Ahlstrom-Munksjö publishes additional pro forma financial information

AHLSTROM-MUNKSJÖ OYJ STOCK EXCHANGE RELEASE, FEBRUARY 14, 2019 at 08:30

Ahlstrom-Munksjö Oyj publishes additional unaudited pro forma financial information for 2018 and for each of the quarters in 2018 in addition to the fourth quarter in 2017. The pro forma information illustrates the financial impact of the acquisitions of Expera and Caieiras as well as the merger of Munksjö and Ahlstrom and the related financing and refinancing of the transactions on the business performance of Ahlstrom-Munksjö as if the transactions had taken place on January 1, 2017. Pro forma information is presented separately for group level and for the business areas, and forms the basis of comparison for Ahlstrom-Munksjö’s future performance.

Considering the magnitude of the acquisitions of Expera and Caieiras as well as the merger of Ahlstrom and Munksjö and the impact on the combined company’s performance and financial position, stand-alone historical information for the periods presented does not provide comparable information for the company’s operating performance and financial position.

On October 10, 2018, Ahlstrom-Munksjö completed the acquisition of U.S. specialty paper producer Expera Specialty Solutions, forming a fifth business area and reporting segment named North America Specialty Solutions. The acquisition expanded significantly the company’s presence in North America and further strengthened its offering.
On October 17, 2018, Ahlstrom-Munksjö completed the acquisition of MD Papéis’ Caieiras specialty paper mill in Brazil. For Ahlstrom-Munksjö, the acquisition strengthened the company’s offering and production platform in South America. The business has been integrated into Decor and Industrial Solutions business areas.
Ahlstrom and Munksjö merged on April 1, 2017 creating a global leader in innovative and sustainable fiber-based materials.

For detailed basis of presentation and notes for the additional unaudited pro forma information see appendix.

The following tables set forth unaudited pro forma financial information for the group 2018 and business area information for 2017 and 2018, each of the quarters in 2018 in addition to the fourth quarter in 2017.

Pro forma income statement for 2018

EUR million, or as indicated	Ahlstrom-Munksjö historical	Pro forma Expera	Pro forma Caieiras	Pro forma financing	Pro forma total
Net sales	2,438.0	490.6	68.3	-	2,996.9
Other operating income	9.6	1.2	-	-	10.9
Total operating income	2,447.7	491.8	68.3	-	3,007.8

Operating costs
Changes in inventories of finished goods and work in progress	25.0	-2.1	1.8	-	24.7
Materials and supplies	-1,208.2	-192.5	-45.0	-	-1,445.7
Other operating expenses	-589.5	-118.1	-7.6	-	-715.3
Employee benefit expenses	-452.4	-120.4	-8.4	-	-581.2
Depreciation, amortization and impairment	-133.9	-21.5	-5.5	-	-161.0
Total operating costs	-2,359.0	-454.7	-64.8	-	-2,878.5

Share of profit in equity accounted investments	0.0	-	-	-	0.0
Operating result	88.7	37.1	3.5	-	129.4

Financial income	8.9	-	0.5	-	9.4
Financial expenses	-34.3	-2.0	-0.2	-15.5	-51.9
Net financial items	-25.3	-2.0	0.3	-15.5	-42.5
Profit/(loss) before tax	63.3	35.1	3.9	-15.5	86.9
Taxes	-20.4	-5.9	-1.6	4.2	-23.6
Net profit/ (loss)	42.9	29.3	2.3	-11.3	63.2

Net profit/ (loss) attributable to:
Parent company’s shareholders	41.6	29.3	2.3	-11.3	61.9
Non-controlling interests	1.4	-	-	-	1.4

Earnings per share, attributable to the equity holders of the parent company
Basic, EUR	0.43				0.54
Diluted, EUR	0.43				0.54

Pro forma quarterly income statement information

The following table presents pro forma income statement information on a quarterly basis for 2018 and for the fourth quarter in 2017 prepared on a basis consistent with the full year pro forma income statement information.

EUR million, or as indicated	Q4/2018	Q3/2018	Q2/2018	Q1/2018	Q4/2017
Net sales	734.8	745.2	766.0	751.0	718.9
Other operating income	3.4	3.3	2.1	2.2	1.7
Total operating income	738.2	748.5	768.0	753.1	720.6

Operating costs
Changes in inventories of finished goods and work in progress	-4.7	5.1	9.9	14.3	4.3
Materials and supplies	-350.3	-362.7	-372.4	-360.2	-331.8
Other operating expenses	-184.8	-169.4	-180.6	-180.4	-175.4
Employee benefit expenses	-150.8	-136.5	-148.4	-145.5	-147.5
Depreciation, amortization and impairment	-46.2	-37.8	-38.6	-38.4	-40.0
Total operating costs	-736.9	-701.3	-730.2	-710.2	-690.4

Share of profit in equity accounted investments	0.0	-	-	-	-0.2
Operating result	1.3	47.2	37.9	43.0	30.0

Net financial items	-12.7	-11.8	-8.5	-9.4	-12.2
Profit/(loss) before tax	-11.4	35.4	29.4	33.6	17.8
Taxes	1.2	-9.7	-5.9	-9.3	9.8
Net profit/(loss)	-10.3	25.7	23.4	24.3	27.6

Net profit/(loss) attributable to:
Parent company’s shareholders	-10.3	25.3	22.8	24.1	27.5
Non-controlling interests	0.0	0.4	0.6	0.2	0.1

Earnings per share, attributable to the equity holders of the parent company
Basic, EUR	-0.09	0.22	0.20	0.21	0.24
Diluted, EUR	-0.09	0.22	0.20	0.21	0.24

Pro forma business area information

Following the acquisitions of Expera and Caieiras, Ahlstrom-Munksjö is organized into five business areas, which are Decor, Filtration and Performance, Industrial Solutions, North America Specialty Solutions and Specialties. The following table presents pro forma business area information for the year ended December 31, 2018 and for the year ended December 31, 2017 as well as for each of the separate quarters for the year 2018 and for the last quarter for the year 2017.

EUR million, or as indicated	2018	2017	Q4/2018	Q3/2018	Q2/2018	Q1/2018	Q4/2017
Pro forma net sales by business area
Decor	451.9	431.8	115.1	109.1	114.7	112.9	107.8
Filtration and Performance	672.5	665.3	162.6	168.3	174.7	167.0	159.9
Industrial Solutions	691.2	678.4	163.4	174.5	177.3	176.0	167.8
North America Specialty Solutions	626.0	637.9	155.5	157.6	156.8	156.1	149.2
Specialties	580.3	574.3	140.9	142.6	150.9	145.9	138.9
Other and eliminations	-25.1	-26.2	-2.7	-6.9	-8.5	-6.9	-4.7
Total pro forma net sales	2,996.9	2,961.5	734.8	745.2	766.0	751.0	718.9

Pro forma comparable EBITDA by business area
Decor	37.1	43.8	11.5	7.0	10.2	8.3	11.0
Filtration and Performance	114.7	120.6	24.5	31.2	30.2	28.7	24.6
Industrial Solutions	99.7	112.1	17.7	32.9	24.4	24.7	26.2
North America Specialty Solutions	57.0	62.2	12.5	15.0	13.0	16.5	14.1
Specialties	37.6	52.9	7.9	7.5	10.2	12.0	10.2
Other and eliminations	-16.2	-25.3	-2.7	-4.2	-5.3	-3.9	-5.7
Total pro forma comparable EBITDA	329.9	366.3	71.4	89.4	82.8	86.3	80.5

Pro forma comparable EBITDA margin by business area, percent
Decor	8.2%	10.2%	10.0%	6.5%	8.9%	7.3%	10.2%
Filtration and Performance	17.0%	18.1%	15.1%	18.5%	17.3%	17.2%	15.4%
Industrial Solutions	14.4%	16.5%	10.8%	18.8%	13.7%	14.1 %	15.6%
North America Specialty Solutions	9.1%	9.7%	8.0%	9.5%	8.3%	10.6 %	9.5%
Specialties	6.5%	9.2%	5.6%	5.3%	6.8%	8.2 %	7.3%
Other and eliminations	n/a	n/a	n/a	n/a	n/a	n/a	n/a
Total pro forma comparable EBITDA margin	11.0%	12.4%	9.7%	12.0%	10.8%	11.5%	11.2%

For further information, please contact:

Johan Lindh, Head of Investor Relations, +358 10 888 4994, johan.lindh@ahlstrom-munksjo.com
Juho Erkheikki, Investor Relations Manager, +358 10 888 4731, juho.erkheikki@ahlstrom-munksjo.com

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.

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