I’m pleased with our financial performance in the third quarter, and in particular, with our agile way of responding to the recovery in customer activity. Our comparable EBITDA increased to EUR 79 million and the margin to 12.1% from the previous quarter on the back of higher customer deliveries. This was a good achievement considering the scheduled maintenance activity, and if this timing impact is excluded, our result would have been at last year’s level. Our profitability continued to benefit from lower variable costs due both to lower raw material prices and our cost-saving measures. Cash flow was strong, thanks to the seasonal reduction in net working capital, and this helped to strengthen our financial position.
Customer activity recovered during the third quarter as countries and markets reopened after lockdowns. This was particularly visible for transportation, as well as home building- and furniture-related applications, which are important end-use segments for us. Demand continued on a good level in health care and life science end uses, and remained stable in the consumer goods-related end uses. Towards the end of the quarter, there were also signs of increasing demand for industrial-related products. Overall, our sales volumes increased notably from the second quarter and were close to the previous year’s level.
A consortium of investors has announced a public tender offer to the shareholders of Ahlstrom-Munksjö. I consider this evidence of the good work we have done in recent years and how we have succeeded in creating an attractive business in a world of increasing stakeholder expectations. I am also confident that the planned ownership change would ensure that we can develop our company to its fullest future potential.
IMPROVING CUSTOMER SATISFACTION
I’m particularly pleased with the positive results of our comprehensive customer survey conducted by Opticom International Research, which is a proof point that we have further reinforced our position as a global leader in fiber-based solutions. We scored particularly well in categories such as personal contact and technical service, as well as in innovation and sustainability. These are essential in strengthening our partnership with our customers, and are also important in solving the challenges of today’s society. We also achieved a world-class rating for a manufacturer in business-to-business Net Promoter Score.
The recovery in our main markets seems to be continuing. However, there is some uncertainty provided that the recent increase in coronavirus cases could force governments around the world to reimpose regional or national restrictions. Overall, I’m very proud of how well our organization has performed in these very exceptional circumstances and responded to quickly changing market conditions. This really highlights the strengths of our company.
OUTLOOK FOR 2020
The gradual increase in customer activity translated into a broad-based recovery across the company’s businesses during the third quarter of 2020. The overall demand for Ahlstrom-Munksjö’s products is expected to remain at a rather good level in the fourth quarter of 2020, albeit with some variation depending on the end use of the products.
Ahlstrom-Munksjö’s comparable EBITDA in 2020 is expected to be in the range of EUR 315-335 million (EUR 313 million in 2019). The latest development in the pandemic has further increased uncertainty.
Updated: October 28, 2020