Ahlstrom-Munksjö interim report January-September 2019: Strong cash flow and stable profitability


This release is a summary of Ahlstrom-Munksjö’s’ interim report January-September 2019. The complete report is attached to this release as a pdf-file. It is also available at www.ahlstrom-munksjo.com.


  • Q3/2019 comparable EBITDA grew by 16.4% to EUR 83.6 million (actual EUR 71.8 million in Q3/2018)
  • Strong operating cash flow of EUR 125.4 million (EUR 28.0 million)
  • The market environment remained uncertain and overall rather weak
  • Launched a cost saving program of at least EUR 50 million to improve competitiveness
  • New products were launched including a plastic-free solution for U-shaped drinking straws and an expanded range of filter media for industrial air applications
  • Exploring strategic alternatives for Decor business
  • Non-binding memorandum of understanding to divest the fine art paper business

Q3/2019 VS Q3/2018 pro forma

  • Net sales EUR 712.9 million (EUR 745.2 million), a decrease of 4.3%.  
  • Comparable EBITDA EUR 83.6 million (EUR 89.4 million), representing 11.7% (12.0%) of net sales
  • Gross margin for products continued to improve, while profitability was impacted by lower volumes
  • Net profit EUR 12.0 million (EUR 25.7 million), impacted by higher depreciation and amortization, as well as net financial items
  • Earnings per share EUR 0.10 (EUR 0.22)
  • Comparable EPS excluding depreciation and amortization arising from PPA EUR 0.22 (EUR 0.33)

1-9/2019 VS 1-9/2018 pro forma

  • Net sales EUR 2,216.9 million (EUR 2,262.2 million), a decrease of 2.0%.    
  • Comparable EBITDA EUR 242.4 million (EUR 258.4 million), representing 10.9% (11.4%) of net sales
  • Gross margin for products continued to improve, while profitability was impacted by lower volumes
  • Net profit EUR 30.9 million (EUR 73.5 million), impacted by items affecting comparability, depreciation and amortization, as well as net financial items that were higher
  • Earnings per share EUR 0.26 (EUR 0.63)
  • Comparable EPS excluding depreciation and amortization arising from PPA EUR 0.68 (EUR 0.96)

In this interim report, the comparison quarterly and full-year figures are presented on a pro forma basis to illustrate the financial impact of the acquisitions of Expera Specialty Solutions and MD Papéis Caieiras, and the merger between Ahlstrom and Munksjö had they been completed at the beginning of 2017. For the basis for presenting pro forma figures, please see appendix 2.Appendix 1, including consolidated financial statements, has been prepared according to International Financial Reporting Standards (IFRS).

PPA = purchase price allocation

Key figures

Actual (IFRS) Key figures,
EUR million, or as indicated
Q3/2019 Q3/2018 Q2/2019 1-9/2019 1-9/2018 2018
Net sales 712.9 565.6 745.3 2,216.9 1,725.8 2,438.0
Comparable EBITDA 83.6 71.8 83.8 242.4 205.6 277.7
Comparable EBITDA margin, % 11.7 12.7 11.2 10.9 11.9 11.4
Items affecting comparability in EBITDA -5.8 -8.7 -5.7 -26.3 -20.5 -55.1
EBITDA 77.8 63.1 78.1 216.1 185.1 222.6
Comparable operating result excl. depreciation and amortization arising from PPA * 53.4 50.1 53.8 152.4 139.8 186.1
Comparable operating result 40.1 42.4 40.7 113.5 116.9 151.4
Comparable operating result margin, % 5.6 7.5 5.5 5.1 6.8 6.2
Items affecting comparability in operating result -5.8 -8.7 -5.7 -26.3 -20.5 -62.7
Operating result 34.3 33.7 35.0 87.2 96.3 88.7
Net profit / loss 12.0 19.4 14.8 30.9 62.7 42.9
Earnings per share (basic), EUR 0.10 0.20 0.13 0.26 0.64 0.43
Comparable EPS excl. depreciation and amortization arising from PPA, EUR * 0.22 0.33 0.25 0.68 0.98 1.18
Cash generated from operating activities 125.4 28.0 63.1 218.4 60.7 91.6
Depreciation, amortization and impairment 43.4 29.4 43.1 128.9 88.7 133.9
Capital expenditure 50.6 38.5 38.7 124.8 95.6 160.1
Net debt ** 981.7 453.2 1,044.7 981.7 453.2 962.5
Gearing ratio, % ** 85.4 43.8 92.8 85.4 43.8 82.8
pro forma Key figures,
EUR million, or as indicated
Actual (IFRS)
pro forma  Q3/2018 Actual (IFRS)
Actual (IFRS)
pro forma
pro forma 2018
Net sales 712.9 745.2 745.3 2.216.9 2,262.2 2,996.9
Comparable EBITDA 83.6 89.4 83.8 242.4 258.4 329.9
Comparable EBITDA margin, % 11.7 12.0 11.2 10.9 11.4 11.0
Items affecting comparability in EBITDA -5.8 -4.4 -5.7 -26.3 -15.5 -39.6
EBITDA 77.8 85.0 78.1 216.1 242.9 290.3
Comparable operating result excl. depreciation and amortization arising from PPA * 53.4 63.8 53.8 152.4 180.2 225.5
Comparable operating result 40.1 51.6 40.7 113.5 143.6 176.6
Comparable operating result margin, % 5.6 6.9 5.5 5.1 6.3 5.9
Items affecting comparability in operating result -5.8 -4.4 -5.7 -26.3 -15.5 -47.3
Operating result 34.3 47.2 35.0 87.2 128.1 129.4
Net profit / loss 12.0 25.7 14.8 30.9 73.5 63.2
Earnings per share (basic), EUR 0.10 0.22 0.13 0.26 0.63 0.54
Comparable EPS excl. depreciation and amortization arising from PPA, EUR * 0.22 0.33 0.25 0.68 0.96 1.15
Depreciation, amortization and impairment 43.4 37.8 43.1 128.9 114.8 161.0
Capital expenditure 50.6 44.6 38.7 124.8 110.4 176.3

*Depreciation and amortization arising from PPA (purchase price allocation) comprise depreciation and amortization charges from fair value adjustments relating to the business combinations starting from 2013.
** Classification of certain balance sheet items between interest-bearing and non-interest-bearing assets and liabilities was redefined. For more more information, see appendix 1.
Ahlstrom-Munksjö has adopted the European Securities and Markets Authority (ESMA) guidelines on Alternative Performance Measures (APMs) to reflect the underlying business performance and improve comparability. These measures should, however, not be considered as a substitute for measures of performance in accordance with IFRS. Alternative performance measures are derived from performance measures reported in accordance with IFRS by adding or deducting items affecting comparability (IAC), or purchase price allocation (PPA,) and they are called “comparable”. More details on APMs and key figures are available in the appendix 2.


Our profitability remained stable and cash flow was strong in the third quarter despite the uncertain market environment and rather weak demand. Our gross margin for products continued to improve and reached a new record. However, this positive impact was largely offset by the continued weak volumes. Excluding the machine closure in Stenay, France, our deliveries were 4% lower than in the previous year. As a result, our comparable EBITDA was EUR 84 million, on the same level as in the previous quarter. Excluding the negative EBITDA impact of EUR 6 million from  bringing down inventory levels, the result was largely in line with last year’s level.

Following our increased focus and active working capital management, I am very pleased with the strong operative cash flow of EUR 125 million, which enabled us to reduce our net debt.

savings program to support profitability

The prevailing market environment is not promising much tailwind and we are therefore proceeding with measures to improve competitiveness. We target savings with an overall impact of at least EUR 50 million for the year 2020 compared with 2019. In addition, the integration of the recent acquisitions has proceeded well, and we are on track to exceed the promised synergies.


In September, as a result of our regular assessment of the most value creating structure for our businesses, we announced that we are exploring strategic alternatives for our Decor business. Today, we also announced that we have signed a non-binding memorandum of understanding to divest the fine art business in Arches, France.

In the third quarter, we completed two strategic investments. In the Insulation business, we completed the rebuild of the recovery boiler and debottlenecking of the pulp line in Billingsfors, Sweden, enabling improved environmental performance as well as higher pulp and electrotechnical paper production. In the Coated Specialties business, we expanded coating capabilities in Jacarei, Brazil. Furthermore, we also have continued to introduce new value-added products for our customers, including an expanded range of filter media for industrial air applications and an innovative plastic-free material for technically challenging U-shaped drinking paper straws.

We have implemented actions to improve our competitiveness and drive profitable growth, and we are taking action on our strategic opportunities. Therefore I have confidence in the future despite the weaker market environment.

Outlook for 2019  

Ahlstrom-Munksjö’s pro forma comparable EBITDA reached EUR 330 million in 2018. At the beginning of 2019, customers reacted to signs of slowing economic growth. Demand has slowed in several product segments, and customers have reduced inventories. The overall market environment remains uncertain and demand continues to fluctuate. Ahlstrom-Munksjö will continue its efforts to improve performance and competitiveness. The gross margin for products continued to increase in the first nine months of 2019, and the targeted synergy benefits and cost reduction measures are expected to contribute positively to earnings for the full year.

In the fourth quarter of 2019 scheduled maintenance shutdowns at the Aspa, Mosinee and Thilmany pulp mills are expected to be carried out to about the same extent as in the fourth quarter of 2018, with a negative profitability impact of approximately EUR 6 million.

Short-term risks

Ahlstrom-Munksjö is exposed to changing market conditions and uncertainty caused by both macroeconomic and industry related events and is exposed to risks that may arise from its operations, changes in the business environment, developments in the global economy or potential changes in the legislative framework. The materialization of such risks could have a material adverse effect on the company’s operations, earnings and financial position.

The company’s significant risks and uncertainty factors mainly consist of developments in demand for and prices of sold products, the cost of significant raw materials, financial risks, as well as other business factors including developments in the financial markets. The company’s financial performance may be impacted by the timing of possible raw material price rises and its ability to raise selling prices. On-going trade disputes and the outcome of the Brexit increases uncertainty in the global economic outlook and this may have an effect on Ahlstrom-Munksjö’s markets.

Ahlstrom-Munksjö has recently acquired Expera and Caieiras and it may not be able to fully integrate the acquired operations into its existing businesses.

The company’s key financial risks include interest rate and currency risks, liquidity risk and credit risk. The Group has exposure to tax risks due to potential changes in tax laws or regulations or their application, or as a result of on-going or future tax audits or claims.

The company has operations in many countries, and sometimes disputes cannot be avoided in daily operations. The company is sometimes involved in legal actions, disputes, claims for damages and other procedures. The result of these cannot be predicted, but taking into account all available information to date, the impact is not expected to have a significant impact on the financial position of the company.

More information about risks and uncertainty factors related to Ahlstrom-Munksjö’s business and the company’s risk management is available at www.ahlstrom-munksjo.com.

Additional information

Hans Sohlström, President and CEO, tel. +358 10 888 2520
Sakari Ahdekivi, Deputy CEO and CFO, tel. +358 10 888 4760
Johan Lindh, Vice President, Communications and Investor Relations, + 358 10 888 4994
Juho Erkheikki, Investor Relations Manager, tel. +358 10 888 4731

Webcast and conference call

A combined news conference, call and live webcast will be arranged on the publishing day, October 30, 2019, at 11:00 a.m. EET at Ahlstrom-Munksjö’s head office in Helsinki (Alvar Aallon katu 3 C). The report will be presented in English by President and CEO Hans Sohlström and Deputy CEO and CFO Sakari Ahdekivi.

Webcast and conference call information

The combined webcast and teleconference can be viewed at:

Finland: +358 (0)9 7479 0360
Sweden: +46 (0)8 5033 6573
UK: +44 (0)330 336 9104

Conference ID: 832656

To join the conference call, participants are requested to dial one of the numbers above 5-10 minutes prior to the start of the event. An on-demand version of the conference call will be available on Ahlstrom-Munksjö’s website later the same day. By dialing in to the conference call, the participant agrees that personal information such as name and company name will be collected. The conference call will be recorded.

Ahlstrom-Munksjö in brief

Ahlstrom-Munksjö is a global leader in fiber-based materials, supplying innovative and sustainable solutions to its customers. Our mission is to expand the role of fiber-based solutions for sustainable every day life. Our offering include filter materials, release liners, food and beverage processing materials, decor papers, abrasive and tape backings, electrotechnical paper, glass fiber materials, medical fiber materials and solutions for diagnostics as well as a range of specialty papers for industrial and consumer end-uses. Our annual net sales is about EUR 3 billion and we employ some 8,000 people. The Ahlstrom-Munksjö share is listed on the Nasdaq Helsinki and Stockholm.  

Read more at www.ahlstrom-munksjo.com.