Ahlstrom targets €35m in cost savings

This target includes the earlier announced €15 million rightsizing measures, of which approximately €10 million will be derived from the transfer of certain sales, finance and information services related personnel and cost to Munksjö, which is in the process of absorbing the Ahlstrom Label and Processing business, by the end of May 2014.

According to the overall Ahlstrom plan, key actions include: the completion of demerger related transfers (as above); consolidation of and efficiency improvements in functional activities to reduce selling, general and administration costs; and optimization and productivity improvements in the supply chain.

As a result of the planned program, Ahlstrom's personnel number is estimated to be reduced by approximately 350 people globally. The employee consultation processes will start in accordance with local legislation.

The company plans to book a one-time cost of approximately €15 million during 2013-2014. The majority of the planned savings are estimated to take place by the end of 2014.

Ahlstrom president and chief executive officer Jan Lång said: ‘Ahlstrom has in the past three years executed a significant transformation of the company, as our business portfolio has been reshaped through major transactions, including the divestment of our wipes business, Home and Personal, and the combination of our specialty papers business, Label and Processing, with Munksjö.

‘At the same time, we have been reshaping our business processes through key development programs.’

Lång added: ‘Many of our key development programs are nearing completion, which will allow us to scale back our spending levels and make our cost base reflect the new size and scope of our business.

‘As a result of the refocusing of the business, our net sales have been reduced by €800 million to €1.1 billion in the past two years. This new cost saving program is fundamental in achieving the required improvement in our financial performance.’