Ahlstrom Corporation STOCK EXCHANGE RELEASE 26.10.2007
Ahlstrom, a leader in high performance fiber-based materials, reports
net sales of EUR 444.9 million in the third quarter (Q3/2006: EUR
385.9 million). Operating profit amounted to EUR 16.1 million (EUR
25.3 million), representing a 3.6% margin (6.5%). Profit before taxes
was EUR 6.7 million (EUR 21.4 million) and return on capital employed
(ROCE) 5.5% (10.3%). Earnings per share (EPS) amounted to EUR 0.10
(EUR 0.36).
Excluding non-recurring items, the operating profit for the third
quarter of 2007 was EUR 16.2 million (EUR 20.8 million), representing
a 3.6% margin (5.4%). Profit before taxes was EUR 6.7 million (EUR
17.0 million) and ROCE 5.5% (8.5%) both excluding non-recurring
items.
July-September 2007 in brief
- Net sales (adjusted for currency effect) grew by 18% from the third
quarter of 2006 as a result of acquisitions and organic growth
investments.
- Group operating profit decreased due to weak performance of the
Label & Packaging Papers business area and escalating raw material
costs. Ahlstrom has taken decisive actions to correct the situation.
- The Ahlstrom-VCP joint venture in Brazil was consolidated from the
beginning of September.
- The integration work of the four acquisitions continued and is
expected to be completed by the end of 2007. The acquisitions will
have a positive impact on Ahlstrom's financial development from the
last quarter of 2007 onwards.
+-------------------------------------------------------------------+
| Key figures, EUR | Q3/ | Q3/ | Q1-Q3/ | Q1-Q3/ | |
| million | 2007 | 2006 | 2007 | 2006 | 2006 |
|-------------------+--------+--------+---------+---------+---------|
| Net sales | 444.9 | 385.9 | 1,298.3 | 1,210.1 | 1,599.1 |
|-------------------+--------+--------+---------+---------+---------|
| Operating profit | 16.1 | 25.3 | 60.5 | 83.8 | 96.1 |
|-------------------+--------+--------+---------+---------+---------|
| Operating profit | 16.2 | 20.8 | 56.8 | 73.2 | 87.3 |
| excl. | | | | | |
| non-recurring | | | | | |
| items | | | | | |
|-------------------+--------+--------+---------+---------+---------|
| Profit before | 6.7 | 21.4 | 43.4 | 71.8 | 81.2 |
| taxes | | | | | |
|-------------------+--------+--------+---------+---------+---------|
| Profit before | 6.7 | 17.0 | 39.6 | 61.2 | 72.5 |
| taxes excl. | | | | | |
| non-recurring | | | | | |
| items | | | | | |
|-------------------+--------+--------+---------+---------+---------|
| Profit for the | 5.0 | 16.4 | 30.3 | 48.8 | 57.6 |
| period | | | | | |
|-------------------+--------+--------+---------+---------+---------|
| Net cash flow | 37.1 | 57.0 | 34.1 | 94.2 | 119.2 |
| from operating | | | | | |
| activities | | | | | |
|-------------------+--------+--------+---------+---------+---------|
| Gearing ratio, % | 60.1 | 25.0 | 60.1 | 25.0 | 20.3 |
|-------------------+--------+--------+---------+---------+---------|
| Return on capital | 5.5 | 10.3 | 7.4 | 11.8 | 10.4 |
| employed (ROCE),% | | | | | |
|-------------------+--------+--------+---------+---------+---------|
| Return on capital | | | | | |
| employed (ROCE),% | | | | | |
| excl. | | | | | |
| non-recurring | | | | | |
| items | 5.5 | 8.5 | 6.9 | 10.4 | 9.5 |
|-------------------+--------+--------+---------+---------+---------|
| Cash earnings per | 0.79 | 1.29 | 0.73 | 2.18 | 2.72 |
| share, EUR | | | | | |
|-------------------+--------+--------+---------+---------+---------|
| Earnings per | 0.10 | 0.36 | 0.65 | 1.13 | 1.31 |
| share, EUR | | | | | |
|-------------------+--------+--------+---------+---------+---------|
| Average number of | | | | | |
| shares | | | | | |
| during the | | | | | |
| period, 1000s | 46,671 | 45,592 | 46,411 | 43,195 | 43,802 |
+-------------------------------------------------------------------+
Jukka Moisio, President & CEO, comments on Ahlstrom's third quarter:
- We saw solid sales growth in the third quarter as a result of the
implemented growth actions. The expansion outside of Europe continued
as we started the Ahlstrom-VCP joint venture in Brazil and signed an
agreement to form a joint venture with KAN Paper in China. We are
currently running at an annualized 1.9 billion euro net sales level
and we have now set a strong foothold on five continents to enable
future expansions of our businesses.
- The weak performance of the Label & Packaging Papers business area
decreased the company's financial result and we reported a ROCE of
5.5%. As earlier announced, we are taking actions with the weakly
performing units to improve our profitability. At the same time I am
satisfied that the other businesses have improved their operating
profit from the 2006 level.
- All our business areas are currently increasing prices in order to
balance the rising raw material costs. We also continue the
integration process of the acquisitions made in 2007. These actions
will contribute positively to our financial development from the
fourth quarter onwards.
Ahlstrom Group: Interim report January-September, 2007
All comparable figures in this report refer to the same period last
year unless otherwise stated.
Operating environment
The demand for label and packaging papers weakened in Europe and the
weakened USD also affected Ahlstrom's competitiveness in the European
export markets. However, the demand for Ahlstrom's other businesses
continued at a good level in Europe, Asia and Latin America. In the
USA the demand was increasingly short-term oriented and the housing
markets continued to slow down which affected the market for air
filtration products.
The prices for main raw materials continued to rise during the
quarter. The average USD market price for NBSK pulp, Ahlstrom's main
raw material was on average approximately 14% higher than in the
third quarter of 2006 and 3% higher than in the second quarter of
2007. The market price for BHKP pulp (i.e. eucalyptus pulp) was on
average approximately 8% higher than in the third quarter of 2006 and
5% higher than in the second quarter of 2007. The eucalyptus pulp has
been approximately USD 100/ton cheaper than the NBSK pulp. The prices
for most of the synthetic fibers and chemicals continued to increase
as a result of rising oil prices and a shortage of certain raw
materials due to strong demand in Asia.
Energy costs remained high during the review period. Ahlstrom's main
energy sources are natural gas and electricity.
Financial performance in July-September 2007
The Group's net sales increased by 15.3% and amounted to EUR 444.9
million (EUR 385.9 million). Exchange rate fluctuations, mainly the
weakened USD, decreased Ahlstrom's net sales by EUR 10.4 million or
by 2.7%. The four acquisitions (joint venture with Votorantim
Celulose e Papel i.e Ahlstrom-VCP, Fabriano, Orlandi's nonwovens
business and Fiberweb's consumer wipes business) added sales of EUR
55.4 million in the third quarter. Ahlstrom-VCP was consolidated for
September and Orlandi, Fabriano and Fiberweb for the full quarter.
Comparable net sales, adjusted for the acquisitions and the currency
effect, grew by 3.6%.
Sales volumes improved by 15.4% from the third quarter of 2006.
Growth was mainly driven by the acquisitions both in the
FiberComposites and the Specialty Papers segment and by organic
growth investments.
The Group's operating profit excluding non-recurring items for the
third quarter decreased by 22.4% and amounted to EUR 16.2 million
(EUR 20.8 million). The excess capacity in release base papers as
well as strong competition and weak demand of one-side coated papers
in Europe decreased Ahlstrom's operating profit in the third quarter.
In addition, the increase in the main raw material costs impacted
operating profit negatively. Energy costs remained approximately at
the same level as in the second quarter. The integration costs of the
acquisitions decreased profitability by approximately EUR 1.5
million.
The third quarter included net non-recurring items of EUR -0.1
million mainly related to the closure of the Bellingham, USA plant
and a government grant in Brazil.
Total net financial expenses were EUR 9.7 million (EUR 3.7 million)
which includes start-up financing costs of EUR 1.5 million related to
the Ahlstrom-VCP joint venture in Brazil. Net interest expenses
increased to EUR 7.7 million (EUR 2.2 million) mainly due to the
increase in net debt and the market valuation of interest rate
hedges. Net foreign exchange losses on financial items were EUR 0.9
million (EUR 0.9 million).
Ahlstrom's share of the profits of the associated company Jujo
Thermal was EUR 0.2 million (losses of EUR 0.2 million).
Profit before taxes excluding non-recurring items decreased to EUR
6.7 million (EUR 17.0 million). Profit before taxes amounted to EUR
6.7 million (EUR 21.4 million). Income tax expenses amounted to EUR
1.6 million (EUR 5.0 million). Profit for the period decreased to EUR
5.0 million (EUR 16.4 million) and earnings per share (EPS) to EUR
0.10 (EUR 0.36). The increase in financial expenses had a negative
impact on the profit for the period and EPS.
ROCE excluding non-recurring items amounted to 5.5% (8.5%) and return
on equity (ROE) was 2.6% (8.7%). Net asset turnover was 1.5 (1.6).
Financial performance in January-September 2007
Ahlstrom's net sales in January-September 2007 grew by 7.3% on the
corresponding period last year and amounted to EUR 1,298.3 million
(EUR 1,210.1 million). Currency fluctuations, mainly the weakened
USD, decreased net sales by EUR 31.0 million or by 2.6%. Sales
volumes increased by 7.8%. Comparable net sales, adjusted for
acquisitions, investment standstills and the currency effect, grew by
4.2%.
The operating profit excluding non-recurring items decreased to EUR
56.8 million (EUR 73.2 million). High raw material and energy costs,
the ramp up of several large investments together with the
integration costs of the completed acquisitions decreased
profitability during the period. In addition, the weakening demand in
the Label & Packaging Papers business area and the excess capacity of
release base papers in the third quarter had a negative impact on the
operating profit. The non-recurring items of EUR 3.7 million were
mainly related to the sale of three power plants in Italy, the
Bellingham plant closure in the USA and the government grant in
Brazil.
Total net financial expenses were EUR 16.9 million (EUR 12.3
million). Net interest expenses increased to EUR 14.0 million (EUR
6.7 million) mainly due to the increase in net debt and the fair
valuation of interest rate hedges. Net foreign exchange losses were
EUR 0.7 million (EUR 4.0 million). The decrease was mainly
attributable to the actions implemented in 2006 to decrease the level
of equity hedging.
Ahlstrom's share of the losses of the associated company Jujo Thermal
amounted to EUR 0.2 million (profits of EUR 0.2 million).
Profit before taxes excluding non-recurring items decreased to EUR
39.6 million (EUR 61.2 million). Profit before taxes amounted to EUR
43.4 million (EUR 71.8 million). Income tax expenses totaled EUR 13.0
million (EUR 23.0 million). The cumulative tax rate for the period
was 30.0%. Profit for the period amounted to EUR 30.3 million (EUR
48.8 million) and earnings per share (EPS) to EUR 0.65 (EUR 1.13).
Excluding net non-recurring items, ROCE amounted to 6.9% (10.4%).
Return on equity (ROE) was 5.2% (9.6%). Net asset turnover was 1.6
(1.7).
Financing and financial position in January-September 2007
Ahlstrom's net cash flow generated from operating activities amounted
to EUR 34.1 million (EUR 94.2 million). The decrease in cash flow was
mainly attributable to the EUR 20.8 million payment to the pension
fund in the United Kingdom in the first quarter 2007.
Interest-bearing net liabilities increased by EUR 314.0 million to
EUR 469.2 million. (December 31, 2006: EUR 155.2 million).
Gearing ratio was 60.1% (December 31, 2006: 20.3%) and the equity
ratio 45.2% (December 31, 2006: 56.5%).
On September 30, 2007 committed credit facilities available to the
Group amounted to EUR 342 million of which EUR 117 million were
undrawn.
Capital expenditure in January-September 2007
Capital expenditure excluding acquisitions amounted to EUR 115.1
million (EUR 80.5 million). The value of acquisitions was EUR 215.8
million (EUR 8.0 million).
The full-year capital expenditure for Ahlstrom Group, excluding
acquisitions, is expected to exceed the 2006 level (EUR 120.1
million) by approximately 25%.
Growth strategy
Ahlstrom's strategy is to grow both organically and by acquisitions.
Ahlstrom's growth investments are targeted to expand business to fast
growing markets and serve customers globally.
Ahlstrom's growth 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%.
In January-September 2007, Ahlstrom continued its global growth
strategy by implementing several acquisitions and organic growth
investments on four continents.
Acquisitions and investment decisions in January-September 2007
On September 21, 2007 Ahlstrom signed the agreements with Zhejiang
Kan Specialty Material Co (KAN Paper) and its management to acquire a
majority shareholding in a specialty papers joint venture in China.
Ahlstrom will hold 70% of the shares in the joint venture and the
debt-free value of the acquisition is expected to be approximately
EUR 10 million. The annual production capacity of the joint venture
is approximately 12,000 tons and it employs 130 people. The
transaction is expected to be closed during the fourth quarter 2007.
On September 3, 2007 Ahlstrom closed the transaction to form a joint
venture formed with Brazilian Votorantim Celulose e Papel (VCP)
(Ahlstrom-VCP). Ahlstrom holds 60% and VCP 40% of the shares in the
joint venture. The price for Ahlstrom's shareholding was
approximately EUR 80 million. The annual net sales of the joint
venture is approximately EUR 100 million.
On May 31, 2007 Ahlstrom closed the acquisition of Italian Fabriano
Filter Media SpA. Fabriano is a manufacturer of microglass filter
media, serving mainly the high efficiency air filtration market. The
acquisition price was approximately EUR 7 million. The transaction
includes one manufacturing plant employing 32 people with net sales
of approximately EUR 7 million.
On May 25, 2007 Ahlstrom closed the acquisition of the consumer wipes
business of Fiberweb plc. The acquisition price was approximately EUR
65 million. The acquired business includes four plants in Europe and
in the USA. In 2006, the net sales of the acquired business amounts
to EUR 110 million and it employs approximately 400 people.
On May 11, 2007 Ahlstrom announced that it will invest EUR 8 million
in a new needlepunch line for its North American filtration business,
targeting the growing dust filtration market.
The new line will be located at the current Darlington, SC, USA
facility. The targeted completion date is June 2008.
On May 7, Ahlstrom signed a memorandum of understanding with Mundra
Special Economic Zone (SEZ) in Gujarat, India to purchase a land area
of 5 hectares in the Textile and Apparel Park. The parties agreed not
to disclose the purchase price of the property.
On April 30, Ahlstrom closed the acquisition of the spunlace
nonwovens business of the Italian Orlandi Group. The acquisition
price was approximately EUR 60 million and the acquired business
includes two plants in Italy employing approximately 120 people in
total. In connection with the acquisition, Ahlstrom invested
approximately EUR 2.5 million in the airlace line at the Cressa,
Italy plant. The acquired business will generate annual net sales of
approximately EUR 65 million.
On February 2, Ahlstrom decided to invest EUR 5 million in a new
drylaid nonwoven line to serve the North American air filtration
market. The new line is located at Ahlstrom's Groesbeck, TX, USA
plant and is expected to start at the beginning of 2008.
Organic growth investment start-ups in January-September 2007
In June 2007, a major release base paper capacity expansion was
started up at the La Gère, France plant. The investment standstill
lasted five weeks.
Ahlstrom's new specialty glassfiber reinforcement plant in
Bishopville, SC, USA serving the wind energy, marine and
transportation markets was ramping up its production in January-
September 2007.
Ahlstrom's new wiping fabrics line located at the Green Bay, WI, USA
plant was started up in the end of December, 2006. The line was
ramping up during January-September 2007.
During the first quarter of 2007 Ahlstrom repaired the existing glass
furnace and increased the production capacity of the chopped strand
mat machine at its Karhula, Finland plant.
Divestments in January-September 2007
In March, Ahlstrom agreed to sell three hydropower plants close to
its Turin, Italy plant to a local energy company for approximately
EUR 7 million. The deal is consistent with the company's strategy to
focus on high performance fiber-based materials and to divest
non-core assets and reduce related costs.
Personnel
At the end of September 2007, Ahlstrom had 6,544 employees (5,675).
The average number of employees during January-September was 5,989
(5,690).
Principal risks and uncertainties
The principal uncertainties that could affect Ahlstrom's net sales
and financial performance in the short term are related to:
- General economic conditions and changes in the demand for end-user
products
- Increases in raw material prices (e.g. pulp, chemicals and
synthetic fibers)
- Increases in energy prices
- Fluctuations in foreign currency rates
These factors are described in more detail in Ahlstrom's Annual
report 2006, on pages 22-23.
Shares and share capital
During January-September 2007, a total of 8.6 million Ahlstrom shares
were traded for a total of EUR 190.1 million. The lowest trading
price during the review period was EUR 19.43 and the highest EUR
24.50. The closing price on September 28, 2007 was EUR 19.88 and
market capitalization was EUR 928 million.
Equity per share of Ahlstrom Group was EUR 16.10 at the end of the
review period (December 31, 2006: EUR 16.79).
At the end of the review period, there were no outstanding options
entitling to subscription of Ahlstrom shares.
In January-September, a total of 1.008.871 new shares of Ahlstrom
Corporation were subscribed with option rights under the company's
stock option programs I (2001) and II (2001). After the corresponding
increases in Ahlstrom's share capital, the share capital at the end
of the review period amounted to EUR 70,005,912.00. The total number
of shares on September 30 was 46,670,608.
Ahlstrom's Board of Directors is authorized to repurchase a maximum
of 4,500,000 Ahlstrom shares, corresponding to less than 10% of all
issued company shares. The Board of Directors is also authorized to
resolve to distribute the shares held by the company. The shares may
be used as compensation in acquisitions and in other arrangements as
well as to implement the company's share-based incentive plans. The
Board of Directors has also the right to decide on the distribution
of the shares in public trading for the purpose of financing possible
acquisitions.
Events after the review period
Ahlstrom Corporation has changed the operative organization within
the Specialty Papers segment with effect from October 1, 2007. The
Stenay and the Rottersac plants in France, previously part of the
Label & Packaging Papers business area, were transferred to the
Technical Papers business area. The plants employ 410 people.
Following the reorganization, the Label & Packaging Papers business
area was renamed Release & Label Papers. Ahlstrom's reporting will be
changed to reflect the new structure as of October 1, 2007.
Daniele Borlatto, previously Vice President, Filtration business in
Europe and South America was appointed Senior Vice President of the
Release and Label Papers business area and member of the Corporate
Executive Team as of October 11, 2007. Daniele Borlatto joined
Ahlstrom in 1990, and he has held several managerial positions in
sales and controlling prior to his current role.
Diego Borello, previously Senior Vice President of Ahlstrom's Label &
Packaging Papers business area, was appointed Senior Vice President,
Innovation and Technology as of October 11, 2007. He continues as a
member of the Corporate Executive Team.
On October 10, 2007 the Ascoli plant in Italy and the Chantraine
plant in France were set under review due to unsatisfactory
profitability and cash flow. During the fourth quarter, Ahlstrom
evaluates the long-term economic viability of the plants and the
options to either sell or close the facilities under review.
Outlook for October 2007-March 2008
Demand in Ahlstrom's main markets Europe, USA, South America and Asia
is expected to remain good with the exception of the labeling paper
markets in Europe and the European export markets. However, the
visibility is low in the USA which is Ahlstrom's single largest
geographical market area. Ahlstrom's products are primarily used in
industrial processes which react to changes in consumer demand with a
slight delay.
The growth initiatives are expected to increase Ahlstrom's full year
2007 net sales by over 10% compared to 2006 despite the weakened USD.
The largest organic growth investment in the outlook period is the
commissioning of the glassfiber tissue plant in Russia. The announced
joint venture with KAN Paper in China is estimated to be completed
during the last quarter of 2007.
Prices for Ahlstrom's main raw materials are anticipated to remain at
the current high level or continue to rise during the outlook period.
The price for Ahlstrom's most important raw material, wood pulp, rose
through the third quarter of 2007 with further price hikes announced
for the fourth quarter. Oil prices continued to increase in the third
quarter and consequently the energy costs are expected to remain on
the current high level or increase during the outlook period. In
addition the high oil prices are expected to put pressure on chemical
and synthetic fiber costs.
Price increases are currently taking effect in all business areas in
order to offset the effect of rising raw material and energy costs.
The eucalyptus pulp is becoming Ahlstrom's most important raw
material, lowering the company's average raw material costs in the
long term.
The integration of Orlandi's nonwovens business, Fiberweb's consumer
wipes business and the Ahlstrom-VCP joint venture is estimated to be
completed by the end of 2007. The new acquisitions and investments
will have a positive impact on Ahlstrom's financial development from
the last quarter of 2007 onwards.
As announced on October 10, 2007 Ahlstrom's operating profit for 2007
excluding non-recurring items is expected to be somewhat below the
2006 level. The primary reasons for the decrease in operating profit
are continuously rising raw material and energy costs as well as the
weakened demand in the Label & Packaging Papers business area. The
Technical Papers business area, which is part of Ahlstrom's Specialty
Papers segment, as well as the FiberComposites segment are expected
to improve their operating profit from 2006.
Financial information in 2008
Ahlstrom Corporation will publish its financial information in 2008
as follows:
Financial statements bulletin 2007 Friday, February 1
Annual report 2007 Week 12
Interim report January - March Friday, April 25
Interim report January - June Friday, July 25
Interim report January - September Tuesday, October 28
Ahlstrom's Annual General Meeting will be held on Wednesday, April 2,
2008 at 13.00 at the Finlandia Hall, Mannerheimintie 13 e, Helsinki.
This interim report has been prepared in accordance with the
International Financial Reporting Standards (IFRS). The report is
unaudited.
Comparable figures refer to the same period last year unless
otherwise stated.
Helsinki, October 26, 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
Anna Ahlberg, Investor Relations Manager, tel. +358 (0)10 888 4718
A conference call for analysts and investors regarding the third
quarter results will be held on Friday, October 26, 2007 at 14.00
Finnish time. To participate in the teleconference, please dial +44
(0) 20 7162 0025 a few minutes before the call. Use the password:
Ahlstrom. A replay of the conference is available until November 2,
2007. The number for the replay is + 44 (0) 20 7031 4064, access
code: 770726.
The presentation material will be available at www.ahlstrom.com >
Investors > IR presentations on October 26, 2007 after the interim
report 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 6,500 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
Appendix 1
Segment reviews July-September 2007
FiberComposites segment
+-------------------------------------------------------------------+
| Key figures, | Q3/ | Q3/ | Change, | Q1-Q3 | Q1-Q3 | |
| EUR million | 2007 | 2006 | % | 2007 | 2006 | 2006 |
|-----------------+-------+-------+---------+-------+-------+-------|
| Net sales | 249.8 | 195.3 | 27.9 | 691.7 | 612.8 | 808.2 |
|-----------------+-------+-------+---------+-------+-------+-------|
| Operating | | | | | | |
| profit excl. | | | | | | |
| non-recurring | | | | | | |
| items | 14.1 | 13.3 | 6.0 | 44.8 | 43.1 | 54.1 |
|-----------------+-------+-------+---------+-------+-------+-------|
| Operating | | | | | | |
| profit, % excl. | | | | | | |
| non-recurring | | | | | | |
| items | 5.7 | 6.8 | | 6.5 | 7.0 | 6.7 |
|-----------------+-------+-------+---------+-------+-------+-------|
| Return on net | | | | | | |
| asses (RONA), % | | | | | | |
| excl. | | | | | | |
| non-recurring | | | | | | |
| items | 7.1 | 8.7 | | 8.5 | 9.4 | 8.9 |
+-------------------------------------------------------------------+
The segment's net sales increased by 27.9% and amounted to EUR 249.8
million (EUR 195.3 million). The three acquisitions (Fabriano,
Orlandi's nonwovens business and Fiberweb's consumer wipes business)
increased net sales by EUR 47.8 million in the third quarter. Sales
volumes increased by 37.6%. Comparable net sales adjusted for
acquisitions and currency effect grew by 7.7%. Currency fluctuations,
mainly the weakened USD, decreased the segment's net sales by EUR 8.3
million.
The operating profit of the third quarter improved from the
corresponding period last year and amounted to EUR 14.1 million. The
integration costs of the acquisitions decreased profitability by
approximately EUR 1.5 million.
Nonwovens business area (25% of the Group's net sales)
The Nonwovens business area serves customers in the food packaging,
medical, wiping, building and technical goods sectors.
Demand remained solid in most product areas with strongest growth
seen in wiping fabrics and wall cover applications. Sales volumes
increased by 82.6% driven mainly by the investments and the
acquisitions within the wiping fabrics business. The business area's
net sales increased by 51.1% and amounted to EUR 134 million.
Comparable net sales, adjusted for acquisitions and currency effect,
grew at a slower rate than in the second quarter or by 3.1%, due to
changes in product mix and the adverse effect from a weakened USD.
Approximately 50% of the business area's net sales is denominated in
USD.
Prices for synthetic fibers, particularly rayon, continued to
increase due to temporary lack of raw material supply. Rayon and
polyester are the most important raw materials in the nonwovens
business area. Ahlstrom implemented price increases for wiping
fabrics in order to balance the effect of the rising raw material
costs in the third quarter.
The integration of Fiberweb's consumer wipes business and the
nonwovens business of the Orlandi Group is proceeding according to
plan and is expected to be completed by the end of 2007. The annual
net sales of the acquisitions amount to approximately EUR 170
million.
Demand for nonwoven products is expected to remain good in the next
six months with normal seasonal slowdown during the holiday period at
the end of the year.
Filtration business area (20 % of the Group's net sales)
Filtration media produced by Ahlstrom are used in the transportation
industry and in liquid and air filtration applications.
Overall demand for filtration materials continued to be similar to
the first half of the year. Market activity for transportation
filtration was particularly strong in Asia and Latin America fuelled
by strong local economic growth and certain customers relocating to
these areas. In Europe the demand for filtration materials was stable
for all segments. In the USA, however, the development was mixed and
some softness was perceived in the air filtration segment due to the
slowdown of the housing markets. Net sales for the third quarter
increased by 4.2% to EUR 84 million while sales volumes grew by 5.6%.
Exchange rate fluctuations impacted net sales negatively.
Costs for energy and raw materials remained at a high level
particularly for pulp, methanol, and methanol related materials.
Price increases were implemented in most product areas but the
business environment was challenging for air filtration where
competition continued to be tough due to the slowing down of the
housing market in the USA.
The integration of Fabriano Filter Media SpA, Italy was completed
successfully in the third quarter. Annual net sales of the acquired
business is approximately EUR 7 million.
Overall demand is expected to remain good for transportation and
liquid filtration in Ahlstrom's main markets, however, uncertainty
continues for air filtration particularly in the North American
markets.
Glass Nonwovens business area (7% of the Group's net sales)
Ahlstrom's glass nonwovens products are used in the building
materials, marine, transportation, windmills, and sporting goods
sectors.
Demand in all main product areas (building materials, windmill,
marine and transportation) and geographic regions remained solid.
Especially the windmill market continued to grow strongly. Net sales
for the business area increased to EUR 33 million or by 23.5%. Sales
volumes grew by 25.9%. Exchange rate fluctuations impacted the net
sales negatively.
The new specialty reinforcement plant in Bishopville, USA and the
investment made in Karhula, Finland in the beginning of the year
contributed positively to the net sales in the third quarter.
Costs for the business areas' main raw materials and energy increased
from the second quarter. Price increases were implemented during the
third quarter in certain product areas to partially offset the high
raw material and energy costs.
The new glassfiber tissue plant in Tver, Russia is expected to start
production on schedule in December 2007.
Solid demand is expected to continue in all product areas and
geographic regions in the next six months.
Specialty Papers segment
+-------------------------------------------------------------------+
| Key figures, | Q3/ | Q3/ | Change, | Q1-Q3 | Q1-Q3 | |
| EUR million | 2007 | 2006 | % | 2007 | 2006 | 2006 |
|-----------------+-------+-------+---------+-------+-------+-------|
| Net sales | 196.3 | 191.5 | 2.5 | 610.3 | 600.0 | 794.0 |
|-----------------+-------+-------+---------+-------+-------+-------|
| Operating | | | | | | |
| profit excl. | | | | | | |
| non-recurring | | | | | | |
| items | 2.7 | 8.7 | -68.8 | 16.7 | 32.0 | 36.4 |
|-----------------+-------+-------+---------+-------+-------+-------|
| Operating | | | | | 5.3 | |
| profit, % excl. | | | | 2.7 | | |
| non-recurring | | | | | | |
| items | 1.4 | 4.5 | | | | 4.6 |
|-----------------+-------+-------+---------+-------+-------+-------|
| Return on net | | | | | 14.1 | |
| asses (RONA), % | | | | 5.7 | | |
| excl. | | | | | | |
| non-recurring | | | | | | |
| items | 2.7 | 11.2 | | | | 11.8 |
+-------------------------------------------------------------------+
Net sales of the Specialty Papers segment in the third quarter
increased by 2.5% from the corresponding period in 2006 and totaled
EUR 196.3 million (EUR 191.5 million). Sales volumes increased by 6.6
%. The Ahlstrom-VCP joint venture increased net sales by EUR 7.6
million, whereas comparable net sales adjusted for acquisitions
decreased by 1.5%.
Average sales prices decreased in the Label & Packaging Papers
business area due to excess supply of release base papers and strong
competition and weakening demand of one-side coated papers in Europe.
In addition, the ramp-up of the La Gère investment weakened the
segment's operating profit. As a consequence, operating profit
decreased to EUR 2.7 million (EUR 8.7 million).
Label & Packaging Papers business area (30% 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.
The market situation for label and packaging papers was challenging
in the third quarter of 2007. The excess supply of release base
papers continued and demand for one-side coated papers for wet glue
labels and packaging papers in Europe weakened, which increased price
pressure within the business area. In Latin America, the markets for
label and packaging papers developed favorably.
Total sales volumes of the business area increased by 6.0% compared
to the corresponding period in 2006 mainly driven by the Ahlstrom-VCP
joint venture in Brazil. Net sales amounted to EUR 126 million and
was approximately at the same level as last year. Net sales adjusted
for acquisitions and currency effect decreased by 5.5%. The capacity
expansion for release base papers at the La Gère, France plant was
ramping up production during the third quarter and impacted the
performance of the business area negatively.
The price for pulp, the business area's main raw material continued
to increase from the second quarter and was on a clearly higher level
compared to the corresponding period last year.
Ahlstrom announced on October 10, 2007 that the Ascoli plant in Italy
and the Chantraine plant in France were put under review due to
unsatisfactory profitability and cash flow. Both facilities produce
one-side coated papers for wet glue labeling, flexible packaging, and
graphical end uses, mainly for the Western European markets. Ahlstrom
evaluates the long-term economic viability of the plants and the
options to either sell or close the facilities under review. The
plants have an annual production capacity of approximately 100,000
tons and they employ approximately 300 persons. The current combined
book value of the plants is EUR 5 million.
The demand for release base papers is expected to continue similar to
the third quarter in the next six months. In label papers, the peak
season has ended and demand is expected to be lower in Europe in the
next six months. In Latin America, good demand for label and
packaging papers is expected to continue.
Technical Papers business area (18% 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.
Overall good demand prevailed in most product areas but was slightly
softer than in the second quarter due to the summer holiday season.
In the third quarter, the business area's sales volumes grew by 7.9%
driven mainly by strong demand in abrasive base and crepe papers. Net
sales increased by 7.9% compared to the corresponding quarter in 2006
and amounted to EUR 71 million.
The price for pulp, the main raw material of the business area,
continued to increase in the third quarter. Price increases have been
announced in abrasive base papers, electro papers and pre-impregnated
decor papers to compensate for the higher raw material prices.
On September 17, 2007 Ahlstrom signed the agreements with Zhejiang
Kan Specialty Material Co (KAN Paper) and its management to acquire a
majority shareholding in a specialty papers joint venture in China.
The plant is mainly aimed to serve the local crepe paper markets and
forms a platform for Ahlstrom's further growth in China. The
acquisition is expected to be closed in the fourth quarter after
which Ahlstrom will hold 70% of the shares in the joint venture.
The market situation for the business area is expected to remain
reasonably good in the next six months.
APPENDIX 2
CONSOLIDATED FINANCIAL STATEMENTS
ACCOUNTING PRINCIPLES
This report has been prepared in accordance with the International
Financial Reporting Standards (IFRS) and the accounting policies set
out in IAS 34 (Interim Financial reporting) as adopted by EU and in
the Group's Financial Statements for 2006.
Application of amended or new IFRS-standards as of January 1, 2007
The Group has adopted the following new or amended standards and
interpretations as of January 1, 2007:
- IFRS 7 Financial Instruments: Disclosures
- Amendment to IAS 1 Presentation of Financial Statements - Capital
disclosures
- IFRIC 9 Reassessment of Embedded Derivatives
- IFRIC 10 Interim Financial Reporting and Impairment
The above mentioned standards and interpretations do not have a
material effect on the consolidated financial statements. They will
impact the format and extent of year-end 2007 notes to the financial
statements.
Financial Statements are unaudited.
INCOME STATEMENT Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Eur million 2007 2006 2007 2006 2006
Net sales 444.9 385.9 1,298.3 1,210.1 1,599.1
Other operating income 5.0 12.4 18.0 31.1 36.7
Expenses -409.6 -353.2 -1,191.1 -1,097.4 -1,458.2
Depreciation, amortization -24.1 -19.8 -64.8 -60.1 -81.6
and impairment charges
Operating profit 16.1 25.3 60.5 83.8 96.1
Net financial expenses -9.7 -3.7 -16.9 -12.3 -14.9
Share of profit (loss) of 0.2 -0.2 -0.2 0.2 0.0
associated companies
Profit before taxes 6.7 21.4 43.4 71.8 81.2
Income taxes -1.6 -5.0 -13.0 -23.0 -23.6
Profit for the period 5.0 16.4 30.3 48.8 57.6
Attributable to
Equity holders of the parent 4.9 16.4 30.2 48.7 57.5
Minority interest 0.1 0.0 0.2 0.1 0.1
Basic earnings 0.10 0.36 0.65 1.13 1.31
per share, EUR
Diluted earnings 0.10 0.35 0.65 1.11 1.29
per share, EUR
BALANCE SHEET Sep 30, Sep 30, Dec 31,
Eur million 2007 2006 2006
ASSETS
Non-current assets
Property, plant and equipment 753.5 592.9 601.7
Goodwill 189.8 103.7 101.0
Other intangible assets 37.1 34.4 32.6
Investments in associated companies 12.5 13.1 12.9
Other investments 0.2 0.2 0.2
Other receivables 15.0 6.8 6.1
Deferred tax assets 25.4 24.0 25.9
Total non-current assets 1,033.5 775.3 780.4
Current assets
Inventories 247.4 207.8 214.4
Trade and other receivables 414.8 385.4 328.0
Income tax receivables 6.0 6.2 8.7
Other investments 8.8 4.3 5.0
Cash and cash equivalents 17.1 22.6 20.1
Total current assets 694.1 626.4 576.1
Total assets 1,727.7 1,401.7 1,356.6
EQUITY AND LIABILITIES
Equity attributable to equity holders of the 751.3 760.9 765.8
parent
Minority interest 29.0 0.8 0.8
Total equity 780.3 761.7 766.6
Non-current liabilities
Interest-bearing loans and borrowings 185.3 52.2 44.0
Employee benefit obligations 90.1 113.2 112.4
Provisions 5.4 3.7 3.7
Other liabilities 0.7 0.7 0.6
Deferred tax liabilities 34.5 23.6 26.8
Total non-current liabilities 315.9 193.5 187.4
Current liabilities
Interest-bearing loans and borrowings 309.8 165.0 136.4
Trade and other payables 298.3 253.6 241.0
Income tax liabilities 12.4 15.2 12.4
Provisions 10.9 12.6 12.8
Total current liabilities 631.4 446.4 402.6
Total liabilities 947.4 639.9 590.0
Total equity and liabilities 1,727.7 1,401.7 1,356.6
STATEMENT OF CHANGES IN EQUITY
1) Issued capital
2) Share premium
3) Non-restricted equity reserve
4) Hedging reserve
5) Translation reserve
6) Retained earnings
7) Minority interest
Attributable to equity holders of the parent Total
Eur million 1) 2) 3) 4) 5) 6) 7) equity
Equity at Dec
31, 54.6 26.7 - 1.0 3.7 503.7 0.8 590.5
2005
Cash flow
hedges,
net of tax:
Gains and losses - - - -1.2 - - - -1.2
taken to equity
Translation - - - - -10.5 - - -10.5
differences
Gains and losses
from hedge of
net
investments in
foreign
operations,
net of tax - - - - 7.7 - - 7.7
Other changes - - - - - 0.0 -0.0 0.0
Profit for the - - - - - 48.7 0.1 48.8
period
Total recognized
income
and expense
for the period - - - -1.2 -2.8 48.7 0.1 44.9
Dividends paid - - - - - -65.2 -0.1 -65.3
Share issue 13.7 182.4 - - - - - 196.1
Share options 0.0 0.2 - - - - - 0.2
exercised
Redemption of - - - - - -4.7 - -4.7
share options
13.8 182.6 - - - -69.9 -0.1 126.3
Equity at 68.4 209.3 - -0.2 0.9 482.5 0.8 761.7
Sep 30, 2006
Equity at 68.5 209.3 0.5 0.1 -3.1 490.4 0.8 766.6
Dec 31, 2006
Cash flow
hedges,
net of tax:
Gains and losses - - - -0.1 - - - -0.1
taken to equity
Translation - - - - -11.4 - - -11.4
differences
Gains and losses
from hedge of
net
investments in
foreign
operations,
net of tax - - - - 4.1 - - 4.1
Minority
increase - - - - - - 28.2 28.2
Ahlstrom-VCP
Other changes - - - - - 0.1 -0.0 0.1
Profit for the - - - - - 30.2 0.2 30.3
period
Total recognized
income
and expense
for the period - - - -0.1 -7.3 30.3 28.3 51.2
Dividends paid - - - - - -46.6 -0.1 -46.7
Share options 1.5 - 7.7 - - - - 9.2
exercised
1.5 - 7.7 - - -46.6 -0.1 -37.5
Equity at 70.0 209.3 8.3 -0.0 -10.4 474.1 29.0 780.3
Sep 30, 2007
STATEMENT OF CASH FLOWS Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
Eur million 2007 2006 2007 2006 2006
Cash flow from operating
activities
Profit for the period 5.0 16.4 30.3 48.8 57.6
Adjustments, total 26.6 20.0 76.6 85.4 109.8
Changes in net working 12.0 24.1 -36,4*) -3.8 -14.4
capital
Change in provisions and 0.3 1.5 -17,1*) -0.5 -0.5
pension liability
Financial items -4.1 -1.6 -8.2 -10.4 -3.7
Taxes paid -2.8 -3.4 -11.1 -25.3 -29.6
Net cash from operating 37.1 57.0 34.1 94.2 119.2
activities
Cash flow from investing
activities
Acquisition of Group -88.0 - -215.8 -8.0 -7.8
companies
Purchases of property, -45.7 -31.4 -108.5 -83.5 -116.5
plant & equipment
Other investing activities -5.5 5.9 8.9 6.8 45.3
Net cash from investing -139.3 -25.5 -315.4 -84.8 -79.0
activities
Cash flow from financing
activities
Share issue - - 9.2 194.5 195.1
Dividends paid - - -46.8 -65.3 -65.3
Other financing activities 97.7 -25.9 315.7 -131.9 -165.8
Net cash from financing 97.7 -25.9 278.2 -2.7 -36.0
activities
Net change in cash and cash -4.5 5.6 -3.2 6.7 4.3
equivalents
Cash and cash equivalents
at beginning of 21.5 17.0 20.1 16.0 16.0
period
Foreign exchange adjustment 0.0 0.0 0.1 -0.1 -0.1
Cash and cash equivalents
at end of 17.1 22.6 17.1 22.6 20.1
period
*) Includes EUR -20,8 million payment to the pension fund to cover
approximately half of the historical deficit of the defined benefit
pension plan in the United Kingdom in Q1 2007.
KEY FIGURES Q3 Q3 Q1-Q3 Q1-Q3 Q1-Q4
2007 2006 2007 2006 2006
Operating profit, % 3.6 6.5 4.7 6.9 6.0
Operating profit (excluding non- 3.6 5.4 4.4 6.0 5.5
recurring items), %
Return on capital employed 5.5 10.3 7.4 11.8 10.4
(ROCE), %
ROCE (excluding non-recurring 5.5 8.5 6.9 10.4 9.5
items), %
Return on equity (ROE), % 2.6 8.7 5.2 9.6 8.5
Interest-bearing net
liabilities, 469.2 190.3 469.2 190.3 155.2
EUR million
Equity ratio, % 45.2 54.4 45.2 54.4 56.5
Gearing ratio, % 60.1 25.0 60.1 25.0 20.3
Earnings per share, EUR 0.10 0.36 0.65 1.13 1.31
Earnings per share, diluted, EUR 0.10 0.35 0.65 1.11 1.29
Equity per share, EUR 16.10 16.71 16.10 16.71 16.79
Cash earnings per share, EUR 0.79 1.29 0.73 2.18 2.72
Average number of shares during 46,671 45,592 46,411 43,195 43,802
the period, 1000's
Number of shares at the end of
the 46,671 45,592 46,671 45,592 45,662
period, 1000's
Capital expenditure, EUR million 49.4 33.6 115.1 80.5 120.1
Capital employed, at the end 1,275.4 979.0 1,275.4 979.0 946.9
of the period, EUR million
Number of employees, average 6,414 5,777 5,989 5,690 5,687
CHANGES OF PROPERTY, PLANT AND EQUIPMENT
Q1-Q3 Q1-Q3 Q1-Q4
Eur million 2007 2006 2006
Book value at Jan 1 601.7 577.4 577.4
Acquisitions through business combinations 118.5 4.8 4.6
Additions 114.8 80.4 117.0
Disposals -1.4 -0.6 -1.0
Depreciations and impairment charges -61.1 -55.6 -75.7
Translation adjustment and other changes -18.9 -13.4 -20.6
Book value at end of the period 753.5 592.9 601.7
TRANSACTIONS WITH RELATED PARTIES Q1-Q3 Q1-Q3 Q1-Q4
Eur million 2007 2006 2006
Transactions with associated companies
Sales and interest income 0.4 1.0 1.3
Purchases of goods and services -3.9 -6.1 -10.9
Trade and other receivables 0.3 40.6 0.5
Trade and other payables 0.3 0.4 0.8
Interest-bearing loans and borrowings - 2.6 6.6
Market prices have been used in transactions with associated
companies.
OPERATING LEASES Sep 30, Sep 30, Dec 31,
Eur million 2007 2006 2006
Current portion 6.7 6.0 6.1
Non-current portion 23.8 20.0 18.2
Total 30.5 26.0 24.3
CONTINGENT LIABILITIES Sep 30, Sep 30, Dec 31,
Eur million 2007 2006 2006
For own liabilities
Other loans
Amount of loans 1.3 1.7 1.5
Book value of pledges 1.5 2.0 1.6
For other own commitments
Guarantees 22.9 21.5 29.1
For commitments of associated companies
Guarantees 6.3 8.3 8.3
Capital expenditure commitments 36.9 60.3 50.6
Other contingent liabilities 5.0 4.6 5.3
Acquisitions in 2007
In January-September 2007 Ahlstrom made several acquisitions in line
with its strategy.
In April, Ahlstrom acquired the spunlace nonwovens business of the
Italian Orlandi Group. The transaction expands Ahlstrom's technology
portfolio with airlace technology which is used to manufacture
pulp-containing wiping fabrics. In May, Ahlstrom acquired the
consumer wipes business of Fiberweb plc, serving mainly the personal
care, baby care and household wipes applications. With these two
acquisitions, Ahlstrom became the leading wiping fabrics producer in
the world. In May, Ahlstrom acquired Italian Fabriano Filter Media
SpA, a manufacturer of microglass filter media, serving mainly the
high efficiency air filtration market.
In September, Ahlstrom acquired 60% of a Brazilian specialty paper
production plant and formed a joint venture with the seller,
Votorantim Celulose e Papel (VCP). The joint venture will serve
mainly labelling and flexible packaging applications but produces
also coated and uncoated papers for other end users.
Management estimates that the consolidated net sales for
January-September 2007 would have been EUR 1,450 million, if the
acquisition had been accomplished on January 1, 2007.
The table below summarizes the acquisitions in January-September
2007. The business combinations and purchase price allocations were
accounted for as preliminary as the determination of fair values to
be assigned to the assets, liabilities and contingent liabilities
were not yet finalized. The goodwill that arose mainly from the
acquisition of Orlandi Group and the Ahlstrom-VCP joint venture
reflects the synergy benefits resulting from the expanded product
offering to wipes and filtration business, entry to the new
geographical markets as well as growth opportunities.
ACQUISITIONS OF BUSINESSES Book values Fair values
before the entered in
Eur million consolidation consolidation
Property, plant and equipment 101.3 119.2
Intangible assets 5.6 9.1
Inventories 33.5 32.0
Trade and other receivables 53.2 53.1
Cash and cash equivalents 3.2 3.2
Assets, total 196.7 216.6
Deferred tax liabilities 0.8 10.3
Employee benefit obligations 1.4 1.4
Interest-bearing loans and borrowings 11.1 11.1
Trade and other payables 37.5 37.6
Liabilities, total 50.8 60.4
Net assets 145.9 156.2
Goodwill arising in acquisition - 93.7
Acquisition price paid (in cash) - 249.9
Minority interest - -28.2
Exchange rate differences - -2.7
Cash (acquired) - -3.2
Net cash outflow - 215.8
QUARTERLY DATA Q3 Q2 Q1 Q4 Q3 Q2 Q1
Eur million 2007 2007 2007 2006 2006 2006 2006
Net sales 444.9 436.9 416.5 389.0 385.9 409.6 414.6
Other operating 3.1 1.7 2.6 4.3 4.4 5.6 7.0
income *
Expenses * -407.7 -396.5 -379.9 -359.3 -349.6 -368.7 -375.5
Depreciation,
amortization, -24.1 -21.0 -19.6 -19.9 -19.8 -20.5 -19.8
impairment
charges *
Non-recurring -0.1 - 3.8 -1.9 4.4 2.9 3.3
items
Operating profit 16.1 21.0 23.3 12.3 25.3 28.9 29.6
Net financial -9.7 -4.3 -3.0 -2.6 -3.7 -4.1 -4.5
expenses
Share of profit
(loss) 0.2 -0.3 -0.1 -0.2 -0.2 0.4 -0.0
of associated
companies
Profit before 6.7 16.4 20.3 9.4 21.4 25.2 25.1
taxes
Income taxes -1.6 -4.5 -6.9 -0.7 -5.0 -8.6 -9.3
Profit for 5.0 11.9 13.4 8.8 16.4 16.6 15.8
the period
Attributable to
Equity holders 4.9 11.9 13.3 8.8 16.4 16.5 15.8
of the parent
Minority interest 0.1 0.0 0.0 -0.0 0.0 0.1 0.0
Operating profit * 16.2 21.0 19.6 14.1 20.8 26.0 26.3
Operating profit, %* 3.6 4.8 4.7 3.6 5.4 6.4 6.3
* Excluding non-recurring items
QUARTERLY DATA BY SEGMENT
Q3 Q2 Q1 Q4 Q3 Q2 Q1
Eur million 2007 2007 2007 2006 2006 2006 2006
Net sales
FiberComposites 249.8 235.5 206.4 195.4 195.3 204.9 212.7
Specialty Papers 196.3 202.7 211.4 193.9 191.5 205.2 203.3
Other operations and -1.2 -1.3 -1.3 -0.3 -0.9 -0.5 -1.5
eliminations
Group total 444.9 436.9 416.5 389.0 385.9 409.6 414.6
Operating profit
FiberComposites 13.5 17.3 15.2 9.2 13.3 13.9 15.9
Specialty Papers 2.7 5.4 13.0 3.0 6.0 10.3 13.0
Other operations and -0.1 -1.7 -4.9 0.1 6.0 4.8 0.7
eliminations
Group total 16.1 21.0 23.3 12.3 25.3 28.9 29.6
Operating profit excluding non-recurring items
FiberComposites 14.1 17.3 13.4 11.0 13.3 13.9 15.9
Specialty Papers 2.7 5.4 8.6 4.4 8.7 10.3 13.0
Other operations and -0.7 -1.7 -2.5 -1.2 -1.2 1.9 -2.6
eliminations
Total 16.2 21.0 19.6 14.1 20.8 26.0 26.3
Non-recurring items -0.1 - 3.8 -1.9 4.4 2.9 3.3
Group total 16.1 21.0 23.3 12.3 25.3 28.9 29.6
KEY FIGURES Q3 Q2 Q1 Q4 Q3 Q2 Q1
QUARTERLY
Eur million 2007 2007 2007 2006 2006 2006 2006
Net sales 444.9 436.9 416.5 389.0 385.9 409.6 414.6
Operating profit 16.1 21.0 23.3 12.3 25.3 28.9 29.6
Operating profit
(excluding 16.2 21.0 19.6 14.1 20.8 26.0 26.3
non-recurring
items)
Profit before 6.7 16.4 20.3 9.4 21.4 25.2 25.1
taxes
Profit before
taxes
(excluding 6.7 16.4 16.5 11.3 17.0 22.3 21.8
non-recurring
items)
Profit for the 5.0 11.9 13.4 8.8 16.4 16.6 15.8
period
Gearing ratio, % 60.1 50.9 24.3 20.3 25.0 30.0 30.0
Return on capital
employed 5.5 8.0 10.0 5.3 10.3 11.7 12.3
(ROCE), %
ROCE (excluding
non-recurring 5.5 8.0 8.4 6.1 8.5 10.6 11.0
items), %
Earnings per 0.10 0.26 0.29 0.18 0.36 0.36 0.41
share, EUR
Cash earnings 0.79 0.20 -0.26 0.54 1.29 0.21 0.68
per share,EUR
Average number
of shares during 46,671 46,636 45,918 45,602 45,592 45,587 38,326
the period,
1000's
CALCULATION OF KEY FIGURES
Interest-bearing Interest-bearing loans and borrowings - Cash
net liabilities and cash equivalents
- Other investments (current)
Equity ratio, Total equity x100
% Total assets - Advances received
Gearing ratio, Interest-bearing net liabilities x100
% Total equity
Return on equity Profit (loss) for the period x100
(ROE), % Total equity (annual average)
Return on capital Profit (loss) before taxes + Financing X100
employed expenses
Total assets (annual average) -
(ROCE), % Non-interest bearing liabilities (annual
average)
Earnings per share, Profit for the period attributable to
equity holders of the parent
EUR Average adjusted number of shares during
the period
Cash earnings Net cash from operating activities
per share,
EUR Average adjusted number of shares during
the period
Equity per share, Equity attributable to equity holders of
the parent
EUR Adjusted number of shares at the end of
the period
Ahlstrom s Interim report January-September 2007 - Strong growth in net sales, unsatisfactory profitability
| Source: Ahlstrom
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