Munksjö Oyj - Interim Report January - June 2013 First phase of combination completed, business performing steadily

Munksjö Oyj - Interim Report January - June 2013 First phase of combination completed, business performing steadily

Helsinki, Finland, 2013-08-22 07:30 CEST (GLOBE NEWSWIRE) --

MUNKSJÖ OYJ, INTERIM REPORT

Munksjö Oyj was created as a result of the combination of Munksjö AB, Sweden
and the Label and Processing business area of Ahlstrom Corporation, Finland.
Aside from the financial performance during the reporting period January-June
2013, this interim report provides pro forma figures reflecting the business
combination for informative purposes. A more detailed description of how the
pro forma figures were arrived at is provided in the notes to the Financial
Statements under the heading 'Business combination'.

Unless otherwise indicated, the figures in parentheses refer to the figures for
the equivalent period in 2012. The figures provided in this interim report are
unaudited. The interim report is published in Swedish, Finnish and English. In
case of any discrepancies between the three versions, the Swedish text shall
prevail.

Highlights of the first half of 2013:

-- At the end of May, the first phase of the combination of Munksjö AB and
Ahlstrom's Label and Processing business area was completed and Munksjö Oyj
commenced operations.
-- Trading with Munksjö Oyj's shares commenced on the Helsinki Stock Exchange
at the beginning of June.
-- Net sales increased to EUR 362,5 (301,7) million primarily as a result of
the business combination and increased volumes.
-- Adjusted EBITDA was EUR 28,0 (23,4) million.
-- Operating profit adjusted for non-recurring items reached EUR 13,3 (11,2)
million. Most of the non-recurring items totalling EUR -30,6 (-2,6) million
were related to the business combination. Operating loss was EUR 17,3
(profit of 8,6) million.
-- Earnings per share (EPS), were EUR -1,4 (0,0).
-- Interest-bearing net debt at the end of the reporting period stood at EUR
268,2 (249,7) million, equivalent to a gearing of 68,9% (119,9%).

Highlights of the second quarter of 2013:

-- Net sales increased to EUR 208,0 (154,1) million, primarily as a result of
the completion of the first phase of the business combination.
-- Adjusted EBITDA was EUR 16,5 (11,4) million.
-- Operating profit adjusted for non-recurring items reached EUR 8,3 (5,2)
million. Most of the non-recurring items totalling EUR -27,6 (-2,3) million
were related to the business combination. Operating loss was EUR 19,3
(profit of 2,9) million.
-- Earnings per share (EPS), were EUR -1,0 (0,0).

Key Figures Apr-Jun Jan-Jun Full year
MEUR 2013 2012 2013 2012 2012
Net sales 208,0 154,1 362,5 301,7 607,1
EBITDA (adj*) 16,5 11,4 28,0 23,4 42,3
EBITDA margin, % (adj*) 8,0 7,4 7,7 7,8 7,0
Operating profit -19,3 2,9 -17,3 8,6 7,5
Operating margin, % -9,3 1,9 -4,8 2,9 1,2
Operating profit (adj*) 8,3 5,2 13,3 11,2 16,9
Operating margin, % (adj*) 4,0 3,3 3,7 3,7 2,8
Net profit -22,0 0,0 -23,9 0,9 -10,4
Earnings per share (EPS), EUR -1,0 0,0 -1,4 0,0 -0,9
Interest-bearing net debt 268,2 249,7 268,2 249,7 217,3

*Adjusted for non-recurring items

Munksjö's President and CEO, Jan Åström:

"One of the world's leading manufacturers of specialty papers, Munksjö Oyj was
established as a result of the combination of Munksjö AB with Ahlstrom's
specialty paper business. After several months of preparations and a thorough
antitrust process by the European Commission, the business combination was
completed smoothly without any problems or surprises. Subsequently, Munksjö Oyj
was listed on the Helsinki Stock Exchange on 7 June as planned.

Integration is now under way and intensive efforts are being made throughout
the Group to deliver the foreseen synergy benefits. In terms of money, the
annual synergy outcomes will reach EUR 20 to 25 million, and 60% of the target
synergy level should be achieved during the first twelve months. The final
synergy benefit level is to be achieved in 36 months.

The second phase of the transaction, in which Ahlstrom's specialty papers
business in Brazil is combined with Munksjö, will be completed during the
second half of 2013. As part of the completion of the first phase of the
combination, Munksjö reorganised its external loan portfolio. As a result, the
company is on a sound footing with a financing at market rates.

The new management team is complete and formally appointed by the company's
Board of Directors. I am looking forward to working with my new committed,
result-oriented and highly experienced management team which is now beginning
its work.

Faced with challenging market conditions in its main markets, primarily Europe,
Munksjö has succeeded to re-inforce its position. In the Decor and Industrial
Applications business areas, we have been able to deliver double-digit adjusted
EBITDA margins. Primarily, this was achieved through growing volumes and the
steady prices of the end products. At the same time, we were able to establish
a competitive cost structure. A programme to improve profitability in Graphics
and Packaging is currently under preparation for deployment during the third
quarter. Our goal is to substantially improve profitability in this business
area in accordance with the financial objectives communicated by the company."

Outlook for 2013

Market trends and the demand for Munksjö's Release Liners and Graphics and
Packaging products are expected to remain challenging for the rest of the year.
Profits in the third quarter will be affected by the planned shutdown of
production facilities in the summer, which will be similar in duration to last
year. A range of pre-defined maintenance operations will be completed during
the shutdown. Financial performance during the second half of the year will be
impacted by non-recurring items arising from the efforts to achieve the
foreseen synergy benefits and the programme to improve profitability in the
Graphics and Packaging business area.

The Munksjö Group Apr-Jun Jan-Jun Full year
MEUR 2013 2012 2013 2012 2012
Reported 1)
Net sales 208,0 154,1 362,5 301,7 607,1
EBITDA (adj*) 16,5 11,4 28,0 23,4 42,3
EBITDA margin, % (adj*) 8,0 7,4 7,7 7,8 7,0
Operating profit -19,3 2,9 -17,3 8,6 7,5
Operating margin, % -9,3 1,9 -4,8 2,9 1,2
Operating profit (adj*) 8,3 5,2 13,3 11,2 16,9
Operating margin, % (adj*) 4,0 3,3 3,7 3,7 2,8
Net profit -22,0 0,0 -23,9 0,9 -10,4
Capital expenditure 4,6 2,4 6,8 4,7 14,8
Employees, FTE 1 970 1 684 1 814 1 683 1 679

Pro forma I (incl. LP Europe) 2)

Net sales 275,1 272,8 543,5 534,7 1 055,6
EBITDA** 12,5 14,0 28,9 5,7 32,9
Non-recurring items 3,0 2,1 3,7 29,5 36,3
EBITDA** (adj*) 15,5 16,1 32,6 35,2 69,2
Delivery volumes, tonnes 204 300 203 592 408 802 405 014 796 900

Pro forma II (incl. LP Europe and Coated Specialties) 3)

Net sales 299,6 298,1 590,0 585,1 1 154,6
EBITDA** 13,3 16,3 31,5 10,1 39,8
Non-recurring items 3,0 2,1 3,7 30,0 36,8
EBITDA** (adj*) 16,3 18,4 35,2 40,1 76,6
Delivery volumes, tonnes 231 000 229 580 458 065 455 845 897 371

* Adjusted for non-recurring items
** Does not include stand-alone cost savings or synergy benefits as described
in the section Pro forma information in the notes to the interim report
1) Includes LP Europe from 27 May, 2013
2) Includes LP Europe from 1 January, 2012
3) Includes LP Europe and Coated Specialties from 1 January, 2012

First half of 2013

Munksjö's net sales increased to EUR 362,5 (301,7) million, primarily due to
the completion of the first phase of the combination with Ahlstrom's Label and
Processing business area and increased volumes in Decor and Industrial
Applications. The acquired business contributed an additional EUR 46,9 million
to net sales. Pro forma II net sales increased marginally to EUR 590,0 (585,1)
million.

Operating profit adjusted for non-recurring items reached EUR 13,3 (11,2)
million. Non-recurring items totalled EUR -30,6 (-2,6) million. Munksjö has
made a commitment to Ahlstrom to pay certain costs arising from the divestiture
of some of Ahlstrom's business in Osnabrück, Germany, required by the EU
Commission as a condition for regulatory approval. The non-recurring items
include an expense of EUR 13,5 million related to said commitment. Other
non-recurring items related to the business combination amounted to EUR 16,3
million.

Pro forma II EBITDA adjusted for non-recurring items was EUR 35,2 (40,1)
million exclusive of any cost savings or synergy benefits. The operating loss
was EUR 17,3 (profit of 8,6) million and net loss EUR 23,9 (profit of 0,9)
million.

Second quarter 2013

Munksjö's net sales increased to EUR 208,0 (154,1) million, primarily as a
result of the completion of the first phase of the business combination and
continued growth in volumes. The acquired business contributed an additional
EUR 46,9 million to net sales. Pro forma II net sales increased marginally to
EUR 299,6 (298,1) million.

Operating profit adjusted for non-recurring items reached EUR 8,3 (5,2)
million. Most of the non-recurring items totalling EUR -27,6 (-2,3) million
were due to the business combination. Operating loss was EUR 19,3 (profit of
2,9) million.

Webcast and conference call

A combined news conference, conference call and live webcast for investors,
analysts and media will be arranged on the publishing day, 22 August, 2013, at
10.00 am CET (11.00 am EET, 9.00 am UK time) at restaurant Savoy, room
Salikabinetti (Eteläesplanadi 14, 7th floor, Helsinki). The report will be
presented by President and CEO Jan Åström. The event will be held in English.

The conference call and live webcast can be followed on the Internet and an
on-demand version of the webcast will be available on the same webpage later
the same day. To join the conference call, participants are requested to dial
one of the numbers below 5 to 10 minutes prior to the start of the event.

Webcast and conference call information:

Finnish callers: +358 (0)9 2313 9201
Swedish callers: +46 (0)8 5052 0110
US callers: +1 334 323 6201
UK callers: +44 (0)20 7162 0077

Conference ID: 934525

Link to the webcast

Munksjö Oyj

For more information:

Jan Åström, President and CEO, tel. +46 10 250 1001
Kim Henriksson, CFO, tel. +46 10 250 1015
Attachments:Q2_2013_Interim_Report_ENG_22082013.pdf

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