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Ahlstrom Group, Finland
Filtration Industry Analyst
May 2000
Ahlstrom Group, Finland Profile
Ahlstrom is a privately owned international paper, packaging and technology group. It serves its customers through four independent business groups. These are Ahlstrom Paper; ~kerlund & Rausing; Ahlstrom Machinery; and Ahlstrom Pumps. Analysis
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For the year ended 31 December 1999, Ahlstrom Group's net sales totaled C2164 million. This represents a drop of about 11% on C2438 million that the company posted for 1998. The decline was caused mainly by the divestiture of its 50% interest in Lexel, and through the sale of the Ahlstrom Energy and Hygiene & Domestic businesses. For the 12 month period, the group posted operating income of C69 million, or 3.2% of net sales, compared with the previous year's figure of about C87 million, or 3.6% of net sales. Income before extraordinary items and taxes amounted to C62.4 million, or 2.9% of net sales. Net income for the fiscal year was @392 million, or about 18% of net sales, compared with C12 million, which the company recorded for 1998. The return on net assets was 6.9%, compared with 5.9%, while the return on equity was 4.6%, compared with 1.6%. The company's target for return on net assets is 15%. Earnings per share were C94, compared with C43. For fiscal 1999, the Ahlstrom Paper Group reported net sales of CI112 million, compared with C1109 million, which it posted at the end of 1998. Taking into account the divestiture of the Hygiene & Domestic business, aggregate net sales on a 'same-unit' basis was 5.3% higher than 1998. For this group, operating income totaled C58.3 million, or 5.2% of net sales, compared with ~45.4 million reported tbr 1998. The growth in operating income was largely driven by improved operational efficiency and cost savings. ,~kerlund & Rausing Group's net sales figure was C332 million, which was 6.7% lower than the previous year's figure. Ahlstrom Machinery Group and Ahlstrom Pumps posted sales of C537 million and
~134 million for 1999, compared with C539 million and C130 million, reported for 1998. During the third quarter of 1999, the Ahlstrom Group decided to focus its operations on speciality papers and fibre materials. These are areas which, it feels, offer the best potential for achieving a strong market position. The company intends completing the disposal of business groups that do not fit into its strategy within two years.
Fiscal 1999 was. in many ways. eventful for the Ahlstrom group of companies, and it was also marked by a number of achievements. At the operational level, the Paper Group, Pumps and ,~kerlund & Rausing reported improved earnings on the previous year, though the latter company's result was still negative. Machinery's operating result was atso weak. This meant that operating income for the Group as a whole fell below the level it experienced in 1998. A positive development was the improvement of the underlying performance of the group's business operations towards the end of the year. The positive trend was attributed partly to the recovery of the markets during the last four months of 1999. The growth prospects for speciality papers and fibre-web materials are impressive, and the company estimates that its global market potential is upwards of ~'20 billion. •
Key Figures (~ million) Ahlstrom Group Net Sales Personnel Costs
For the year ended 31.12 1999
1998
1997
1996
1995
2164
2438
2438
1988
2036
575
616
591
457
475
Operating Income
69
87
162
152
141
Income Before Extraordinary Items and Taxes
62
28
112
105
84
Net Income
392
12
84
21
115
Net Debt
470
1002
980
851
607
Shareholders' Equity
917
651
679
628
639
Capital Expenditures
131
135
222
209
217
11 462
14 462
13 497
11 119
11 912
Number of Employees (Annual Average) Contact Details
President and chief executive officer: Address:
Juha Rantanen Sentnerikuja 2 00440 Helsinki, PO Box 329 FIN-00101 Helsinki Finland
Tel: +358 9 503 911 Fax: +358 9 503 9709 Web: www.ahlstrom.com
Recent Events
• The Ahlstrom Group 'overhauled' its structure during 1999 by divesting non-core businesses.
I/
May 2000
Ahlstrom Group, Finland Profile
Ahlstrom is a privately owned international paper, packaging and technology group. It serves its customers through four independent business groups. These are Ahlstrom Paper; ~kerlund & Rausing; Ahlstrom Machinery; and Ahlstrom Pumps. Analysis
© >. Z
©
For the year ended 31 December 1999, Ahlstrom Group's net sales totaled C2164 million. This represents a drop of about 11% on C2438 million that the company posted for 1998. The decline was caused mainly by the divestiture of its 50% interest in Lexel, and through the sale of the Ahlstrom Energy and Hygiene & Domestic businesses. For the 12 month period, the group posted operating income of C69 million, or 3.2% of net sales, compared with the previous year's figure of about C87 million, or 3.6% of net sales. Income before extraordinary items and taxes amounted to C62.4 million, or 2.9% of net sales. Net income for the fiscal year was @392 million, or about 18% of net sales, compared with C12 million, which the company recorded for 1998. The return on net assets was 6.9%, compared with 5.9%, while the return on equity was 4.6%, compared with 1.6%. The company's target for return on net assets is 15%. Earnings per share were C94, compared with C43. For fiscal 1999, the Ahlstrom Paper Group reported net sales of CI112 million, compared with C1109 million, which it posted at the end of 1998. Taking into account the divestiture of the Hygiene & Domestic business, aggregate net sales on a 'same-unit' basis was 5.3% higher than 1998. For this group, operating income totaled C58.3 million, or 5.2% of net sales, compared with ~45.4 million reported tbr 1998. The growth in operating income was largely driven by improved operational efficiency and cost savings. ,~kerlund & Rausing Group's net sales figure was C332 million, which was 6.7% lower than the previous year's figure. Ahlstrom Machinery Group and Ahlstrom Pumps posted sales of C537 million and
~134 million for 1999, compared with C539 million and C130 million, reported for 1998. During the third quarter of 1999, the Ahlstrom Group decided to focus its operations on speciality papers and fibre materials. These are areas which, it feels, offer the best potential for achieving a strong market position. The company intends completing the disposal of business groups that do not fit into its strategy within two years.
Fiscal 1999 was. in many ways. eventful for the Ahlstrom group of companies, and it was also marked by a number of achievements. At the operational level, the Paper Group, Pumps and ,~kerlund & Rausing reported improved earnings on the previous year, though the latter company's result was still negative. Machinery's operating result was atso weak. This meant that operating income for the Group as a whole fell below the level it experienced in 1998. A positive development was the improvement of the underlying performance of the group's business operations towards the end of the year. The positive trend was attributed partly to the recovery of the markets during the last four months of 1999. The growth prospects for speciality papers and fibre-web materials are impressive, and the company estimates that its global market potential is upwards of ~'20 billion. •
Key Figures (~ million) Ahlstrom Group Net Sales Personnel Costs
For the year ended 31.12 1999
1998
1997
1996
1995
2164
2438
2438
1988
2036
575
616
591
457
475
Operating Income
69
87
162
152
141
Income Before Extraordinary Items and Taxes
62
28
112
105
84
Net Income
392
12
84
21
115
Net Debt
470
1002
980
851
607
Shareholders' Equity
917
651
679
628
639
Capital Expenditures
131
135
222
209
217
11 462
14 462
13 497
11 119
11 912
Number of Employees (Annual Average) Contact Details
President and chief executive officer: Address:
Juha Rantanen Sentnerikuja 2 00440 Helsinki, PO Box 329 FIN-00101 Helsinki Finland
Tel: +358 9 503 911 Fax: +358 9 503 9709 Web: www.ahlstrom.com
Recent Events
• The Ahlstrom Group 'overhauled' its structure during 1999 by divesting non-core businesses.
I/