Ahlstrom Corporation STOCK EXCHANGE RELEASE 2.2.2007 at 08.30
Ahlstrom's Financial Statements Bulletin 2006:
EPS was EUR 1.31, dividend of EUR 1.00 per share proposed
Ahlstrom, a leader in high performance fiber-based materials,
reports an operating profit of EUR 96.1 million for full year 2006
(EUR 117.2 million). Profit before taxes was EUR 81.2 million (EUR
100.7 million). Return on capital employed (ROCE) was 10.4%
(12.4%). Net sales amounted to EUR 1,599.1 million (EUR 1,552.6
million) and earnings per share (EPS) to EUR 1.31 (EUR 1.71). The
Board of Directors proposes a dividend of EUR 1.00 (EUR 1.79) per
share to be paid for the financial year 2006.
Excluding non-recurring items, the operating profit for full year
2006 was EUR 87.3 million (EUR 99.0 million). Profit before taxes
was EUR 72.5 million (EUR 82.5 million) and ROCE was 9.5% (10.5%),
both excluding non-recurring items.
October-December 2006 in brief
- Net sales grew by 3.9% (adjusted for currency effect)
- High raw material and energy costs put pressure on margins
- European Commission closed its investigation related to an
alleged cartel in the label papers sector
- Ahlstrom announced four growth investments on three continents,
valued in total at approximately EUR 54 million.
Key figures
EUR million 2006 2005 Q4/2006 Q4/2005
Net sales 1,599.1 1,552.6 389.0 383.6
Operating profit 96.1 117.2 12.3 24.5
Operating profit excl. non- 87.3 99.0 14.1 22.0
recurring items
Profit before taxes 81.2 100.7 9.4 19.1
Profit before taxes excl. non- 72.5 82.5 11.3 16.6
recurring items
Profit for the period 57.6 62.6 8.8 11.9
Net cash flow from operating 119.2 126.6 25.0 30.4
activities
Gearing ratio, % 20.3 57.7 20.3 57.7
Return on capital employed 10.4 12.4 5.3 10.1
(ROCE),%
Return on capital employed 9.5 10.5 6.1 9.1
(ROCE),%
excl. non-recurring items
Cash earnings per share, EUR 2.72 3.48 0.54 0.84
Earnings per share, EUR 1.31 1.71 0.18 0.32
Average number of shares 43,802 36,418 45,602 36,418
during the period, 1000s
Jukka Moisio, President & CEO, comments Ahlstrom's year 2006:
- The year 2006 marked a major change for Ahlstrom, as the company
made a successful initial public offering on the Helsinki Stock
Exchange. The IPO provided us with good financial resources that
were further strengthened by good operative cash flow of 2006.
During the year, we implemented our strategy through announcing
and starting up several growth investments. We divested non-core
assets as well as streamlined the company structure. Our
comparable net sales grew by 5% and return on capital employed,
our most important financial target, was 10.4%. I consider this a
reasonable achievement in difficult trading conditions where
increased energy and raw material costs affected our profitability
throughout the year.
Ahlstrom's excellent financial position supports our long term
customer commitment and our growth strategy implementation and
will help us to achieve our targets.
Ahlstrom Group: Financial statements 2006
Financial performance in the fourth quarter
The Group's net sales increased to EUR 389.0 million (EUR 383.6
million). The weakening of the USD decreased net sales
approximately by EUR 10 million from the fourth quarter of 2005.
Comparable net sales (adjusted for the currency effect) increased
by 3.9% from the same period last year. Sales volumes increased by
1.1% compared with the corresponding period of 2005.
Operating profit for the fourth quarter of 2006 amounted to EUR
12.3 million (EUR 24.5 million). The operating profit included net
non-recurring costs totaling EUR 1.9 million (net gains of EUR 2.5
million). The non-recurring gains of EUR 1.3 million in the fourth
quarter 2006 consisted of minor holdings sold. The non-recurring
costs of EUR 3.2 million in the fourth quarter were mainly related
to the asset impairment in the Label & Packaging Papers business
area and restructuring costs in the Filtration business area.
Excluding the non-recurring items, operating profit amounted to
EUR 14.1 million (EUR 22.0 million).
Prices for Ahlstrom's main raw materials continued to increase in
the fourth quarter. The average USD price for NBSK pulp was
approximately 21% higher than in the fourth quarter of 2005. With
sales price increases, productivity improvements and fixed cost
reductions, Ahlstrom has been able to partially compensate for the
effect of the rising raw material costs.
Total net financial expenses were EUR 2.6 million (EUR 4.8
million). Net interest expenses totaled EUR 1.7 million (EUR 2.9
million). Net foreign exchange losses on financial items were EUR
0.5 million (losses of EUR 1.4 million).
Ahlstrom's share of the losses of associated companies amounted to
EUR 0.2 million (losses of EUR 0.6 million). Ahlstrom sold its
35.5% share in the Sonoco-Alcore joint venture in July 2006.
Profit before taxes was EUR 9.4 million (EUR 19.1 million).
Excluding the non-recurring items, profit before taxes amounted to
EUR 11.3 million (EUR 16.6 million).
Income tax expenses were EUR 0.7 million (EUR 7.2 million) in line
with the final annual tax rate. Profit for the period was EUR 8.8
million (EUR 11.9 million).
Return on capital employed (ROCE) was 5.3% (10.1%) in the fourth
quarter. Excluding the net non-recurring costs, ROCE amounted to
6.1% (9.1%). Return on equity (ROE) was 4.6% (7.9%). Earnings per
share (EPS) amounted to EUR 0.18 (EUR 0.32).
Overview of 2006
Demand for Ahlstrom's products was balanced in most geographic
areas. The demand in Europe improved, driven by higher GDP growth,
while in North America the demand slowed down towards the end of
the year as the expected deceleration of economic growth started
to materialize. In Asia, Latin America and Russia, which are
increasingly important markets for Ahlstrom, growth in demand
continued.
Despite the solid demand in several product areas, the business
environment was challenging in 2006. The prices for fibers,
chemicals and energy continued to rise and put intense pressure on
Ahlstrom's margins. The company continued to increase sales prices
and reduce costs throughout the year to offset the impact of more
expensive production costs.
Financial performance in 2006
The Group's net sales increased to EUR 1,599.1 million (EUR
1,552.6 million). Net sales of the continuing operations (adjusted
for the divestment of PM1 at the Kauttua, Finland plant in 2005)
increased by 4.6% from the previous year. Comparable sales volumes
(adjusted for the divestment) increased by 1.7% compared with the
level of 2005.
Operating profit for financial year 2006 amounted to EUR 96.1
million (EUR 117.2 million). The operating profit of 2006 included
net non-recurring gains totaling EUR 8.7 million (EUR 18.2
million). The non-recurring gains consisted of a capital gain from
the sale of Ahlstrom's shareholding in Sonoco-Alcore and from the
divestments of two properties in Germany. The non-recurring costs
in 2006 were related to the asset impairment in the Label &
Packaging Papers business area and to the restructuring costs in
Filtration and Technical Papers business areas.
Excluding the non-recurring items, operating profit for 2006
amounted to EUR 87.3 million (EUR 99.0 million).
Prices for Ahlstrom's main raw materials and energy increased
heavily in 2006, putting a strong pressure on Ahlstrom's margins.
With sales price increases, productivity improvements and fixed
cost reductions, Ahlstrom was able to partially compensate for the
effect of the rising raw material costs.
Total net financial expenses were EUR 14.9 million (EUR 16.8
million). Net interest expenses totaled EUR 8.4 million (EUR 11.5
million). Net foreign exchange losses on financial items were EUR
4.5 million (losses of EUR 3.8 million).
Ahlstrom's share of the profits of associated companies amounted
to EUR 0.03 million (EUR 0.4 million). Ahlstrom sold its 35.5%
share in the Sonoco-Alcore joint venture in July 2006.
Profit before taxes was EUR 81.2 million (EUR 100.7 million).
Excluding the net non-recurring gains, profit before taxes
amounted to EUR 72.5 million (EUR 82.5 million).
Income tax expenses were EUR 23.6 million (EUR 38.1 million).
Ahlstrom's tax rate for the full year 2006 was 29%. Profit for the
period was EUR 57.6 million (EUR 62.6 million) in 2006.
Return on capital employed (ROCE) was 10.4% (12.4%). Excluding the
net non-recurring gains, ROCE was 9.5% (10.5%). Return on equity
(ROE) was 8.5% (10.7%). Earnings per share (EPS) decreased to EUR
1.31 (EUR 1.71) primarily due to the issue of new shares in March,
2006.
Financing and financial position in 2006
Net cash flow from operating activities in 2006 amounted to EUR
119.2 million (EUR 126.6 million).
Interest-bearing net liabilities decreased by EUR 185.4 million to
EUR 155.2 million (December 31, 2005: EUR 340.6 million).
Ahlstrom's extensive investment program in 2006 was primarily
financed with good operating cash flow.
Gearing ratio was 20.3% (December 31, 2005: 57.7%) and the equity
ratio 56.5% (December 31, 2005: 43.2%).
Capital expenditure in 2006
Capital expenditure excluding acquisitions amounted to EUR 120.1
million (EUR 62.4 million). In 2006, the value of acquisitions was
EUR 7.8 million (EUR 10.8 million).
Implementation of the growth strategy in 2006
In 2006, Ahlstrom continued to implement its growth strategy by
investing in attractive growth segments on four continents.
Ahlstrom's investments are expected to generate net sales
amounting to 1.5 times the investment value in 3-5 years and reach
a return of capital employed of at least 13%.
Investment decisions and acquisitions
In December, Ahlstrom decided to invest EUR 27 million in new food
nonwovens capacity at the Chirnside, UK plant. The new line,
utilizing spunmelt technology, will primarily serve the growing
infusion products market with next generation products. It is
estimated to be operational in late 2008.
In October, Ahlstrom decided to invest EUR 23 million in new
nonwovens capacity in Brazil and France. The new wiping fabrics
production line in Brazil will utilize spunlace technology and its
main customers operate within the household and industrial wipes
sectors in Latin America. The line is estimated to be operational
in early 2008. The new industrial nonwovens production line at
Ahlstrom's facility in Brignoud, France utilizing needlepunch
technology is primarily targeted to serve building, graphics,
automotive, wipes and niche hygiene sectors and it is estimated to
be operational in late 2007.
In October, Ahlstrom announced that it will add a new needlepunch
line to its Wuxi, China facility to serve the growing dust
filtration market in Asia. The investment, valued at approximately
EUR 4 million, will start in the third quarter of 2007.
In March, Ahlstrom announced an investment of EUR 38 million in a
new glassfiber tissue plant in Redkino, Tver, Russia. The plant
will in the first phase concentrate on specialty glassfiber tissue
production, but the site also enables future expansions of
Ahlstrom's businesses in Russia. The new plant will commence
production during the fourth quarter of 2007.
In January, Ahlstrom acquired the specialty nonwovens manufacturer
HRS Textiles Inc., based in Darlington, SC, USA. The company
serves mainly the North American air and liquid filtration
markets. The transaction added approximately EUR 17 million of
annualized net sales to Ahlstrom's filtration business.
Investment start-ups
In December, Ahlstrom started up its new spunlace line located at
its Green Bay, WI, USA facility two weeks ahead of schedule. The
additional capacity primarily serves the North American wipes
market but also has the flexibility to meet the demands of other
nonwovens markets. The total value of this investment is
approximately EUR 30 million.
In November, Ahlstrom started up its EUR 5 million expansion of
the Mikkeli, Finland plant.
In August, Ahlstrom started up new filtration media capability at
its Tampere, Finland plant. The investment, valued at EUR 2
million, further strengthens the plant's position as an important
developer and manufacturer of advanced filtration media.
In June, Ahlstrom decided to invest approximately EUR 5 million in
a new specialty glassfiber reinforcement plant in South Carolina,
USA. In September, Ahlstrom announced an additional investment of
EUR 5 million to expand the capacity of this new plant to better
meet the growing demand. The new plant further strengthens
Ahlstrom's position as a leading global developer and manufacturer
of specialty reinforcements especially for the wind energy, marine
and transportation markets. The plant is ramping up its production
in the first quarter of 2007.
A new nanofiber filtration production line in the Madisonville,
KY, USA plant was started in June.
In May, Ahlstrom upgraded its capabilities for the production of
cotton-containing spunlace products at its Green Bay, WI, USA
plant.
In January 2006, Ahlstrom started up the expansion of release base
paper production capacity at its Turin, Italy plant. The
investment was valued at EUR 18 million.
Divestments in 2006
In July, Ahlstrom decided to sell its 35.5% shareholding in the
Sonoco-Alcore joint venture to Sonoco for EUR 39.5 million.
Ahlstrom booked a capital gain of EUR 3.4 million from the sale in
the third quarter 2006. The transaction was completed in October.
In July, Ahlstrom sold a property in Hochheim, Germany to WM-
Bauträger GmbH for EUR 7.5 million and booked a capital gain of
EUR 4.6 million in the third quarter of 2006.
In June, Ahlstrom sold a property in Hochheim, Germany to AERO
Pump Vermögens-verwaltungs GmbH & Co. KG for EUR 4.2 million and
booked a capital gain of EUR 2.9 million in the second quarter of
2006.
In the fourth quarter, Ahlstrom divested minor shareholdings and
consequently booked non-recurring gains totaling EUR 1.3 million.
The sales were consistent with Ahlstrom's strategy to focus on the
development and manufacture of fiber-based materials and to divest
non-core assets.
Research and development (R&D) in 2006
In 2006, the R&D expenses totaled EUR 25.0 million (EUR 27.1
million), representing 1.6% (1.8%) of Ahlstrom's total expenses
and 1.6% (1.8%) of net sales. In 2004, the expenses amounted to
EUR 27.6 million, 1.8% of total expenses and 1.8% of net sales.
In 2006, Ahlstrom continued to introduce new products and
technologies in order to further strengthen its leading position
in the fiber-based materials market. The new products that were in
focus in 2006 included, among others, a new heat and sound
insulation material for automotives and a bicomponent spunbond
nonwoven for medical applications. The company further developed
technologies utilizing fine fibers and nanofibers. In addition,
Ahlstrom worked to continuously improve its existing products and
to reduce the manufacturing costs.
Innovation is a key element in Ahlstrom's growth strategy. In
2006, 39% of Ahlstrom's net sales was generated by new or improved
products, exceeding the company's target range of 25-35%.
Changes in corporate structure in 2006
In line with its strategy to improve profitability through various
actions, including the closing of non-competitive manufacturing
units, Ahlstrom decided to close its Nümbrecht, Germany plant in
September. As a consequence of the closure, effective in December
2006, Ahlstrom booked a provision for a non-recurring cost of EUR
2.5 million in its third quarter result of 2006.
Changes in the Corporate Executive Team in 2006
Ahlstrom's Senior Vice President, Technology, Patrick Jeambar,
M.Sc. (Paper Eng.), MBA, assumed a new role as leader of the
Technical Papers business area as of June 26, 2006. Mr. Jeambar
continues on the Corporate Executive Team and also as leader of
the Innovation as well as Health, Safety and Environment (HSEA)
functions of Ahlstrom.
Laura Raitio, Licentiate in Technology, was appointed Senior Vice
President, Marketing, and member of the Corporate Executive Team
as of January 1, 2006. She is responsible for corporate marketing,
business development and the sales network, excluding Asian sales
offices. Previously, Mrs. Raitio worked as Vice President and
General Manager of the product lines Abrasive base, Pre-
impregnated decor and Wallpaper & Poster, based in Osnabrück,
Germany.
Personnel
2006 2005 2004
Number of employees, year-end 5,677 5,525 5,755
Number of employees, average 5,687 5,605 6,428
Wages and salaries, incl. bonus 234.1 225.1 254.8
payments, EUR million
Geographically, 72% of Ahlstrom's employees were located in
Europe, 23% in North America, and 5% in the rest of the world.
With 24% of the total workforce, France has the largest percentage
of employees, followed by the United States with 23%, Italy with
14%, Finland with 13% and Germany with 11%.
In 2006, 54% of Ahlstrom's employees worked within the
FiberComposites segment, 40% in the Specialty Papers segment and
6% in other operations.
Risk management
The objective of Ahlstrom's risk management is to create a
consistent consideration of risk and reward in day-to-day planning
and execution to support achievement of agreed targets while
avoiding undesired operational and financial events.
A development process to further support the Group's risk
management approach and framework continued in 2006 under the
direction of the Chief Financial Officer. Fine tuning of risk
management principles and development of the framework resulted in
the issuance of Group risk management policy. Structured risk
assessment has been undertaken within certain business operations
and the company plans to continue risk assessments further in
2007.
Ahlstrom has classified risks affecting its operations in three
categories, which are strategic business risks, operational risks
and financial risks. Ahlstrom will provide more detailed
information on its risk management in the Annual Report 2006.
Strategic business risks
Strategic business risks are often related to customer
relationships, product development, efforts to maintain
competitive capacity, as well as capital investments and
acquisitions. Some of the strategic business risks that Ahlstrom
is exposed to relate to global fiber-based materials market,
production capacity utilization as well as sourcing of raw
materials.
In accordance with the operative organization of the company,
strategic business opportunities and risks are primarily addressed
by the business area and product line management.
Operational risks
Operational risks often arise as a consequence of inadequate or
failed internal processes, people's actions, systems or external
events. If the risks materialize, they can lead to injuries,
damage to property, interruption of operations, environmental
impacts, or liabilities to third parties. In order to mitigate
operational risks, Ahlstrom has established a group-wide insurance
program for risks related to property damages and business
interruption, liability exposure and cargo transport.
Financial risks
Financial risks are managed by Group Treasury, under a Treasury
Policy approved and overseen by the Board through the Audit
Committee. The Treasury Policy covers funding, interest rate,
foreign currency and counterparty risks. There have been no major
changes in the area of the financial risks during 2006.
Health, safety and environment
Health & safety
Ahlstrom complies with international, national and local rules,
regulations and agreements and has also developed its own internal
standards and guidelines, with which business units are required
to comply. Regular assessment is undertaken on a three-year
rotational basis of all sites by specifically trained cross-
functional teams to ensure that operations comply with regulations
as well as internal standards.
Ahlstrom reported continual improvement in its health and safety
results in 2006. The Accident Frequency Rate (AFR) was 16,
slightly above the target of 12. The ratio indicates the number of
accidents that resulted in absence per million man hours worked.
Approximately 74% of Ahlstrom sites improved or maintained their
AFR and the overall number of Lost Time Accidents continued to
decrease.
Despite consistent practises and encouraging development in health
and safety, Ahlstrom reported a death of one of its employees at
the Stenay, France plant in 2006. The regulatory authorities are
investigating the accident, and the results of the investigation
will be made public when they are available.
A new Crisis Communication and Management system was launched in
2006 to further support local management. In addition, the
development of health and safety continues in 2007 with
enhancement of the accident reporting databases. The key target is
to ensure that employees and supervisors have the necessary
support in proactive accident prevention.
Environment
Ahlstrom's environmental policy is incorporated in its
"Operational Risk Management Policy Statement" which was approved
by the Board of Directors in 2002. In large part, Ahlstrom's
approach to the environment protection mirrors that embodied in
the International Standards Organization's (ISO) 14001: 2004. This
continual improvement model is based on:
1. Identifying the environmental aspects and impacts of its
operations and products
2. Setting goals and objectives relative to these impacts.
3. Checking performance against these goals and targets.
4. Taking actions to continually improve environmental
performance.
Ahlstrom applies this model throughout the entire life cycle of
its products: from product development through raw material
sourcing, production, product delivery and ultimate disposal or
recycling.
In 2006, Ahlstrom's environmental performance improved as gauged
by its key environmental performance indicators. Ahlstrom's CO2
emissions declined group-wide and Ahlstrom remains a net creditor
of CO2 allowances within the European Emissions Trading Scheme
(ETS). Energy efficiency improved slightly (both electricity and
process heat), as did process water usage. Landfill usage
continues to decrease, reflecting a transition to more
environmentally friendly disposal techniques coupled with waste
reduction and recycling efforts.
There were no significant environmental incidents in 2006. At the
end of 2006, 90% of Ahlstrom's production capacity was certified
to ISO 14001.
Ahlstrom believes that there are no material issues regarding
compliance with applicable environmental laws or regulations at
any of its sites. The company continuously monitors regulatory
developments worldwide. At this time, Ahlstrom does not foresee
any prospective environmental regulatory change that could have a
material impact on Ahlstrom's operations or product offerings. The
year 2007 is the deadline for compliance with the European
Directive requiring Integrated Pollution Prevention and Control
(IPPC) permits. Again, Ahlstrom anticipates no difficulty
complying with this directive.
Consistent with its standard practice, Ahlstrom will provide more
detailed information on its environmental performance in the
Annual Report 2006.
Shares and share capital
Trading with Ahlstrom share commenced on the Pre list of the
Helsinki Stock Exchange on March 14, 2006 and on the Main list on
March 17, 2006. During 2006, 10.7 million Ahlstrom shares were
traded for a total of EUR 246.0 million, excluding the over-
allotment option exercised by the lead manager of Ahlstrom's
Initial Public Offering. The lowest trading price during the year
was EUR 19.92 and the highest EUR 25.45. In the fourth quarter,
the lowest trading price was EUR 19.93 and the highest EUR 22.80.
Closing price on December 29, 2006 was EUR 22.65 and market
capitalization was EUR 1,034 million.
Equity per share of Ahlstrom Group was EUR 16.79 at the end of the
review period (December 31, 2005: EUR 16.21).
At the end of the review period, the number of options entitling
to subscription of Ahlstrom shares was 1,008,871.
In 2006, a total of 93,318 new shares of Ahlstrom Corporation were
subscribed with option rights under the company's stock option
program I (2001). After the corresponding increases in Ahlstrom's
share capital, the share capital at the end of the review period
amounted to EUR 68,492,605.50. The total number of shares at the
year-end was 45,661,737 with a nominal value of EUR 1.50 per
share. Together with the stock options, the number of shares may
increase to a maximum of 46,670,608.
In 2006, the Board of Directors of Ahlstrom Corporation cancelled
a total of 649,879 option rights of the company's stock option
programs I a, b and c (2001) and II b and c (2001). The cancelled
option rights were in the possession of the company's
subsidiaries.
The Board of Directors of Ahlstrom Corporation decided in November
to apply for the listing of the option rights of stock option
program I a, b and c (2001) and stock option program II b and c
(2001) on the Helsinki Stock Exchange starting on January 2, 2007.
Listing was sought for 538,699 option rights of stock option
program I (2001) and 520,172 option rights of stock option program
II (2001). Each option right gives its holder the right to
subscribe for one share in Ahlstrom Corporation. The current
subscription price is EUR 9.22. The share subscription period with
option rights of stock option program I a, b and c (2001)
commenced on May 1, 2002 and ends on April 30, 2007. The share
subscription period with option rights of stock option program II
b and c (2001) starts on January 1, 2007 and ends on April 30,
2007.
At present, the Board of Directors does not have an authorization
to buy back company shares or to issue convertible bonds, share
options, or new shares.
Annual General Meeting
The Annual General Meeting (AGM) of Ahlstrom Corporation was held
on February 14, 2006. The AGM resolved, in accordance with the
proposal of the Board of Directors, to increase the share capital
by issuing a maximum of 9,150,000 new shares to be offered to
domestic and international institutional investors and the public
in Finland.
The AGM resolved to distribute a dividend of EUR 1.79 per share
for 2005 as proposed by the Board of Directors. The record date
for the dividend payment was February 17, 2006, and the dividend
was paid on February 24, 2006.
Further, the AGM resolved to amend the Articles of Association
according to the proposal of the Board of Directors.
The AGM approved the Company's and the Group's income statement
and balance sheet, and discharged the members of the Board of
Directors and CEO of the Company from liability for the financial
year 2005. The AGM confirmed the number of Board members at seven.
The composition of the Board remained unchanged. Johan Gullichsen,
Sebastian Bondestam, Jan Inborr, Urban Jansson, Bertel Paulig,
Peter Seligson and Willem F. Zetteler were re-elected for the
period ending at the close of the next Annual General Meeting.
After the AGM, the organization meeting of the Board re-elected
Johan Gullichsen as Chairman. Urban Jansson was elected as Vice
Chairman of the Board. The Board also appointed the Committee
members. The members of the Compensation Committee are Johan
Gullichsen (Chairman), Urban Jansson and Willem F. Zetteler. The
members of the Audit Committee are Peter Seligson (Chairman), Jan
Inborr and Bertel Paulig.
KPMG Oy Ab was re-elected as the Company's auditor for the period
ending at the close of the next AGM.
Initial Public Offering
The Annual General Meeting (AGM) of Ahlstrom decided on February
14, 2006 to increase the company's share capital by issuing a
total of up to 8,000,000 shares in deviation from the
shareholders' pre-emptive subscription rights. In addition, the
decision of the AGM allowed for the issuance of an additional
1,150,000 shares. The institutional offering started on February
27, 2006 and ended on March 13, 2006. The retail offering began on
March 1, 2006 and ended on March 9, 2006. The offer price range
was EUR 20.00 to 24.00. The Board of Directors determined to set
the offer price at EUR 22.00 based on the results of the book-
building process during the marketing of the offering.
Initially, the institutional offering comprised 7,300,000 and the
retail offering 700,000 shares. The institutional offering was
approximately 9.5 times oversubscribed at the offer price and the
Finnish retail offering was approximately 6.6 times
oversubscribed. The Board of Directors decided on March 13, 2006
to allocate 6,600,000 shares to institutional investors and
1,400,000 shares to retail investors. Approximately 43 percent of
the demand in the institutional offering originated from Finnish
investors and approximately 57 percent from international
investors. In total, 14,159 investors participated in the retail
offering. On March 16, SEB Enskilda exercised the over-allotment
option to subscribe for 1,150,000 additional shares of Ahlstrom to
cover over-allotment in the institutional offering.
Net proceeds for Ahlstrom from the offering were EUR 172.1
million, plus additional net proceeds amounting to EUR 24.7
million after the exercise of the over-allotment option. Ahlstrom
intends to use the proceeds of the offering to expand and further
improve its operations mainly through investments in new capacity
and new technologies in existing operations, investments in
geographic expansion, particularly in Asia, Russia/Eastern Europe
and the Americas to grow with its global customer base. Moreover,
the company seeks acquisitions to expand its geographic presence
and enhance its product offering.
Other events
In September, the Board of Directors of Ahlstrom Corporation
decided to establish a Nomination Committee. The Nomination
Committee consists of three members of the Board. Johan
Gullichsen, Chairman of the Board of Ahlstrom, was elected as
Chairman of the Nomination Committee, and Jan Inborr and Urban
Jansson were elected as members. The main tasks of the Nomination
Committee are to identify and propose candidates for election to
the Board as well as propose compensation of the Board. The term
of the Nomination Committee elected by the Board will last until
the close of the next Annual General Meeting.
Ahlstrom Corporation was notified on November 16, 2006 by the
European Commission that the Commission had closed its
investigation related to an alleged cartel in the label papers
sector. The European Commission commenced the investigation in May
2004. Currently, Ahlstrom is not involved in any material legal
proceeding.
Events after the review period
On February 1, 2007 Ahlstrom signed an agreement to acquire the
spunlace nonwovens business of the Italian Orlandi Group. With
this acquisition, Ahlstrom will become one of the leading
producers of nonwoven roll goods for wipes globally. The
acquisition price is approximately EUR 60 million and the
transaction is expected to be EPS enhancing from 2007. The
acquired business includes two plants with four production lines
in Cressa and Gallarate in northern Italy, close to Milan. The
plants employ approximately 120 people. Ahlstrom anticipates to
close the deal within the first half of 2007, subject to antitrust
clearances and satisfactory conclusion of the ongoing due
diligence.
On February 2, 2007 Ahlstrom signed an agreement to acquire
Fabriano Filter Media SpA, based in Sassoferrato, in central
Italy. The transaction price is approximately EUR 7 million.
Fabriano is a manufacturer of microglass filter media, serving
mainly the high efficiency air filtration market. The transaction
complements Ahlstrom's air filtration portfolio, increasing the
medium efficiency product offering and giving the company access
to the growing markets for high efficiency products. The plant
employs 32 people. The transaction is expected to be closed at the
beginning of the second quarter of 2007.
On February 2, 2007 Ahlstrom announced that it will invest EUR 5
million in a new drylaid nonwoven line to serve the North American
air filtration market. The new line, located at Ahlstrom's
Groesbeck, TX, USA facility, is expected to start at the beginning
of 2008.
Outlook for the first half of 2007
In the first half of 2007, the demand in Europe is expected to
continue at the same level as in 2006. In terms of sales,
Ahlstrom's main markets are Germany, France and Italy which are
expected to show stable or positive development. Ahlstrom's
products are primarily used in industrial processes which react to
changes in consumer demand with a slight delay. In the USA, which
is Ahlstrom's single largest market, the demand is currently
stable. However, the visibility in demand in the USA is low, but
the current weakness of the housing market may extend to other
sectors and consequently impact the demand for Ahlstrom's
products. Demand in South America and Asia is expected to develop
well due to the positive GDP development.
Costs for fibers and chemicals continued to increase throughout
the fourth quarter, maintaining pressure on margins. The price for
Ahlstrom's most important raw material, wood pulp, continued to
rise in January 2007 and it is expected to remain at the current
high level. Sales price increases and cost reductions are
implemented to offset the effect of more expensive raw materials.
Oil and natural gas prices continued to decline in the fourth
quarter. If sustained, this decline will gradually lower
Ahlstrom's costs for energy and synthetic fibers.
Ahlstrom continues to see promising growth opportunities in the
fiber-based materials business, and the company proceeds with
global growth initiatives in line with its business strategy. In
2007, several new growth investments will bring new volumes and
revenues for Ahlstrom.
Proposal for the distribution of profits
In accordance with Ahlstrom's dividend policy, the payout ratio is
on average at least 50% of the net profit. The Board of Directors
proposes to the Annual General Meeting that a dividend of EUR 1.00
per share be paid for the fiscal year that ended December 31,
2006. According to the proposal of the Board of Directors the
dividend record date will be April 4, 2007 and the pay date April
13, 2007. In addition, the Board of Directors proposes that EUR
70,000 be reserved to be used for the public good at the
discretion of the Board of Directors.
Financial information in 2007
Ahlstrom Corporation will publish its financial information in
2007 as follows:
Annual report 2006 Week 11
Interim report January - March Friday, April 27
Interim report January - June Wednesday, July 25
Interim report January - September Friday, October 26
Ahlstrom's Annual General Meeting will be held on Friday, March
30, 2007 at 13.00 at the Finlandia Hall, Mannerheimintie 13 e,
Helsinki.
This financial statement bulletin has been prepared in accordance
with the International Financial Reporting Standards (IFRS).
Comparable figures refer to the same period last year unless
otherwise stated.
Helsinki, February 2, 2007
Ahlstrom Corporation
Board of Directors
For additional information, please contact:
Jukka Moisio, President and CEO, tel. +358 (0)10 888 4700
Jari Mäntylä, CFO, tel. +358 (0)10 888 4768
A press conference on the 2006 results will be held on Friday,
February 2, 2007 at 10.30 Finnish time in Ahlstrom's head office,
address Eteläesplanadi 14, 00130 Helsinki. The press conference
will be held in Finnish.
A conference call for analysts and investors will be held on
Friday, February 2, 2007 at 13.00 Finnish time. To participate in
the teleconference, please dial +44 (0) 20 7162 0125 a few minutes
before the call. Use the password: Ahlstrom. A replay number is
available until February 8, 2007. The number for the replay is +
44 (0) 20 7031 4064, access code: 735509.
The presentation material will be available at www.ahlstrom.com >
Investors > IR presentations on February 2, 2007 after the
financial statements bulletin has been published.
Ahlstrom's stock exchange and press releases can be ordered on
www.ahlstrom.com > Media. Releases are delivered by e-mail.
This report contains certain forward-looking statements that
reflect the present views of the company's management. Due to the
nature of these statements, they contain uncertainties and risks
and are subject to changes in the general economic situation and
in the company's business.
Distribution:
Helsinki Stock Exchange
www.ahlstrom.com
Main media
Ahlstrom in brief
Ahlstrom is a global leader in the development, manufacture and
marketing of high performance fiber-based materials. Nonwovens and
specialty papers, made by Ahlstrom, are used in a large variety of
everyday products, e.g. in filters, wipes, flooring, labels, and
tapes. The company has a strong market position in several
business areas in which it operates, built upon the company's
unique fiber expertise and innovative approach. Ahlstrom's 5,700
employees serve customers via sales offices and production
facilities in more than 20 countries on six continents. In 2006,
Ahlstrom's net sales amounted to EUR 1.6 billion. Ahlstrom's share
is listed on the Helsinki Stock Exchange. The company website is
www.ahlstrom.com.
Appendices
1. Segment reviews
2. Financial statements 2006
Appendix 1
Segment reviews
FiberComposites segment
EUR million 2006 2005 Change, Q4/2006 Q4/2005 Change,
% %
Net sales 808.2 742.3 8.9 195.4 189.4 3.1
Operating 52.3 65.5 -20.2 9.2 13.8 -33.2
profit
Operating 54.1 62.7 -13.7 11.0 15.2 -27.9
profit
excl. non-
recurring
items
Operating 6.7 8.4 5.6 8.0
profit, %
excl. non-
recurring
items
Return on net 8.6 11.3 6.0 9.1
assets (RONA),
%
Return on net 8.9 10.8 7.2 10.1
asses (RONA),
%
excl. non-
recurring
items
In the fourth quarter, the segment's net sales grew slightly and
amounted to EUR 195.4 million (EUR 189.4 million). The weakening
of the US dollar decreased segment's net sales by EUR 7.6 million.
Volumes sold increased by 4.5%. Operating profit decreased
significantly to EUR 9.2 million (EUR 13.8 million), representing
a 4.7% margin (7.3%).
Operating profit of the fourth quarter included non-recurring
costs of EUR 1.8 million (EUR 1.4 million), mainly related to the
restructuring measures within the Filtration business area.
Excluding the non-recurring costs, the operating profit for the
fourth quarter amounted to EUR 11.0 million.
For the full financial year 2006, the segment's net sales amounted
to EUR 808.2 million (EUR 742.3 million), reflecting an 8.9%
growth. Volumes sold grew by 6.2% from the 2005 levels. However,
the operating profit decreased clearly to EUR 52.3 million (EUR
65.5 million), representing a 6.5% margin (8.8%).
Operating profit for the full year 2006 included net non-recurring
costs totaling EUR 1.8 million (gains of EUR 2.8 million), mainly
related to the restructuring measures mentioned.
The segment's profitability was affected by the continued
escalation of raw material and energy costs. The sales price
increases in most product areas as well as internal productivity
improvements partly compensated for the higher costs.
Nonwovens business area (23% of the Group's net sales)
The Nonwovens business area serves customers in the food
packaging, medical, wiping, building and technical goods sectors.
In 2006, overall sales volumes generally remained at the same
level as in 2005. The year saw an upturn in demand in numerous
European nonwovens market applications and in North America food
packaging and certain medical nonwovens applications showed
increased volumes. The market for spunlace wipes also continued
strong in North America. The fourth quarter did not reflect any
notable changes in the market situation, with the exception of the
demand for medical nonwovens that continued to strengthen from the
softer first half-year level.
In the fourth quarter, the business area's sales volumes remained
unchanged compared with the corresponding period of 2005. However,
the net sales declined by 5% from the corresponding quarter in
2005 mainly due to the weakening of the US dollar. For the full
year 2006, volumes sold remained stable with a modest growth in
net sales due to price increases.
Costs for energy and raw materials increased significantly in
2006, which put pressure on margins. The business area was,
however, able to partially offset the increased input costs by
improving its productivity, reducing fixed costs and increasing
sales prices. The weakening of the USD impacted the business
area's financial performance throughout the year, as a significant
share of its sales is non-euro nominated.
In the fourth quarter, Ahlstrom announced investments totaling EUR
50 million targeted to both increase production capacity and
technology capability of the Nonwovens business area in Brazil,
France and the United Kingdom. Additionally, the new nonwovens
line in the USA was started up ahead of schedule at the end of
2006.
Demand for Ahlstrom's nonwovens is estimated to remain at the
current good level in the coming months.
Filtration business area (21% of the Group's net sales)
Filtration media produced by Ahlstrom are used in the
transportation industry and in liquid and air filtration
applications.
Demand for transportation filtration media was good in North
America and particularly strong in South America and Asia. In
Europe, the market softened after the first quarter of 2006 and
strengthened again towards the end of the year. Demand for air
filtration media was relatively weak in the product line's main
market area, North America, due to the weakness in the housing
markets. The overall market for liquid filtration materials
continued to be strong throughout the year.
In the fourth quarter, the business area's sales volumes rose by
10% from the corresponding quarter of 2005. Net sales increased by
13%. For the full year 2006, volumes sold improved by 9% and net
sales by 17% when compared with 2005 figures. Growth was mainly
driven by the continued strong demand in all geographical areas
for transportation, especially in Latin America and Asia, and was
supported by the additional production capacity for air media
acquired in late 2005 and in the beginning of 2006 as well as the
new products launched during the year.
Raw material and energy costs rose in 2006 affecting the business
area's margins. The business area was able to partially compensate
for the impact of increased costs by raising its sales prices,
improving productivity and by decreasing fixed costs. Ahlstrom
decided in the fourth quarter to transfer its liquid filtration
converting activities from the Mt. Holly Springs, PA, USA site to
another Ahlstrom facility in Bishopville, SC, USA. The transfer,
expected to take place during the first quarter of 2007, will
improve the business area's competitiveness.
At the beginning of 2006, Ahlstrom acquired HRS Textiles Inc. in
the USA to further strengthen its position in the North American
air and liquid filtration markets. In the fourth quarter, Ahlstrom
decided to invest EUR 4 million in a new filtration media
production line in China to serve the fast growing dust filtration
market.
The company completed the installation of a new technology
investment to produce nanofiber filtration media at the
Madisonville, KY plant in the USA. This allows Ahlstrom to
introduce a new range of materials to filtration producers.
The overall market situation is estimated to remain positive.
However, the North American housing market, where Ahlstrom
supplies HVAC filtration materials, is expected to remain
uncertain.
Glass Nonwovens business area (7% of the Group's net sales)
Ahlstrom's glass nonwovens products are used in the building
materials, marine, transportation, windmill, and sporting goods
sectors.
The market environment in the windmill and marine market segments,
both very important for the business area, was very favorable in
2006. Moreover, the demand in the building materials industry
strengthened towards the year-end.
Sales volumes for the full year 2006 increased by 13% and net
sales by 12% compared with 2005 levels. In the fourth quarter,
sales volumes remained nearly unchanged compared with the strong
last quarter of 2005, while net sales grew by 7 %. The solid
demand continued in the fourth quarter with Ahlstrom's capacity in
full utilization. In addition, the fourth quarter sales
development reflects the planned increase in Ahlstrom's inventory
levels as part of the preparations for a glass furnace investment
at the Karhula, Finland plant in the first quarter of 2007.
The business area's net sales grew at a higher rate than the
market in general, thanks to the strong demand in the wind mill
and marine market segments as well as in the building materials
industry. However, the higher costs for energy and raw materials
impacted profitability. The business area was able to partially
offset this effect by internal improvement measures and sales
price increases, despite the tight competition that prevailed
throughout the year.
In 2006, Ahlstrom decided to build new glass nonwovens plants in
Russia and in the USA. The Bishopville, USA plant is ramping up
its production in the first quarter of 2007, and the Tver, Russia
facility is estimated to be operational in the fourth quarter of
2007. In addition, the expansion of the Mikkeli, Finland plant was
completed in the fourth quarter of 2006. These investments further
strengthen Ahlstrom's global position as a leading supplier of
glassfiber materials, and support the business area's target to
continue profitable growth at a rate that exceeds the market
average.
Demand for Ahlstrom's glass nonwovens is expected to remain solid
in the coming months.
Specialty Papers segment
EUR million 2006 2005 Change, Q4/2006 Q4/2005 Change,
% %
Net sales 794.0 814.7 -2.5 193.9 195.3 -0.7
Operating profit 32.2 57.7 -44.1 3.0 8.2 -63.7
Operating profit 36.4 42.9 -15.2 4.4 8.2 -46.7
excl. non-
recurring items
Operating 4.6 5.3 2.3 4.2
profit, % excl.
non-recurring
items
Return on net 10.5 18.7 3.8 11.1
assets (RONA), %
Return on net 11.8 13.9 5.6 11.2
asses (RONA), %
excl. non-
recurring items
In the fourth quarter, net sales of the Specialty Papers segment
amounted to EUR 193.9 million (EUR 195.3 million). Net sales as
well as the volumes sold remained nearly unchanged compared with
the corresponding period last year. Operating profit decreased
significantly to EUR 3.0 million (EUR 8.2 million), representing a
1.5% margin (4.2%). A fire at a paper machine at the La Gère,
France plant decreased operating profit approximately by EUR 1
million.
Operating profit of the fourth quarter included non-recurring
costs of EUR 1.4 million, mainly related to the asset impairment
in the Label & Packaging business area. Excluding the non-
recurring costs, operating profit for the fourth quarter amounted
to EUR 4.4 million (EUR 8.2 million).
For the full financial year 2006, the segment's net sales
decreased slightly and amounted to EUR 794.0 million (EUR 814.7
million) due to the divestment of Kauttua plant's PM1 in 2005. Net
sales as well as sales volumes, adjusted for divestment, were
stable. Operating profit decreased remarkably to EUR 32.2 million
(EUR 57.7 million), representing a 4.1% margin (7.1%).
Operating profit for the full year 2006 included net non-recurring
costs totaling EUR 4.2 million (gains of EUR 14.7 million), mainly
related to the closure of the Nümbrecht, Germany plant the asset
impairment in the Label & Packaging business area and to the
restructuring measures in the Technical Papers business area.
Sales development varied by product line and geographic area. Best
performance was seen in the fast growing Asian and Latin American
markets and in the release base paper as well as in the decor
paper product lines. The market environment was particularly
challenging for flexible packaging papers.
Constantly increasing raw material and energy costs had a
significant impact on the segment's profitability. In addition, a
major production line was closed down in January for an investment
standstill. The impact of the high raw material prices has partly
been compensated for by price increases.
In 2006, the non-recurring costs of EUR 4.2 million were related
to the asset impairment of the Chantraine, France plant, the
closure of the Nümbrecht, Germany plant and to the streamlining of
the Technical Papers business area. In 2005, the net non-recurring
gains related to asset sales amounted to EUR 14.7 million.
Label & Packaging Papers business area (32% of the Group's net
sales)
The Label & Packaging Papers business area manufactures a number
of different specialty papers for use in the self-adhesive
industry, as well as in the labeling, packaging and graphic
industries.
Demand for release base papers, as well as for metalizing and wet
glue label papers was good throughout the year. However, there was
temporary excess supply in the release base paper market at the
end of 2006 due to simultaneous major capacity expansions in the
industry. In flexible packaging papers, the overall market
environment remained challenging.
In the fourth quarter, volumes sold as well as net sales declined
slightly compared with the corresponding quarter last year. For
the full year 2006, the business area's sales volumes decreased by
6% and net sales by 5% compared with the 2005 levels, due to the
divestment of the PM1 at the Kauttua, Finland plant. Comparable
sales volumes as well as net sales remained at 2005 levels. A
paper machine at the business area's La Gère, France plant was
closed for one week in the fourth quarter due to a fire.
Costs for energy, raw materials and transportation escalated in
2006, which made it necessary for Ahlstrom to increase its sales
prices. However, the business area was able to partially
compensate for the impact of increased input costs also by
improving operational efficiency, and through the sourcing of more
cost-effective raw materials.
The investment to increase the production capacity of release base
papers at the Turin, Italy plant was completed successfully in
January. The investment standstill decreased operating profit by
approximately EUR 2.5 million. A similar investment at the La
Gère, France plant is ongoing and will be completed during the
second quarter of 2007. These investments, valued in total at
approximately EUR 50 million, will further strengthen Ahlstrom's
leading position in the growing release base paper markets.
The demand for release base papers is estimated to remain at a
good level despite the temporary excess supply in the market. In
label papers, the demand is expected to pick up in the coming
months following the start of the peak season of the beverage
label industry. In flexible packaging papers, the market will
remain challenging also in the near future.
Technical Papers business area (17% of the Group's net sales)
The main products of the Technical Papers business area are
abrasive base papers, crepe papers (such as masking tape base,
wipes, medical applications), pre-impregnated decor papers,
sealing & shielding materials (for gaskets, heat shields, calender
bowls), coated papers (e.g. wallpaper base and poster papers) as
well as vegetable parchment papers. The business area's main
markets include the furniture and home decoration, healthcare,
food and automotive industries.
In 2006, good and stable demand prevailed in most of the product
lines. The market environment was particularly favorable for pre-
impregnated decor papers, while market conditions for vegetable
parchment and decal papers were more challenging. In the fourth
quarter, the business area entered the casting paper market, which
offers promising future opportunities, for example in the
automotive industry.
In the fourth quarter, the business area's sales volumes as well
as net sales improved slightly compared with the corresponding
quarter last year. For the full year 2006, sales volumes increased
by 3% compared with the 2005 levels, and net sales grew at a
similar rate.
Rising costs of raw materials, packaging, transportation and
energy put strong pressure on the business area's margins. In
addition to the substantial internal efforts towards production
efficiency, the business area also increased its sales prices
during 2006 to secure its margins.
The business area continued its performance improvement program
aimed to improve operative performance in order to reduce costs.
In line with its strategy to improve profitability through various
actions, including the closing of non-competitive manufacturing
units, Ahlstrom closed its Nümbrecht, Germany plant at the end of
2006.
The Technical Papers business area launched several new or
improved products in 2006. The focus was on advanced high-end
products, such as a new heat shield material for automotives with
a temperature resistance of up to 1,000°C and unique sound
insulation properties and a new pre-impregnated decor material.
The business area expects stable demand to continue in coming
months.
Appendix 2
CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES
This report has been prepared in accordance with the IFRS and the
accounting policies set out in the Group's Financial Statements
for 2006.
Financial Statements are audited.
INCOME STATEMENT Q4 Q4 Q1-Q4 Q1-Q4
Eur million 2006 2005 2006 2005
Net sales 389.0 383.6 1,599.1 1,552.6
Other operating income 5.6 4.7 36.7 30.8
Expenses -360.8 -343.1 -1,458.2 -1,382.4
Depreciation, -21.5 -20.7 -81.6 -83.8
amortization
and impairment charges
Operating profit 12.3 24.5 96.1 117.2
Share of profit of -0.2 -0.6 0.0 0.4
associated companies
Net financial expenses -2.6 -4.8 -14.9 -16.8
Profit before taxes 9.4 19.1 81.2 100.7
Income taxes -0.7 -7.2 -23.6 -38.1
Profit for the period 8.8 11.9 57.6 62.6
Attributable to
Equity holders of the 8.8 11.9 57.5 62.4
parent
Minority interest -0.0 0.0 0.1 0.2
Basic earnings per 0.18 0.32 1.31 1.71
share, EUR
Diluted earnings per 0.18 0.31 1.29 1.67
share, EUR
BALANCE SHEET Dec 31, Dec 31,
Eur million 2006 2005
ASSETS
Property, plant and equipment 601.7 577.4
Goodwill 101.0 108.6
Other intangible assets 32.6 39.0
Investment property - 4.0
Investments in associated companies 12.9 49.4
Other investments 0.2 2.9
Other receivables 6.1 4.9
Deferred tax assets 25.9 32.2
Total non-current assets 780.4 818.4
Inventories 214.4 212.6
Trade and other receivables 328.0 319.4
Income tax receivable 8.7 0.7
Other investments 5.0 0.0
Cash and cash equivalents 20.1 16.0
Total current assets 576.1 548.8
Total assets 1,356.6 1,367.2
EQUITY AND LIABILITIES
Equity attributable to equity holders of 765.8 589.7
the parent
Minority interest 0.8 0.8
Total equity 766.6 590.5
Interest-bearing loans and borrowings 44.0 119.6
Employee benefit obligations 112.4 112.8
L-T provisions for contingencies 3.7 3.7
Other liabilities 0.6 0.4
Deferred tax liabilities 26.8 26.3
Total non-current liabilities 187.4 262.8
Interest-bearing loans and borrowings 136.4 237.0
Trade and other payables 241.0 243.7
Income tax liability 12.4 19.9
S-T provisions for contingencies 12.8 13.3
Total current liabilities 402.6 513.9
Total equity and liabilities 1,356.6 1,367.2
STATEMENT OF CHANGES IN EQUITY
Hedg- Trans- Re- Minor-
Issued ing lation tained ity
capi- Share re- re- earn- inte- Total
Eur tal premium serve serve ings rest equity
million
Equity at 55 27 1 4 504 1 590
Dec 31,
2005
Dividends -65 0 -65
paid
Trans- -7 -7
lation
adjust-
ment*
Share 14 183 197
issue
Profit 57 0 58
for
the
period
Other -1 -5 0 -6
Equity at 68 210 0 -3 491 1 767
Dec 31,
2006
*Translation adjustment after equity hedging, net of tax
STATEMENT OF CASH FLOWS Q4 Q4 Q1-Q4 Q1-Q4
Eur million 2006 2005 2006 2005
Cash from operations before
change in working capital 33.3 38.1 167.2 179.6
Change in working capital -10.7 5.1 -14.6 -15.2
Cash generated from operating 22.7 43.3 152.6 164.4
activities
Financial items 6.6 -7.0 -3.7 -28.4
Income taxes -4.3 -5.8 -29.6 -9.4
Net cash from operating 25.0 30.4 119.2 126.6
activities
Purchases of property, plant -33.0 -19.1 -116.5 -55.4
and equipment
Acquisition of group companies 0.3 -10.0 -7.8 -10.8
Other investing activities 38.5 13.3 45.3 55.4
Cash flow before financing 30.8 14.7 40.2 115.8
activities
Share issue 0.6 - 195.1 -
Dividends paid - -35.4 -65.3 -62.8
Other financing activities -33.9 -0.3 -165.8 -57.1
Net change in cash and cash -2.5 -21.0 4.3 -4.1
equivalents
KEY FIGURES Q4 Q4 Q1-Q4 Q1-Q4
2006 2005 2006 2005
Operating profit, % 3.2 6.4 6.0 7.5
Operating profit (excluding 3.6 5.7 5.5 6.4
non-recurring items), %
Return on capital employed 5.3 10.1 10.4 12.4
(ROCE), %
Return on equity (ROE), % 4.6 7.9 8.5 10.7
Interest-bearing net 155.2 340.6 155.2 340.6
liabilities,
EUR million
Equity ratio, % 56.5 43.2 56.5 43.2
Gearing ratio, % 20.3 57.7 20.3 57.7
Earnings per share, EUR 0.18 0.32 1.31 1.71
Earnings per share, 0.18 0.31 1.29 1.67
diluted, EUR
Equity per share, EUR 16.79 16.21 16.79 16.21
Cash earnings per share, EUR 0.54 0.84 2.72 3.48
Average number of shares 45,602 36,418 43,802 36,418
during the period, 1000's
Number of shares at the end 45,662 36,418 45,662 36,418
of the period, 1000's
Capital expenditure, EUR 39.5 26.0 120.1 62.4
million
Capital employed, at the end of 946.9 947.1 946.9 947.1
the period, EUR million
Number of employees, average 5,677 5,479 5,687 5,605
Calculation of key figures: www.ahlstrom.com
QUARTERLY DATA
Eur million
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2005 2005 2005 2005 2006 2006 2006 2006
Net sales
384.2 402.8 381.9 383.6 414.6 409.6 385.9 389.0
Other operating income*
1.3 2.5 4.9 1.5 7.0 5.6 4.4 4.3
Expenses*
-338.0 -355.6 -344.2 -342.6 -375.5 -368.7 -349.6 -359.3
Depreciation, amortization, impairment charges*
-20.3 -21.3 -21.3 -20.5 -19.8 -20.5 -19.8 -19.9
Non-recurring items
1.3 2.0 12.4 2.5 3.3 2.9 4.4 -1.9
Operating profit
28.6 30.3 33.7 24.5 29.6 28.9 25.3 12.3
Share of profit of associated companies
0.8 -0.4 0.6 -0.6 -0.0 0.4 -0.2 -0.2
Net financial expenses
-2.4 -4.5 -5.1 -4.8 -4.5 -4.1 -3.7 -2.6
Profit before taxes
27.0 25.4 29.2 19.1 25.1 25.2 21.4 9.4
Income taxes
-8.9 -11.1 -11.0 -7.2 -9.3 -8.6 -5.0 -0.7
Profit for the period
18.0 14.4 18.3 11.9 15.8 16.6 16.4 8.8
Attributable to
Equity holders of the parent
18.0 14.3 18.2 11.9 15.8 16.5 16.4 8.8
Minority interest
0.0 0.0 0.1 0.0 0.0 0.1 0.0 -0.0
Operating profit*
27.3 28.4 21.3 22.0 26.3 26.0 20.8 14.1
Operating profit, %*
7.1 7.0 5.6 5.7 6.3 6.4 5.4 3.6
* Excluding non-recurring items
QUARTERLY DATA BY SEGMENT
Eur million
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2005 2005 2005 2005 2006 2006 2006 2006
Net sales
FiberComposites
176.3 193.3 183.3 189.4 212.7 204.9 195.3 195.4
Specialty Papers
209.1 211.2 199.1 195.3 203.3 205.2 191.5 193.9
Other operations and eliminations
-1.2 -1.6 -0.5 -1.2 -1.5 -0.5 -0.9 -0.3
Group 384.2 402.8 381.9 383.6 414.6 409.6 385.9 389.0
total
Operating profit
FiberComposites
13.5 17.3 20.9 13.8 15.9 13.9 13.3 9.2
Specialty Papers
14.8 12.7 21.9 8.2 13.0 10.3 6.0 3.0
Other operations and eliminations
0.3 0.3 -9.1 2.5 0.7 4.8 6.0 0.1
Group 28.6 30.3 33.7 24.5 29.6 28.9 25.3 12.3
total
Operating profit excluding non-recurring items
FiberComposites
12.5 17.2 17.8 15.2 15.9 13.9 13.3 11.0
Specialty Papers
14.5 12.0 8.3 8.2 13.0 10.3 8.7 4.4
Other operations and eliminations
0.3 -0.8 -4.7 -1.4 -2.6 1.9 -1.2 -1.2
Total 27.3 28.4 21.3 22.0 26.3 26.0 20.8 14.1
Non-recurring items
1.3 2.0 12.4 2.5 3.3 2.9 4.4 -1.9
Group total
28.6 30.3 33.7 24.5 29.6 28.9 25.3 12.3
KEY FIGURES QUARTERLY
Eur million
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2005 2005 2005 2005 2006 2006 2006 2006
Net sales
384.2 402.8 381.9 383.6 414.6 409.6 385.9 389.0
Operating profit
28.6 30.3 33.7 24.5 29.6 28.9 25.3 12.3
Operating profit excl. non-recurring items
27.3 28.4 21.3 22.0 26.3 26.0 20.8 14.1
Profit before taxes
27.0 25.4 29.2 19.1 25.1 25.2 21.4 9.4
Profit before taxes excl. non-recurring items
25.6 23.4 16.8 16.6 21.8 22.3 17.0 11.3
Profit for the period
18.0 14.4 18.3 11.9 15.8 16.6 16.4 8.8
Gearing ratio, %
60.0 65.4 49.4 57.7 30.0 30.0 25.0 20.3
Return on capital employed (ROCE), %
12.1 12.1 14.0 10.1 12.3 11.7 10.3 5.3
ROCE excl. non-recurring items, %
11.6 11.3 9.0 9.1 11.0 10.6 8.5 6.1
Earnings per share, EUR
0.49 0.40 0.50 0.32 0.41 0.36 0.36 0.18
Cash earnings per share, EUR
0.31 0.71 1.62 0.84 0.68 0.21 1.29 0.54
Average number of shares
during the period, 1000's
36,418 36,418 36,418 36,418 38,326 45,587 45,592 45,602
Calculation of key figures: www.ahlstrom.com
OPERATING LEASES Dec 31, Dec 31,
Eur million 2006 2005
Current portion 6.1 4.6
Non-current portion 18.2 23.6
Total 24.3 28.2
CONTINGENT LIABILITIES Dec 31, Dec 31,
Eur million 2006 2005
For own liabilities
Loans from financing institutions
Amount of loans - 0.2
Amount of mortgages - 0.2
Other loans
Amount of loans 1.5 3.3
Book value of pledges 1.6 3.6
For other own commitments
Guarantees 29.1 24.1
For commitments of associated companies
Guarantees 8.3 8.3
For commitments of third parties
Guarantees - -
Capital expenditure commitments 50.6 11.2
Other contingent liabilities 5.3 8.4
DERIVATIVE FINANCIAL INSTRUMENTS *
Dec 31, Dec 31,
Eur million 2006 2005
Fair values ** Positive Negative Positive Negative
Hedge accounting
Interest rate swaps - - 0.8 -0.1
Foreign exchange 0.5 -0.3 0.4 -2.3
forward contracts
Total 0.5 -0.3 1.2 -2.4
Non-hedge accounting
Interest rate swaps 0.8 - - -
Foreign exchange 0.7 -1.0 1.7 -2.3
forward contracts
Total 1.5 -1.0 1.7 -2.3
Nominal values Dec 31, 2006 Dec 31, 2005
Interest rate swaps 25.0 67.4
Foreign exchange 393.1 434.6
forward contracts
Total 418.1 502.0
* The values illustrate the extent of the hedging activities and
do not as such measure the risk exposure of Ahlstrom.
** The fair values of interest rate swaps are based on actually
quoted market rates at period ends.
The fair values of all other financial instruments have been
calculated from prevailing market rates at period ends.
Ahlstrom's Financial Statements Bulletin 2006: EPS was EUR 1.31, dividend of EUR 1.00 per share prop
| Source: Ahlstrom