Helsinki, Finland, 2014-02-13 13:15 CET (GLOBE NEWSWIRE) -- MUNKSJÖ OYJ, FINANCIAL STATEMENTS BULLETIN
13 FEBRUARY 2014AT 1.15 PM CETMunksjÖ Oyj's Financial Statements Bulletin 2013 – Combination completed and synergy level ahead of plan Highlights of the fourth quarter 2013 - The second and final phase of the business combination was completed at the turn of the month, November. - Net sales for the fourth quarter increased to EUR 255.7(159.1) million, primarily as a result of the combination. - Adjusted EBITDA was EUR 16.0(8.8) million. - Operating result adjusted for non-recurring items amounted to EUR 2.6(1.9) million. The non-recurring items, totalling EUR -16.6(-2.2) million, were primarily costs for achieving synergy benefits, including the improvement programme for Graphics and Packagingas well as increased environmental provisions. - Operating result was EUR -14.0(-0.3) million and the net result was EUR -26.2(-4.6) million. - Earnings per share (EPS) were EUR -0.6(-0.4). Highlights of the reporting period January–December 2013 - The business combination with Ahlstrom’s Label and Processing business area in Europeand Brazilwas completed in two phases; in May and December, respectively. - Trading with MunksjÖ Oyj’s shares commenced on the Helsinki Stock Exchangeon 7 June. - Net sales increased to EUR 863.3(607.1) million, primarily as a result of the combination. - Adjusted EBITDA was EUR 55.0(42.3) million. - Operating result adjusted for non-recurring items amounted to EUR 15.7(16.9) million. Most of the non-recurring items, totalling EUR -49.1(-9.4) million, relates to the business combination. - Operating result was EUR -33.4(7.5) million and the net result EUR -57.4(-10.4) million. - Earnings per share (EPS) were EUR -2.0(-0.9). - Interest-bearing net debt at the end of the reporting period was EUR 230.4 million( 30 Sep 2013: 257.5, 31 Dec 2012: 217.3), equivalent to a gearing of 54.4% ( 30 Sep 2013: 66.8%, 31 Dec 2012: 108.9%). The net debt has decreased with EUR 37.8 millionsince the end of the second quarter. - The Board of Directors proposes that the Annual General Meeting would decide to pay EUR 0.1per share from the reserve for invested non-restricted equity as return of equity based on the balance of 31 December 2013. KEY FIGURES (MEUR) Oct-Dec Full year 2013 2012 2013 2012 Net sales 255.7 159.1 863.3 607.1 EBITDA (adj*) 16.0 8.8 55.0 42.3 EBITDA margin, % (adj*) 6.3 5.6 6.4 7.0 EBITDA -0.6 6.6 5.9 32.8 EBITDA margin, % -0.2 4.2 0.7 5.4 Operating result (adj*) 2.6 1.9 15.7 16.9 Operating margin, % (adj*) 1.0 1.2 1.8 2.8 Operating result -14.0 -0.3 -33.4 7.5 Operating margin, % -5.5 -0.2 -3.9 1.2 Net result -26.2 -4.6 -57.4 -10.4 Earnings per share (EPS), EUR -0.6-0.4 -2.0 -0.9 Interest-bearing net debt 230.4 217.3 230.4 217.3 *Adjusted for non-recurring items MunksjÖ’s President and CEO, Jan ÅstrÖm "In December MunksjÖ completed the combination between MunksjÖ and Ahlstrom Corporation’s specialty papers division, Label and Processing, by making Ahlstrom’s specialty paper mill in Jacarei outside Sao Pauloin Brazil, a part of the MunksjÖ Group. The complete group was fully operational during the last month of 2013. MunksjÖ’s business continues to develop well, especially the business areas Decor and Industrial Applications, where the volume growth was five (5) and seven (7) per cent respectively year on year, and prices have remained stable. During the year the Group continued to release working capital and the business combination contributed to a significantly improved capital structure. In 2014, the focus for MunksjÖ is to realise the remaining synergies and the completion of the integration. The work with achieving synergies is continuing unabated. At year end, the annual synergy run-rate was EUR 11 million. The realised synergies for 2013 were EUR 5 million. The synergies of EUR 20-25 millionwill be achieved earlier than expected, since the annual run-rate is expected to be within the communicated range already during 2014, and are in their entirety expected to be realised already during 2015. The programme to significantly improve the profitability of the business area Graphics and Packaging, is proceeding according to plan. The strategic change that involves replacing low-margin products in the product portfolio began to take effect in the fourth quarter. Negotiations, regarding personnel reductions with the relevant trade unions, are ongoing and the ambition is to finalise them during the first quarter of 2014. MunksjÖ’s year as a complete company has started and the organisation is now set to deliver on synergy and profitability targets." Outlook During the first half of 2014, demand for MunksjÖ’s products is expected to be generally stable, but some improvement in certain product areas can be seen. Prices are expected to remain at the same level at the beginning of 2014 as in the fourth quarter of 2013. The synergy benefits of EUR 20-25 millionwill be achieved earlier than expected, since the annual run-rate is expected to be within the communicated range already during 2014, and are in their entirety expected to be realised already during 2015. The production facility in Aspa, Swedenwill prolong the intervals between the maintenance stops from 12 to 18 months. This means that Aspa’s maintenance shutdown will take place already in early April 2014. Otherwise, the yearly shutdowns for the holiday, during which planned maintenance operations are scheduled, are expected to be carried out to the same extent as in 2013. Synergy benefits and integration Annual synergy benefits rising from the business combination are related to procurement, production efficiency, economies of scale and improved organisational performance and efficiency, and are still expected to be between EUR 20-25 million.Integration efforts were launched in May when the first phase of the business combination was completed and are proceeding according to plan. At year end, the annual synergy benefits run-rate was EUR 11 million. The synergies were achieved within procurement and improved efficiency within the organisation. It is within these areas, including the improvement programme in the business area Graphics and Packaging, that synergies are expected to be further developed during 2014. EUR 5 millionin synergy savings were realised and recorded in the 2013 financial results. An annual synergy savings level within the communicated range is expected to be reached already during 2014. The previously communicated 60 per cent after the first 12 months is expected to be surpassed. Non-recurring items to achieve synergies are estimated to EUR 10-15 millionand the majority; approximately EUR 11 millionwas recorded in the financial result for 2013. Of these costs EUR 4 millionimpacted the cash flow in 2013, while the rest of the costs are expected to affect the cash flow during 2014. Annual cost savings as a result of the separation of the specialty paper operations from Ahlstrom’s other business operations (stand-alone cost savings), will amount to EUR 11 millionannually and are hence within the previously communicated range of EUR 10-15 million.The MunksjÖ Group Oct–Dec Full year ACQUIRED Oct–De 27 OPERATIONS c May–De c MEUR 2013 2012 2013 2012 MEUR 2013 2013 Reported 1) Reported 1) Net sales 255.7 159.1 863.3 607.1 Net sales 105.0 257.0 EBITDA (adj*) 16.0 8.8 55.0 42.3 EBITDA 3.6 6.9 (adj*) EBITDA 6.3 5.6 6.4 7.0 EBITDA 3.4 2.7 margin, % margin, % (adj*) (adj*) EBITDA -0.6 6.6 5.9 32.8 EBITDA -3.6 -3.5 EBITDA, -0.2 4.2 0.7 5.4 EBITDA, -3.4 -1.4 margin % margin % Operating 2.6 1.9 15.7 16.9 Operating -1.9 -4.9 result result (adj*) (adj*) Operating 1.0 1.2 1.8 2.8 Operating -1.8 -1.9 margin, % margin, % (adj*) (adj*) Operating -14.0 -0.3 -33.4 7.5 Operating -9.1 -15.3 result result Operating -5.5 -0.2 -3.9 1.2 Operating -8.7 -6.0 margin, % margin, % Net result -26.2 -4.6 -57.4 -10.4 Delivery 90,914 223,414 volumes, tonnes Capital 8.2 5.4 22.6 14.8 expenditure Employees, 2,641 1,669 2,216 1,679 FTE Pro forma II (incl. LP Europeand Coated Specialties) 2) Net sales 265.2 288.5 1,120.3 1,154.6 EBITDA** 16.8 23.3 64.1 76.6 (adj*) EBITDA** 6.3 8.1 5.7 6.6 margin, % (adj*) EBITDA** 1.0 21.1 42.3 39.8 EBITDA**, 0.4 7.3 3.8 3.4 margin % Delivery 208,875 222,439 885,232 897,371 volumes, tonnes * Adjusted for non-recurring items ** Includes stand-alone cost savings and synergies obtained after 27 May 2013. Further information under the heading Pro forma information in the notes. 1) Includes LP Europe from 27 May 2013and Coated Specialties from 2 December 2013. 2) Includes LP Europe and Coated Specialties from 1 January 2012. Reported Fourth quarter 2013 Net sales increased to EUR 255.7(159.1) million, primarily as a result of the business combination. The acquired business contributed an additional EUR 105.0 millionto net sales. EBITDA adjusted for non-recurring items increased to EUR 16.0(8.8) million while the adjusted EBITDA margin was 6.3% (5.6%). Operating result adjusted for non-recurring items amounted to EUR 2.6(1.9) million and the adjusted operating margin 1.0% (1.2%). The non-recurring items, totalling EUR -16.6(-2.2) million, was primarily costs for achieving synergies and the improvement programme for Graphics and Packagingas well as increased environmental provisions. The operating result was EUR -14.0(-0.3) million with a net result of EUR -26.2(-4.6) million. January–December 2013 Net sales increased to EUR 863.3(607.1) million, primarily as a result of the combination. The acquired business contributed an additional EUR 257.0 millionto net sales. EBITDA adjusted for non-recurring items increased to EUR 55.0(42.3) million while the adjusted EBITDA margin was 6.4% (7.0%). Operating result adjusted for non-recurring items was EUR 15.7(16.9) million and the adjusted operating margin 1.8% (2.8%). Most of the non-recurring items totalling EUR -49.1(-9.4) million relates to the business combination. For non-recurring items in January- December 2013, see the table below. EUR million Transaction costs -13.4 Commitment in relation to OsnabrÜck -13.5 Inventory valuations -2.4 Cost for achieving the foreseen synergy benefits -11.0 Environmental provisions -6.3 Other costs -2.5 Total -49.1 The transaction costs are primarily costs for financial and legal advice as well as market studies and similar activities for the assessment of the transaction. MunksjÖ made a commitment to pay certain costs arising from the divestments of some businesses in OsnabrÜck, Germany, required by the European Commissionas a condition for regulatory approval. This commitment is included in the non-recurring items in the amount of EUR 13.5 million. This cost was booked in the second quarter of 2013. The equivalent impact on cash flow during 2013 was EUR 2.5 million. Inventory valuation refers to the non-cash revaluation of inventories at the time of acquisition. The costs for achieving the synergy and integration benefit levels are costs for achieving the communicated synergies including the improvement programme for Graphics and Packaging. The environmental provisions in respect of the closed production facilities in Italyand the USAhave increased. Other non-recurring items include, among other things, minor restructuring costs deemed to be unrelated to the synergy benefits programme. The operating loss was EUR -33.4(7.5) million with a net loss of EUR -57.4(-10.5) million. Pro forma II Fourth quarter 2013 Pro forma II net sales decreased to EUR 265.2(288.5) million. Compared to 2012, the Brazilian Real has weakened significantly against the Euro, which affected the euro-translated sales of the Brazilian operations. The Brazilian operation is part of the business area Release Liners. Adjusted pro forma II EBITDA decreased to EUR 16.8(23.3) million and the adjusted pro forma II EBITDA margin to 6.3% (8.1%). The result for the fourth quarter 2012 includes a positive impact on the result of approximately EUR 8 millionas result of the release of certain accruals related to personnel liabilities and production costs. January–December 2013 Pro forma II net sales decreased to EUR 1,120.3(1,154.6) million. Net sales for the business area Industrial Applications increased but remained at the same level as in the previous year for business area Decor. Net sales for Release Liners decreased short of the 2012 level. Compared to 2012 the Brazilian real weakened significantly against the euro, which affects the euro-translated sales and profit of the Brazilian operations. Net sales by Graphics and Packagingdecreased short of the 2012 level. The business areas Decor and Industrial Applications showed higher adjusted EBITDA margins than in 2012 whereas the equivalent margins for the business areas Release Liners and Graphics and Packagingwere weaker. Somewhat lower raw material prices in 2013 had a positive impact on profitability but a less favourable product mix diluted this effect. The holiday shutdown in the third quarter went according to plan in terms of scope, but its negative impact on financial result was slightly greater than in 2012. Adjusted pro forma II EBITDA decreased to EUR 64.1(76.6) million and the adjusted pro forma II EBITDA margin to 5.7% (6.6%). The fourth quarter 2012, includes a positive impact on the result of approximately EUR 8 million, the release of certain accruals related to personnel liabilities and production costs. The result for the first quarter 2013 includes a positive impact on the result of approximately EUR 3 millionas result of the release of certain accruals related to personnel liabilities. 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: 940958 To join the conference call, participants are requested to dial one of the numbers above 5-10 minutes prior to the start of the event. Direct link to the webcast : http://qsb.webcast.fi/m/munksjo/munksjo_2014_0213_q4/#/stream For further information, please contact Jan ÅstrÖm, President and CEO, tel. +46 10 250 1001 Kim Henriksson, CFO, tel. +46 10 250 1015 Copyright © 2014 OMX AB (publ).