“Earnings per share increased sequentially in the second quarter, a trend we expect to continue in coming quarters,” said Mitch Butier, Chairman and CEO. “Volumes in our Materials businesses continue to recover from slow market conditions, largely destocking, while our Intelligent Labels platform accelerates adoption into new categories. "While it's good to see the continuing sequential improvements in our Materials businesses and the building momentum in Intelligent Labels, the pace of our recovery is slower than anticipated. Our results for the quarter were below our expectation due to lower revenue, something the team was able to largely offset through cost reduction actions,” Butier added.
Ahlstrom-Munksjö is exploring strategic options for its Decor business, including the possibility of divesting the business. The review process, first announced on September 17, 2019, has been impacted by the Covid-19 outbreak.
In 2020, the Decor business saw strong customer demand with tailwinds from increased consumer spending on furniture and domestic refurbishments as a consequence of structural changes related to working from home accelerated by the Covid-19 pandemic. For the full year, comparable EBITDA increased, partly driven by higher raw material efficiency, and reached 14% of sales in the fourth quarter.
In the past months, Ahlstrom-Munksjö has progressed with the carve-out of Decor with the objective of enabling the business to operate as a stand-alone entity. Decor has also been discussing opportunities for partnering with leading Chinese suppliers to create a more global leader with strong presence in Europe, South America and Asia.
As the acquisition of Ahlstrom-Munksjö by the Bain Capital-led consortium has now been completed and the carve-out activity and dialogue with potential partners in China is progressing, Ahlstrom-Munksjö is reactivating the process to identify the interest of capital investment in the Decor business and find the best path to develop Decor’s full potential.
“With the aim to strengthen our platform of businesses, Ahlstrom-Munksjö regularly assesses what is the best structure of its businesses. Our goal remains to accelerate the development of Decor into a stand-alone market leader, and we are open to the possibility that a new owner, fully focused on this business, may be best positioned to accomplish such an objective. New capital will also allow further investments to enhance Decor’s operating performance and enable expansion through acquisitions and mergers in China”, says President and CEO Hans Sohlström.
“Whilst Decor is a great business with strong potential for global development, we are fully supportive of Ahlstrom-Munksjö’s strategy of focusing management’s effort in the other four business areas of the company which we expect to demand significant resources to consolidate and expand leadership in their respective end markets”, says Chairman Ivano Sessa.