Schweitzer-Mauduit decreased Adjusted EBITDA from Continuing Operations margin to 21.7% in 2Q2017

Schweitzer-Mauduit International (SWM), a leading global provider of highly engineered solutions and advanced materials, reported 17.5 % increase of net sales and 7.8% increase of Adjusted EBITDA from Continuing Operations  in 2Q2017 y-o-y. According to the announcement, the company’s net sales accounted for USD 255.3 million, generating Adjusted EBITDA from Continuing Operations of USD 55.4 million (21.7% margin vs 23.7% in the same quarter of 2016) in the period.

In January-June, the company’s net sales accounted for USD 488.6 million, Adjusted EBITDA from Continuing Operations totalled USD 99.3 million (20.3% margin).

Frédéric Villoutreix, commented:

“Second quarter financial results demonstrate solid overall performance of our business with several notable highlights. AMS delivered strong organic sales growth, with accelerating double-digit growth in high-margin specialty films underpinning segment results. These surface protection products for the transportation end-market are exhibiting significant momentum, particularly in Asia, and we are exploring options to leverage SWM’s international footprint to capitalize on this increasing regional demand. This growth, coupled with continued execution of our Conwed synergy plans, contributed to another quarter of robust segment margin expansion. The phased site consolidation project of a legacy AMS site is underway, and we remain confident in our ability to deliver USD 10 million of expected run-rate synergies by the end of next year.

Engineered Papers performed generally as expected. Although the anticipated volume challenges for traditional RTL remain a factor, continued momentum of wrapper and binder reconstituted tobacco products and the ramp-up of Heat-not-Burn sales provided a stabilizing offset. Insights from our customers, combined with increasing product awareness and test marketing of this innovative tobacco technology, support our optimism and growth-oriented investments in HnB. While our suite of recon products delivered essentially flat volume, declines in cigarette papers, including LIP, drove an overall EP segment volume decline. Expected lower pricing, LIP royalties, and reduced efficiencies contributed to margin pressure, however, we resolved certain production issues that significantly impacted EP’s first quarter profits.

With a solid first half of 2017 behind us, we remain keenly focused on continued execution of our Conwed synergy plans, supporting the momentum in our fastest growing product lines, and overall cost management to achieve our 2017 guidance for Adjusted EPS of USD 3.15. Looking longer-term, with AMS achieving critical mass and non-tobacco products now representing roughly half of the company’s total sales, I believe SWM is approaching an inflection point. While the past several years have been spent rebalancing the portfolio by building AMS as we navigated the headwinds in our tobacco business, we believe that we are now poised to become a growth-oriented enterprise in the years ahead. The strong cash flows, international footprint, and operational excellence expertise from our mature paper operations are a powerful complement to our expanding AMS segment and we intend to continue investing in attractive technologies, products, and end-markets to drive sustainable long-term growth.”

Earlier Schweitzer-Mauduit appointed a new CEO.

About SWM:

The company is a leading global provider of highly engineered solutions and advanced materials. It is an expert in developing and manufacturing technical materials from fibers, resins and polymers that are critical components in many instantly recognizable products and industries globally. Historically, the company focused on engineered papers but in recent years has diversified to include a range of films, nets and nonwovens, offered through its Advanced Materials & Structures (AMS) segment.

Source: Woodbizforum