Our financial performance improved in the second quarter of 2019. We succeeded with our commercial strategy that focuses on product differentiation, service and quality. Our gross margin for products continued to improve and reached a record. This will further underpin profitability once volumes improve.
I am pleased that we also managed to lower our fixed costs as this partially offset the impact of continued low delivery volumes. Comparable EBITDA improved to EUR 84 million in the second quarter compared to EUR 83 million in the previous year and EUR 75 million in the first quarter of 2019. Our EBITDA margin also improved.
Cash flow from operating activities doubled following our increased focus and active working capital management. Net debt remained nearly unchanged although we paid half of the annual dividend.
Uncertain Market environment
The market environment remained uncertain as demand continued to fluctuate. Excluding the machine closure in Stenay, France, our deliveries were 5% lower than in the previous year and burdened clearly our profitability. As a supplier of advanced fiber-based solutions we focus on customer relatioships that are aligned with our strategy.
Substantial steps driving strategic progress
In the second quarter, we completed the bailing line modernization at the Aspa pulp plant in Sweden. The ramp-up of the line has proceeded well, enabling us to improve safety and production efficiency. It also gives us access to new customers.
We have continued to introduce new value-added products including Optilam™, which is a new generation of release materials to optimize RFID inlay lamination for our customers in the electronics industry. In addition, our grease wrapping papers received the OK compost HOME and OK compost INDUSTRIAL certifications from TÜV® Austria, confirming the compostability of those products for our customers.
As a result of our good performance within environmental impact, labor practices, fair business practices and sustainable procurement, our work was awarded with third consecutive EcoVadis Gold rating. This gives us confidence that we are on the right track towards our strategic targets and allows us to communicate an independent view on our performance.
I have confidence in the future despite the uncertain market environment. We have leading market positions and a balanced exposure to a broad range of end-uses. This provides us stability and opportunities for the future. The integration of the recent acquisitions proceeds as planned and we focus on delivering on the promised synergies as well as cash flow.
Outlook for 2019
Ahlstrom-Munksjö’s pro forma comparable EBITDA reached EUR 330 million in 2018. At the beginning of 2019, customers reacted to signs of slowing economic growth. Demand has slowed somewhat in certain product segments and customers have reduced inventories. The overall market environment remains uncertain and demand continues to fluctuate. Ahlstrom-Munksjö will continue its efforts to improve performance and competitiveness. The gross margin for products continued to increase in the first half of 2019 and the targeted synergy benefits and cost reduction measures are expected to contribute positively to earnings for the full year.
Updated: July 30, 2019