Welcome to our new PowerPoint template - Ahlstrom … · Tax credit related to PPT impairment loss – *Impairment loss of approximately EUR 11.6 million from the PPT withdrawal

Ahlstrom Investor presentation

October 2014

Contents

– Ahlstrom in brief

– Summary of Q3/2014 and future prospects

– Business area financials

– Strategic agenda for 2020

– Long-term financial targets

– Sustainability

– Key financials 2009-2013

– Debt financing

– Global sourcing

10/28/2014 © 2014 Ahlstrom Corporation Page 2

Ahlstrom today

– High performance fiber-based materials company

– Approximately 3,500 employees in 24 countries

– Net sales EUR 1 billion in 2013 (continuing operations)

– Founded in 1851, constantly moving forward

– Listed on the NASDAQ OMX Helsinki since 2006



Business areas

is one of the

leading players

globally for

materials used in

wall coverings,

floorings and

windmill blades

is one of the

leading players

globally for

materials used in

tea bags, coffee

pods, molds,

trays, food

packaging and

masking tape

is the global

leader in

transportation

filtration materials

is a global

supplier of air and

liquid filtration

materials, with a

leading market

position in life

science and gas

turbine filtration

is one of the

leading players

globally for

materials used in

medical gowns

and drapes,

apparel and

sterile barrier

systems

Building and

Energy

Food

Transportation

Filtration

Advanced

Filtration

Medical

Creating value 1. Primary production

– Natural fibers: wood, cotton, hemp

– Oil and petrochemicals

2. Raw material supplier – Pulp producers

– Synthetic fiber producers (PET, PP, glass)

– Chemical suppliers

5. Marketer / seller – World class consumer

or industrial brands

6. Consumers

3. Ahlstrom – Other roll goods producers

4. Converters and industrial customers – Healthcare and consumer goods suppliers

– Transportation industry suppliers

– Air and liquid filter manufacturers

– Packaging industry

– Wallcover printers and designers


Major acquisitions and divestments

1980s 1990s 2010s 2000s

Focus on specialty

papers, filtration

‒ Acquisition of

Filtration Sciences

Inc. in the USA

(1989)

Move to nonwovens

‒ Acquisition of

Sibille-Dalle in

France (1996)

Expand and focus on nonwovens

and specialty papers

Key acquisitions:

‒ Dexter’s nonwoven fabrics

production in the USA (2000)

‒ Orlandi’s spunlace production in

Italy (2007)

‒ Fiberweb’s consumer wipes

business in Italy, Spain, USA

(2007)

‒ Fabriano Filter Media in Italy

(2007)

‒ Friend Group, manufacturer of

vegetable parchment in the USA

(2008)

More focused business portfolio and

expansion in Asia

‒ Acquisition of a filtration plant in China

(2010)

‒ Joint venture in medical papers and

masking tape substrates in China

(2010)

‒ Acquisition of a 49.5% stake in Porous

Power Technologies, LLC (2011)

‒ Acquisition of Munktell Filter AB

(2012)

Key divestments and exits:

‒ Ahlstrom machinery (2000)

‒ Ahlstrom Pumps (2000)

‒ Ahlstrom Electronics (2000)

‒ Åkerlund & Rausing Carton

(2000) and flexible packaging

(2001)

‒ Kamtech (2002)

‒ Alcore cores and board

(2004-2006)



‒ Exit from dust and air filtration

materials, sealing & shielding

papers (2010)

‒ Divestment of Home and

Personal -business area

(2011)

‒ Demerger of Label and

Processing business (2013)


‒ Exit from publication

papers (1987)

Summary Q3/2014& future prospects


Page

Executive Management Team as of October 24, 2014

CEO

Marco Levi

CFO

Sakari Ahdekivi

EVP Building and Energy

Fulvio Capussotti

EVP Filtration

Jari Koikkalainen

EVP Food and Medical

Omar Hoek

EVP HR

Päivi Leskinen

EVP Legal

Ulla Bono

EVP Commercial Excellence & Customer

Service

Nadia Stoykov

–8

Page

Business areas as of January 1, 2015

–9

Building and Energy Filtration Food and Medical

One of the leading players

globally for materials used in

wallcoverings, floorings and

windmill blades.

A global supplier of

transportation, air and liquid

filtration materials, with a

leading market position in life

science and gas turbine

filtration.

One of the leading players

globally for materials used in

beverage and food

packaging, masking tape and

medical gowns and drapes.

July-September 2014 in brief


Highlights

+ Fourth consecutive quarter of year-on-year improvement in profitability

+ Four business areas improved profitability: Advanced Filtration, Transportation Filtration, Food,

and Medical

+ Strong sales growth in Advanced Filtration, Transportation Filtration and Food

+ Improved product mix and pricing management

+ Rightsizing program progressing as planned

+ New EUR 100 million bond issued

Lowlights

- Profitability and lower net sales in Building and Energy

- Withdrawal from Porous Power Technologies

Key figures


*Excluding non-recurring items

**Including discontinued operations

EUR million Q3/2014 Q3/2013

Change,

%

Q1-

Q3/2014

Q1-

Q3/2013

Change,

%

Net sales 252.0 251.1 0.3 754.1 771.4 -2.2

EBITDA* 22.6 14.4 57.5 67.1 54.8 22.5

% of net sales 9.0 5.7 8.9 7.1

Operating profit excl.

NRI 9.7 1.5 N/A 30.4 15.9 91.0

% of net sales 3.9 0.6 4.0 2.1

Gearing** 88.4 74.2 88.4 74.2

ROCE, % -8.0 0.7 0.2 2.3


Quarterly net sales development

260.3 261.6 248.8 240.1

255.3 265.0 251.1 243.4 249.2 253.0 252.0

0

25

50

75

100

125

150

175

200

225

250

275

300

Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

MEUR

+0.3%

(Comparable net sales growth +2.3%

at constant currency rates excluding

divestments)

Highlights

+ Increased selling prices

+ Favorable product mix

+ Higher volumes in

Advanced Filtration,

Transportation Filtration,

Food, Medical

Lowlights

- Lower volumes in Building

and Energy

Quarterly operating profit development Profitability has improved for four consecutive quarters Y-o-Y

10.5

7.4 7.3

-4.1

6.5

7.9

1.5

-2.5

7.2

13.4

9.7

-3%

-2%

-1%

0%

1%

2%

3%

4%

5%

6%

7%

-6

-4

-2

0

2

4

6

8

10

12

14

Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

MEUR Operating profit excl. NRI % of net sales

Highlights

+ Pricing and product mix

management

+ Cost savings from

rightsizing program

+ Easing raw material cost

inflation

Lowlights

- Lower volumes in Building

and Energy

- Focus units: Chirnside

production line, Longkou


Operating profit* supported by higher selling

prices / product mix and lower costs


1.5

9.7

3.7

1.3 2.4

2.7

0.9

0

1

2

3

4

5

6

7

8

9

10

11

OP excl. NRIQ3/2013

Selling price &mix

Volume RM andEnergy

Other costs FX OP excl. NRIQ3/2014

MEUR

*Continuing operations, excluding non-recurring items

+ Price increases and

favorable product mix

+ Lower raw material

costs in some pulp

grades

+ Cost savings from the

rightsizing program

– Lower sales volumes

in Building and

Energy

Update on rightsizing program

– Target to reach annual costs savings of EUR 39 million in continuing operations by the end

2015

• Approximately EUR 50 million including costs transferred to Munksjö Oyj

– Personnel reductions of about 400 globally

– Ahlstrom to book non-recurring items of approximately EUR 15 million in 2013-15

– Achieved by the end of Q3/2014:

• Approximately EUR 22 million in cost savings have been achieved in continuing operations

• Personnel reductions of approximately 355

• Non-recurring costs: EUR 13.2 million, of which EUR 10.1 million in Q1-Q3/2014


Income statement


Q3/2014 Q3/2013

EUR million

Net sales 252.0 251.1

Cost of goods sold -221.8 -218.1

Gross profit

30.2

33.0

Sales, administrative and research & development

expenses

Other income and expenses

-31.6

-12.1

-31.4

-0.1

Operating profit

-13.4

1.5

Operating profit excl. NRI

Net financial expenses

Share of profit / loss of equity accounted investments

9.7

-6.3

-0.2

1.5

-5.4

-0.6

Profit / loss before taxes

Income taxes

Profit / loss for the period from continuing

operations

Earnings per share

-19.9

3.2

-16.7

-0.30

-4.4

0.7

-3.7

-0.09

NRIs: EUR -23.2 million in Q3/14*

SGA costs excluding NRI continued to

decrease in Q3/14, but were impacted

by one-time pension cost in the U.K.

and set-up costs related to the shared

service center in Vilnius

Costs related to new bond issue,

tender of an outstanding bond

Tax credit related to PPT impairment

loss

– *Impairment loss of approximately EUR 11.6

million from the PPT withdrawal. Net of tax

approximately EUR 8 million.

– *Additional depreciation of approximately EUR

5.3 million on the Chirnside production line

– *Additional depreciation of approximately EUR

2.9 million on glassfiber production assets

– *Non-recurring cost of approximately EUR 1.7

million related to the transfer of IT operations

Balance sheet


Sept. 30, 2014 Dec. 31, 2013

EUR million

Total non-current assets

Inventories

Trade and other receivables

Income tax 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

614.4

123.6

183.7

1.2

63.8

-

986.8

327.8

11.3

353.5

76.9

207.2

10.0

-

986.8

633.4

106.6

173.0

0.6

38.2

18.9

970.6

341.4

8.3

330.4

76.1

200.2

8.3

5.9

970.6

Gearing

88.4

85.5

– Impact from non-recurring items in

Q3/14

– Includes EUR 100 million hybrid

bond.

– Market value of shareholding in

Munksjö Oyj EUR 42.6 million (Sept.

30, 2014)

– Shareholding in Suominen Oyj

included, shares sold in October

2014


Development of operating working capital (including discontinued operations)

179.1 171.8 169.9 169.3

198.3

155.5

132.7

108.0 120.5 125.6 129.0

25

30

35

40

45

50

0

50

100

150

200

250

Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Days MEUR

Operative working capital* Turnover rate in days

– Stable development of working

capital QoQ

– 12-month rolling turnover rate

increased to 46 days at the end

of Q3/2014 from 44 days at the

end Q3/2013

Operating working capital was released

due to the LP Europe demerger in

Q2/2013 and Coated Specialties

demerger in Q4/2013

*Operative working capital = Accounts receivables + inventories – accounts payable

Net cash from operating activities (including discontinued operations)

14.6

27.5

21.2 15.5

-21.4

35.5

23.2

3.7

-6.1

14.2 8.4

-25

-20

-15

-10

-5

0

5

10

15

20

25

30

35

40

Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14


MEUR


Gearing (including discontinued operations)

Gearing was 88.4% on

September 30, 2014

– Gearing was negatively

impacted by non-recurring

items in Q3/2014

– Sale of Suominen shares

to have positive impact on

gearing in Q4/2014

– Transaction price

EUR 33.3 million

241.2

290.2 279.8

303.4

348.9

294.5

285.6 291.7

281.3 283.3 289.7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

150

175

200

225

250

275

300

325

350

375

400

Q1/12 Q2/12 Q3/12 Q4/12 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

MEUR

Interest bearing net liabilities Gearing ratio, %

Gearing:

target range 50–80%

Gearing

Outlook for 2014

© 2013 Ahlstrom Corporation Page 21

– Ahlstrom narrows its outlook range for net sales and operating profit margin

excluding non-recurring items in 2014

– Net sales are expected to be EUR 960-1,020 million

– Operating profit margin excluding non-recurring items is expected to be 2.5-4% of

net sales

– Previous outlook:

– Net sales are expected to be EUR 930-1,090 million

‒ Operating profit margin excluding non-recurring items is expected to be 2-5% of net

sales

‒ Investments excluding acquisitions are still estimated to amount to

approximately EUR 50 million

10/28/2014

Business area autopsy

Advanced Filtration a global supplier of air and liquid filtration materials, with a leading market position in Life Science

and Gas Turbine filtration.

© 2014 Ahlstrom Corporation Page 23 10/28/2014

24.3 26.2 24.2 23.2 24.5

26.2

26.4

0

10

20

30

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Net sales

3.2 3.7

3.3 2.6 3.7

4.2 5.0

111213141516171819

0

1

2

3

4

5

6

7

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Operating profit ex. NRI MEUR

MEUR

% of net

sales


Change,

%

Q1-

Q3/2014

Q1-

Q3/2013

Change,

%

Net sales 26.4 24.2 9.1 77.1 74.7 3.2

Operating profit 5.0 3.3 49.0 12.8 10.2 26.5

% of net sales 18.8 13.8 16.7 13.6

Operating profit excl. NRI 5.0 3.3 49.0 12.8 10.2 26.5

% of net sales 18.8 13.8 16.7 13.6

RONA, % 41.5 27.6 36.5 28.3

Sales volumes, 000s tons 4.3 3.9 12.2 12.8 12.2 5.1

Building and Energy one of the leading players globally for materials used in wall coverings, floorings and windmill

blades


73.4 71.0 67.5

63.8 68.8 65.5 61.5

0

20

40

60

80

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Net sales

2.5 1.6

-0.4

-0.9 1.3

2.0

-2.3

-4-3-2-101234

-4-3-2-101234

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Operating profit ex. NRI

% of net

sales MEUR

MEUR


Change,

%

Q1-

Q3/2014

Q1-

Q3/2013

Change,

%

Net sales 61.5 67.5 -8.9 195.9 212.0 -7.6

Operating profit -4.5 -0.4 N/A -0.8 3.6 N/A

% of net sales -7.4 -0.6 -0.4 1.7


NRI -2.3 -0.4 N/A 1.0 3.6 -73.1

% of net sales -3.8 -0.6 0.5 1.7

RONA, % -17.8 -1.8 -1.1 5.4

Sales volumes, 000s

tons 32.1 35.5 -9.7 101.9 112.7 -9.6

Food one of the leading players globally for materials used in tea bags, coffee pods, molds, trays, food

packaging and masking tape


60.1 63.7 58.1 61.8 59.0 58.4 60.6

0

20

40

60

80

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Net sales

0.8 1.4

0.3

1.7 2.3 2.5

4.2

0

1

2

3

4

5

6

7

0

1

2

3

4

5

6

7

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Operating profit ex. NRI % of net

sales MEUR

MEUR


Change,

%

Q1-

Q3/2014

Q1-

Q3/2013

Change,

%

Net sales 60.6 58.1 4.2 178.0 181.9 -2.1

Operating profit -1.1 0.3 N/A 2.9 1.5 96.2

% of net sales -1.8 0.5 1.6 0.8

Operating profit excl. NRI 4.2 0.3 N/A 9.0 2.5 N/A

% of net sales 6.9 0.5 5.1 1.4

RONA, % -4.8 1.4 4.4 2.1


Medical one of the leading players globally for materials used in medical gowns and drapes, apparel and

sterile barrier systems


36.5 38.5

34.6 33.3 30.1

32.8 33.9

0

10

20

30

40

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Net sales

0.0 0.3

-1.6 -1.8 -1.8 -0.8

-0.3

-8

-6

-4

-2

0

2

-2

-1

0

1

2

3

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Operating profit ex. NRI

% of net

sales MEUR

MEUR


Change,

%

Q1-

Q3/2014

Q1-

Q3/2013

Change,

%

Net sales 33.9 34.6 -1.9 96.9 109.5 -11.5

Operating profit -0.3 -1.6 79.0 -4.5 -1.3 N/A

% of net sales -1.0 -4.7 -4.7 -1.2


NRI -0.3 -1.6 80.0 -3.0 -1.3 -130.6

% of net sales -1.0 -4.7 -3.1 -1.2

RONA, % -1.8 -8.0 -7.9 -2.1

Sales volumes, 000s

tons 9.9 9.4 4.7 29.1 30.0 -3.0

Transportation Filtration the global leader in transportation filtration materials


74.6 81.0 77.7

73.4 77.9

82.9 83.0

0

20

40

60

80

100

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Net sales

4.1 4.6 3.6

1.9

5.0

7.3 7.3

0

2

4

6

8

10

0

2

4

6

8

10

Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14

Operating profit ex. NRI % of net

sales MEUR

MEUR


Change,

%

Q1-

Q3/2014

Q1-

Q3/2013

Change,

%

Net sales 83.0 77.7 6.8 243.8 233.3 4.5

Operating profit 7.3 3.6 104.4 19.5 12.3 59.0

% of net sales 8.8 4.6 8.0 5.3

Operating profit excl. NRI 7.3 3.6 104.4 19.5 12.3 59.0

% of net sales 8.8 4.6 8.0 5.3

RONA, % 18.7 9.5 17.0 11.0


Strategic agenda for 2014-2020

Strategy statement


We will grow with a high

performance product offering for

a clean and healthy environment

We have successfully executed our

transformation strategy during 2009-2013


2009 2013

Demerger of Label and

Processing business

Divestment of small non-

core businesses

One Ahlstrom,

common processes

Focus on

key customers

and Asia

Divestment of

Home and

Personal business

New

Ahlstrom

Food

Beverage

Materials used in food and

beverage packaging, water

filtration and other consumer

goods

Medical Care

Life Science

Materials used in medical fabrics,

diagnostics as well as laboratory

and life science applications

Transportation Materials used in automotive and

heavy-duty air, oil and fuel

filtration, reinforcements and

other transportation applications

Energy

Environment

Materials used in energy

production, gas turbines and

other environment-specific

applications

Building

Materials used in construction

and decoration applications such

as wallcovers, flooring and

masking tape

We have selected our key markets


Customer markets Applications Served by

Business

areas:

Advanced

Filtration

Building and

Energy

Food

Medical

Transportation

Filtration


Global megatrends drive our growth

Resource scarcity, energy and environment

• We design products that minimize environmental impacts

• We are the global leader in environmentally friendly transportation, offering a

comprehensive range of filtration media enable reduced emissions

• Our production processes allow more efficient use of raw materials, energy

and water

Emerging needs in healthcare

• We focus on laboratory and point-of-care medical testing and diagnostics

• We offer a comprehensive range of single-use medical materials that enable

safe medical care

Demographics and urbanization

• We are a leading provider of high quality functional materials for construction

and home decoration

• We provide safe, convenient and innovative food and beverage packaging


Our strategic enablers

A high performance product offering for a clean and healthy environment

Technology and manufacturing platforms Unique know-how of fibers, chemistry and materials technology

Flexible manufacturing capabilities

Environmentally sound technologies utilizing renewable materials

Co-creation and open innovation Competent people with a passion for results

Differentiated products to meet specific customer needs

Deep partnerships with customers, partners and suppliers

Global reach and local insights Global operations, local sales and technical service

Global product offering, customized to market needs

Resource-efficient value chains


We have sustainable and profitable

growth opportunities

CURRENT AND FUTURE

BUSINESS – IMPACT

ON SOCIETY

Clean drinking water

Clean air

Energy efficiency

Well-being and quality of life

Safe medical care

Light and durable structures

GROWTH 2020: HIGH

GROWTH AREAS

Clean Water

Medical Diagnostics

Composites

CURRENT BUSINESS

Laboratory and life science

Wallcovers

Specialty reinforcements

Medical fabrics

Food and beverages

packaging

Air, oil, and fuel filtration

Tapes


Water scarcity challenge Ahlstrom Disruptor ® offers a low-energy and

chemical-free water cleaning technology Water scarcity trends

• Demand for safe drinking water

is increasing water reuse needs

• Population and industrial growth

will demand more water

Ahlstrom Disruptor ® removes

particles not captured

by mechanical filters

• Inorganic nanoparticles

• Organic/microbial macromolecules

• Virus and bacteria

• Chemical-free

• Low energy consumption

Ahlstrom and Dow collaboration

• Ahlstrom’s Disruptor® technology

for various drinking water applications

LIQUID FILTRATION

HIGH POTENTIAL

GROWTH AREA

Clean water

Total market opportunity in

filtration systems and

membranes, approximately EUR

4.5 billion as of today

CAGR 6-7%


Medical diagnostics challenge Fiber-based components enable

improved specimen collection Market and technology trends

• Medical diagnostics grow

due to e.g. aging population

• Need for personalized medical

treatment, diagnostics at home

• Increased focus on new technology

development in diagnostics

• Regulatory development favoring

point-of-care (POC) diagnostics

Ahlstrom offers

• Easy sample collections and handling

• Cost-effective diagnostics

Alliances and M&A

• In addition to media, expand

offering towards device solutions

• Partnering with key customers

HIGH POTENTIAL

GROWTH AREA

Medical Diagnostics


medical diagnostics and specimen

collection approximately EUR 1.6

billion as today

CAGR 5-6%

LABORATORY

AND LIFE SCIENCE

APPLICATIONS

TRANSPORTATION

AND CONSTRUCTION

APPLICATIONS


Energy efficiency challenge Lightweight, bio-based composites are gaining

market share from steel and aluminium

HIGH POTENTIAL

GROWTH AREA

Composites


transportation and construction

related applications

approximately EUR 21 billion

as of today

CAGR 7-9%

Growth drivers

• Growing middle-class and wealth

in emerging countries drive demand

for cars, construction, infrastructure

and consumer goods

• Energy efficiency requirements and

more stringent CO2 emission regulation

drive demand for lightweight materials

• Sustainability requirements drive demand

for bio-based materials and recyclability

Demand for composite materials

is growing

• Composites are gaining market share

due to benefits such as more efficient

construction process, corrosion resistance,

lighter weight, multi-functionality, and better

weight-strength ratio

Ahlstrom is reinforcing product

& technology development and

preparing entry into new segments

• Bio-composites for transportation

and construction applications

Alliances and M&A

Ahlstrom

is a high

performance

materials

company,

partnering

with leading

businesses

around the

world to help

them stay ahead.

Act

responsibly

Create

value

Learn

and renew

Inspiring people,

passionate about new ideas, growing with our customers

Performance, Improvement, Certainty, Simplicity

Core

Purpose Values

Vision

Brand

Promise


Long-term financial targets

Long-term financial targets over the economic cycle


Net sales At least 5% underlying growth

Sales from new

products * At least 20%

Operating profit **

7% of net sales by 2016 • Implies ROCE 13%

10% of net sales beyond 2016

• Implies ROCE 15%

Gearing To be maintained within 50–80% range

*Developed in the last three years

**Excluding non-recurring items

Page

Reaching our profitability target

–10/28/2014 –© 2014 Ahlstrom Corporation –41

0

1

2

3

4

5

6

7

8

9

10

11

2013 Rightsizing Focus units Current &new

businesses

Inflation onfixed costs

2016 Current &new

businesses

Beyond 2016

Long-term financial target (over the economic cycle):

‒ Operating profit margin of 7% by 2016

‒ Operating profit margin of 10% beyond 2016

‒ Rightsizing: excluding costs transferred to Munksjö Oyj

‒ Focus units: ramp-up of recent and new investments

‒ Current & new businesses: margin and volume improvement through product portfolio development

% of net sales

(net of inflation)

Performance against long-term targets


2013 2012 2011 2010 2009

Net sales 1,336.1 1,598.6 1,852.6 1,894.2 1,596.1

Net sales - continuing operations 1,014.8 1,010.8 1,025.8

Net sales from new products 13.0 11.0 18.0 N/A N/A

Operating profit** 28.6 56.5 55.8 74.2 39.8

% of net sales 2.1 3.5 3.0 3.9 2.5

Operating profit - continuing

operations** 13.4 21.1 27.6

% of net sales 1.3 2.1 2.7

Gearing 85.5 62.5 40.9 46.9 57.7

*Developed in the last three years

**Excluding non-recurring items

‒ Aim is to pay a dividend of not less than

one third of net cash from operating

activities after operative investments,

calculated as three-year rolling average.

0.55 0.88 0.87

0.63 0.30

0.43

0,0

0,5

1,0

1,5

2,0

2009 2010 2011* 2012 2013

Dividend per share (€)

26

41

61

29

14.0

0

25

50

75

2009 2010 2011 2012 2013

Total amount of dividends paid (EUR million)

Dividend policy

*Consisting of a dividend of EUR 0.87 per share and an extra

dividend of EUR 0.43 per share.


– The AGM held on March 25, 2014 resolved that

dividend in the aggregate maximum amount of

EUR 14.0 million, or EUR 0.30 per share, shall be

paid as follows:

– (i) Dividend payable in Munksjö Oyj’s

shares: Each 26 Ahlstrom’s shares entitle

their holder to receive 1 share in Munksjö

Oyj as a dividend. Ahlstrom shall distribute

to its shareholders as dividend a maximum

of 1,795,023 shares of Munksjö.

– (ii) Dividend payable in cash: A dividend of

approximately EUR 0.09 per share be paid

in cash from the retained earnings. As per

January 30, 2014, the number of shares of

the Company amounts to 46,670,608

based on which the maximum amount to be

distributed as dividend payable in cash

would be approximately EUR 4.3 million.

– Ahlstrom intends to pay dividends in cash and

Munksjö shares also in the future.

Shareholders

5.1 1.1 1.7

2.4

14.8

20.9

54.0

Public sector institutions

Financial and insurance institutions

Non-profit institutions

Nominee registered

Corporations

Foreign holders

Finnish private investors

Major shareholders (30/9/2014)

1. Vimpu Intressenter Ab 11.0%

2. AC Invest Six BV 10.2%

3. Varma Mutual Pension

Insurance Company 3.28%

4. Huber Mona Lilly 2.68%

5. Tracewski Jacqueline 2.16%

6. Nahi Kai Anders 1.71%

7. Kylmälä Tauno Kim 1.65%

8. Lund Niklas Roland 1.49%

9. Studer Anneli 1.43%

10. Kylmälä Kasper Johannes 1.40%

Shareholder structure (30/9/2014)

In total 46.7 million shares outstanding

Ahlström family members hold approximately 2/3 of the

shares*

*Ahlstrom Corporation is not aware of any shareholders’

agreements relating to its share


Sustainability


Link to Ahlstrom sustainability report 2013:

http://www.ahlstrom.com/globalassets/files/publications/sustainability-

report-2013.pdf

http://www.ahlstrom.com/globalassets/files/publications/sustainability-report-2013.pdf






Sustainability as a key driver in product development

EcoDesign approach is based on

life-cycle assessment

The target is to minimize the

environmental impacts of a product

over its whole life-cycle

EcoDesign approach is a

continuous improvement process

focusing on:

• Technical performance

• Cost efficiency

• Environment


Our approach to sustainability

PRODUCT

DEVELOPMENT RESPONSIBLE

SOURCING

MANUFACTURING

SALES AND

MARKETING

– Minimized

environmental

impacts of the

products over

their life cycle

(LCA)

– Social impacts

of products

– Certified fiber

sources

– Supplier Code of

Conduct

– Water use

– Waste

minimization

– Resource

efficiency

– Energy use

– Minimized

emissions to air,

water and soil

– Product

stewardship

– Sustainable

value

propositions

– Helping

customers to

solve their

sustainability

challenges

Safety in workplace, human rights, leadership and management practices

Economic, social and environmental focus areas in Ahlstrom's value chain


Key financials 2009-2013

LP Europe included until May

27, 2013. Brazilian parts of

Label and Processing and

Home and Personal and two

production lines in Osnabrûck

included throughout.

Includes Home and

Personal, Label and

Processing

Includes Label and

Processing,

Brazilian part of

Home and

Personal

1,596.1

1,031.1 1,025.8 1,010.8 1,014.8

0

200

400

600

800

1000

1200

1400

1600

1800

2000

2009 2010 2011 2012 2013

Continuing ops. Discontinued ops.


Net sales development More focused portfolio

MEUR

123.2

79.3

70.3 74.1 64.6

0

1

2

3

4

5

6

7

8

0

20

40

60

80

100

120

140

160

2009 2010 2011 2012* 2013

Continuing ops. Discontinued ops. % of net sales (Cont. ops.)

%


EBITDA and operating profit

39.8

74.2

27.6

21.1 13.4

0

1

2

3

4

5

6

7

8

0

10

20

30

40

50

60

70

80

2009 2010 2011 2012* 2013

Continuing ops. Discontinued ops. % of net sales (Cont. ops.)

MEUR

EBITDA Operating profit ex. NRI

*2012 figures are restated and 2013 figures reported according to new

IFRS standard on employee benefits.

MEUR %

Net cash from operating activities (including discontinued operations)

209.6

167.5

83.7 78.7

41.0

0

25

50

75

100

125

150

175

200

225

2009 2010 2011 2012 2013

MEUR


Operative working capital

reduction project in 2009-

2010

Cash flow

stabilized following

the project

- Negative cash flow in

Q1/2013 due to increase in

operative working capital

- Adjustment of operative

working capital had a

negative impact on cash

flow in Q4/2013


Gearing ratio (including discontinued operations)

395.9

330.1

237.8

303.4

348.9

294.5 285.6 291.7

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0

50

100

150

200

250

300

350

400

450

500

2009 2010 2011 2012 Q1/13 Q2/13 Q3/13 Q4/13

MEUR

Interest bearing net liabilities Gearing ratio, %

Gearing ratio:

target range 50–80%

Gearing

Gearing ratio negatively affected in 2013 by:

– Impairment losses in discontinued operations

– Fair valuation of Munksjö Oyj shares held by Ahlstrom

– Adjustment of operative working capital

Net debt lower due to the Label and Processing demerger

Investments 2008-2012

63.8

51.1 49.8

74.1 76.1

50

63.8 62.3 50.8

95,4

76.1

0

20

40

60

80

100

120

2009 2010 2011* 2012* 2013* 2014E

Capex, excl. acquisitions Capex, incl. acquisitions Depreciation

– Annual maintenance

investments approximately

EUR 25-30 million

– Major acquisitions

– 2010: Filtration plant in

Binzhou, China from

Purico Group

– 2012: Munktell Filter AB

MEUR


*Continuing operations

Personnel (number of employees, year-end)

5841

3792 3918 3829 3536

0

1000

2000

3000

4000

5000

6000

7000

2009 2010 2011 2012 2013

Continuing ops. Discontinued ops.


Debt financing



Debt structure Main debt securities and facilities

EUR millions Total amount Outstanding* Interest rate Maturity

Bond issued in 2014 EUR 100 EUR 100 4.125% 2019

Bond issued in 2010 EUR 100 EUR 54 4.50% 2015

Hybrid bond** issued in

2013 EUR 100 EUR 100 7.875% Perpetual***

Revolving credit facility EUR 200 EUR 0 - 2016

Commercial paper

program EUR 300

EUR 77 - - * September 30, 2014

**Subordinated to debt, treated

as equity

***Callable in 2017

As of September 30, 2014, Ahlstrom's interest-bearing liabilities amounted to EUR

353.5 million (EUR 330.4 million at the end of 2013).

– The capital weighted average interest rate was 3.85%

– The modified interest rate duration of the loan portfolio (average interest rate

fixing period) was 19.8 months

– The average maturity of the long-term loan portfolio and committed credit

facilities was 31.6 months

44%

22%

33%

1 %

Debt structure (interest-bearing liabilities of EUR 353.5 million as Sept. 30, 2014)

Bonds

Commercial papers

Loans from banks and financial institutions

Commitments under financial leasesMain financial arrangements

EUR 100 million bond issued in 2014

Issuer:

Ahlstrom Corporation

Status: Senior, unsecured

Amount: EUR 100 million

Issue date: September 15, 2014

Maturity date: September 15, 2019

Coupon: Fixed rate 4.125%, p.a.

Listing: NASDAQ OMX Helsinki

ISIN code: FI40000108501

Lead Managers: Danske Bank, SEB


Prospectus of the bond: http://www.ahlstrom.com/globalassets/bond/listing-prospectus-2014.pdf

http://www.ahlstrom.com/globalassets/bond/listing-prospectus-2014.pdf






EUR 100 million bond issued in 2010

EUR 45.8 million tendered in 2014, EUR 54.2 million maturing in 2015

Issuer:

Ahlstrom Corporation

Status: Senior, unsecured

Amount: EUR 100 million

Issue date: November 10, 2010

Maturity date: November 10, 2015

Coupon: Fixed rate 4.50%, p.a.

Listing: NASDAQ OMX Helsinki

ISIN code: FI4000019120

Lead Managers: Nordea Markets, Pohjola Bank


Prospectus of the bond: http://www.ahlstrom.com/Global/files/Investors-other-files/Listing-Prospectus-Ahlstrom-FINAL-

15122010.pdf

http://www.ahlstrom.com/Global/files/Investors-other-files/Listing-Prospectus-Ahlstrom-FINAL-15122010.pdf














Hybrid bond*

– EUR 100 million hybrid bond

• Issued in October 2013

• Pays an annual coupon of 7.875%

• Callable in October 2017

*A hybrid bond is an instrument which is subordinated to the company's other debt obligations and which is treated as equity in the IFRS financial statements. Hybrid bonds do not confer to their holders the right to vote at shareholder meetings and do not dilute the holdings of the current shareholders.


Maturity profile of medium/long-term credit

facilities


– Total liquidity, including cash and

unused committed credit facilities

was EUR 317.6 million at the

end of Q3/2014

– In addition, Ahlstrom had

undrawn uncommitted credit

facilities and cash pool overdraft

limits of EUR 144.4 million

available

0

25

50

75

100

125

150

175

200

225

2014 2015 2016 2017 2018 2019

Mid-term / long-term loans Undrawn credit facilities

EUR 100 million bond (Issued in 2010) EUR 100 million bond (Issued in 2014)

Debt servicing figures (including discontinued operations)


0

1

2

3

4

2009 2010 2011 2012 2013

Net debt/Ebitda

0

1

2

3

4

5

6

7

8

9

2009 2010 2011 2012 2013

Ebitda/interest coverage

Interest-bearing loans and borrowings

0

50

100

150

200

250

300

200

9

201

0

201

1

201

2

201

3

Long-term loans EUR

million


0

20

40

60

80

100

120

140

160

180

200

2009 2010 2011 2012 2013

Current portion of non-current loans Other short-term debt

Commercial papers

EUR

million Short-term loans

Global sourcing

Total costs EUR 950 mil. (excl. NRI) in 2013*

‒ Natural fibers

• Pulp (NBSK, BHKP, specialty pulps)

• Abaca

• Viscose rayon

‒ Synthetic fibers

• Polyester

• Polypropylene

‒ Chemicals

• Latex

• Starch

• Liquid solvents

‒ Main sources of energy

• Natural gas

• Electricity


23%

13%

18% 9% 3%

23%

14%

Total costs*

Wood pulp, other natural fibers Synthetic fibers

Chemicals Energy

Delivery costs Production direct and indirect costs

SGA costs


48%

35%

12%

2% 2% 1%

Raw materials (595,327 tons in total)*

Woodpulp ChemicalsSynthetic fibers PackagingAnnual fibers Recycled paper


Raw materials used in 2013*

Key raw materials 2013*

Wood pulp Tons 293,000

Synthetic fibers Tons 69,582

Chemicals Tons 212,850

– 83% of the fiber material used in 2013 was

from renewable sources



Energy usage in 2013*

Fuels 2013*

Coal TJ 471

Oil TJ 200

Gas TJ 3,928

Solid Waste TJ 755

Other TJ 343

Total 5,697

Electricity 2013*

Purchased TJ 1,785

Own production TJ 190

Other TJ 0

Total 1,975

Process heat 2013*

Steam, own

production TJ 3,296

Steam,

purhcased TJ 1,054

Gas (IR) TJ 1,613

Electric energy (IR) TJ 13

Total 5,975

*continuing operations

Pulp price trends


Ahlstrom’s total costs

Natural fibers Other

USD/ton

Source: FOEX Indexes/Bloomberg

400

500

600

700

800

900

1000

1100

6.1

.20

09

6.4

.20

09

6.7

.20

09

6.1

0.2

009

6.1

.20

10

6.4

.20

10

6.7

.20

10

6.1

0.2

010

6.1

.20

11

6.4

.20

11

6.7

.20

11

6.1

0.2

011

6.1

.20

12

6.4

.20

12

6.7

.20

12

6.1

0.2

012

6.1

.20

13

6.4

.20

13

6.7

.20

13

6.1

0.2

013

6.1

.20

14

6.4

.20

14

6.7

.20

14

6.1

0.2

014

Hard wood pulp Soft wood pulp

Thank you

For further information:

Juho Erkheikki

Manager, Financial Communications & Investor Relations

T: +358 50 413 4583

[email protected]


Documents

Welcome to our new PowerPoint template - Ahlstrom … · Tax credit related to PPT impairment loss – *Impairment loss of approximately EUR 11.6 million from the PPT withdrawal