Ahlstrom Holding 3 Oy (AM1S) Q2 2024 earnings summary

Executive summary

• Q2 2024 saw increased profitability, strong margin management, and solid cash flow, driven by transformation initiatives in pricing, procurement, operational excellence, and working capital.

• Market activity improved, supported by new safe and sustainable product launches, including fluoro-free filtration and next-generation pet food packaging.

• Completed organizational transformation to a three-division structure, aligning with market growth trends and simplifying resource allocation.

• Employee engagement reached an all-time high, with participation and results placing near the top 10% of companies in manufacturing.

• Refined strategy and simplified divisional structure became effective in July, aiming to accelerate growth and innovation in sustainable specialty materials.

Financial highlights

• Net sales for Q2 2024 were €780 million, up 0.7% year-over-year; excluding Stenay, sales grew 3%.

• Comparable EBITDA increased to €114.3 million in Q2 2024 (14.7% margin), up from €101 million (13.1%) in Q2 2023.

• Margin on variable cost per ton reached €982, close to record levels, up from €936 in Q2 2023.

• Operating cash flow remained strong, with net cash from operating activities at €156.1 million for H1 2024 and a 73% cash conversion rate.

• Free cash flow was €90.7 million in Q2 and €164.8 million in H1 2024.

Outlook and guidance

• Management expects continued growth driven by sustainability and innovation, with all divisions aligned to long-term growth trends.

• Transformation initiatives are expected to yield further cost savings and margin improvements in the coming quarters.

• Market activity expected to continue improving, with further ramp-up of new sustainable solutions.

• Working capital improvements are considered sustainable, with ongoing focus on offsetting receivable and inventory increases.