Ahlstrom Corporation: Growth investments and structural changes provide a solid position for 2005

 

Ahlstrom, a leader in high performance fiber-based materials, reports slightly improved full-year earnings compared with the previous year. Operating profit for 2004 was EUR 51.0 million (EUR 48.5 million). Profit before extraordinary items and taxes was EUR 34.8 million (EUR 33.7 million). Net sales amounted to EUR 1,567.8 million (EUR 1,556.4 million). Earnings per share were EUR 0.48 (EUR 0.61).

 

- Ahlstrom completed its structural change from multi-business company to a focused fiber-based materials supplier.

 

- Ahlstrom's business environment remained challenging and the company was faced by weak demand in Europe.

 

- The Specialties division improved its financial performance significantly.

 

- Healthy operating cash flow.

 

 

EUR million	2004	2003	Q4/2004	Q4/2003
Net sales	1,567.8	1,556.4	371.8	365.9
Operating profit / loss	51.0	48.5	3.6	-11.0
Profit / loss before extraordinary items and taxes	34.8	33.7	-2.7	-14.5
Net profit / loss	17.5	22.4	-3.7	-4.6
Net cash flow from operations	128.0	202.0	48.9	56.7
Gearing ratio, %	53.9	42.3	53.9	42.3
Return on capital employed (ROCE), %	5.3	4.6	1.0	-4.4
Earnings per share, euro	0.48	0.61	-0.10	-0.14

 

Jukka Moisio, President & CEO, says:

"Our operative performance improved towards the end of 2004 but remained clearly below the company target level for return on capital employed (ROCE) of 13%. I am pleased to note that the Specialties division achieved a financial turnaround in 2004 with operating profit amounting to EUR 10.8 million. In order to improve the Group's profitability, a number of measures have been taken to lower our cost structure. These measures are estimated to reduce our fixed costs by approximately EUR 30 million annually. By divesting the remaining packaging units and forming the Sonoco-Alcore joint venture, Ahlstrom achieved its target of being a focused fiber-based materials producer. These actions position Ahlstrom well in 2005 to better serve its customers and to achieve higher profitability."

 

Fourth quarter 2004 results

 

Ahlstrom's net sales in the fourth quarter were EUR 371.8 million (EUR 365.9 million).

The Group's financial performance in October-December 2004 improved compared with the same period last year. The improvement was mainly due to enhanced financial performance of the Specialties division. Operating profit for the fourth quarter amounted to EUR 3.6 million (operating loss of EUR 11.0 million). Net loss was 3.7 million (net loss of EUR 4.6 million). Earnings per share were EUR -0.10 (EUR -0.14).

 

The Q4 result includes non-recurring costs of EUR 18.8 million related to divestments of non-core businesses (packaging units Tecno Jolly and Kuban) as well as write-downs of assets and the cost of workforce reductions across a number of units. In addition, the result includes a capital gain of EUR 4.3 million resulting from asset sales (cores and coreboard production).

Quarterly results for 2003 and 2004 are presented in the appendix.

 

 

 

Ahlstrom Corporation will publish its Annual Report for 2004 in week 11 and Interim Report for Q1 on April 27, 2005.

 

 

Helsinki, February 7, 2005

 

Ahlstrom Corporation
Board of Directors