Ahlstrom Corp, Finland

October 2006

Filtration Industry Analyst

Cummins Inc, USA

Ahlstrom Corp, Finland  million) Key Figures ( Second quarter ended 30.6 2006

2005

Net Sales Of Which: FiberComposites

409.6

402.8

204.9

Operating Profit Of Which: FiberComposites

2.7.2006

26.6.2005

2842

2490

193.3

Net Sales Of Which: Components

563

511

28.9

30.3

Cost of Sales

2170

1940

13.9

17.3

Gross Margin

672

550

325

235

Profit before Taxes

25.2

25.4

Profit for the Period

16.6

14.4

Net Cash Flow from Operations

11.3

25.9

Earnings before Interest and Taxes (EBIT) Of Which: Components

12.1

Net Earnings

Return on Capital Employed (%) 11.7

34

21

220

141

Six months ended

Six months ended 30.6

2.7.2006

26.6.2005

5520

4698

369.6

Net Sales Of Which: Components

1118

984

58.5

58.9

Cost of Sales

4249

3692

Gross Margin

1271

1006

29.7

30.8

Profit before Taxes

50.3

52.4

580

398

Profit for the Period

32.4

32.4

65

44

Net Cash Flow from Operations

37.2

37.1

355

238

Return on Capital Employed (%) 12.4

12.1

2006

2005

Net Sales Of Which: FiberComposites

824.2

787.1

417.6

Operating Profit Of Which: FiberComposites

Net Earnings

COMMENT

COMMENT Ahlstrom’s filtration business unit, part of the FiberComposites division, saw its sales volumes increase by 9% and its net sales by 15% in the second quarter of 2006 compared with a year earlier. Growth was driven by strong demand in Latin America and Asia, with the acquisitions of late 2005 and early 2006 also contributing. General market conditions remained steady during the second quarter of 2006, although demand varied by area and application. The filtration business area was able to increase its sales prices in all of its geographic regions and most of its product areas during the

Earnings before Interest and Taxes (EBIT) Of Which: Components

second quarter, which partially compensated for the high raw material and energy costs. Unfavourable currency rates continued to negatively affect the filtration unit’s result. A new nanofibre filtration production line in the Madisonville, USA plant started up in June, with commercial sales scheduled to begin in September. A facility providing warehousing, converting and packaging for all filtration customers in Wuxi, China was completed during the second quarter. Ahlstrom expects the market for its filtration materials to remain stable in the coming months. ■

Cummins posted second-quarter sales of US$2.84 billion, a 14% increase on the same period in 2005. Net earnings rose 56% on a year ago to reach US$220 million, benefiting in part from the favourable resolution of tax audits related to prior years. The Components segment, made up of its filtration, turbocharger, fuel systems and exhaust aftertreatment businesses, continued its recent improvement, posting a 10% sales gain to a record US$563 million. It also recorded a 62% increase in EBIT to US$34 million. Strong sales gains in North and Latin American filtration

markets, as well as profit improvement initiatives, helped drive this growth. “We had a terrific second quarter and remain on pace for a record 2006,” said Cummins chairman and CEO Tim Solso. “Our markets are strong around most of the world, we are winning new business and we continue to serve our customers well. We have reduced debt significantly and increased our pension funding. At the same time we are investing in growth markets that will enhance our brand position and help us deliver strong returns well into the future.” ■

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COMPANY WATCH

Key Figures (US$ million) Second quarter ended