Profitability shows signs of improvement - Seite 3

Result including discontinued operations

In January-March 2014, profit for the period including discontinued operations was EUR 1.9 million (EUR 7.9 million). Earnings per share with the effect of interest net of tax on the hybrid bond were EUR 0.03 (EUR 0.16).

Return on equity (ROE) was 2.2% (6.6%).

Rightsizing program

Following the completion of the Label and Processing demerger in 2013, Ahlstrom initiated a rightsizing program to bring down costs to reflect its new size and scope. The company aims to achieve EUR 50 million in annual cost savings. The majority of the planned actions related to the rightsizing program will be realized by the end of 2014, and the full impact of the program is expected to be visible in 2015.

As a result of the planned program, Ahlstrom's personnel is to be reduced by approximately 400 people globally. The planned changes and personnel impacts are subject to employee consultation processes according to local legislation in the countries affected. The targeted savings will be derived from all business areas and functions globally. In particular, the aim is to reduce selling, general and administration (SGA) costs and further improve supply chain efficiency. The aim is to bring the SGA costs back to a level of 10-11% of net sales in 2015.

The program is moving ahead as targeted. As of March 31, 2014, approximately EUR 19 million in total cumulative cost savings were achieved, corresponding to an annualized run rate of EUR 25 million.

In continuing operations, approximately EUR 12 million in cumulative cost savings were achieved, of which approximately EUR 4 million in the first quarter of 2014. In addition, approximately EUR 7 million were derived from costs transferred to Munksjö Oyj, of which EUR 2 million in the first quarter of 2014.

Ahlstrom plans to book non-recurring costs of approximately EUR 15 million related to rightsizing during the years 2014-2015. So far, EUR 6.3 million in non-recurring costs have been booked, of which EUR 3.1 million was in the first quarter of 2014.

Outlook

The outlook presented on January 30, 2014 remains unchanged. Based on Ahlstrom's view of the development of its main markets, pricing and product mix, competitive dynamics and expected cost savings, the company anticipates net sales in 2014 to be EUR 930-1,090 million. The operating profit margin excluding non-recurring items is expected to be 2-5% of net sales.

In 2014, investments excluding acquisitions are estimated to be approximately EUR 50 million (EUR 76.1 million in 2013).

Short-term risks