Ahlstrom-Munksjö interim report January-September 2019

Highlights During and After the Reporting Period
•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)

CEO COMMENTS
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.
more detail at: https://www.ahlstrom-munksjo.com/Media/releases/stock-exchange-releases2/2019/ahlstrom-munksjo-interim-report-january-september-2019-strong-cash-flow-and-stable-profitability/

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