As part of a new strategy, Ahlstrom’s operations will now be based on two distinct business models, the first with a focus on providing added value products for customers and the second on operational excellence.

It is envisaged that the value-added business will be the company’s primary growth engine, developing through organic growth and possibly by making small acquisitions. New products that help Ahlstrom’s customers become more competitive will create the foundation for success, it is believed.
The cluster will include the Fiber Composites segment’s Advanced Nonwovens and Glass and Industrial Nonwovens business areas, as well as transportation and liquid filtration media in the Filtration business area. It will also include crepe papers and vegetable parchment from the Technical Papers business area of the Specialty Papers segment.
The focus of the operational excellence business will be to develop cost effective products through, for instance, alternative raw materials or new technological solutions. The cluster covers the Release and Label Papers business area and the majority of the Technical Papers business area in the Specialty Papers segment. In the Fiber Composites segment, it will include the Home and Personal Nonwovens business area and air filtration media in the Filtration business area.
The long-term target of the strategy is to strengthen Ahlstrom’s competitive position and generate returns that are in line with the company’s financial targets. One of the most important indicators is return on capital employed (ROCE), which should reach its target level of 13%. In January-September 2009 ROCE was 1.5% and in July-September 4.8%. Measures to reach these targets will be continued in respect of the product lines and units falling below the target level.
Ahlstrom’s net sales for the three months from July to September 2009 were €400.6 million, compared to €451.2 million in the same period in 2008, but EBIT for the 2009 period was up, at €13.1 million compared to €11.3 million, as was profit before taxes of €7.3 million compared to €3.5 million.
In the nine months of 2009 to date, however, net sales were €1,175.6 million compared to €1,383.4 million in the same period of 2008, EBIT was €12.1 million compared to €50 million and the company has recorded a loss before taxes of €6.6 million, compared to profit of €28.9 million.
Having carried out two restructuring programmes, the company has shed 516 jobs in 2009 to date, while approximately 2,400 employees have been affected by temporary layoffs and other flexible working hour arrangements

“Despite the challenging market environment, we achieved a positive EBIT for July-September, particularly as a result of streamlining efforts, cost control and lower raw material prices,” said president and CEO Jan Lång. “Employees have committed themselves excellently to our target of shifting the focus towards cash flow and working capital reduction. Our net debt has decreased by over €87 million since the turn of the year, but our profitability is still not satisfactory, so the streamlining efforts will continue. Due to higher raw material prices, we have also announced price increases.”
The very challenging market conditions resulting from the recession continued until the end of the first half of 2009, when the weakening of demand for Ahlstrom’s products stopped and the demand for some products began to pick up. The positive trend continued during July-September, but demand did not increase to the level of the corresponding period last year.
In the Fiber Composites segment, the recession has not impacted the demand for Ahlstrom’s food packaging and teabag materials or nonwovens in medical applications. Between January and September their demand remained close to the usual level. The demand for Ahlstrom’s construction materials increased slightly in July-September compared to the first half of the year, as it did for wipes and transportation filtration media.
Net sales of the Fiber Composites segment amounted to €637.7 million in the first nine months of this year, representing 54% of the group’s overall sales and compared to €758.3 million in the same period of 2008.
Ahlstrom’s capital expenditure for January-September was €53.9 million, its largest on-going investment project being the construction of a medical nonwovens plant in Gujarat, India. Operations at the plant are estimated to start in the first quarter of 2010. The project has proceeded according to plans, and the buildings and installations of equipment are nearly complete. The estimated total cost of the project is €38 million.