Ahlstrom Realigns Growth Strategy, Sets Long Term Financial Targets

"Our updated long-term financial targets reflect our determination to improve our profitability." – Jan Lång, President and CEO, Ahlstrom.

Sept. 19, 2013 - Ahlstrom, a global high performance fiber-based materials company, announces its new strategic agenda and updates its long-term financial targets.

During the last four years, Ahlstrom has undergone a major transformation as a company and refocused its business portfolio to become a global high performance materials company. The divestment of the Home and Personal business and the demerger of specialty papers, the Label and Processing business, were key steps in executing the 2009 strategy.

Ahlstrom has now defined a growth strategy extending to the year 2020. The company's current and future product offering is driven by global megatrends, such as resource scarcity, environmental awareness, demographics and urbanization.

The company aims to grow with a high performance product offering for a clean and healthy environment. Ahlstrom's strategy is built on three strong strategic enablers: environmentally sound technologies and manufacturing platforms, capability to co-create unique products together with customers and partners, and global reach in operations.

PRODUCTS WITH PURPOSE

The company has selected to serve the following market segments:

  • Food, beverage & household
  • Medical care & life science
  • Transportation
  • Energy & environment
  • Building & decoration

The current businesses and the selected market segments offer good opportunities for growth globally. In addition, the company has identified new high priority growth areas in clean air and water, medical diagnostics and composite materials for the construction and transportation industries.

"Through our unique knowledge of fibers and materials, we provide customers with improved performance and resource-efficiency such as reduced usage of materials, energy and water. Our platforms already provide cleaner air and water with our filtration products. We also see very lucrative growth opportunities in medical diagnostics, composites and safe drinking water," said Jan Lång, President and CEO.

LONG-TERM FINANCIAL TARGETS

To support Ahlstrom's sustainable growth strategy, the Board of Directors has approved the company's updated long-term financial targets over the economic cycle:

  • Net sales: at least 5% underlying annual growth
  • Net sales from new products[1]: At least 20%
  • Operating profit[2]: 7% of net sales by 2016 and 10% of net sales beyond 2016. With the current balance sheet structure, this implies a return on capital employed of approximately 13% and approximately 15%, respectively.
  • Gearing ratio: to be maintained within 50-80% range

"Our updated long-term financial targets reflect our determination to improve our profitability. I am confident that the new targets are achievable, considering our more focused business portfolio and the identified new growth opportunities. We also expect that our rightsizing program will deliver significant savings and improve shareholder return," stated Lång.

Ahlstrom's financial reporting segments remain unchanged. The company will elaborate more on its strategy during the fall and at its Capital Markets Day on November 21, 2013.

NOTES:
[1] Developed in the last three years
[2] Excluding non-recurring items

Ahlstrom is a high performance fiber-based materials company, partnering with leading businesses around the world to help them stay ahead. Our products are used in a large variety of everyday applications, such as filters, medical gowns and drapes, diagnostics, wallcoverings, flooring and food packaging. We have a leading market position in the businesses in which we operate. In 2012, Ahlstrom's net sales from the continuing operations (excluding Label and Processing business) amounted to EUR 1 billion. Our 3,800 employees serve customers in 24 countries. Ahlstrom's share is quoted on the NASDAQ OMX Helsinki. More information available at www.ahlstrom.com.

SOURCE: Ahlstrom