Ahlstrom cuts outlook as it divests wipes unit
Following the deal, Ahlstrom forecasts 2011 operating profit excluding non-recurring items at €67-87 million, compared with a previous forecast for €75-95 million.
The company said it expects full-year net sales from continued operations to be €1.58 billion-1.74 billion. It had previously forecast net sales including discontinued operations at €1.92-2.08 billion.
As part of the transaction, which Ahlstrom said is in line with its strategy to steer the company towards a more focused business and product portfolio, the company has agreed to use €30 million to sign up for shares in Suominen.
Suominen will finance the transaction through debt and also plans a share issue. Its largest current shareholders, representing a minimum of 64% of the shares and votes, have committed to vote in favor of the issue.
After a successful share issue has been completed, Ahlstrom will become the largest shareholder in Suominen with a minimum stake of 20% and a maximum stake of 28.2% depending on the size of the share issue.
Ahlstrom has agreed to a two-year lock-up period for a minimum of 20% ownership in holding its Suominen shares.
Jan Lång, Ahlstrom's president and CEO, says, "We accelerated the execution of our strategy. The divestment of Home and Personal enables us to further drive profitable growth in businesses chosen as our strategic priorities. Also, the development programs we have implemented to strengthen the way we manage the business are being executed solidly. In terms of growth, we took further steps in Asia as we announced investments to start the production of high-quality wall cover materials and specialty reinforcements to the wind energy industry in China.
"Our teams have been working with high intensity and good success over the past year to actively manage pricing and safeguard our profitability. However, given the challenging market environment we were not able to fully compensate for the increased costs, particularly related to synthetic fibers and chemicals during the second quarter. We assume that the business environment will continue to be challenging, given the current instability of the global economy. The recent turbulence in the global markets has reduced visibility going forward.
"We have addressed our cost structure through group-wide development programs to improve manufacturing efficiency, particularly in reducing production waste and sourcing costs. Going forward, we will continue to address this with increased vigor and strive to streamline our overall cost base in the supply chain.