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Ahlstrom Financial Statements Release 2016: Record high profitability in 2016 with accelerated sales growth in the last quarter of the year

Ahlstrom Corporation FINANCIAL STATEMENTS RELEASE January 27, 2017 at 08:30

This is a summary of the Financial Statements Release 2016. The complete
report with tables is attached to this release and available

Ahlstrom Financial Statements Release 2016

Record high profitability in 2016 with accelerated sales growth in the last
quarter of the year

October-December 2016 compared with October-December 2015

* Net sales EUR 266.1 million (EUR 255.0 million).At constant currency rates,
growth was 4.9%.
* Adjusted EBITDA EUR 26.4 million (EUR 21.6 million), representing 9.9%
(8.5%) of net sales
* Operating profit EUR 8.0 million (EUR 16.4 million loss)
* Adjusted operating profit EUR 14.4 million (EUR 7.6 million), representing
5.4% (3.0%) of net sales
* Profit before taxes EUR 4.8 million (EUR 20.5 million loss)
* Earnings per share EUR 0.00 (EUR -0.46)
* Net cash flow from operating activities EUR 26.9 million (EUR 23.3 million)

January-December 2016 compared with January-December 2015

* Net sales EUR 1,085.9 million (EUR 1,074.7 million).At constant currency
rates, growth was 2.6%.
* Adjusted EBITDA EUR 130.9 million (EUR 104.8 million), representing 12.1%
(9.7%) of net sales
* Operating profit EUR 70.8 million (EUR 21.9 million)
* Adjusted operating profit EUR 80.6 million (EUR 47.5 million), representing
7.4% (4.4%) of net sales
* Profit before taxes EUR 56.3 million (EUR 22.6 million. The comparison
figure includes a capital gain of EUR 20.3 million from share sales.)
* Earnings per share EUR 0.61 (EUR 0.06)
* Net cash flow from operating activities EUR 125.8 million (EUR 60.0

Major events

* Ahlstrom announced a plan to merge with Munksjö Oyj to create a leader in
sustainable and innovative-fiber solutions. In conjunction, Sakari Ahdekivi
was appointed interim President&CEO of Ahlstrom. He replaced Marco Levi,
who left the company in November as a consequence of the merger
* The Extraordinary General Meetings of Ahlstrom and Munksjö approved the
merger on January 11, 2017. The transaction is expected to be completed at
the beginning of the second quarter of 2017.
* The EGM of Ahlstrom also authorized the Board of Directors to distribute an
extraordinary dividend of EUR 0.49 per share in lieu of an annual payout

Sakari Ahdekivi, interim President&CEO

"In 2016, we achieved an all-time high profitability in the current structure
of the company and our balance sheet is much stronger than before. During the
latter part of the year we also demonstrated our ability to grow, something
we have lacked in the past few years, and achieved remarkable growth in net
sales of close to 5% at constant currency rates in the last quarter of the
year. In addition to higher sales, we also benefited from improved
operational efficiency and lower variable costs. Our business units made good
progress and the majority improved their sales and operating profits
throughout the year.

We have executed on our strategy at an accelerated pace. Our margins have
clearly increased thanks to improved commercial excellence, a leaner
operating model, higher capacity utilization and our ability to capture new
growth opportunities. As a result, we came close to achieving our 2018
profitability target of above 8% adjusted operating profit margin already in

The planned merger with Munksjö Oyj is a major strategic milestone in the
recent history of Ahlstrom. This combination will create a leader in
innovative and sustainable fiber-based solutions. The deal will create
substantial value to our stakeholders by offering further opportunities for
growth and improved operational efficiency. A strong balance sheet and cash
generation will support growth of the combined company. The focus will now be
on completing the merger and the subsequent integration of the two


Ahlstrom does not provide an outlook for the year 2017 due to the planned
merger with Munksjö, which is expected to be completed at the beginning of
the second quarter of 2017.

Key figures

| EUR million Q4/2016 Q4/2015 Change, % 2016 2015 Change, % |
| Net sales 266.1 255.0 4.4 1 085.9 1 074.7 1.0 |
| EBITDA 20.0 14.8 34.6 121.1 96.4 25.6 |
| % of net sales 7.5 5.8 11.2 9.0 |
| Adjustment items included in EBITDA -6.4 -6.7 -9.8 -8.3 |
| Adjusted EBITDA 26.4 21.6 22.3 130.9 104.8 25.0 |
| % of net sales 9.9 8.5 12.1 9.7 |
| Operating profit 8.0 -16.4 70.8 21.9 223.8 |
| % of net sales 3.0 -6.4 6.5 2.0 |
| Adjustment items included in operating profit -6.4 -23.9 -9.8 -25.6 |
| Adjusted operating profit 14.4 7.6 90.3 80.6 47.5 69.8 |
| % of net sales 5.4 3.0 7.4 4.4 |
| Profit before taxes 4.8 -20.5 56.3 22.6 148.4 |
| Profit for the period 1.4 -20.2 34.9 8.6 |
| Earnings per share -0.00 -0.46 0.61 0.06 |
| Return on capital employed, % 6.5 -11.4 13.6 3.9 |
| Net cash flow from operative activities 26.9 23.3 15.6 125.8 60.0 109.8 |
| Capital expenditure 20.0 13.7 46.1 37.9 27.3 39.0 |
| Interest-bearing net liabilities 140.8 195.9 -28.1 140.8 195.9 -28.1 |
| Gearing ratio, % 44.6 65.4 44.6 65.4 |
| Equity ratio, % 38.2 35.8 38.2 35.8 |
| Number of personnel, at the end of the period 3,233 3,311 -2.4 3,233 3,311 -2.4 |
Ahlstrom has adopted the European Securities and Markets Authority (ESMA)
guidelines on Alternative Performance Measures, which became effective on
July 3, 2016. The company uses alternative performance measures to reflect
the underlying business performance and to improve comparability. These
alternative performance measures should, however, not be considered as a
substitute for measures of performance in accordance with IFRS.
Ahlstrom has used revised terminology since the beginning of 2016. In
accordance, the previously used term "Operating profit excluding
non-recurring items" has been replaced by "Adjusted operating profit"
and the term "EBITDA excluding non-recurring items" by "Adjusted EBITDA"

Adjusted items affecting comparability and alternative performance measures
used by Ahlstrom are defined:

Adjustment items: restructuring costs, impairment charges, capital gains or
EBITDA = Operating profit + depreciation and amortizations + impairments
Adjusted EBITDA = EBITDA - Adjustment items
Adjusted operating profit = Operating profit - Adjustment items

Ahlstrom and Munksjö to combine

On November 7, 2016, Ahlstrom Corporation and Munksjö Oyj announced a plan
merge the two companies. The combination will create a global leader in
sustainable and innovative fiber-based solutions. The combination is expected
to create significant value for the stakeholders in the combined company
through stronger global growth opportunities and improved operational
efficiency. The combined company's growth ambitions will be supported by a
strong balance sheet and strong cash flow generation.

* Ahlstrom and Munksjö will merge through an absorption merger whereby
Ahlstrom's shareholders will receive Munksjö shares as merger consideration

* Ahlstrom's shareholders will receive 0.9738 new shares in Munksjö for each
share held in Ahlstrom as merger consideration, corresponding to an
ownership in the combined company of approximately 47.2% for current
Ahlstrom shareholders and approximately 52.8% for current Munksjö
* In connection with the merger Ahlstrom proposes to distribute funds in the
total amount of approximately EUR 23 million, corresponding to EUR 0.49 per
share before the combination is completed in lieu of the company's ordinary
annual distribution
* The Extraordinary General Meetings of both companies have approved the
merger, which is expected to be completed at the beginning of the second
quarter of 2017

Unaudited pro forma financials of the combined company and certain other
information, such as composition of the management team can be found in the
merger prospectus, published on December 16, 2016.

Short-term risks

The global economic outlook varies based on region. Growth in the U.S. is
expected to be the highest among developed economies, while that in Europe is
expected to continue growing at a moderate pace. Britain's decision to leave
the European Union as well as swings in political tendencies across several
nations has increased uncertainty. China's expected shift in its economic
structure towards more consumer consumption and less investment has caused
some concerns, but it can also provide opportunities.

Slower-than-anticipated economic growth poses risks for Ahlstrom's financial
performance. It may lead to lower sales volumes and force the company to
initiate market-related shutdowns at plants, which could affect
profitability. Tougher competition through competitors' increased production
capacity, aggressive pricing as well as the adoption of new technologies may
also affect profitability. Shifts in the pattern of demand for the company's
products may strain the flexibility of its asset base and leave some assets
underutilized, while others may become over-loaded.

Swings in currency exchange rates may lead to fluctuations in net sales and
profitability. Ahlstrom's main raw materials are wood pulp, synthetic fibers,
and chemicals. The prices of these key raw materials are volatile, and any
increases may affect the company's profitability depending on its ability to
mitigate the ri...

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