Tag: Schweitzer-Mauduit International

  • SWM and Neenah Paper Agree to Merge

    SWM and Neenah Paper Agree to Merge

    Photo: Mikael Damkier

    Neenah Paper and Schweitzer-Mauduit International (SWM) have agreed to merge, creating a specialty materials company with a combined $3 billion in sales. The new company does not have a name yet.

    The combined company would be headquartered in Alpharetta, Georgia, USA. Neenah President and CEO Julie Schertell will lead the new company while SWM CEO Jeff Kramer will take a role as a strategic advisor. Five SWM board members and four Neenah board members will make up the combined company’s board of directors.

    The two companies expect to trim at least $65 million from their operating costs over the next two to three years. It will do so through production synergies and “highly complementary technologies, geographies and product portfolios in specialty materials,” the companies said in a news release. The new company would have strong market share in growing categories like healthcare and wellness, protective and adhesive solutions, industrial solutions, packaging paper and specialty paper.

    “This merger is an exciting next step on our journey and one that will deliver significant shareholder value,” said Kramer. “The combination with Neenah is a continuation of our strategic intent to solve our customers’ most complex design challenges. We are excited by the numerous benefits of this merger, including the significantly broadened customer base, product lines and technical expertise.”

    “This combination is a unique opportunity to accelerate our growth strategy and continue the transformation of our business, creating a global leader in specialty materials with strong and defensible positions in attractive end markets,” said Schertell. “Merging our two companies enhances our ability to grow and solve the needs of our customers for demanding, innovative products that address global challenges, such as the necessity for clean water and air, sustainable alternatives, and enhanced health and wellness.”

    The deal has been approved by both companies’ boards but still must be approved by shareholders for both companies and regulators.

    Neenah was founded in 1873. It was acquired by Kimberly-Clark in 1902 and operated until Kimberly-Clark spun off its regular paper-making operations under the Neenah name in 2004. Schweitzer-Mauduit is also a former division of Kimberly-Clark that was spun off as an independent company in 2015.

  • SWM Reports Full-Year and Quarterly Results

    SWM Reports Full-Year and Quarterly Results

    Photo: SWM

    Schweitzer-Mauduit International reported sales of $1.44 billion in 2021, up 4 percent on an organic basis. GAAP operating profit was $83.3 million, down $45.5 million, and included $38.9 million of transaction and integration costs and incremental purchase accounting expenses from the Scapa acquisition that closed on April 15, 2021. Adjusted operating profit was $158.8 million, down $12.8 million.

    The company’s engineered papers business recorded sales of $509.3 million for the year, down 4 percent, driven by a 2 percent volume decline and unfavorable price/mix of 4 percent, which were partially offset by a 3 percent currency benefit related to the euro. 

    The volume decline was primarily attributable to lower tobacco paper volumes, particularly low-ignition propensity (LIP) papers, as customers adjusted inventories lower after building significant safety stocks in mid-2020. The lower LIP volume was also a significant contributor to the negative mix effect. Rapid growth throughout the year in heat-not-burn sales was a positive offset within the tobacco business, while nontobacco paper volumes also increased.

    In the fourth quarter of 2021, the engineered papers segment business reported sales of $134.8 million, up 3 percent, driven by a 5 percent volume increase, unfavorable price/mix of 1 percent and 1 percent of negative currency related to the euro. Volumes benefited from gains in tobacco papers, continued rapid growth in heat-not-burn products, and an increase in nontobacco papers.

    “We enter 2022 confident that we will deliver strong growth in sales and profitability, said SWM CEO Jeff Kramer in a statement. “2021 top line performance met our growth expectations, but profits were impacted by sharp input cost increases and supply chain challenges, which we expect to moderate as this year progresses.

    “Early signs show more positive fundamentals on several fronts. We have successfully increased prices across the business and see moderation on some key input costs while we continue to progress against other supply chain hurdles.”

  • SWM Adjusts Outlook Following Tough Quarter

    SWM Adjusts Outlook Following Tough Quarter

    Photo: SWM

    Schweitzer-Mauduit International reported GAAP income of $12.2 million in the third quarter of 2021, down from $24.5 million in the third quarter of 2020. Adjusted income was $25.8 million, down 29 percent; Adjusted EBITDA declined 18 percent to $52.8 million. Net currency movements had a $1.8 million negative impact on operating profits.

    “We are clearly operating in an unprecedented economic environment for the second year in a row,” said SWM CEO Jeff Kramer in a statement. “After delivering strong 2020 performance despite a global epidemic, we are now seeing robust demand across many of our end-markets. However, manufacturers around the world are now navigating widespread inflationary pressures and supply chain disruptions.

    “Given the performance to-date and expected lingering fourth quarter pressures, we believe our 2021 Adjusted EPS will finish below our originally guided range. However, we are seeing early signs of relief from several challenges and fully expect our 2022 guidance, when issued in February, to reflect a strong operating profit rebound as we are well positioned for growth as conditions normalize throughout next year.”

  • Court Partially Nullifies ‘Fire-Safe’ Paper Patent

    Court Partially Nullifies ‘Fire-Safe’ Paper Patent

    Photo: Vitalii Vodolazskyi

    The German Federal Court of Justice has partially nullified a European patent assigned to U.S. paper manufacturer Schweitzer-Mauduit International (SWM), reports Juve Patent.

    European patent 1 482 815 protects a paper with reduced ignition proclivity characteristics used for manufacturing cigarettes. The papers are treated with film-forming solutions, which makes them less permeable to oxygen. As such, the embers inside the cigarette cannot easily spread to any material it may be lying on. This is to prevent fires caused by dropped or discarded cigarettes.

    In 2015, SWM sued Julius Glatz, insisting the German company’s Cigla brand of cigarette papers infringed on its patents. After much legal back and forth, Julius Glatz stopped its production of the disputed papers, closing production facilities and laying off employees.

    Following the recent ruling, Julius Glatz announced it would restart production with immediate effect. “As the patent in suit was held invalid, Julius Glatz GmbH and its daughter company LIPtec GmbH never infringed a valid patent,” the company wrote in a statement.

    “Glatz is assuring the high quality, service level and competitiveness the industry is used [to] from them in all paper segments and is therefore proud to say that they are back as a full-service supplier, meaning with LIP-papers too.”

    Julius Glatz is demanding almost €40 million ($46.3 million) from SWM in compensation for the damages it suffered in the dispute.

  • SWM Announces Second-Quarter Results

    SWM Announces Second-Quarter Results

    Photo: SWM

    Schweitzer-Mauduit International reported sales of $377.8 million in the second quarter of 2021, up 48.6 percent (11 percent on organic basis) from the comparable 2020 quarter. GAAP operating profit was $15.9 million, down $18.5 million, and included $19.2 million of transaction costs and incremental purchase accounting expenses driven by the acquisition of Scapa, which closed April 15, 2021. Adjusted operating profit was $44.6 million, up 3 percent from a year ago.

    Engineered Papers segment sales were $125.8 million, up 4 percent, driven by a 3 percent volume increase, unfavorable price/mix of 4 percent and a 6 percent currency benefit, primarily related to the euro.  The volume performance was attributable to growth in nontobacco products, such as battery papers, furniture laminates and packaging. The negative price/mix effect was primarily a function of lower low-ignition propensity volumes as certain customers resumed more normalized order patterns versus 2020 when they built inventories. Accelerated growth in reduced-risk heat-not-burn products continued to be a positive driver within the tobacco business.

    “The strength of our portfolio was again evident during the quarter as an increase in global economic activity drove very strong demand across the business,” said Jeff Kramer, CEO of SWM, in a statement.

    “Excluding the benefit of the Scapa acquisition, overall sales increased double-digits, and we are confident that robust order activity will continue in the coming quarters. We also closed and began integrating the largest acquisition in our history as Scapa joined our portfolio, putting us in even better position to drive sustainable long-term profit growth. And while we were not immune to global supply chain challenges, our teams again demonstrated their flexibility and skill in delivering against these increased volumes, resulting in second-quarter adjusted EPS of $0.90.”

  • SWM Reports Full-Year Financial Results

    SWM Reports Full-Year Financial Results

    Photo: SWM

    Schweitzer-Mauduit International (SWM) reported sales of $1.07 billion in 2020, up 5 percent from 2019. GAAP operating profit was $128.8 million, or 12 percent of sales, down 4 percent. Adjusted operating profit was $171.6 million, or 16 percent of sales, up 8 percent.

    “We are very proud of the performance of our business in a year marked by volatility and uncertainty,” said SWM CEO Jeff Kramer. “We delivered another year of adjusted EPS [earnings per share] growth to $3.68, over $128 million of free cash flow, and exited the year with strong organic sales momentum in AMS [advanced materials and structures].”

    In the engineered papers segment, SWM reported sales of $530.9 million in 2020, down 3 percent from 2019, with immaterial currency impacts.

    A volume decline of 3 percent was partially offset by positive price/mix performance of 1 percent. Price/mix benefited from a higher mix of high-value cigarette, heat-not-burn, and battery separator papers and a smaller proportion of lower margin nontobacco volumes compared to the prior year period. The 2020 volume decline was driven primarily by the continued strategic deemphasis of lower margin nontobacco volumes while tobacco-related papers declined modestly, in line with industry attrition.

    GAAP operating profit was $116.8 million, down 2 percent, and included the $16.2 million of restructuring and site closure expenses. During the third quarter, SWM reached an agreement with a large customer to shift production of papers purchased from the company’s Spotswood, New Jersey, USA, site—which exclusively served this customer—to other SWM facilities. As part of the transition, SWM worked collaboratively with the customer to co-develop a new production technology to better meet the customer’s needs, and SWM and the customer signed a new multi-year supply agreement.

    SWM shut down the Spotswood facility during the fourth quarter, and for full-year 2020 incurred $11.7 million of restructuring and related site closure costs, which are excluded from adjusted financial metrics.

  • Sales up at Schweitzer-Mauduit

    Sales up at Schweitzer-Mauduit

    Photo: SWM

    Schweitzer-Mauduit International (SWM) reported sales of $279.3 million in the third quarter of 2020, up 9 percent over those in the 2019 third quarter. GAAP operating profit was $37 million, up 7 percent, and adjusted operating profit was $52.7 million, up 26 percent.

    SWM’s engineered papers segment sales were $140.4 million, up 8 percent, driven by a 2 percent volume increase and favorable price/mix performance of 6 percent. Higher volumes benefited from strong growth across cigarette paper products as customers increased inventory levels to de-risk their supply chains in the event of future disruptions from Covid-19.

    These volume gains were partially offset by the continued de-emphasizing of lower margin nontobacco paper products. Price/mix improved due to the strong sales of higher value cigarette papers, including low-ignition propensity papers coupled with the favorable mix impact of lower nontobacco volumes.

    “We are pleased to report a strong quarter with sales and adjusted profit growth in both segments,” said SWM CEO Jeff Kramerin a statement. “While the pandemic continued to impact some of our end markets, the global SWM team continues to perform well under challenging circumstances. All of our sites were fully operational throughout the entire quarter, a testament to our people’s commitment to the safety protocols implemented across the company.”