Ahlstrom January-March 2015 interim report: Clear improvement in operating profit driven by better pricing and product mix
Ahlstrom Corporation STOCK EXCHANGE RELEASE April 28, 2015 at 08.30
This is a summary of the January-March 2015 interim report. The complete report with tables is attached to this release and available at www.ahlstrom.com
Ahlstrom January-March 2015 interim report
Clear improvement in operating profit driven by better pricing and product mix
January-March 2015 compared with January-March 2014
- Net sales EUR 271.8 million (EUR 249.2 million), showing an increase of 9.1%.
- Operating profit excluding non-recurring items EUR 12.0 million (EUR 7.2 million).
- Operating margin excluding non-recurring items 4.4% (2.9%).
- Profit before taxes EUR 13.8 million (EUR 5.2 million), including a EUR 6 million capital gain booked from the sale of Munksjö Oyj shares.
- Earnings per share EUR 0.17 (EUR 0.05).
- Comparable net sales at constant currencies remained flat, as better pricing and product mix were offset by lower volumes. Reported net sales growth was primarily driven by a favorable currency effect.
- Sixth consecutive quarter of year-on-year improvement in profitability excluding non-recurring items as Filtration, and Food and Medical businesses continued to improve their performance.
Outlook for 2015
- Ahlstrom reiterates the outlook published on January 29, 2015. The company expects net sales in 2015 to be in the range of EUR 1,000-1,100 million. The operating profit margin excluding non-recurring items is expected to be 3.5-5% of net sales.
Key figures
| EUR million | Q1/2015 | Q1/2014 | Change, % | 2014 |
| Net sales | 271.8 | 249.2 | 9.1 | 1,001.1 |
| EBITDA excl. NRI | 26.2 | 18.9 | 38.6 | 78.6 |
| % of net sales | 9.6 | 7.6 | 7.9 | |
| Operating profit | 12.7 | 4.4 | 188.6 | -3.7 |
| % of net sales | 4.7 | 1.8 | -0.4 | |
| Operating profit excl. NRI | 12.0 | 7.2 | 66.5 | 28.6 |
| % of net sales | 4.4 | 2.9 | 2.9 | |
| Profit before taxes | 13.8 | 5.2 | 167.7 | -9.4 |
| Profit for the period | 8.8 | 3.1 | 188.0 | -10.3 |
| Earnings per share | 0.17 | 0.05 | N/A | -0.22 |
| Return on capital employed, % | 8.1 | 3.4 | -0.5 | |
| Net cash flow from operative activities* | -1.5 | -6.1 | 74.8 | 35.4 |
| Capital expenditure | 3.0 | 9.0 | -66.3 | 45.4 |
| Interest-bearing net liabilities* | 254.0 | 281.3 | -9.7 | 253.8 |
| Gearing ratio*, % | 74.0 | 87.7 | 79.3 | |
| Equity ratio*, % | 34.3 | 32.4 | 34.8 | |
| Number of personnel, at the end of period | 3,381 | 3,502 | -3.5 | 3,401 |
EBITDA = operating profit before depreciation and amortization, excluding non-recurring items
* Including discontinued operations.
Marco Levi, President & CEO
"We continued to improve our financial performance in the quarter, driven by improved results in the Filtration and the Food and Medical business areas. We have seen a positive impact from our enhanced pricing and product mix, while foreign currency fluctuations also had a positive impact. The Building and Energy business area suffered from low volumes and an adverse currency effect.
"The program to improve the results of our commercial operations has now been extended to all our business areas, and the benefits are already visible. We are also moving ahead at full speed with the other key priorities of our roadmap, and will continue to focus on selling, general and administrative cost reductions by streamlining our office structure."
Outlook
Ahlstrom reiterates the outlook published in January 29, 2015. The company expects net sales in 2015 to be in the range of EUR 1,000-1,100 million. The operating profit margin excluding non-recurring items is expected to be 3.5-5% of net sales.
In 2015, investments excluding acquisitions are estimated to be approximately EUR 35 million (EUR 45.4 million in 2014).
Short-term risks
Uncertainly related to the global economic growth poses risks to Ahlstrom's financial performance. Slower-than-anticipated growth may lead to lower sales volumes and force the company to initiate more market-related shutdowns at plants, which could affect profitability.
Further swings in foreign currency exchange rates may lead to fluctuations in net sales and profitability. Combined with the uncertainty related to global economic growth and increased volatility in our main markets, it is more challenging to forecast future developments.
Ahlstrom's main raw materials are wood pulp, chemicals, and synthetic fibers. The prices of these key raw materials are volatile, and possible increases can affect the company's profitability depending on its ability to mitigate the risk.
In recent years, Ahlstrom has undertaken investment projects, such as the wallcoverings production line in Binzhou, China, that are in a start-up phase. The company's financial results may be negatively affected by the performance of the new production lines.
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 2014. 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-March 2015 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
Ahlstrom's President & CEO Marco Levi and CFO Sakari Ahdekivi will present the report at an analyst and press conference in Helsinki on Tuesday, April 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 web- and teleconference will be held in English and can be viewed at the following address: http://qsb.webcast.fi/a/ahlstrom/ahlstrom_2015_0428_q1
To participate via telephone, please dial +358 (0)9 2313 9201 in Finland or +44 (0)20 7162 0077 outside Finland a few minutes before the conference begins. The confirmation code is 952611.
An on-demand webcast including slides is available for viewing and listening on the company website for one year after the conference call.
The presentation material will be available at www.ahlstrom.com/en/Investors/Reports-and-presentations/2015/ after the report has been published.
Financial information in 2015
| Report | Date of publication | Silent period |
| Interim report January-June 2015 | Wednesday, August 6 | July 1- August 6 |
| Interim report January-September 2015 | Wednesday, October 28 | October 1-28 |
During the silent period, Ahlstrom will not communicate with capital market representatives.
Ahlstrom in brief
Ahlstrom is a high performance fiber-based materials company, partnering with leading businesses around the world to help them stay ahead. We aim to grow with a product offering for clean and healthy environment. Our materials are used in everyday applications such as filters, medical fabrics, life science and diagnostics, wallcoverings and food packaging. In 2014, Ahlstrom's net sales amounted to EUR 1 billion. Our 3,400 employees serve customers in 22 countries. Ahlstrom's share is quoted on the NASDAQ OMX Helsinki. More information available at www.ahlstrom.com.