APRIL 26, 2017 HELSINKI Todays presenters Sakari Ahdekivi Jan strm - PowerPoint PPT Presentation

Q1/2017 BRIEFING APRIL 26, 2017 HELSINKI

Today’s presenters Sakari Ahdekivi Jan Åström Deputy CEO of Ahlstrom-Munksjö President and CEO of Ahlstrom-Munksjö Pia Aaltonen-Forsell CFO of Ahlstrom-Munksjö

Agenda • Introduction • Ahlstrom Final Accounts • Munksjö January-March 2017 interim report • Way forward

Two leaders has become one • A global leader in sustainable and innovative fiber-based solutions • Leading market positions in several niches • 6,000 employees • 41 production and converting sites* in 14 countries • Combined net sales approx. EUR 2.1 billion Ahlstrom Munksjö • • Net sales 2016: EUR 1.1 billion Net sales 2016: EUR 1.1 billion • • 3,200 employees 2,800 employees • • 27 production and converting sites in 12 countries 15 production and converting sites in 7 countries * Ahlstrom and Munksjö shared one site

Advantages for all our stakeholders • Leading global positions in several segments • Global reach • Expanded product and service offerings • Improved service, design and R&D capabilities • Enhanced career opportunities • Strong financial position • Benefits of scale in the capital markets

Ahlstrom Final Accounts

Ahlstrom Final Accounts - Summary All-time high adjusted operating profit with very strong sales growth Very strong comparable net sales growth • Comparable net sales increased by 7.6% at constant currency rates, excluding the divested operations in Osnabrück • Higher sales of filtration, wallcover and glassfiber materials as well as tape, medical and coffee products • Relatively higher sales growth in Asia impacted product mix and average selling price Record high operating profit and margins • Driven by higher volumes, improved operational efficiency, lower fixed costs as well as keeping the benefit from lower energy and raw material costs • Adjusted operating profit and margin improved for the 14th consecutive quarter, year-on-year • Improved operational result and active working capital management driving cash flow • Balance sheet strengtened

Key figures Record profitability with comparable* sales growth of 7.6% at constant currencies EUR million Q1/2017 Q1/2016 Change, % 2016 Net sales 272.7 1,085.9 267.2 2.1 Adjusted EBITDA 42.6 130.9 27.9 52.4 % of net sales 15.6 10.5 12.1 Adjusted operating profit 30.7 80.6 15.0 104.2 % of net sales 11.2 5.6 7.4 Cash flow from operations 26.2 125.8 8.4 210.1 Net debt 138.2 140.8 194.9 Gearing, % 44.5 44.6 66.5 * Excluding divested operations in Osnabrück 8

Rolling 12-month adjusted operating margin above 8% target Operating profit and margin improved for the 14th consecutive quarter, year-on-year % Q1/17 vs Q1/16 Adj. operating profit % of net sales R12M % of net sales MEUR 16 + Sales volumes (excl. 32 Osnabrück) 14 28 + Operational efficiency, raw 12 materials and energy 24 + Fixed costs 10 + Currency 20 8 16 - Product mix and average 6 selling price due to relatively 12 higher sales growth in Asia 4 8 2 4 0 0 Q1/13 Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 -4 -2 9

Net debt and gearing Target was to keep gearing below Significant reduction in net debt 100%. MEUR Gearing 44.5% as of March 31, 2017 300 100% 289.7 283.3 281.3 • Lower net debt, driven by a strong 270 90% improvement in operational result, 253.8 254.0 reduction in operating working capital 233.8 240 80% and low investments 203.7 195.9 194.9 210 70% • Cash and equity impact of paid 180 60% dividend in Q1/17 160.2 140.8 150 138,2 50% • Equity includes EUR 100 million 130.5 hybrid bond. Gearing was 113% if the 120 40% hybrid is treated as debt at the end of 90 30% Q1/2017. 60 20% 30 10% 0 0% Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Interest bearing net liabilities Gearing ratio, % 10

Filtration & Performance MEUR Net sales Net sales EUR 169.0 million in Q1/17 (EUR 171.1 million) 200 • Net sales -1.2%: volumes -19.5% 180.4 175.7 169.0 176.9 168.4 171.1 170.5 170.8 • 175 Comparable net sales +7.3% at constant currency, 159.8 excluding Osnabrück 150 • Higher sales of filtration and glass fiber products as well as wallcover materials in Asia 125 Adjusted operating profit EUR 22.0 million in Q1/17 (EUR 100 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 9.1 million) • Adj. operating profit % of net sales Higher volumes MEUR 22.0 • Improved operational efficiency through less 24 14 waste 18.8 12 20 15.8 • 10 Pricing management, lower pulp and glass costs 16 8 offsetting cost inflation in chemicals 9.5 12 9.1 9.1 6 7.8 8 4 5.4 3.0 4 2 0 0 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 11

Specialties Net sales MEUR Net sales EUR 109.1 million in Q1/17 (EUR 102.7 million) 125 108.3 109.1 105.7 • Net sales +6.2%: volumes +6.1%, net sales at 110 104.6 103.1 102.7 104.0 100.9 100.4 constant currency rates +6.3% 95 • Higher sales of tape, medical, laboratory & life 80 science products, single-serve coffee and meat casing materials 65 Adjusted operating profit EUR 12.0 million in Q1/17 (EUR 50 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 7.8 million) Adj. operating profit % of net sales • Higher sales volumes MEUR • 14 14 Improved product and price mix 12.0 12 12 • Lower fixed costs 10.0 10.0 10 10 7.8 7.4 7.1 8 6.6 8 5.9 4.6 6 6 4 4 2 2 0 0 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 12

Munksjö Q1/17 interim report

Munksjö January-March 2017 - summary Continued profitability improvement building strong platform for AM Increased delivery volumes and net sales • The positive volume development was particularly strong in BA Industrial Applications and Decor as well as in the European release paper business • Partly offset by lower volumes in BA Graphics and Packaging and the specialty pulp business • Net sales increased accordingly Strong result, cash flow and profitability improvement • EBITDA (adj.) increased by 20%, driven by lower variable costs and higher production • Net result increased by 57% • Strong cash flow

Key figures Q1/2017 Record Q1 results and cash flow EUR million Q1/2017 Q1/2016 Change, % 2016 294.3 1142.9 Net sales 288.0 2 37.3 136.7 EBITDA (adj.*) 31.0 20 12.7% 12.0% EBITDA margin (adj.*) 10.8% 24.6 81.5 Operating result (adj.*) 16.3 51 8.4% 7.1% Operating margin (adj.*) 5.7% Net result 9.9 43.3 6.3 57 Cash flow from operating activities 16.5 114.3 3.6 * Adjusted for items affecting comparability (IAC) 15

Continued clear margin improvement EBITDA (adj.*) and margin development 2013-2017 Q1/17 • Delivery volumes increased. The 45 16% MEUR positive volume development was 40 14% particularly strong in BAs Industrial Target was an EBITDA margin of 12% 12,7% 35 over a business cycle Applications and Decor as well as 12% 10,8% in the European release paper 30 9,5% 9,5% business, but partly offset by lower 10% volumes in the BA Graphic and 25 8% Packaging and the specialty pulp 20 business 37,3 6% 15 31,0 • Net sales higher as the delivery 27,4 26,5 4% volumes increased 10 • EBITDA (adj.) increased, driven 2% 5 by lower variable costs and higher 0 0% production . * Adjusted for items affecting comparability Pro forma figures for the period Q1-Q4/2013. From Q1/2014 the reported figure is used. 16

Net debt and gearing 300 80% 241,1 250 237,6 234,4 200 60% 184,7 58,5% 57,1% 55,3% 150 100 40% 43,2% 50 0 20% Q2/13 Q3/13 Q4/13 Q1/14 Q2/14 Q3/14 Q4/14 Q1/15 Q2/15 Q3/15 Q4/15 Q1/16 Q2/16 Q3/16 Q4/16 Q1/17 Interest-bearing net debt, MEUR Debt/equity ratio, % Pro forma figures for the period Q2-Q4/2013. From Q1/2014 the reported figure is used. 17

Business Area Decor DELIVERY VOLUMES, KTON NET SALES, MEUR 200 Q1/2017 500 400 150 • Delivery volumes were higher 300 100 • Net sales increased due to higher 200 50 100 volumes 46,8 46,0 48,6 95,5 93,2 95,4 0 0 • EBITDA (adj.) decreased as 2015 2016 2017 2015 2016 2017 profitability improvement actions and higher volumes did not Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 compensate the lower average price EBITDA (ADJ.*) AND MARGIN, MEUR AND % 20 24% 20% 16 14,7% 13,9% 16% 12,4% 12 11,8% 12% 8 8% 4 4% 0 0% * Adjusted for items affecting comparability 18

Business Area Release Liners Q1/2017 DELIVERY VOLUMES, KTON NET SALES, MEUR 600 • Delivery volumes higher in the 500 500 400 European paper business and 400 stable in the Brazilian paper 300 300 business. Specialty pulp business 200 200 volumes decreased 100 100 131,3 132,2 118,2 118,6 111,6 106,8 0 • Net sales and average price were 0 2015 2016 2017 2015 2016 2017 higher • EBITDA (adj.*) increased Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 supported by profitability EBITDA (ADJ.*) AND MARGIN, MEUR AND % improvement actions, lower variable costs and the higher 16,4% 20 20% average price 16 16% 12 9,8% 12% 9,1% 8,4% 8 8% 4 4% 0 0% * Adjusted for items affecting comparability 19