Finnish Ahlstrom publishes interim data and new roadmap to success
Continued operations’ figures for July-September 2013 against last year show improved sales, less operating profit and margin and a loss before taxes, however the figures for January to September present slightly higher sales, less operating profit, thus a lower operating margin and a loss before taxes. At the same time, the global high performance fibre based materials company, Finnish Ahlstrom Corporation is drawing up a new roadmap for future growth
Over the period of July to September 2013 net sales amounted to EUR 251.1 million (EUR 248.8 million), in constant currency it rose 5.4 % and an operating profit of EUR 1.5 million (EUR 6.3 million). The operating profit excluding non-recurring items was EUR 1.5 million (EUR 7.3 million), and the operating profit excluding non-recurring items was meagre 0.6 % (2.9 %). The loss before taxes reached 4.4 million (EUR -0.2 million). The company has recently issued a new EUR 100 million hybrid bond and completed a partial repurchase of a hybrid bond issued in 2009.
During January to September 2013 Ahlstrom reports net sales of EUR 771.4 million (EUR 770.8 million) at an operating profit of EUR 16.3 million (EUR 20.9 million). The operating profit excluding non-recurring items reached EUR 15.9 million (EUR 25.2 million) thus leading to a corresponding operating margin of 2.1 % (3.3 %). The loss before taxes was EUR 4.4 million (EUR +2 million). Capital expenditure amounted to EUR 50.0 million (EUR 48.0 million) or plus 4.2 %. The number of personnel decreased by 1.7 % or from 3760 to 3697.
In view to all of 2013 the outlook remains unchanged with net sales from continuing operations earmarked between EUR 960 million to EUR 1040 million. The operating profit margin excluding non-recurring items from continuing operations is expected to be 0 to 2 % of net sales. In 2013, investments excluding acquisitions from continuing operations are estimated to be around EUR 75 million (EUR 74 million). The estimate includes investments already announced in 2011 and 2012, such as the wall covering materials line in Binzhou (PRC), and the additional capacity in filtration materials in Turin (I).
Recently the European economy has shown some signs of recovery, however, it might be uneven and fragile. Recent indicators for the U.S. economy are more positive, yet mixed. In Asia, the Chinese economy in particular, may grow at a slower pace than previously anticipated.
Ahlstrom’s main raw materials are natural fibres, mainly pulp, synthetic fibres and chemicals. The prices of some of the key materials used remain at a high level and are volatile.
The rightsizing programme is moving ahead as targeted. As of end of September 2013, around EUR 6 million in cost savings, of which some EUR 2 million are derived from costs being transferred to Munksjö Oyj (acquirer of the Label and Processing business), were achieved and only minor restructuring costs were booked.
Jan Lang, President & CEO commented the results: “We have now defined our new strategy to take us forward following the major transformations over the past few years. Our current businesses offer good opportunities for global growth. We have identified three new high priority growth areas in clean water, medical diagnostics and composite materials for the construction and transportation industries. We continue to make progress in renewing our product portfolio and launched several new products during the quarter, including Ahlstrom TenderGuardTM in medical fabrics and Ahlstrom MasterTapeTM for the Chinese market. We were improving our capabilities and I am confident that we will be able to reach our ambitious long term target of generating 20 % of net sales from new products.”