ahlstrom corporation october-december 2011 & financial ......q1/11 q2/11 q3/11 q4/11 q1/12 q2/12...
TRANSCRIPT
Ahlstrom Interim report January-June 2013
Jan Lång
President & CEO
Seppo Parvi CFO
Helsinki
August 7, 2013
8/7/2013 © 2012 Ahlstrom Corporation Page 2
Agenda
– April-June 2013
– Business area review
– Cash flow and debt development
– Income statement and balance sheet
– Future prospects
April-June 2013 in brief
© 2012 Ahlstrom Corporation Page 3
Highlights
– Net sales and profitability improved slightly
– Advanced Filtration and integration of Munktell
– Higher selling prices and improved product mix
– LP Europe demerger completed, Coated Specialties in Brazil expected to be
completed during H2/2013
Lowlights
– Volatile demand in North America
– Higher indirect and administration costs
– Focus units at Food and Medical
– Higher gearing ratio due demerger effects
8/7/2013
Q2/2013 key figures
8/7/2013 © 2012 Ahlstrom Corporation Page 4
EUR million Q2/2013 Q2/2012
Change,
%
Q1-Q2/
2013
Q1-Q2/
2012
Change,
%
Net sales 265.0 261.6 1.3 520.3 521.9 -0.3
Operating profit excl. NRI 7.9 7.4 6.3 14.4 17.9 -19.9
% of net sales 3.0 2.8 2.8 3.4
Gearing* 83.7 56.4 83.7 56.4
ROCE, % 1.0 1.5 3.2 3.8
*Including discontinued operations
– Target to reach annual costs savings of EUR 35 million by the end of 2014
• Includes earlier announced EUR 15 million cost savings measures, of which approximately EUR 10
million relate to costs being transferred to Munksjö Oyj
• Net effect approximately EUR 25 million
– Key actions:
• Completion of demerger related transfers
• Reduction of selling, general and administration (SGA) costs
• Optimization and productivity improvements in the supply chain
– Personnel reductions of about 350 globally
– Completion of key development programs will increase efficiency and enable cost savings
– Ahlstrom to book non-recurring items of approximately EUR 15 million in 2013-14
8/7/2013 © 2012 Ahlstrom Corporation Page 5
Rightsizing program
8/7/2013 © 2012 Ahlstrom Corporation Page 6
Quarterly net sales development
264.4 266.6 251.9 242.8
260.3 261.6 248.8 240.1 255.3 265.0
0
25
50
75
100
125
150
175
200
225
250
275
300
325
350
Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13
EUR million
1.3%
Highlights
– Higher selling prices
– Favorable product mix
Lowlights
– Adverse currency effect
– Sales in North America
Quarterly operating profit development
10.5
7.4 7.3
-4.1
6.5
7.9
-3,0 %
-2,0 %
-1,0 %
0,0 %
1,0 %
2,0 %
3,0 %
4,0 %
5,0 %
6,0 %
7,0 %
-6
-4
-2
0
2
4
6
8
10
12
14
Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13
EUR million Operating profit excl. NRI % of net sales
Highlights
‒ Pricing management
Lowlights
‒ Higher indirect production
and administration costs,
mainly related to new units
8/7/2013 © 2012 Ahlstrom Corporation Page 7
2012 figures restated
Q2/2013 operating profit* increase driven by
higher selling prices and volumes
8/7/2013 © 2012 Ahlstrom Corporation Page 8
7.4 7.9
3.4
1.4
3.3
0.9
2.0 2.5
0.6
0
2
4
6
8
10
12
14
OP excl. NRIQ2/2012
Selling price Volume RM andEnergy
Indirectcosts
SGA Othercosts**
FX OP excl. NRIQ2/2013
EUR million
*Continuing operations, excluding non-recurring items
**Including change in inventory
– Price increases
implemented to
compensate for earlier
occurred higher input
costs
– Higher indirect and
administrative costs,
mainly in new units
8/7/2013 © 2012 Ahlstrom Corporation Page 10
Advanced Filtration
Highlights
• Munktell acquisition
• Net sales growth 15.7% excluding
the acquisition
• Higher sales of gas turbine,
laboratory & life science
applications
• Increased selling prices
Lowlights
• Increased raw materials costs
18.9
26.2
0
5
10
15
20
25
30
35
Q2/2012 Q2/2013
Net sales
2.9
3.7 2.9
3.7
0
1
2
3
4
5
6
7
8
Q2/2012 Q2/2013
Operating profit EUR
million
EUR
million +39.1%
(volumes +26.8%)
Operating profit Operating profit excl. NRI
8/7/2013 © 2012 Ahlstrom Corporation Page 11
Building and Energy
Highlights
• Flooring material sales in Europe
• Poster papers
• Stable sales of wallpaper/
wallcoverings
Lowlights
• Sales of wind energy applications
• Increased market-related downtime
in production
• Adverse product mix
• Lower sales of construction and
consumer-related applications in
Europe
72.4 71.0
10
20
30
40
50
60
70
80
Q2/2012 Q2/2013
Net sales
2.2 1.6 2.2 1.6
0
1
2
3
4
5
6
7
8
Q2/2012 Q2/2013
Operating profit EUR
million
EUR
million -1.9%
(volumes -0.7%)
Operating profit Operating profit excl. NRI
8/7/2013 © 2012 Ahlstrom Corporation Page 12
Food and Medical
Highlights
• Food packaging, beverage and
tape materials sales in North
America
• Increased selling prices and
improved product mix
Lowlights
• Sales of medical products
• Adverse currency effect
• Commercialization of Longkou
plant
• Mundra plant and Chirnside
production line
89.4 88.7
30
40
50
60
70
80
90
100
Q2/2012 Q2/2013
Net sales
1.1
1.5
1.6
1.7
0
1
2
3
4
5
6
7
8
Q2/2012 Q2/2013
Operating profit
EUR
million
EUR
million -0.8%
(volumes 1.7%)
Operating profit Operating profit excl. NRI
8/7/2013 © 2012 Ahlstrom Corporation Page 13
Transportation Filtration
Highlights
• Higher sales volumes
• Sales growth in Asia
• Sales in Europe in difficult market
environment
• Improved product mix
Lowlights
• Sales of heavy duty filtration in
North America
• Increased raw material and energy
costs
77.4 81.0
20
30
40
50
60
70
80
90
Q2/2012 Q2/2013
Net sales
0.2
4.6 4.0
4.6
0
1
2
3
4
5
6
7
8
Q2/2012 Q2/2013
Operating profit EUR
million
EUR
million +4.6%
(volumes +3.3%)
Operating profit Operating profit excl. NRI
8/7/2013
Quarterly net cash from operating activities (including discontinued operations)
18.5
27.6 26.7
10.9 14.6
27.5
21.2
15.5
-21.4
35.5
-25
-20
-15
-10
-5
0
5
10
15
20
25
30
35
40
Q1/11 Q2/11 Q3/11 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13
© 2012 Ahlstrom Corporation Page 15
– Cash flow increased
due to the release of
operative working
capital
EUR
million
8/7/2013 © 2012 Ahlstrom Corporation Page 16
Development of operative working capital (including discontinued operations)
230.7
194.3
176.7 179.1 171.8 169.9 169.3
198.3
155.5
20
25
30
35
40
45
50
55
100
125
150
175
200
225
250
275
Q1/10 Q4/10 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13
Days EUR million
Operative working capital* Turnover rate in days
– Operative working capital
released due to LP Europe
demerger
– Turnover rate was 39 days
on June 30, 2013 (41 days
on Dec. 31, 2012)
*Operative working capital = Accounts receivables + inventories – accounts payable
8/7/2013 © 2012 Ahlstrom Corporation Page 17
Gearing ratio (including discontinued operations)
– Lower net debt due to the completion
of LP Europe demerger
– Gearing ratio affected by:
– EUR 30.9 million net of tax
impairment loss and costs to
sell related to the Coated
Specialties demerger
– EUR 67.6 million recognition of
Coated Specialties distribution
liability
– Fair valuation of Munksjö Oyj
shares causing EUR 28.6
million write-down
– Gearing ratio was 83.7% on June 30,
2013
– Ahlstrom has an option to repay its
EUR 80 million hybrid bond in
November, 2013
– The company is exploring
refinancing options
375.9
330.1
237.8
241.2
290.2 279.8
303.4
348.9
294.5
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
150
175
200
225
250
275
300
325
350
375
400
Q1/10 Q4/10 Q4/11 Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13
EUR million
Interest bearing net liabilities Gearing ratio, %
Gearing ratio:
target range 50–80%
Gearing
8/7/2013 © 2012 Ahlstrom Corporation Page 18
Maturity profile of medium/long-term credit
facilities
– Total liquidity, including cash
and unused committed credit
facilities was EUR 326.0 million
at the end of Q2/2013.
– In addition, Ahlstrom had
undrawn uncommitted credit
facilities and cash pool overdraft
limits of EUR 143.2 million
available.
0
25
50
75
100
125
150
175
200
225
250
2013 2014 2015 2016 2017 2018-
EUR million
Mid-term and long-term loans Undrawn credit facilities EUR 100 million bond
Income statement
8/7/2013 © 2012 Ahlstrom Corporation Page 20
Q2/2013 Q2/2012
EUR million
Net sales 265.0 261.6
Cost of goods sold -222.3 -225.2
Gross profit
42.7
36.4
Sales, administrative and research &
development expenses
Other income and expenses
-36.7
0.4
-33.7
1.3
Operating profit
6.4
4.0
Net financial expenses
Share of profit / loss of equity accounted
investments
-4.9
-5.0
-5.6
-1.7
Profit / loss before taxes
Income taxes
Profit / loss for the period from
continuing operations
Profit for the period from discontinued
operations
Profit for the period
-3.5
-1.4
-4.9
66.7
61.8
-3.3
-0.5
-3.8
3.1
-0.6
Higher selling prices and improved
product mix
NRI EUR -1.5 million in Q2/13 vs.
EUR -3.4 million in Q2/12
Includes EUR 90.6 million income
recognized from the demerger as
well as operative results.
Includes EUR 30.9 million net of
tax impairment loss and costs to
sell related to the Coated
Specialties demerger.
No tax revenues nor tax assets
were recognized for companies
with uncertain profit forecasts or for
associated companies
Suominen Oyj, Jujo Thermal
2012 figures are restated
Balance sheet
8/7/2013 © 2012 Ahlstrom Corporation Page 21
June 30, 2013 Dec. 31, 2012
EUR million
Total non-current assets
Inventories
Trade and other receivables
Other short-term receivables
Cash and cash equivalents
Assets classified as held for sale and
distribution to owners
Total assets
Total equity
Provisions
Interest bearing loans and borrowings
Employee benefit obligations
Trade and other payables
Others
Liabilities classified as held for sale and
distribution to owners
Total equity and liabilities
634.9
121.5
177.0
0.7
72.1
151.8
1,157.9
351.7
9.2
367.6
71.3
280.5
22.4
55.3
1,157.9
575.4
112.4
157.4
0.6
53.4
448.3
1,347.5
485.1
9.2
357.7
81.4
196.2
19.8
197.9
1,347.5
Gearing ratio
83.7
62.5
Demerger effect of Label and
Processing. Includes EUR 80
million hybrid bond.
Gearing ratio higher due to
impairment loss and recognition
of Coated Specialties distribution
liability and fair valuation of
Munksjö Oyj shares.
Coated Specialties, Brazilian
part of Home and Personal,
production lines to be divested
Coated Specialties, Brazilian
part of Home and Personal,
production lines to be divested
2012 figures are restated
Market value of shareholding in
Munksjö Oyj EUR 49.9 million
and Suominen Oyj EUR 35.3
million
EUR 67.6 million recognition of
Coated Specialties distribution
liability
Statement of cash flows (including discontinued operations)
8/7/2013 © 2012 Ahlstrom Corporation Page 22
Q2/2013 Q2/2012
EUR million
EBITDA
Adjustments
Changes in net working capital
Financial items
Income taxes paid / received
Net cash from operating activities
Acquisition of Group companies
Purchases of intangible and tangible assets
Other investing activities
Net cash from investing activities
Dividends paid and other
Effect of partial demerger
Changes in loans and other financing activities
Net cash from financing activities
Net change in cash and cash equivalents
Cash and cash equivalents at the beginning of the
period
Cash and cash equivalents at the end of the period
20.8
-1.4
19.9
-2.7
-1.2
35.5
-1.4
-23.5
-77.0
-102.0
-29.1
146.5
-18.8
98.6
32.2
43.1
73.1
28.4
-1.8
8.3
-5.5
-2.0
27.5
-20.8
7.2
-13.7
-60.0
6.6
-53.4
-39.6
88.2
48.8
Wallcovering materials in
Binzhou, China,
Filtration materials investment
in Turin, Italy
Operative working capital
released due to the LP
Europe demerger
2012 figures are restated
EUR 78.5 million equity
contribution to Munksjö Oyj
Debt transfer related to LP
Europe demerger
Outlook for 2013
© 2012 Ahlstrom Corporation Page 24
‒ Net sales from continuing operations are expected to be EUR 980-
1,140 million
‒ Operating profit margin excluding non-recurring items from continuing
operations is expected to be 2-5% of net sales
‒ Investments excluding acquisitions are estimated to amount to
approximately EUR 75 million
8/7/2013
Thank you
Ahlstrom Group
P.O. Box 329, Alvar Aallon katu 3c
FI-00100 Helsinki, Finland
T: +358 (0)10 888 0
F: +358 (0)10 888 4709
www.ahlstrom.com
8/7/2013 © 2012 Ahlstrom Corporation Page 25