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Ahlstrom Reports Improved Profitability

February 7, 2006

Finnish roll goods producer Ahlstrom recently reported positive annual financial results. In 2005 the company’s operating profit amounted to €117.2 million compared to €62.1 million in 2004. Excluding non-recurring gains totaling €18.2 million, 2005 operating profit was €99 million compared to €82.1 million in 2004. Return on capital employed (ROCE) was 12.4% in 2005. Basic earnings per share (EPS) amounted to €1.71 compared to €0.91 in 2004. Ahlstrom's net sales were €1.5 billion in 2005 compared to € 1.6 billion in the prior year.

In the October-December 2005 period, net sales—excluding divested cores and board business—grew by 5.2%, while sales volumes remained stable. Profitability improved despite a challenging market situation and Ahlstrom announced organic growth investments at its La Gere, France and Mikkeli, Finland plants, valued at €35 million in total. Add-on acquisitions in the U.S. and China announced in December are also expected to support Ahlstrom's growth. Net sales of these acquired businesses were approximately €20 million in total in 2005.

"Our performance improved clearly in 2005,” said Jukka Moisio, president and CEO, “although it still remained below our long-term target level for ROCE of 13%. Operating profit grew due to a more competitive cost structure and better manufacturing performance. High energy and raw material prices put pressure on our margins but price increases partially offset these higher costs.” Mr. Moisio added that three add-on acquisitions in the FiberComposites segment were announced at the end of 2005 and early 2006. “Growth actions, combined with improving profitability, position Ahlstrom well to serve its customers in 2006 and beyond," he said.

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