COMPANY WATCH
Ahlstrom Corp, Finland
Alfa Laval AB, Sweden
Key Figures ( million) Fourth quarter ended 31.12 2008
2007
Key Figures (SKr million) Fourth quarter ended 31.12 2008
2007
Net Sales Of Which: Filtration
419.0
462.5
Order Intake
6181
6576
66.2
78.7
Net Sales
8096
7220
Operating Profit/(Loss)
(35.4)
(34.7)
Cost of Goods Sold
4905
4354
Profit/(Loss) before Taxes
(49.5)
(43.2)
Gross Profit
3191
2866
Profit/(Loss) for the Period
(37.0)
(29.0)
215
206
Return on Capital Employed (%)
(10.8)
(10.7)
1488
1624
870
1056
2008
2007
1802.4
1760.8
Full year ended 31.12 2008
2007
Order Intake
27 464
27 553
306.5
332.5
Net Sales
27 850
24 849
14.6
25.8
Cost of Goods Sold
16 481
15 340
Profit before Taxes
(20.6)
0.2
Gross Profit
11 369
9509
Profit/(Loss) for the Period
(16.1)
1.3
R&D Costs
718
643
1.4
2.5
Operating Income
5736
4691
Net Income
3807
3180
R&D Costs Operating Income Net Income
Year ended 31.12 Net Sales Of Which: Filtration Operating Profit
Return on Capital Employed (%)
COMMENT Ahlstrom concluded a difficult fiscal 2008 with a disappointing fourth quarter that saw net sales fall 9.4% to 419.0 million and the company post an operating loss of 35.4 million. Jan Lång, Ahlstrom’s president and CEO, said the global economic downturn had been reflected in the company’s performance with a strong decline in the demand for most of its products emerging towards the end of the year coupled with a downsizing of inventory levels in the supply chain. Sales volumes decreased by 16.6% during the quarter, while comparable net sales adjusted for currency effects, plant closures and acquisitions decreased by 4.5%. Fourth quarter net sales in Ahlstrom’s Fiber Composites segment totalled 229.1 million, down 8.2% on the 2007 comparator due to lower volumes and pricing pressures in many products, especially in
March 2009
transportation filtration, wipes for home and personal care and in industrial nonwovens products. More positively, net sales grew in medical and food nonwovens applications. The Fiber Composites division posted a net loss for the quarter of 24.7 million, compared with a profit of 2.7 million a year earlier, representing 70% of the overall operating loss. Lång said that most of the decline was related to non-recurring items and writedowns related with the restructuring actions. Excluding the non-recurring items and writedowns, the operating loss for the segment was 4.5 million, compared with a year earlier profit of 15.7 million, reflecting the significantly lower level of demand and the weak performance of the wipes business. In addition, profitability was burdened by ramp-up and integration costs. ■ www.ahlstrom.com
COMMENT Alfa Laval enjoyed a good fiscal year in 2008 with net sales up 13.4% on a year earlier at SKr27 850 million and net income 19.7% stronger at SKr3807 million. Tightening demand in the fourth quarter, however, suggests more difficult times lie ahead. “2008 was a very good year for Alfa Laval with record sales and record profit,” Lars Renström, Alfa Laval’s president and CEO, said. “The demand, however, decreased towards the end of the year.” Results for the fourth quarter were mixed with net sales up 12.1% to SKr8096 million, while net income fell 17.6% to SKr870 million. The slowdown in demand during the period, meanwhile, was reflected in Alfa Laval’s order intake falling 15% on a year earlier to SKr6181 million.
Renström said that the decrease in demand was most significant within its Marine sector, while the recent positive trends for the company’s Energy & Environment and Parts & Service segments continued. In term of geographic markets, Renström said the downturn was especially apparent in Central and Eastern Europe and Asia, while Western Europe and North America performed on a similar basis to the corresponding period in 2007. Renström added that due to the expectations of a tough year in 2009, Alfa Laval had intensified restructuring initiatives to reduce capacity and costs. He said the company was projecting demand to decline further during the first quarter of fiscal 2009. ■ www.alfalaval.com
Filtration Industry Analyst
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