a Finnish-language press and analyst conference in Helsinki today,  August 10, 2011, at 1:30 p.m. (CET+1). The conference will take place at Event Arena Bank, Unioninkatu 20, 2nd floor. The meeting room will be announced on the display board in the lobby.  

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 10, 2011 at 5:00 p.m. (CET+1). To participate in the conference call, please dial (09) 2319 4250 in Finland or +44 (0)20 7136 6283 outside Finland a few minutes before the conference begins. The access code is 6345530.

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 10, 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.

Ahlstrom's financial information in 2011

Ahlstrom will publish financial information in 2011 as follows:

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 is available at www.ahlstrom.com.

Appendix
Consolidated financial statements

Appendix

Financial statements are unaudited.

* With the effect of interest on hybrid bond for the period, net of tax

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

* 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.

Segment information is presented according to the IFRS standards.

Market prices have been used in transactions with associated companies.

* With the effect of interest on hybrid bond for the period, net of tax

Calculation of key figures