Ahlstrom half-year report reveals all-time high quarterly operating profitability and cash flow
Finally Finnish Ahlstrom is presenting better results for the first half year of 2016
April-June 2016 compared with April-June 2015
• Net sales EUR 279.4 million (EUR 281.1 million).At constant currency rates, growth was 2.8%.
• Adjusted EBITDA EUR 37.1 million (EUR 31.5 million), representing 13.3 % (11.2 %) of net sales
• Operating profit EUR 23.3 million (EUR 15.7 million)
• Adjusted operating profit EUR 24.5 million (EUR 16.8 million), representing 8.8 % (6.0 %) of net sales, and the 11th consecutive quarter of year-on-year improvement
• Profit before taxes EUR 19.6 million (EUR 20.8 million. The comparison figure includes a capital gain of EUR 11.1 million from share sales.)
• Earnings per share EUR 0.22 (EUR 0.29)
• Net cash flow from operating activities EUR 54.9 million (EUR 14.0 million)
January-June 2016 compared with January-June 2015
• Net sales EUR 546.6 million (EUR 552.9 million).At constant currency rates, growth was 1.0%.
• Adjusted EBITDA EUR 65.1 million (EUR 57.7 million), representing 11.9 % (10.4 %) of net sales
• Operating profit EUR 34.0 million (EUR 28.4 million)
• Adjusted operating profit EUR 39.5 million (EUR 28.8 million), representing 7.2 % (5.2 %) of net sales
• Profit before taxes EUR 26.4 million (EUR 34.6 million. The comparison figure includes a capital gain of EUR 17.1 from share sales.)
• Earnings per share EUR 0.27 (EUR 0.46)
• Net cash flow from operating activities EUR 63.3 million (EUR 12.5 million)
Major events after the reporting period
• July 20: outlook on profitability for 2016 raised
• July 27: the agreement to divest Ahlstrom’s Building & Wind business unit to Owens Corning was terminated
Marco Levi, President & CEO comments the results as follows: “April-June 2016 was a very strong quarter, where we delivered sales growth of 2.8 % at constant currency rates and were able to raise our profitability to an all-time high level in the current structure of the company. Albeit we continued to benefit from lower variable costs, we now have a much improved operational efficiency and a more competitive cost structure. In addition, our cash flow generation was very good in the quarter, driven by higher profitability and active management of working capital.
We are successfully executing on our strategic roadmap through better commercial excellence and a new lean operating model, and will further pursue to improve margins and lower costs. In addition, we are growing by increasing the capacity utilization of our recent investments and finding new growth opportunities in areas such as single-serve coffee materials and water filtration. This has been reflected in our updated guidance for 2016, giving us confidence we can reach our target of above 8% adjusted operating profit margin by 2018.
Sales growth at constant currency rates was also very encouraging in the quarter and most of our business units increased their profits. In the Filtration & Performance segment, the Filtration as well as Wallcover & Poster units delivered either higher sales or margins despite challenging market conditions with the Industrial Nonwovens unit continuing to make steady progress. In the Specialties segment, all four business units – Food, Advanced Liquid Technologies, Tape, and Medical – improved their profitability.
I’m also happy about the much improved performance of our Building & Wind business unit, which we will continue to manage and develop as part of our business portfolio.”
Outlook for 2016
Ahlstrom reiterates the outlook published on July 27, 2016. The company expects net sales from continuing operations in 2016 to be in the range of EUR 1040-1140 million. The adjusted operating profit from continuing operations is expected to be 5.4 %-6.4 % of net sales.